A comparative study on labour legislations with respect to gig workers: India, UK and China.

Introduction

These digital platforms can be classified as web-based platforms and location-based platforms.^[1]

Web-based platforms are fully based on digital content works such as content writing, graphics and some others such as digital marketing, translating, and data entry. These web-based platforms are open to people globally. Location-based platforms are based on a particular geographical area where services need to be provided. Zomato, Swiggy, Amazon, and Uber are some examples for location-based platforms.

The people working in these platforms are called ‘gig workers’ who don’t fall under the ambit of an employer-employee relationship. They enter into a contractual relationship with the employers.

Gig workers and gig economy in India

In India, the population of gig workers was estimated to have more than 15 million in the different fields of the economy. Adding to that the contribution of these gig workers to the GDP is estimated to be 1.25% according to the BCG report.^[2]According to the NITI Aayog report on Gig economy, during 2020-21 it was estimated 7.7 million workers were engaged in this platform.

Further, it was estimated to have 23.5 million workers in 2039-40. Most importantly nearly 24% of the world’s gig workers are from India. So, in the near future, there is a great possibility of people working in the gig economy and might contribute to the GDP at a higher percentage.

It also increases the employment rate of the maximum of medium-skilled labourers and also leads to an increase in the low-skilled labourer. The statistics show that 47% of the gig workers are medium-skilled and 22%of the workers are high-skilled and majorly 31% of the workers are low-skilled. Thus, it provides livelihood to 4.1% of the country.

And notably, it is set to provide 455 billion dollars in the financial year 2039-40. Thus, the contribution of the gig economy goes on increasing in the range such that it provides 90 million jobs.

Problems faced by gig workers

Though the growth of the gig workers in the economy is increasing at a rate of approximately 1:20 ratio of the employees to the gig workers. They have not been given appropriate recognition yet.  They are not entitled to any of the benefits under the existing laws and more importantly they are not covered under the existing labour laws in the country.

They face a lot of difficulties such that they don’t avail insurance or get credits at banks and they severely face salary fluctuations in the work and they are not possessed by any job securities. As this platform-based works are fully online they need quality internet which is not easily available.

They are not provided with provident funds, employee compensation and other maternity benefits like other employees. They don’t have any redressal platforms to address their issues. Though there are many cases that are filed in the courts, there are no proper provisions that could cover these gig workers and provide them with wages.

These platforms will not bear the employer’s cost such as social insurance contributions for workers. As the management of labour is not restricted by any labour laws, the platforms might exploit the workers such as the platforms might use algorithms to exploit the working hours and commission rates of the workers.^[3]

Unaddressed problems of gig workers

Digital labour platforms are newly developed and still developing. Developing countries like India and the Indian market are new to this trend. So, the Indian courts don’t have any exposure to issues arising out of this and there was no specific legislation in respect to these gig workers were passed.

And these gig workers are also not considered under the existing labour laws as the legislators and judiciary system are still in the confusion to place them under existing laws due to the nature of work done by these gig workers. These gig workers are not considered as employee under Indian law.

The existing labour laws in India consider only the employees under the government sector, private sector and public sector undertaking and others defined under the act. As a result, the gig workers are not entitled to any of the benefits such as minimum wages, maternity leave, paid holidays, compensation for termination, stipulated working hours and forming of trade union as such.

Regulation in the UK

There are no solid labour reforms to monitor the gig workers, their payment methods and their employment status throughout the world. In UK after case Uber BV (Uber BV v. Aslam)^[4] where a dispute has arisen between Uber and the drivers engaged in the riding services. The dispute was about the employment status of the drivers and was resolved by the UK supreme court.

In this case, there was a written contract between the company and the drivers which stated the drivers were self-employed and they are not entitled to any minimum wage or holiday pay. But the supreme court in its judgement stated that it is not just the written contract that decides the relationship between employer and employee but by the way the relationship works in reality.

So, in this case the UK supreme court made its landmark judgement that Uber drivers should be treated as workers rather than self-employed. They are actually workers and they are entitled to all the employment benefits and protection like other workers such as minimum wage, pay holidays and even pensions. This creates a large impact in other organisations operating in the same gig economy which makes them change their terms in the contract.

Recently on April 11, 2022 UK enacted the Digital Platform Workers Right Act, 2022 which creates various rights and responsibilities to platform workers and the platform operators.

Rights of the platform workers are as follows.

• The platform workers are entitled to a minimum wage rate for each work performed by the workers.
• The workers are entitled to the amount earned by them including tips and other gratuities. The platform operators cannot withhold or deduct or return the amount unless the operator is authorized to do so by statute or court order.
• Every worker is entitled to recurring pay period and recurring pay day.
• The operator should provide necessary information to the workers within 24 hours of the assignment of work
• The workers are entitled to the notice of removal of access to the platform unless and until they are provided with written explanations.
• The platform operators are prohibited from threatening, intimidating and penalizing or even attempting to do any such things.
• They are also entitled to dispute resolution.
• The platform workers can also provide digital labour workers more than the benefits provided under the act^[5]

Thus, this act provides protection and sets minimal standards to the larger unprotected workers.

