This article is written by Darshit Vora from SVKM, Narsee Monjee Institute of Management Studies, The article analysis labour laws concerning Gig workers and possible measures that can be taken to protect their interest
Gig-economy is different from the traditional practice of full-time workers. The gig economy includes involving independent contractors and freelancers for a short period or on a project-to-project basis. It is a non-standard form of work where the freelancers or independent contractors doesn’t have usual hours of work, fixed holidays, and fixed salary. According to the Cambridge dictionary, gig economy refers to a form of work that is based on people having temporary jobs or doing separate pieces of work, each paid separately rather than working for an employer. The gig economy gets its name from each piece of work being akin to an individual ‘gig’. The gig economy is not a new concept it was coined a few decades earlier however has gained prominence due to the advent of technology, no intent of the organization to retain employees for a long period, or multi-party transaction. The concept of the gig economy can be witnessed in various sectors like social media marketing, legal consultancy, content writing, art, and designing, etc.
In a gig economy, a consultant or a worker must keep on updating his skill and knowledge to remain relevant in this business for a long period. Along with having several benefits, there is a negative side of the gig economy include instability in the job, lack of social security benefits, unusual hours of work, and uncertain pay schedules. However, due to the emergence of the entrepreneurial generation many people moving towards exploring different opportunities other than the formal standard contracts. Therefore people started providing their professional services on their flexible terms. There has also been the emergence of various gig platforms like Fiverr, Upwork, and Guru which enable the organisation or individuals to recruit freelancers. Digitalisation has contributed significantly to the growth of the gig economy. Due to the advent of technology, many skilled professionals are joining it so that they can serve international clients in the comfort of his/her home countries. Due to such unmatched benefits, there is a fundamental shift from a standard form of work to a non-standard form of work.
History and growth of Gig Economy
The first emergence of the gig economy was witnessed in 1915 a jazz musician who was paid money on the basis of their individual performances for the first time used the word gig. The growth of the gig economy was witnessed in the second world war due to uncertain times the organisations weren’t willing to employ people for a long period of time and therefore they employed people on a short-term basis. However, post the world war importance of the gig economy started to decrease and people preferred having permanent and long-term jobs as compared to short-term.
The next major event that contributed to the growth of the gig economy was by Mr. Craig Newmark started an advertisement website that provided services of gigs in various sectors on short terms basis. After receiving success, it expanded to various cities of the United States and Canada and now it covers over 70 cities. Post the 1900’s in the United States 10% of Americans started considering alternate sources of Income. In the years 1999 famously, the known site now is known as Upwork then was known as Elance which connected those organisations and individuals who required services and professionals who were willing to provide their service. A major push in the growth of the gig economy was witnessed in the initial years of the 2000s where Amazon started hiring a gig workforce. The post-2000s can be considered as decades of “apps” because a lot of new app-based platforms were started which benefitted the gig workforce. In the year 2008, Airbnb started its operation and thus increased the employment opportunities of the gig workforce. Uber started its ridesharing service in the year 2010 where people could get to taxi customers from their own vehicle. Many people in international countries started viewing the gig economy as a part-time source of income.
In India, the emergence of the gig economy was a little late as compared to other international countries. Post the 2010s the growth and emergence of the gig economy were witnessed in India. Where a lot of international companies ventured their business in India. Due to which many Indian entrepreneurs started developing their own apps in different fields thus contributing to the growth of the gig workforce. Initially, in India, it was viewed as a part-time job but now people are viewing it as a source of full-time employment. According to the global gig economy index, India is among the top 10 countries which are outsourcing professionals. The ranking is only going to improve it is expected that the gig economy in India would create 90 million jobs in the next 7 to 8 years. Therefore, such a paradigm shift has benefitted the interests of both the organisations and the working professionals.
Types of Non-Standard Workers
- Part-time work: A person who only works for a few hours of the day is comparatively lesser than the full-time employee of the company. Generally, people take up a part-time job to pay education fees, to support their families. There are engaged with the organisation for only a temporary period of time. These workers aren’t eligible for benefits like health insurance or retirement plans like any other non-standard worker.
