Authors: Mohit Chand and Khushi Sharma are studying law at National Law Univeristy Odisha.
The rapid expansion of the gig economy has highlighted significant legal and ethical challenges, particularly in the realms of workplace safety and sexual harassment prevention. The POSH Act was enacted to safeguard women from sexual harassment in professional environments. However, its applicability to platform workers remains a subject of considerable debate. Aggregators frequently contend that gig workers are “independent contractors” or “partners” rather than employees, in an attempt to circumvent liability. This ambiguity creates a precarious legal situation for both potential victims and alleged perpetrators. The article conducts a thorough examination of the legislative obstacles, interpretation issues, and international precedents pertaining to the status of gig workers and presents a compelling argument for a purposive interpretation of the POSH Act to encompass gig workers. In conclusion, the article emphasizes the pressing need for a reevaluation and expansion of the Act’s scope to effectively address the growing challenges within the gig economy.
The rapid growth of the gig economy and digital platforms has revolutionized the way people work and access services in the present time. However, this transformation has brought to the forefront complex legal and ethical challenges, particularly in the realm of workplace safety and sexual harassment prevention. The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (hereinafter POSH Act), aims to protect women from sexual harassment in any professional setting. Yet, the application of the act to platform workers remains a contentious issue, exposing gaps in the current legal framework.
The platform workers unlike traditional employees lack fixed workplaces and clear employer-employee relationship. This ambiguity has led to significant challenges in implementing the POSH Act for platforms, both as potential victims and alleged perpetrators of sexual harassment.
There have been certain cases where these platforms have tried to get away with the liability completely stating the workers are “independent contractors” or “partners” and therefore are not covered under the definition of employees which further fails to show an employer-employee relationship.
In the case of State v Shiv Kumar Yadav, 2015 where an Uber driver was accused of sexually assaulting a passenger, Uber initially tried to distance itself from the incident, arguing that the driver was an independent contractor rather than an employee. This stance sparked a heated debate about the responsibility of platform companies to ensure the safety of their users and the accountability of platform workers. There have been several other cases where customers are sexually harassed by partners of various service platforms and the companies evade liability. Platform services are a part of our day-to-day lives and washing hands from responsibility leaves the customers in a vulnerable position.
The Delhi High Court in 2017 and the Kerala High Court in 2021 have ruled that these platforms could not absolve itself from liability for the actions of its employees and there is a need for gig workers to be protected under labour laws, including those pertaining to sexual harassment. Despite these judicial interventions, the application of the POSH Act to platforms workers remains inconsistent and inadequate.
Recently, in a lawsuit an aggregator told the Karnataka High Court that it cannot act on a complaint under the POSH Act against one of its drivers as they are not in an employer-employee relationship under the Act.
The legislative hurdle: the interpretation problem
The primary opposition to the inclusion of Gig workers, working for such aggregators like Ola, Uber and such, is that they do not fall under the classic accepted notion of employer-employee relationship or place of employment under the existing labour laws.
The traditional definition of employer-employer relationships falls flat in the face of terminologies like “Independent Contractors” and “Partners” that the contracts entered into by such workers with these aggregates entail.
The POSH Act 2013 was enacted with the vision of ending impunity and providing protection to the “aggrieved woman”, who whether employed or not, alleges to have been subjected to any act of sexual harassment. The unique drafting of the provisions makes it possible not only for an employee, but also for any customer or client to file a complaint if sexually harassed at any workplace.
The primary requirements are: the act of sexual harassment must be done by an employee and it must be done in a workplace.
Employee under the Act
Under Sec 2(f) of the Act provides for a wide enough ambit to recognize a range of categories of workers including regular, temporary, ad hoc as well as extending to contractual labourers, co-workers and even includes categories of employment that may or may not be providing remuneration.
The case of Gig workers is a grey area: these workers are categorized as “partners” in the service chain – thereby giving rise to the argument that they are beyond the traditional employer-employee relationship. This is based on the notion that because of the independence and flexibility that is to be associated with such jobs these, workers are self-employed independent contractors, while these aggregators just playing the role of facilitator by setting them up with prospective jobs. Thus, this is in no way falls within the accepted paradigm of employer-employee.
Place of Employment
Sec 2(o) of the Act defines what would constitute as a workplace and includes places visited by employees during the course of the employment, dwellings, houses, transportation among 7 categories.
Now the problem arises that in the case of gig workers for aggregators like Ola, Uber and Zomato there is no fixed boundaries of place of employment. More often than not these services include travelling from one location to another, using differed means of transportation, which though regulated, always leaves a slight scope for discretion.
Now, in the seminal decision of Vishaka vs Rajasthan, the Court that among other factors, also opined that in determining workplace, it should be considered if the ‘place’ in question is an extended part of the workplace. Further, the concept of ‘notional extension’ has also gained roots in legal jurisprudence as well as statutory provisions, which holds that incidents occurring in the course of or arising out of, occurring outside the conventional workspaces shall also be encompassed under Workspace.
In the case of such gig workers, it can be argued that as their primary places of work are their vehicles or the houses or the residences where they go offer their services, the definition of the workplace can be reasonably and rationally extended to such places, thus ensuring that a narrow reading of the provisions does not lead to under inclusion of acts under the Act.