Regulation in China

Following the trend China has also enacted its own policy in these digital labour platforms which is set to be precedent to many other countries. Previously in China, ride-hailing apps like Uber were not recognised but the number of workers working under these platforms were very large and they are prone to vulnerable management by these platforms.

Nearly 3.51 million workers were engaged in ride-hailing services and 7.7 million were engaged in food delivery platforms. Furthermore 84 million workers of China were already engaged in various other sharing economy platforms.

To be noted that previously there were no labour contracts between these platforms and the workers. They were neither treated as workers nor employees. They either work as independent contractors or work under an arrangement called labour dispatch.

As an independent contractor the platforms are not employers of the workers whereas in the labour dispatch system workers enter into employment contracts with small and medium sized companies and then enter into outsourcing service contracts with the platforms. This creates an assumption that these platforms have no employer’s legal obligations.

As the policymakers are concerned about both the obligations of the platform employers and the workers, China on 18^th August 2021 announced a policy which is titled as “Guiding Opinion on Protecting the rights and interest of employees under New forms of employment”.

This policy enumerates that the drivers engaged in services like Uber should be treated as independent contractors and are not employees. But at the same time, it also emphasizes that they should be treated as employees in certain aspects.

The guidelines of the Chinese policy are as follows.

• Firstly, the workers are not employees of the platforms. The platforms enter into agreements with workers which enumerates the rights and the obligations of both the workers and the platform. Thus, it makes the platform not obliged to make social insurance contributions. This results in significant cost savings for the platform. Therefore, the workers themselves shall make their own social insurance contributions.
• Secondly the platform must pay remunerations not lower than minimum local wage to the workers providing usual working hours. And the platform shall not make unreasonable deductions and delay in payments.
• Thirdly the workers are entitled to the right to rest on statutory holidays. and also pay overtime wages to the workers than those working for normal hours.
• Fourthly these platforms must determine the workers workload and labour intensity in a scientific way and to determine the rest methods as required.
• Fifthly, the platforms should not use algorithms and rules to exploit the workers. If the platforms are formulating algorithms and rules, they must consult with the workers or from the trade union and get their suggestions. And also, the workers have the right to appeal to the platform.^[6]

Most importantly the new revised trade union law of China (Trade union Law of the People’s Republic of China) has added a new clause to article 3 of the act which states that “trade unions adapt to the development and changes of enterprise organization forms, workforce structure, labour relations, employment forms, etc., and safeguard worker’s rights to join and organize trade unions in accordance with the law”^[7].

This enables the 84 million gig workers in China to form trade unions and become members of the trade union which breaks China’s tradition that only employees of an employer can only organize a trade union which has been deprived by the gig workers.

Legal position of gig workers in India

Currently, Indian labour laws don’t recognise gig workers in the status of employee. So, they could not avail any of the employment benefits. Recently In 2022 India has passed labour laws into 4 major codes on the matters of Industrial relations, occupational safety, wages and social security. This new framework recognises ‘Gig workers. The code on Social Security extends to the employment related benefits to the Gig workers.

Need for reforms in India

• Gig workers must be defined under the ambit of labour laws.
• Procedural laws need to be established with respect to the Gig workers and the to the platforms
• They must be provided with minimum wages and the right to collective bargaining and the right to form trade unions.
• Banks and other financial institutions should lend loans to these platform workers and to the platform operators.
• They must be availed paid sick leave, health access and insurance and also paid holidays on the statutory holidays,
• They should be entitled to occupational disease and work accident insurance to all delivery and driver partners.
• under the employment compensation act Gig workers must also be entitled to claim compensation for accidents arising out of the course employment. Thus, ensuring occupational safety hazards.
• Skill development of youth and workforce should be provided. so, they must be employed through various other platforms.

Conclusion

Though gig workers are defined under the code, the very nature of work is unregulated by the existing laws. The least recognition of gig workers and platform workers under Indian law will be protection for them.

Once the code is given effect the three may be several implemental challenges will be encountered by the legislators. Therefore, after taking into consideration of various approaches globally and regulations into mind, India would take steps and implement better legislation in this regard.

References:

[1] https://www.ilo.org/legacy/english/intserv/working-papers/wp011/index.html#ID0ETNBG

[2] https://www.business-standard.com/podcast/jobs/what-is-the-gig-economy-and-who-are-gig-workers-122032400060_1.html

[3] https://www.ontario.ca/laws/statute/22d07

[4] Uber BV v Aslam [2021] UKSC 5 case

[5] https://www.ontario.ca/laws/statute/22d07

[6]https://www.chinajusticeobserver.com/a/ride-hailing-drivers-in-china-not-employees-but-independent-contractors

[7] Trade Union Law of the People’s Republic of China

This article has been authored by Poojajnakiram, a student at Sastra Deemed University, Thanjavur.