- On-call workers: An employee which is supposed to report to the organisation whenever required by the company is known as an on-call employee. They don’t have fixed hours of work. These employees are paid on basis of the hours that they work and aren’t given a salary on monthly basis like other employees.
- Platform workers: It means a worker working for an organisation that provides specific services using an online platform directly to individuals or organisations. Platform work includes food delivery or ride-sharing. These workers aren’t eligible for benefits like health insurance or retirement plans like any other non-standard worker.
- Dependent self-employment: It is a form of employment that lies between self-employment and employment. These workers only earn income from one employer further the worker is also provided by one employer. Legislation providing them benefits is quite limited.
International regularisation of Gig Economy
From the perspective of rights and protection of gig workers, some of the international documents which protect their rights are as follows
United Declaration of Human Rights
In this legal document, the framers didn’t differentiate between non-standard and standard forms of workers. Under Article 23 it is mentioned that everyone should right to just and favorable conditions of work. Remuneration should be made on the concept of equity. Everyone is entitled to social protection and human dignity. Further, everyone has the right to join and form a trade union.
International Covenant on economic social and cultural rights
The legal document under Article 7 obligates the state parties certain basic rights to everyone they include 1. Remuneration to all workers 2. Providing a decent standard of living and 3. Providing proper rest and leisure to the employee. Further Article 8 also protects the rights of the laborers it allows them to form and join a trade union and allows them to go on a strike.
The above provisions are also applicable to gig workers because there is no differentiation between the non-standard and standard forms of workers.
International Labour Organisation
ILO on various occasions has expressed their concerns on the fact that when self-employed persons are generally excluded from the application of employment and labor laws, leading to exclusion of workers from their essential right to work. A recent document published by ILO on a non-standard form of work mentioned plugging regulatory gaps with respect to Non-standard employment it discussed the following points where legislative developments are required:
- Equality of treatment: The equal remuneration convention, 1951 of the ILO mentions that a person should be remunerated on the basis of the work that they perform and distinction should be made on the ground of gender. The convention on Discrimination (Employment and Occupation), 1958 mentions that no discrimination in a workplace can be made on the grounds of sex, race, social opinion, or political opinion. These conventions indirectly protect a non-standard form of workers. In Employment, relationship recommendation calls state to formulate policies elimination distinction and protecting workers interest.
- Minimum hours and other safeguards for a non-standard form of workers: On this issue, minimum regulations are passed to protect the interest with respect to gig workers. ILO recommendation No 182 no of hours, the work time should be established according to the needs and interests of the workers. Further in family responsibility and recommendation, 1981 mentions that efforts should be taken to improve working conditions and also mentioned flexible working conditions.
- Social Insurance for a non-standard form of workers: The ILO part-time work convention mentions social insurance for workers working with multiple employers. The insurance is granted to the workers on the grounds of hours of work and earnings.
- Unemployment Insurance system: If the non-standard workers are unemployed, the state should take efforts to provide vocational training and guidance to improve the skill of the worker this is covered under The Employment Promotion and Protection against Unemployment Convention, 1988.
- Facilitate care of parents and elders of non-standard workers: ILO Family Responsibilities Convention, 1981 mentions that the state should adopt measures to protect and take care of parents and elder of non-standard workers. In Reduction of Hours of Work Recommendation, 1962 mentions accommodating workers’ personal and family responsibilities.
- Collective bargaining and forming association: In Private Employment Agencies Convention, 1997 mentions about rights of workers with respect to collective bargaining, freedom to form an association. The convention imposes a duty on the employer to provide these benefits to the employee.
A publication made by ILO on the topic of non-standard workers mentions plugging legislative gaps with respect to Provisions on collective bargaining, Strengthening social protection and condition, and standard of work. For digital workers ILO has given a guideline and held that they should also have access to universal labor rights, social protection, and collective bargaining to platform workers, ensuring fair competition, fair data use, and improved data protection.
