Karnataka Gig Workers Bill

Reference

Karnataka has introduced the draft Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, 2024. It seeks to provide social security and welfare measures for platform-based gig workers in the state.

Who are called gig workers

• Gig workers are independent contractors, online platform workers, contract firm workers, on-call workers, and temporary employees. Gig workers enter into formal agreements with on-demand companies to provide services to the company's clients.
• According to the Social Security Code of India, 2020, a gig worker is a person who works or participates in work arrangements outside the traditional employer-employee relationship and earns income from such activities.
• There are two groups of gig workers: platform workers and non-platform workers.
  • Platform workers: When gig workers use online algorithmic matching platforms or apps to connect with customers, they are called platform workers, such as ‘delivery persons’ working on Zomato and Blinkit.
  • Non-platform workers: People who work outside of online algorithmic matching platforms or apps are non-platform workers, including construction workers and non-technology-based temporary workers, such as labourers, rickshaw pullers through contractors.

Status of gig workers in India

• According to a study, the gig workforce in 2020-21 was 2.6% of the non-agricultural workforce in India or 1.5% of the total workforce. By 2029-30, gig workers in India are expected to account for 6.7% of the non-agricultural workforce or 4.1% of total livelihoods in India.
• According to the Niti Aayog report on India's Booming Gig and Platform Economy, the gig workforce is expected to grow to 23.5 million by 2029-30.
• According to a Boston Consulting Group (BCG) report, these jobs could add 1.25% to the country's GDP.

Major problems faced by gig workers

• Since the gig economy falls outside the scope of traditional, full-time employment, gig workers generally lack basic employment rights.
• They face the following problems:
  • Non-fixed minimum wages
  • Problems with overtime payments
  • Lack of medical leave
  • Statutorily binding resolution of employer-employee disputes

Some key points of the bill

• Introduced as a 'rights-based bill', Karnataka's draft bill seeks to protect the rights of platform-based gig workers. It places obligations on aggregators with respect to social security, occupational health and safety of workers.
• The draft aims to provide safeguards against unfair dismissal, introduce a two-tier grievance redressal mechanism for workers, and bring in more transparency with respect to automated monitoring and decision-making systems deployed by platforms.
• According to the draft bill, the contract between the aggregator and the employee should contain a detailed list of grounds on which the contract can be terminated by the aggregator.
  • It also provides that the aggregator cannot remove any employee from work without giving valid reasons in writing and without giving 14 days' prior notice.

The rise of gig work issues

• Over the last decade, the number of gig and platform workers has been increasing steadily with the growth of app-based cabs and retail delivery sectors, etc.
• In recent times, there has been a growing protest by gig workers in India on the issue of revenue sharing, working hours and various other working conditions and terms of employment.
• It is difficult to resolve issues related to gig workers within the existing legal framework as the legal framework in labour laws is inherently based on the employer-employee relationship rather than the employment relationship in the gig economy.
• Gig workers demand fair treatment, better working conditions and access to social security as a legal right. 

Main reasons for opposition to the draft bill

• The welfare board model adopted by Rajasthan and Karnataka provides some welfare schemes for gig workers but does not provide institutional social security benefits, such as provident fund, gratuity or maternity benefits, to which regular employees are legally entitled.
  • Rajasthan is the first state in the country to ensure social security to gig workers.
• The Karnataka Bill does not address the issue of minimum wages or working hours for gig workers. Section 16 of the Act discusses income security in relation to pay cuts but does not guarantee minimum earnings, wage rights or revenue sharing between aggregators and gig workers.
  • Section 16(2) only requires weekly payments to be made to workers without specifying a minimum amount.
• Like the Code on Social Security, 2020, and Rajasthan’s Platform-based Gig Workers (Registration and Welfare) Act, 2023, Karnataka’s proposed bill fails to address employment relations in the gig economy.
  • It does not clarify employment relationships and frees employers from legal obligations, making it difficult to protect workers' rights. 

What needs to be done

• A think tank has recommended launching a 'Platform India Initiative' on the lines of 'Startup India Initiative', based on the pillars of accelerating platformisation through simplification and handholding, funding support and incentives, skill development and social financial inclusion.
• Self-employed individuals engaged in selling regional and rural cuisine, street food, etc. can also be integrated with platforms to enable them to sell their produce in wider markets across towns and cities.
• Access to institutional credit can be enhanced through specially designed financial products for platform workers and those interested in setting up their own platforms.
• Platform businesses of all sizes should be provided grants and loans from venture capital funds, banks and other funding agencies in the pre-revenue and early-revenue stages.
• Gender sensitisation and accessibility awareness programmes for workers and their families, expansion of social security for gig and platform workers in India and conducting a comprehensive study on key aspects of the platform economy are necessary.