Author: Subhranshu is a 3rd Year Student at NALSAR University of Law, Hydrabad.
The article examines the Jharkhand Platform Based Gig Workers (Social Security and Welfare) Bill, analysing its provisions, strengths, and areas for improvement. It highlights the bill’s attempt to provide gig workers with social security by introducing measures such as a welfare board, unique worker IDs, and a welfare cess funded by aggregators. The article emphasizes key provisions, including dispute resolution mechanisms, safeguards against unjust termination, and the right to refuse work requests, offering gig workers greater security and autonomy. However, it also critiques ambiguities in tax provisions, burdensome aggregator responsibilities, and the lack of differentiation between primary and secondary gig workers. The article ultimately advocates for a balanced approach that safeguards workers without overburdening aggregators, fostering a sustainable gig economy in India.
India’s fast-growing gig economy has brought immense convenience for millions. Just a tap or two on an app and essential goods and services are delivered at our doorsteps. According to the recent NITI Aayog report, the gig workforce would touch 23.5 million by the year 2029-30. While it gives jobs to millions, gig work largely remains unregulated. The Code of Social Security, 2022, recognizes gig workers; however, the code is yet to take effect. Several states have, therefore, floated legislation to govern the sector, among them the Jharkhand Platform Based Gig Workers (Social Security and Welfare) Bill. Even as it awaits introduction in the state assembly, feedback has already been received on the bill, which is proposed to offer social security and essential benefits to this vulnerable group.
The gig economy has been an important support system for many unemployed youths and the elderly; reasonably low-cost and low-investment jobs have been made available through Ola, Uber, Swiggy, Zomato, and Amazon. All these platforms have given them flexibility but avoided employer liability by labelling the workers as independent contractors or partners. The Jharkhand Bill tries to fill these lacunae by affording much-needed protection and social security to gig workers, bridging the gap between the flexibility of platform work and the safeguards of traditional employment.
Many provisions of the Jharkhand bill mirror the Rajasthan Platform Based Gig Workers Act, India’s first gig worker welfare law. However, key differences include clearer definitions of aggregator services, a mandate for aggregators with over 50 platform workers to set up an Internal Dispute Resolution Committee, and a focus on transparency in automated processes for dispute resolution.
Positive Aspects of the Bill
The bill seeks to protect gig workers by holding platforms accountable for providing social security, ensuring health and safety standards, promoting transparency in automated systems, and resolving disputes. Gig workers are defined as “a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship and who works on contract that results in a given rate of payment, based on terms and conditions laid down in such contract and includes all piece-rate work”.
Section 3 of the bill calls for the creation of a Gig Workers Welfare Board to develop and implement schemes benefiting all registered platform-based gig workers. The responsibility for registering these workers lies with the aggregators. Gig workers will also receive a unique ID valid across all platforms. To support this initiative, the Jharkhand Platform Based Gig Workers Social Security and Welfare Fund will be established. Additionally, a new welfare cess will be imposed on aggregators, calculated as a percentage of each transaction involving gig workers, with the exact rate determined by the State Government.
It also has other important safeguards for gig workers such as the right to refuse a certain number of work requests, as outlined in Section 16(d). This is crucial for those who have faced termination for declining work requests, as highlighted by a case where a worker was fired for rejecting five requests while sick. Additionally, the bill curbs the control of aggregators over terminations by requiring clearly defined grounds and a 14-day notice period, as provided in Sections 16(j) and 16(k). This also makes sure that gig workers get a chance to be heard before termination, hence adding to job security, especially for those who rely on gig work as their main source of livelihood.
Notably, the bill doesn’t formally recognize gig workers as employees—something several countries are beginning to adopt—it introduces key protections like notice periods, clear termination grounds, and the right to reject work requests, offering employment-like safeguards.
