Ensuring a proper social safety net for the gig worker

• The Union Ministry of Labour and Employment is drafting a significant national law aimed at integrating gig workers into social security schemes, providing essential benefits such as health insurance and retirement savings. This legislative effort seeks to redefine the status of gig workers in the Indian economy and address the challenges they face regarding social security and employment rights.

Key Provisions of the Proposed Legislation

Inclusion in Social Security Schemes:

• The new law will ensure that gig workers are eligible for social security benefits by mandating aggregators to contribute 1%-2% of their revenue to a dedicated social security fund.
• This fund will be used to provide essential benefits, including health insurance, maternity benefits, and retirement savings.

Registration and Employment Rights:

• The proposed legislation will require all gig workers to register, enhancing their access to benefits and protections.
• Aggregators will be mandated to provide a 14-day notice with valid reasons prior to the termination of a gig worker, ensuring job security and transparency.
• It will also introduce dispute resolution mechanisms to safeguard gig workers' rights.

Registration on e-Shram Portal:

• Aggregator companies are expected to lead the registration of gig workers on the e-Shram portal, which offers life and accidental insurance along with other benefits for registered workers.

The Need for Regulation of Gig Work

Background on Labour Codes:

• In 2019 and 2020, India formulated four new labour codes to simplify and rationalise existing laws, merging 29 central labour laws into four broad categories: wage, social security, industrial relations, and occupational safety and health.
• The Social Security Code 2020 is the only code that mentions gig and platform workers, recognizing them as a subset of informal sector workers. However, it does not adequately address their rights and entitlements.

Issues with Current Definitions

• The Social Security Code 2020 places gig workers outside the traditional employer-employee relationship, creating ambiguity regarding their employment status.
• This categorization enables aggregators to exploit legal loopholes, avoiding obligations typically associated with formal employment, such as minimum wage protections, occupational safety, and health regulations.

Disparities in Social Security Coverage

Differences in Entitlements:

• There is a stark contrast between institutional social security for formal workers and the limited social security schemes available to gig workers. For instance:
• Formal workers receive 26 weeks of paid leave and comprehensive maternity benefits under the Maternity Benefit Act, 1961.
• Gig workers, on the other hand, may only receive a cash benefit of ₹5,000-₹10,000 for maternity, reflecting a significant gap in entitlements.

Lack of Institutional Protections:

• Gig workers currently lack protections such as minimum wage, occupational health and safety, and access to industrial dispute resolution mechanisms.
• The absence of clear definitions of employment relationships exacerbates these issues, leaving gig workers vulnerable and unprotected.

The Core Issue: Defining Employment Relations

Recognizing Aggregators as Employers:

• A precedent can be drawn from the U.K. Supreme Court's ruling on Uber in 2021, which recognized Uber drivers as workers and mandated compliance with existing labour laws.

Integrating Gig Workers into Existing Labour Codes:

• By clarifying the employment relationship in gig work, it may be possible to include gig workers under the existing four labour codes, thereby eliminating the need for separate legislation.
• This integration would enhance the formalization of gig work, ensuring better protections and benefits for workers in this sector.

Conclusion: A Path Forward:

• The proposed national law to regulate gig work represents a critical step towards protecting the rights and interests of an ever-increasing number of gig workers in India.
• By addressing the fundamental issues of employment relations, the government can create a framework that not only ensures social security for gig workers but also promotes their integration into the formal economy.