By Sandeep Agrawal
In recent years, India has commenced a critical and paradigm-shifting period. We have recently surpassed the UK to become the fifth-largest economy and will reach $30 trillion by 2047. The acceleration towards the $1 trillion mark by the end of the decade in the digital economy has been a driving force behind this phenomenon. The proliferation of affordable, high-speed internet has contributed to the nation's online user base growing close to 900 million individuals.
A contemporary outcome resulting from the widespread adoption of the Internet in our everyday lives is the emergence of the ‘gig economy’. This gig economy has exploded in popularity in the workforce, with more than seven million individuals engaged in micro-entrepreneurial activities. The projected count is expected to be over 20 million by 2030. Most of these employees are affiliated with aggregator companies. They are responsible for delivering food, medicines, and various other goods, products, and services (including but not limited to pest control, sanitation, and repair) and fulfilling online transportation requests.
E-commerce/digital services are ubiquitous, encompassing the delivery of food items, medicines, and various goods, products, and services (including but not limited to pest control, sanitisation, and repair). In spite of the fact that service providers operate online, an ‘on-ground’ workforce is still necessary to deliver their services. The proliferation of ‘gig projects’ can be attributed to the negligible skill requirements and the ease of securing employment, in contrast to traditional occupations that demand specialised knowledge and professional background. The temporary workers who perform day jobs unrelated to technology are referred to as ‘non-platform workers’, while these individuals are classified as ‘platform workers’.
These 'gig workers' are 'partners' and not permanent or fixed-term employees. Consequently, they are rendered ineligible for social security benefits and schemes in accordance with the current labour law framework. Workers are categorised as employees, contract and migrant workers, and unorganised sector workers under the current framework.
An assortment of acts and schemes provide benefits to the average employee, including, but not limited to, the Maternity Benefit Act, 1961, the Payment of Bonus Act, 1965, and the Employee Provident Fund (EPF) and Employee State Insurance (ESI) schemes. The Contract Labour (Regulation and Abolition) Act, 1970 and the Inter-State Migrant Workmen (Regulation of and Conditions for Service) Act, 1979 protect contract and migrant workers, respectively. The Unorganised Workers' Social Security Act, 2008 ensures that the welfare of even unorganised labourers is addressed. The current legislation, schemes, and regulations fail to incorporate any provisions that specifically pertain to gig workers. As a result, 'gig workers' provide businesses with a flexible workforce devoid of any legal responsibilities or liabilities.
They are subject to hiring and firing in accordance with business and seasonal demands. Although the gig economy affords workers flexibility with respect to their age, location, and skill sets, it also deprives them of any benefits, including minimum wage and social security. It is entirely possible for businesses to reduce compensation or make it entirely dependent on feedback and ratings from the end user/customer. Conversely, this renders these employees vulnerable and reliant on market forces.
This issue was resolved through the codification of labour laws; the gig workers have been identified in accordance with the Social Security Code, 2020. They are defined by Section 2(35) of the code as those who generate income through work arrangements other than the traditional employer-employee relationship. Implementing the labour codes was crucial in that it enabled the inclusion of "gig workers" within the social security framework. Furthermore, the integration of the gig economy and the unorganised sector via ESIC schemes and EPFO is currently under consideration. Additionally, the National Social Security Board on Social Security is instituted by the Code.
By virtue of their contractual agreement for a specific duration, fixed-term employees (FTAs) will be entitled to benefits that are on par with permanent staff. These personnel will be eligible to receive gratuity, regardless of their classification as fixed-term staff. Aggregator companies will be obligated to contribute to welfare programmes designed for gig workers.
Furthermore, gig workers will be remunerated 1 per cent to 2 per cent to 5 per cent of the overall revenue by aggregators. Gig workers are also recognised and integrated into social security programmes in compliance with the Occupational Safety and Health and Working Conditions Code, 2020 (OSHWC). This empowers individuals to access various benefits, including skill development initiatives, insurance, provident and pension funds, and health and maternity benefits.
Although this development is significant for gig workers' trajectory, the central implementation of the codes is yet to take place. However, given that labour legislation can be enacted by both the Union and State governments, pressure groups are exerting considerable effort to have State governments implement the stipulations outlined in the new codes. In an effort to force the government to act, strikes and protests are taking place in other states, while some have already introduced legislation.
It is anticipated that the labour codes, once put into effect, will significantly contribute to reducing income inequality and resolving potential issues that may arise from the expanding gig economy. The existence of intrinsic social structures promotes the rapid acquisition of skills, thus increasing the percentage of individuals employed in the formal economy. The aforementioned labour force will play a crucial role in India's effort to attain a $10-trillion economy by the end of the present decade. An increasing proportion of younger individuals are entering the labour market annually. It is crucial to establish a balance between technological advancements and policy interventions to facilitate the productive engagement of the workforce in the formal sector, thus averting their reliance on temporary gig work.
The writer is the director and co-founder at Teamlease Regtech
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