Testing the ‘ independent contractors’ argument
The main resistance to the application of the POSH Act, as discussed above, is the exclusion of such Aggregators from the definitions of employee under the Act. While there have been some developments with Petition No WP (C) 1068/2021 pending in the Supreme Court contending that such Gig Workers should be declared as Employees so as to avail social security benefits.
The major unwillingness to address these issues stems from the facts that the moment these Aggregators open up to liability as Employers under the POSH Act, it would ultimately pave the way for the employee to start demanding social security.
The Global realities: Examples from UK and the world
In a much discussed and debated ruling , the UK Supreme Court held that Uber Drivers are ‘workers’ for all practical purposes, irrespective of the terminology ‘independent contractors’ being used for them.
The decision of the Court was based on the observation that contracts between such aggregators and the employee – essentially the employment contract is very different from a normal contract. The differentiating factor for the reading of such contracts is subordination and dependency.
It held that the very operating practices of Uber – starting from ride allocation, wherein Uber’s algorithm decides which driver to allocate, what route to take, and also sets the fare shows a good amount of control that is exercised on the drivers. Further, Uber itself handles all the financial processes : acts as intermediary between passengers and drivers, deducts a service fee from drivers and also employs policies like surge pricing. Further it is also the forum that delas with formulating policies of Code of Conduct for drivers, is the only medium of communication between passengers and drivers as no exchange of personal information takes place and more importantly handles all the complaints related to drivers as well as often limits the judicial options available to the drivers with regard to dispute resolution.
Therefore, the Court relied on the words of Lord Clarke that ‘the relative bargaining power of the parties must be taken into account in deciding whether the terms of any written agreement in truth represent what was agreed ….. this may be described as a purposive approach to the problem’ held that Uber exercised sufficient control over its drivers to bring them under the purview of ‘workers’.
Further, in recent times, in various judicial systems around the world, the rights of such workers have been upheld on the reasoning that there exists enough control of such aggregators over the working conditions of such workers moving away from a bare reading of the terms to a more actual control based understanding of the contract.
The Indian Application: Taking lessons from the Uber case
Flowing from the Uber case, the first step to establish some sort of responsibility is showing that we can bring, for a purposive interpretation, these independent contractors under the umbrella of ‘workers’ or/and ‘employees’.
Now as the status quo stands, the reasoning that was established by the Court in the Uber Case is replicated, with a few minor tweaking of course, across aggregators. The commonalities lie in the power to actually hire the worker, provide the worker with employment, decide on the payment and fees for the services provided, and most importantly terminate services in case of complaints.
Even accepting the argument that these ‘independent contractors’ do not have a fixed timeline to work but rather work at their own convenience, there still lies no iota of doubt that there is a considerable exercise of control by the aggregators.
In the Indian legal jurisprudence, the question of employer-employee relationships is often tested on the altar of the tests laid out in the decisions of Dhrangadhara Chemical Works Ltd. v State of Saurashtra wherein control over the execution of work was held as a factor and Ram Singh v Union Territory of Chandigarh which said also to look at the power to dismiss workers, pay fees and also organize and provide work.
These agreements entered into between the ‘independent contractors’ and the Aggregators put an ample amount of discretion in the hands of the aggregators regarding the management of the work allotted. Further, there is a clear shift of power balance that is tilted heavily towards the aggregators in such a scenario they cannot be allowed to simply shrug off their duties towards customers citing the wording of a contract.
The relationship and control exerted can be very clearly gleaned from the reading of the contract entered into between them. The Aggregators should not be allowed to be absolved of any liability on the ground that they use a different terminology for the workers.
Conclusion
There is a lawsuit pending in the Supreme Court that deals with the issue of granting such “Partners” and “Independent Contractors” rights equivalent to that of an employee and thus granting protection of social security laws. But the greater question that comes out is: can such female workers and customers be left devoid of access to justice under an Act that was specially made for such scenarios only for the reason that they are called different names and that they do not have a permanent office address? While waiting for the judgement, we also need to make sure that there exist other methods to end impunity.
The best foot forward would be to interpret the POSH Act in the light of the purpose of its creation: providing a safe space and ending impunity for offences committed under any workspace. The Courts should not be bound by the strict interpretation of the terms of such employment, but rather approach the problem from the viewpoint of achieving the objective of the POSH Act, opting for a golden rule of interpretation, wherein to remove any ambiguity or injustice, then the purpose of the legislation is to be given paramount importance.
In conclusion, the act’s narrow focus on traditional employer-employee relationships leaves a significant gap in protection for customers interacting with platform workers classified as independent contractors. This misalignment between legislation and contemporary work dynamics not only leaves customers vulnerable but also absolves companies of direct responsibility for the actions of their platform workers. As these services become increasingly integral to daily life, the potential for harassment escalates, necessitating an urgent reevaluation and expansion of the POSH Act’s scope.
By broadening its applicability to encompass the gig economy, the Act could close critical legal loopholes, enhance corporate accountability, and foster a safer environment for all parties involved in modern service interactions. Such an evolution in legal protection is not just desirable but imperative to ensure that the POSH Act continues to fulfill its original purpose in the face of rapidly changing work paradigms.
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