An image showing a note with the words 'The Gig Economy'.
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The gig economy, characterised by its flexibility and digital platforms connecting service providers with consumers, has reshaped labour dynamics globally. In India, like many other countries, the legal status of gig workers has been a contentious issue, particularly concerning their classification as independent contractors rather than employees. The recent draft legislation by the Karnataka state government, titled The Karnataka Platform Based Gig Workers (Social Security and Welfare) Bill, 2024, represents a legislative attempt to address some of the challenges faced by gig workers. While commendable in its intent, the bill’s approach of setting up a grievance cell to address worker issues rather than tackling the fundamental issue of misclassification reflects a missed opportunity to enact meaningful change.
At the heart of the matter lies the misclassification of gig workers as independent contractors rather than employees. This misclassification denies them various protections and benefits accorded to employees under labour laws. The bill, by proposing a grievance cell to handle complaints from gig workers, appears to treat these issues as stemming from individual grievances caused by bad actors within the platforms rather than as systemic and structural issues inherent in the gig economy model itself.
The systemic exploitation of platform workers and their mischaracterisation as independent contractors is evident in several ways: platforms determine workers’ incentives and basis of earnings without consulting them; there is a bar on workers soliciting business on their own; workers bear the weight of risks disproportionate to their earnings (such as car loans); they face psychological manipulation through algorithms that belie the promise of casual work with the flexibility of choice; and platforms control workers through training and mandatory brand identification, such as requiring the use of t-shirts and delivery bags displaying the platform logo.
The reality is that many gig workers, despite clearly working under the direction and supervision of the platforms, are categorised as independent contractors. This classification is advantageous to the platforms as it absolves them of responsibilities such as providing safe working conditions, minimum wages, fixed working hours, overtime pay, leave entitlements, maternity benefits, health insurance, job security, and retirement benefits. By focusing on resolving grievances through a welfare board, the bill fails to challenge this foundational misclassification. Instead, it perpetuates the existing legal ambiguity that allows platforms to exploit workers under the guise of innovation and independence.
Internationally, jurisdictions such as California, the UK, and the Netherlands have recognised the misclassification of gig workers and have taken steps to reclassify them as employees. Court judgements in these jurisdictions have emphasised the control that platforms exert over workers, thereby asserting that gig workers should be entitled to the same protections as traditional employees. Despite the absence of similar judicial clarity in India, the bill could have taken inspiration from these international precedents to advocate for legislative changes that redefine the legal status of gig workers.
A more effective approach would be for the Karnataka government to align its legislation with evolving international standards and judicial perspectives. This involves redefining the legal definition of employment to encompass gig workers who are substantially dependent on platforms for their livelihoods. By recognising them as employees, these workers would gain access to essential protections and benefits.
Moreover, the incorporation of gig workers into existing labour laws would uphold principles of equity and social justice, providing a safety net for vulnerable workers who often face economic insecurity and exploitation. It would also promote a more inclusive economy where technological advancements do not come at the expense of workers’ rights but instead complement efforts to enhance their welfare.
The Karnataka Platform Based Gig Workers (Social Security and Welfare) Bill, 2024 marks a step in the right direction by recognising the need for social security measures. However, it falls short by not addressing the fundamental issue of misclassification. To truly protect the rights and livelihoods of gig workers in Karnataka and beyond, legislative reforms must prioritise reclassification of gig workers as employees. By taking proactive steps to redefine the legal status of gig workers, Karnataka can set a precedent for other states in India and demonstrate leadership in safeguarding worker rights in the digital economy.
While the bill is a commendable starting point, its potential impact will be limited unless it addresses the core issue of misclassification. Only then can it fulfil its promise of providing meaningful social security and welfare benefits to the millions of gig workers who contribute significantly to the economy but currently operate without adequate protections.
(The writer is an assistant professor with the Department of Professional Studies, Christ deemed to be University, Bengaluru)