In simple terms, a gig economy refers to a free market system in which temporary positions are common and organizations hire independent workers for short-term commitments. The term “gig” is a slang for a job that lasts a specified period of time. Furthermore, the term ‘gig worker’ refers to an individual who works on a temporary basis to perform certain tasks in a specified time through a non-standard work arrangement. For example, agents of Amazon, Ola, Uber, Zomato, Swiggy, etc. are agents that charge or earn a commission from the service provider.
In this article, Team YLCC attempts to write on the gig economy in India and attempts to create a regulatory framework. Read on!
UNDERSTANDING THE GIG ECONOMY IN INDIA
Given India’s massive population, it should not come as a surprise that India has the world’s fifth largest gig economy framework, only behind the United States, China, Brazil and Japan. In light of this fact, in June 2022, the NITI Aayog released a report called ‘India’s Blooming Gig and Platform Economy’ which estimates that in 2020-2021, a record 77 lakh workers were engaged in the gig economy. The report further provided the following data:
- The gig economy currently makes up for 2.6% of the non-agricultural workforce in India.
- India’s gig workforce is expected to expand to 2.35 crores by 2029-30.
- From the existing gig economy, 47% of the workers are engaged in medium-skilled jobs, 31% are in low-skilled jobs and 22% are in high-skilled jobs.
Going forward, most experts believe that the rapidly growing gig ecosystem in India is going to usher in a new age of economic revolution that will significantly boost India’s overall economic growth and help compete with leading economies like that of the US and China. This has been supported by research reports from several reputed organisations. A report by Ernst and Young observed that Indian Freelancers hold a 24% share of the global online gig economy. According to a report by ASSOCHAM (Associated Chambers of Commerce and Industry of India), the gig sector has the potential to grow to US$ 455 billion by 2024.
PROS OF THE GIG ECONOMY
- One of the major advantages of a gig economy has been the democratisation of jobs in a competitive market like India. Most gig and platform jobs have low-entry barriers and therefore offer immense potential for job creation and sustainability in India. More importantly, it offers a better income opportunity to those who were previous engaged in the unorganised sector on odd-wage arrangements.
- Individuals in the gig economy enjoy a higher degree of flexibility compared to regular jobs.
- Gig economy helps start-up companies by offering cost-effective solutions for a wide variety of positions where the work can be easily done by freelancers.
- An important aspect of being part of the gig ecosystem is having to constantly upskill oneself in order to get better opportunities. This contributes to personal as well as professional development of the individual.
- For many gig workers, there is potential for a higher income as compared to those with fixed incomes.
- The gig economy is especially advantageous for women in particular, empowering them to monetise their idle assets when and where they want.
- The gig economy is also advantageous for companies as it allows them to save costs on hiring full-time employees. They are able to provide services more economically to the users.
CONS OF THE GIG ECONOMY
- The major disadvantage of a gig economy is the lack of job security, irregularity of wages, uncertain employment status for workers, etc. as independent contractors, platform workers cannot access many of the workplace protections and entitlements.
- Sometimes, platform workers tend to get exploited by their respective employers in terms of wages and lack of possibilities and growth. Most gig workers face very little chances of growth unless they switch their organisation.
- One of the common drawbacks of working on a gig model is restricted access to the company resources, including internet services and other tech.
- Workers engaged in employment with the digital platforms, particularly, women workers in the app-based taxi and delivery sectors, face various occupational safety and health risks.
REGULATORY FRAMEWORK
Gig workers have limited recognition under current employment laws. As mentioned, the welfare of migrant workers, building and construction workers and unorganised workers is regulated to an extent under CLRA, UWSSA and Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act 1996. However, these laws were not designed for the modern gig workers such as platform workers. Platform workers are not entitled to any benefits under any labour laws including contract labour. Even if the definition of ‘contract labour’ provided scope for extension of CLRA to platform workers, the platforms do not extend these benefits to such workers. The regulatory framework for gig workers in India is still very much in a nascent stage, although gig workers have now started gaining explicit acknowledgment in more recent developments.
- The Occupational Health, Safety, and Working Conditions Code (2020) does not apply to gig workers. This is troubling, especially considering that many gig workers put themselves in peril by actively working throughout the pandemic.
- Gig workers are not covered by the Wage Code (2019) which means that they are not even entitled for minimum wages.
The most important development in terms of having a regulatory framework for gig and platform has come recently in the form of the Code on Social Security, 2020 introduced by the Ministry of Labour and Employment acting on the recommendation of the National Commission on Labour. The Code seeks to replace various existing labour and employment statutes which had varied applicability and coverage such as the Employees’ Compensation Act 1923, the Maternity Benefit Act 1961, the UWSSA, and the Payment of Gratuity Act 1972. Furthermore, the main objective of this Code is to provide adequate social security to all employees and workers either in the organised, unorganised or any other sector. The Code also explicitly introduces and recognises gig and platform workers.
However, it is to be noted that the Code is not in effect yet- is under the consideration of the various states for framing their own rules and is expected to be made effective within a reasonable duration in the future. However, the Code fails to include gig workers in the laws governing wages, occupational safety, or industrial relations in the social security legislation. In addition to this, although the Code currently does not make all the benefits of an employee available to the gig workers such as a gratuity and employee provident fund (conventional social security), the state-specific rules and welfare schemes once framed may provide additional benefits to them with support from the judiciary and learning from the best practices in other respective jurisdictions.
CONCLUSION
From the above analysis, it becomes clear that despite a rapidly growing gig economy in India, the legal framework still remains to be severely underdeveloped. There is a need for both the Central Government as well as the state governments to fast-track more focused legislations for both gig as well as platform workers and to expedite the overall implementation of such policies.
YLCC would like to thank its Content Team for their valuable insights in this article.