Development of Gig Economy in other countries
United States of America
The first major emergence of the gig economy was first witnessed in the United States. In the United States, there has been tremendous legal development in the field of the gig economy. In the year 2019 California passed a bill titled “AB5” which has come into effect on 1 January 2020. The act aimed in providing protection to independent contractors as employees the classification is made on the basis of three tests that were laid down in Dynamex Operations West, Inc. v. Superior Court of Los Angeles.
- The organisation does not control and direct the worker with regard to their performance
- The worker can perform work outside the employment
- The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.
Under this act thus by recognizing independent contractors as employees impose a burden on the employer to provide the benefits that are provided to any other employee.
Various rulings passed by the labour commissions of different states have positively impacted gig workers such as the Labour commission of California ordered reimbursement to Uber drivers and considered Uber drivers as Uber employees. Similarly, Oregon’s labour commission Uber drivers are economically dependent on Uber and they should be considered as separate employees of Uber. In California, there is an employer who is supposed to provide insurance to gig workers of 1 million which can be claimed if the person gets injured during the course of employment. In the United States, some states have adopted laws with respect to gig workers and given them protection but some states such as have shown restrain they include states like Texas and New York City and haven’t allowed any protection to gig workers.
It is another country that has had a significant legal development in the field of the gig economy. A directive has been issued in the European parliament to provide standard working conditions for on-demand employees or short-term employment. The criteria are employees should be working for 3 hours per week or 12 hours per 4 weeks on average. The directive obligates the employer to fulfill the terms of the contract, provide proper working conditions, and restrict the employer from committing adverse treatment against the employee. Recently a landmark judgment was passed by the UK Supreme Court where they held that people working as Uber drivers should be considered as workers and would get legal protection as another worker. According to the UK Supreme Court Uber had the authority to monitor driver performance and also had the capacity to terminate them. So, working for Uber is a classic form of subordination that is a characteristic of an employment relationship. However, this comes as a relief for only platform workers and not self-employed workers.
Legal development of Gig economy in India
In India just like emergence, the legal development of the gig economy was started late. The legal development of the gig economy began after various judicial pronouncements were made on this topic. In Dhrangadhara Chemical Works v. the State of Saurashtra, the court laid the test of control and supervision test to determine the employer-employee relationship. A further similar test was adopted by the Supreme Court in the case of Ram Singh and Ors. V. Union Territory, Chandigarh and Ors the worker was considered as an employee because the employer had control over his action, the employer was paying his wages thus the court termed it under an employer-employee relationship.
Due to a significant rise in the number of gig workers in India the legislature was prompted to pass a law that can protect their interests. There in 2020 Social Security code was passed in both the houses of the parliament and also received assent from the president. The law is named as Social Security Code, 2020 the act provides protection to gig workers. Under the act, a gig worker is defined as a person who performs work or participates in a work arrangement and earns from such activities outside of the traditional employer-employee relationship. After mandatory registration, they would be entitled to various social security benefits
- Life and disability cover;
- Accidental insurance;
- Health and maternity benefits;
- Old age protection.
Problems with respect to Gig Workers in India
The inclusion of gig workers under the social security code and the National minimum wage scheme comes as a welcome step. However, this should not be the last effort to protect the rights and interests of the gig workers still a lot of work is required to eliminate their problems. Some of the problems faced by gig workers are as follows
- No law on gig workers mentions Occupational safety and decent working condition: Proper health facilities and decent working are basic requirements for any kind of employee. For any employee to provide a productive performance requires decent working conditions and occupational safety.
- No law on gig workers which mentions collective bargaining and Trade Union: The current Indian Laws doesn’t have any provision on right to form and collective bargaining for gig workers. The International Labour organisation considers the right to form an association and collective bargain as fundamental rights. Trade union represents employees in situations where their rights are breached by the action of the organisation. Further collective bargaining provides the right to the employees to initiate negation with the management. If these rights aren’t recognized then the management will abuse their power. Thus, these are essential rights that need to be recognized for gig workers.
- No Laws which protect discrimination against gig workers: In India, there is no law that obligates the employer to provide equal treatment of the non-standard workers. ILO regulation mandates that workers should be treated equally and no unfair discrimination should be made. To avoid this issue a law needs to be passed to avoid unfair discrimination.
