| PYQ Relevance: Mains: Q) Examine the role of ‘Gig Economy’ in the process of empowerment of women in India. (UPSC IAS/2021) Q) Can the strategy of regional-resource-based manufacturing help in promoting employment in India? (UPSC IAS/2019) Prelims: Consider the following statements: (UPSC IAS/2017) 1. The Factories Act, 1881, was passed with a view to fix the wages of industrial workers and to allow the workers to form trade unions. 2. N.M. Lokhande was a pioneer in organizing the labour movement in British India.Which of the statements give above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 |
Note4Students:
Prelims: Right to Employment; Social Welfare Policies of the Government;
Mains: Gig Workers and Economy; Minimum Wage Policies adopted in India;
Mentor comment: Last time we discussed that Gig workers are independent contractors, freelancers, or often through online platforms, rather than being employed in traditional long-term employer-employee relationships. We also studied the key highlight of the Bill proposed for the welfare of gig workers. Gig workers are often excluded from social security and labor legislation due to their ambiguous employment status. In India, we lack a comprehensive code coverage for their security. In this aspect, we need to study the areas of scope where we can bring out significant change in governance and policy frameworks.
Let’s learn!
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Why in the news?
The Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, 2024 follows a similar model to the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023, which also established a welfare board for gig workers.
- However, critics argue that this model does not address the employment relations of gig workers, which is a crucial aspect of their working conditions.
The rise of Gig work and the work issues associated in India:
| As per the Economic Survey 2020–21, India has emerged as one of the world’s largest countries for flexible staffing, or gig workers. Gig Economy Growth: • Current Size: Approximately 7.7 million workers. • Future Projections: Expected to rise to 23.5 million by 2029-30. • Proportion of Livelihood: Comprising around 4% of overall livelihood in the country. Job Distribution: • Low Skilled Jobs: 31% (e.g., cab driving, food delivery). • Medium Skilled Jobs: 47% (e.g., plumbing, beauty services). • High Skilled Jobs: 22% (e.g., graphic design, tutoring) |
- The growing gig economy: The number of gig and platform workers in India is rising rapidly, projected to reach 23.5 million by 2030. Gig work is providing livelihoods amid an overall slowdown in employment generation.
- Work Issues with Gig Employment:
- Unresolved Issues: Lack of employment relations means no application of protective labor laws. Many gig workers have protested against issues like revenue sharing, working hours, and poor working conditions.
- No Minimum Earnings: No guarantee of minimum earnings even when available for work.
- No Regulation on Working Hours: Regular incidents of overwork and accidents. Gig workers demand fair treatment, improved working conditions, and access to social security.
- Employment Relations: The existing labor laws are inadequate as they are based on traditional employer-employee relationships, which are absent or complicated in the gig economy.
- Aggregator companies consider gig workers as independent contractors, while workers see them as employers who control the terms of service.
| Case Study: U.K. Ruling: • The UK Supreme Court Ruled that Uber drivers need to be classified as workers who are entitled to minimum wage and paid leave. • This verdict helped in setting a precedent for gig economy workers, potentially leading to significant compensation and improved conditions, due to Uber’s control over their work. |
The issue with the Code and Social Security assigned to Gigworkers in India:
- Prevailing unclear Law:
- In the Code on Social Security 2020, the Gig workers are included as informal self-employed. Even in other codes, there is no mention of ‘gig workers’ on Wages, Industrial Relations, and Occupational Safety.
- Now at present, the issue is that the recent legislations introduced in Rajasthan and Karnataka do not define employment relations, using the term “aggregator” instead of employer.
- Limitations of the Welfare Board Model
- The welfare board model adopted by Rajasthan and Karnataka provides some benefits but does not replace institutional social security like provident fund, gratuity, or maternity benefits available to regular workers.
- Historically, welfare boards have been poorly implemented, as seen with the Construction Workers Welfare Act of 1996 and the Unorganized Workers Social Security Act, where funds were inadequately used.
- Lack of minimum wage and working hour protections
- The Karnataka Bill discusses income security regarding payment deductions (through cess) but does not guarantee minimum income, wage entitlements, or revenue sharing between aggregators and gig workers.
- The bill only requires weekly payments without specifying a minimum amount.
Conclusion: The Karnataka Bill, like the Code on Social Security, 2020 and the Rajasthan Act 2023, fails to address employment relationships in the gig economy. This oversight confuses employment relations and absolves employers of legal obligations, making it difficult to fully protect workers’ rights
