Will inclusion in labour code work or do gig workers need a special law?

7.7 million people employed in the sector need welfare measures hardcoded into the law, say some experts

Many experts believe a separate Act should ensure social and economic benefits to gig workers. Such an Act should be apart from the social security measures provided in labour codes passed by Parliament but yet to be implemented, they say.

According to the code on social security, aggregators will have to provide one to two per cent of their turnover or five per cent of gig workers' wages for a social security fund. Experts believe that it is not enough and there should be a separate legal framework for them. A framework like that however would complicate the government’s aim of simpler labour laws.

Ramaseshan R, director at BHI Capital and executive member of the Tamil Chamber of Commerce, said there should be a separate Act to deal with gig workers.

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"First we need to understand that gig workers have multiple employers and there is no contract of duration. A different type of voluntary freelancing service is rendered. This is not like normal contract labour. It has lot of complexities and intricacies involved," he said.

Gig workers have not been addressed in depth in the labour codes and deducting a percentage of company turnover or wages will not their solve problems, he said

Nirupama Soundararajan, economist and CEO of Pahle India Foundation, said the codes do not take into account the gig economy.

"For example, the fact is that gig workers would work for multiple employees. Even if the code does mandate deduction for social security, it is still unclear if all employees are required to do so, and if yes, what percentage, and based on how many hours," she said.

Although having a distinct code may not be absolutely necessary, it would be easier to modify the existing codes to accommodate these workers as the sector itself is constantly evolving, she said.

Aruna Sharma, former secretary in the ministry of electronics and Information Technology, however, said there is no need for a separate Act and instead suggested a separate provision for part-time and gig workers. "This should provide provisions such as contribution to PF and health care insurance, the percentage of remuneration paid can go as contribution," she said.

Before the labour codes, gig workers were not legally recognised by the government. As they were part of the unorganised sector, they are not paid on a salary basis. As such, they are deprived of many benefits such as health insurance and provident fund.

The codes would change that on implementation. The code on social security empowers the government to frame welfare schemes for these workers on matters related to life and disability, accidental insurance, health and maternity benefits; old age protection; and any other benefit as may be determined by it.

Who are gig workers

The social security code defines a gig worker as a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationships. This legal identification was needed because gig work covers a large group of contract employees.

A gig worker is employed on an hourly basis or does part-time jobs in various fields, ranging from catering events to developing software etc. The jobs are under an unusual employment arrangement.

Under the code, gig workers are required to register on an online portal to avail of benefits which would be specified by the government. However, this registration is subject to fulfilment of certain conditions such as such a worker should have completed 16 years of age but is not 60-year old, he has worked for not less than 90 days during the preceding 12 years.

India’s gig workforce is expected to expand to 23.5 million by 2029-30, a near 200 per cent jump from 7.7 million now, according to a report by NITI Aayog.

The report ‘India’s Booming Gig and Platform Economy’ estimates that gig workers will form 4.1 per cent of the total workforce in India by FY'30, from 1.5 per cent now. The report stated that gig work is expanding in all sectors, but 47 per cent of the jobs are medium-skilled, about 22 per cent are high-skilled, and about 31 per cent are low-skilled.

The report talks about the rising challenges in the sector that need to be addressed. Top among them is the lack of job security, irregularity of wages and uncertain employment status for workers.

NITI Aayog recommends extending social security measures to gig workers and their families, including sick leave, insurance, and pension.