Gig workers should be included under the Industrial Disputes Act

Gig workers lack social and job security, don't have legal support in disputes with their management, cannot form registered trade unions, and are not recognised as regular workmen.

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THE recent critically acclaimed film Zwagato by Nandita Das, starring Kapil Sharma and Shahana Goswami in the lead roles, presents a poignant portrayal of the life of a food delivery rider, who is struggling with the app on his phone and the world of ratings and incentives. The film is not as outlandish as an episode of Black Mirror might be, but the theme is definitely more terrifying. Gig workers like Manas (portrayed by Sharma) do experience a life that is nasty and brutish, if not short.

The rise of the gig economy, which employs approximately 15 million workers, has been one of the major changes in India's workforce in the last few years. Most gig workers are engaged in low-income jobs like cleaning, delivery of goods, etc. 

Unfortunately, gig workers lack social and job security as they are not treated as regular employees. The government partially addressed their problems in the Social Security Code 2020 by putting a non-binding obligation on the Centre and the states to roll out schemes favouring them. It was, however, criticised for failing to put binding obligations on the government.

Also read: The empty promise of social security to gig workers

These workers also lack legal support in disputes with their management, cannot form registered trade unions under the Trade Unions Act, 1926, and are not recognised as workmen under the Industrial Disputes Act, 1947, or the upcoming Industrial Relations Code, 2020. 

Gig workers and the rise of the gig economy

A gig worker temporarily works in a non-traditional set-up without a long-term contract. India is the world's fifth-largest labour market for gig workers with the gig economy projected to grow further. Work flexibility and the potential to earn more attracted youths to such companies. More youths joined such alternative forms of employment with decreased traditional jobs during and after the pandemic. 

Businesses also found this kind of employment attractive with its potential to reduce costs by eliminating the need for hiring full-time workers. 

Collective bargaining and the Industrial Disputes Act

Collective bargaining is the process of resolution of industrial disputes by negotiations between an employer and a group of employees, like a trade union. The Industrial Disputes Act contains provisions for raising and settling disputes and provides a legal framework for workers to engage in collective bargaining. 

The Act covers only disputes between employers and workers, one employer and another, and one worker and another. Workers can raise such disputes through unions or collectively (by many workers working in the same establishment). The law doesn't cover independent contractors. 

Condition of gig workers 

Gig workers are considered independent contractors or freelancers by most service providers. In India, for example, multiple service providers refer to gig workers as 'partners'. It is significant because an employer–employee contract comes under the scrutiny of labour laws in most countries.

Since labour laws do not protect independent contractors, companies usually classify gig workers as 'self-employed' to bypass labour laws. They are made to sign contracts making it appear that workers use the service provider's platform to reach out to consumers and give a portion of the money they receive in return to their employers. 

A People's Union of Democratic Rights report showed that service providers exert sufficient control over the work done by gig workers. Workers have no say in determining the share to be given to the platforms, who arbitrarily decide it. They even work in extreme weather conditions with most of them primarily dependent on a single company. 

Since such work agreements are not considered employment contracts, labour laws don't impact employer–employee relations. Terms of employment are primarily dependent on a contract, which are inherently one-sided due to the difference in the bargaining power of the parties. 

There have been several instances in which their protests have been suppressed due to the lack of registered unions and legal protection. Extending the protection of labour laws, like the Industrial Disputes Act, would improve their condition. 

Legal position of gig workers across the globe

Cases involving gig workers have been reported in several countries. The Supreme Court of California developed the ABC test for determining who is an independent contractor in the Dynamex Operations West, Inc. versus Superior Court of Los Angeles. 

In this case, service providers classified courier service workers as independent contractors. The test has three criteria:

a) Whether the service provider has any control over the work done by the worker
b) Whether the worker performs work usually done during the hiring entity's business
c) Whether the worker is also engaged in an independent trade similar to that done by the hiring entity. 

A similar situation arose in Pimlico Plumbers Ltd versus Smith in the United Kingdom. A plumber who worked for a plumbing firm was described as self-employed. The company argued that it was the plumber's client. The court found that the plumber was an integral part of the company, wore its uniform, used its paper and drove its vehicle. Since the company had sufficient financial and operational control over him, he was held to be its worker.

Also read: As gig workers seek labour protections, Supreme Court must look at UK apex court's verdict in Pimlico Plumbers case

Ignoring the official contract, the courts in these cases considered the details of employer–employee relations, the true nature of work done by the gig worker and the conditions of their employment to determine their status. The International Labour Organization (ILO) has also advocated ignoring official contracts while categorising gig workers. 

Locating gig workers in Industrial Disputes Act

Initially, Indian courts used the control and supervision test for determining the employer–employee relationship. The test was developed in cases like Shivnandan Sharma versus The Punjab National Bank Ltd and Dharangadhara Chemical Works Ltd versus Saurashtra. 

Gradually, it was realised that employers couldn't control the work done by all employees. Therefore, courts began to shift to other tests along with integration or organisation tests, which examined whether the work done by the employee was an integral part of the employer's business. 

In Hussainbhai, Calicut versus The Alath Factory Thozhilali Union, Kozhikode, the Supreme Court (SC) mentioned the employer's economic control over the employee. In Workmen of Nilgiri Coop. Mkt Society Ltd versus State of Tamil Nadu and Ors, the SC took a holistic approach and observed that the test would depend on the extent of control, tenure of the job, paymaster, power of dismissal, nature of the job and nature of the establishment. 

As discussed above, most gig workers depend on one company for income. Often, money is paid to the service provider directly instead of the worker. The PUDR survey also found that gig workers also don't have the unqualified right to reject work. Companies have the right to take disciplinary action if they refuse to undertake a certain number of assignments. Many service providers draft contracts so that workers cannot do direct business with consumers. 

Therefore, the core object of the service provider's business is to give service to the consumer who contacts it. A gig worker is only the medium for delivering the service and depends primarily on the service provider for income. The service provider has sufficient economic control over the worker. In many instances, gig workers receive a part or whole of their income directly from service providers instead of consumers. 

Also read: No bathrooms, no safety, no formalisation: For India's women gig-workers, companies' promises ring hollow

Therefore, gig workers are employees of their service providers. As discussed earlier, courts in other jurisdictions and the ILO have also taken a liberal approach in determining whether gig workers are employees or self-employed.

India should follow global standards to create a robust working environment in which the rights of gig workers are protected and they can utilise their full potential, boosting productivity. India should treat gig workers as employees.

Gig workers essentially do manual or technical work. Once they are treated as employees, they would come under the definition of workers in the Industrial Disputes Act and be entitled to protection.

The gig economy is here to stay and more workers would engage in it due to decreased traditional jobs. Without specific legal provisions protecting gig workers, the scope of laws should be expanded to accommodate them under the Industrial Disputes Act.