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04 December 2019
The Ministry of Labour and Employment recently published the draft Code on Social Security 2019 in an attempt to amalgamate, simplify and rationalise the laws on social security. Notably, the code has introduced the concept of gig and platform workers to Indian labour law and contemplates social security schemes for gig and platform workers with regard to:
Existing industrial jurisprudence in India refers to gig workers as independent contractors. Under the code, the term 'gig worker' has been defined as "a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship". In India it is common for organisations to engage graphic designers, coders, web designers and freelance writers working on short-term projects as gig workers or independent consultants. The code has also defined 'platform work' as "an employment form 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". Examples of platform workers include on-demand delivery personnel engaged by tech-enabled platforms and drivers who use aggregators.
Although the code envisages social security schemes for gig and platform workers, it does not classify gig and platform workers as employees. Unlike the recent law passed in California, which treats gig workers as regular employees, the Indian code does not seek to equate gig and platform workers with employees, but merely provides that such workers may be provided with social security benefits as determined by the government. Further, as the provisions relating to gig and platform workers are set out in the chapter on unorganised workers, they are thereby excluded from the purview of social security benefits which are available to regular employees (eg, the employees' provident fund and employees state insurance and gratuity).
The gig economy is at a relatively nascent stage in India, but it has witnessed rapid growth in recent years due to the demand created by tech-based aggregators and the organisational need for specialised talent for short-term projects. Unlike traditional employees, gig workers are not regulated by existing employment laws, thereby permitting organisations to contractually determine the terms and conditions of their engagement without incurring the costs associated with providing statutory employee benefits.
The code is currently at a draft stage and is likely be revised by the Ministry of Labour and Employment based on comments submitted by the industry. In its current form, the code does not specify the extent of employers' obligations but merely sets out a framework. The government is expected to formulate detailed rules and regulations relating to gig and platform workers who are covered by the code once it enters into force.
Thus, the extent of compliance obligations imposed on aggregators and other organisations that engage gig and platform workers and the impact on the flexibility and autonomy currently enjoyed by the industry remains to be seen.
For further information on this topic please contact Pooja Ramchandani or Srinivas Raman at Shardul Amarchand Mangaldas & Co by telephone (+91 11 4159 0700) or email (email@example.com or firstname.lastname@example.org). The Shardul Amarchand Mangaldas & Co website can be accessed at www.amsshardul.com.
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