- No Law which obligates an employer to provide minimum wages to the non-standard form of worker: International labour organization considers fair wages as a human right. If an employee is not granted a minimum wage rate for his/her service is clear exploitation. Therefore, efforts should be taken by the legislature to eliminate this exploitation by passing a law.
Possible solutions to protect the rights of Gig Workers in India
The legislature in the recent social security code has made a separate category for gig workers so that they can claim social security benefits. However, a better solution could have been enacting separate legislation which only covers the benefits and rights of non-standard workers. In the social security code, different non-standard workers are included under the definition of gig workers and all of them are provided common benefits thus creating ambiguity. Non-standard workers like on-call workers or part-time workers don’t require old-age insurance benefits, life cover, etc. Therefore, proper differentiation should be made types of non-standard workers and should be which is required by them to protect essential rights.
In the new legislation, separate definitions should be given for different non-standard workers such part-time workers, platform workers, on-call workers, self-dependent workers. The legislation should provide certain basic rights which can be claimed by all forms of non-standard workers they include a provision on the elimination of discrimination, a guarantee of minimum wages, collective bargaining, and occupational safety. Differentiation among non-standard workers should be made in categories of decent working conditions which needs to be provided to on-call or temporary workers. Further social security needs to be provided to platform workers. Further maternity benefits for platform workers. Training benefits to the platform or part-time workers.
The legislation should obligate the employer to provide these benefits to the non-standard form of workers if acted ultra vires would be liable to pay heavy penalty. The legislation should mention the mechanism where the non-standard workers can enforce their rights. Thus separate legislation on non-standard workers would encourage many people to join the gig economy which would directly contribute to the growth of our country.
India in the near future is going to become a hub of gig workers. As per a report by ASSOCHAM, the gig economy is substantially growing in India and is expected to have an increase of 455 billion dollars by 2024. It is also estimated that the gig economy in India will generate 350 million jobs. Therefore it is essential to protect the rights of these workers or else they would be exploited by the organisation which is in a dominant position. The legislature expressed its intent to protect the rights and interests by passing the social security code 2020. However, it was a half-hearted attempt to protect the rights and interests of gig workers.
There are three ways that a legislature can adopt First: The legislature makes amendments in the existing legislature and insert the word gig workers, Second: No effort from the legislature Supreme Court would interpret gig workers as employees on the basis of supervision and control test, Third: The legislature should pass new legislation which would only mention about rights of non-standard workers The third is the best solution which would eliminate any future ambiguity in the other two scenarios there would be future ambiguities and would increase the burden of the courts.
India has recognized various international conventions which protect the rights and interests of gig workers. If no conflicting municipal law prevails in the country the domestic country can adopt ratified international law. ILO has on various instances urged the state members to pass laws that can protect the rights and interests of gig workers. Though India is one of the countries where the growth of the gig economy was a little late now because of Covid-19, a change in mindset, flexible hours of work has flourished the growth of the gig economy in India. Thus, legislation is required which protects the right of the gig workers so that the gig economy keeps flourishing in India.
India compared to the other countries is backward when it comes to passing legislation to protect the interest of non-standard forms of workers. The Social Security code that is passed has still not come into effect. Gig workers also play a key role in contributing to the growth of the country and organization and recognizing their basic rights is very important. The legislature should not become pro producerist and not pass legislation because the organisation wants limited regulations but instead be pro gig workers so that they would be motivated to work and positively contribute to the growth of the economy. Due to the continuous growth of the gig economy in our country, it is expected that legislation should take appropriate efforts so that suitable benefits are provided to them which would protect their basic rights.
Referenceshttps://econfinity.in/gig-economy-emerging-as-mainstream-in-india/essay/. https://cll.nliu.ac.in/regulating-the-gig-economy/. https://n26.com/en-eu/blog/gig-economy. https://blog.ipleaders.in/90683-2/. https://www.ilo.org/wcmsp5/groups/public/—ed_protect/—protrav/—travail/documents/publication/wcms_443267.pdf.
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