This article has been written by Satabdi Bhattacharya pursuing the Diploma in Cyber Law, FinTech Regulations and Technology Contracts from LawSikho. This article has been edited by Smriti Katiyar (Associate, Lawsikho).
Table of Contents
Who are GIG workers?
GIG Workers are those who are not in a traditional employer-employee relationship, usually they are employed on contractual basis or project-based work. Freelancers are also GIG workers. Different E- Commerce platforms like Amazon, Flipkart use GIG – workers. GIG worked on different platform-based works where they perform specific services. GIG workers come from different corners of India, they allow different age groups, skills. Gig works are easier to find than any conventional jobs. The law concerning the gig economy has seen transformational changes in the year 2019. India, being the uprising gig economy, has also been witnessing huge growth in the number of gig workers in the past few years. This has led the Indian legislature to introduce the gig workers in one of the draft labour code bills i.e., the Code on Social Security, 2019
GIG workers under contract labour
The Contract Labour (Regulation and Abolition) Act, 1970 regulates engagement of contract labour in India, including work done through third-party contractors. There is scope for gig workers who work for platforms to be “contractors” under this law. This imposes obligations on employers to comply with the requirements under this law, including welfare and health obligations to be provided to employees such as the provision of canteens, first aid, etc. Yet, this law has still not been applied by most platforms nor has it been discussed by any Indian Court.
The Employment Compensation Act, 1923 mandates that the employer pay compensation for accidents arising out of and in the course of employment. The applicability of this law to gig workers also remains to be determined by Courts. If this does apply to gig workers, it would go a long way in ensuring compensation for occupational safety hazards.
Key developments in India
The Code was introduced in the Lok Sabha on December 11, 2019 intended to simplify and rationalize the provisions of nine laws relating to social security, including the Employees’ Provident Fund Act,1952, the Maternity Benefit Act, 1961, and the Unorganised Workers’ Social Security Act, 2008. The Code has introduced the concept of gig workers and contemplates social security schemes for such workers. The Code has included various non-traditional types of occupations and workers involved therein by categorizing them as gig workers and/or platform workers, unorganised workers, home based workers, etc., which the current industrial laws do not cover, to whom the Code proposes to extend certain benefits. The Code defines a gig worker as a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship. Further, platform workers are defined as workers who are involved in work, in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems or to provide specific services in exchange for payment. The Code differentiates a gig or a platform worker from the conventional definition of ’employee’ as given under the Code.
A bare perusal of the definitions of ’employee’ and ‘gig worker’ makes a clear distinction in nature and scope of work of a gig worker and an employee in the traditional sense. While the definition of employee is similar as defined previously under current various social security legislations, the definition of gig or platform worker encompasses the concept of a deemed employment which is independent of traditional employer and employee relationship. Further, the Code proposes that the Central Government may formulate social security schemes for gig and platform workers on matters relating to:
(a) life and disability cover;
(b) health and maternity benefits;
(c) old age protection; and
(d) any other benefit as may be determined by the Central Government.
What are new gigs?
The new gig roles aim at attracting people who would otherwise not be open to full-time roles. It could be highly qualified professionals who may not be able to travel to work because of ailing family members or differently-abled persons who may find it tough to travel.
Similarly, women who have quit their jobs, post-maternity or a difficult pregnancy, can continue working from home through these gig roles.
Traditionally, gig roles are considered to be inferior to a full-time job. This is because semi-skilled or unskilled workers are hired for short-term roles based on demand. Some of these include delivery personnel or logistics staff.
However, the new-age gigs could even have a former vice-president Working on a short-term project. This effectively means that the educational qualifications and work experience requirements would be the same.
Unlike regular freelance jobs, where one individual works on multiple projects across companies, the new-age gig roles would have non-compete agreements where a professional cannot work in such roles in the same sector or industry.
How would hiring be different?
The hiring process for the new-age gig roles would be exactly similar to a regular shortlisting process. First, candidates would need to apply for the role. This will be followed by one or multiple rounds of online interviews. Companies having aptitude tests for new hires would follow the same rigour for the new-age gig roles as well.
IT firms, as well as financial institutions like banks, mutual funds and insurance companies, have background verification as a standard part of the selection process. So, for new-age gig roles as well, this will be no different.
Regular gigs of semi-skilled workers involve a phone call from the hiring manager, after which the individual may join the role. However, the new-age gigs would follow the standard procedures of hiring, and, hence, the shortlisting process will be as lengthy as a regular hire.
How do companies benefit?
The new-age gigs would be specialist roles that will last between 6-12 months. After the project or assignment is over, he/she would need to be redeployed to some other job position, or, worse, be laid off.
Regular gigs like the ones seen in the e-commerce space have a possibility of being extended or the person being absorbed as a full-time staff member. However, the new-age gigs don’t hold this possibility.
One reason why the role works well for the individual as well as for the company is that a qualified worker from any part of the world can be hired for new-age gigs without distance acting as a barrier. Travel costs need not be paid since these are virtual roles. Companies also save costs since the specialist is hired only for a short period. Long-term employee benefits like provident fund, insurance cover and gratuity won’t be available for these positions. The new-age gigs would be 100 percent virtual so physical infrastructure cost for the hire is also saved.
HR experts estimate that compared to less than 3 percent currently, India Inc would have close to 10-15 percent working on new-age gigs in the next five years. Customer-facing roles and shop-floor positions, however, won’t be on a gig model.
Axis Bank, for instance, has said that the new-age gig roles would be offered in areas like digital banking, technology, risk modelling, virtual sales, audit and credit policy, which are the first set of pilot offers.
Conclusion
The introduction of these concepts would lead to provide better work opportunities to students and would promote them to take up non-regular jobs in the market. At the same time, it would be a lesser burden over the employer to not engage in traditional long term employment commitments with the employees. The new concepts would help in generating several small jobs which will be duly regulated by the labour codes and also provide social security to the employees. Further, it would be evident to see how these sectors are practically regulated and what all schemes the Government comes up with to provide benefits to the employees working in the gig and platform-based economy before making any concrete statements.
References
- https://labour.gov.in/sites/default/files/SS_Code_Gazette.pdf
- https://clc.gov.in/clc/acts-rules/contract-labour-regulation-abolition-act-1970
- https://legislative.gov.in/sites/default/files/A1923-08.pdf
- https://labour.gov.in/sites/default/files/TheMaternityBenefitAct1961.pdf.
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