Moreover, section 18 of the bill requires aggregators with more than 50 registered gig workers to establish an Internal Dispute Resolution Committee, which must resolve disputes within 30 days. This is a positive step, as many aggregators currently rely on AI chatbots for handling complaints, which have proven ineffective. Additionally, gig workers are given the option to seek resolution of their disputes through mechanisms outlined in the Industrial Disputes Act, 1947.
Drawbacks and Scope for Improvement
The bill has certainly introduced several provisions for the welfare of gig workers, filling a gap where no previous legislation existed. However, it has its fair share of shortcomings and ambiguities. It lags behind the apparent gold standard set by several Western nations, such as Germany, Spain, Australia, and Switzerland, where gig workers are classified as employees and therefore enjoy employee standard protections and benefits. The European Union (EU) has also approved Platform work directive to grant employee rights to gig workers.
Although, from the other perspective, it can be validly argued that the gig economy is still in its nascent stage, and granting full employee rights could burden platforms with increased costs. In countries where gig workers have been classified as employees, platforms have faced higher operational expenses, leading to reduced job opportunities or even shutting down operations. For developing countries like India, with a significant informal employment sector, a cautious approach seems necessary to avoid misclassification.
The bill proposed by Jharkhand does raise some concerns that require deeper deliberation. Section 21(1) of the bill stipulates that the gig worker welfare fee will be levied “which shall be at such rate (percent) of the value of each transaction related to platform-based gig worker as may be notified by the State Government.”
Fundamentally, the Constitution provides that there can be no taxation without valid authority of law. The Supreme Court of India has held that when imposing any tax, the character of the imposition, the taxable person, the tax rate, and the tax base (meaning, the value to which the rate is applied for computing tax liability) must be specifically clarified in the accompanying legislation. The same logic can be applied for the welfare fee. The bill proposes that the tax rate and tax base will be notified later by the state government. Significantly, the bill leaves a choice in respect of the tax base, contrary to the SC diktat and the foundational canon of certainty that tax and fee legislation must uphold.
The Bill specifies that the fee will be calculated on a per-transaction basis related to gig workers, but leaves the percentage rate to the discretion of the executive. Additionally, the Bill does not impose a cap on this percentage, meaning it can be adjusted through executive notifications without amending the primary law. This approach contrasts with the drafting of similar provisions in the Code of Social Security (CoSS), where both the rates and upper limits are defined and the upper limit as well as relation to the payments to gig workers is taken into consideration.
The introduction of a 14-day notice period is a positive development, as it allows gig workers some time to seek other employment opportunities. However, this rule should be waived in serious cases, such as misconduct or legal violations (e.g., physical violence, theft), where immediate termination is necessary.
Another concern arises from section 7 of the bill, which allows for a gig worker to be registered with the welfare board, irrespective of the duration of the work. It should be noted that some individuals consider gig work as a secondary source of income while others rely on it as their primary livelihood. This disparity is not acknowledged in the bill. Under the Code for Social Security (CoSS), only those gig workers who have worked at least 90 days in a year across all aggregators qualify for benefits. This requirement is intended to ensure that the welfare measures outlined in the bill are accessible to those who genuinely depend on gig work as a substantial part of their livelihood.
A significant issue is in section 11 of the bill which, puts burden of getting workers registered with the welfare board on the aggregators. There is a general trend in gig economy that a lot of individuals register on platforms merely to keep the option of gig work open. Many who register do not actively engage, highlighting that workers are better positioned to assess their own participation than aggregators. Moreover, the gig economy experiences constant churn, with the composition of active workers changing significantly—often by 40-80% within just six months. This dynamic nature makes it challenging for aggregators to maintain an accurate count of active gig workers, highlighting the need for self-registration rather than placing the burden of registration on the aggregator.
By placing the responsibility on workers, as outlined in the Code for Social Security (CoSS), the system can ensure that only genuinely active participants are counted. To support this, aggregator platforms should provide clear instructions for registering with the government’s gig welfare board, especially for those with limited digital literacy. This approach would enhance registration accuracy and improve access to benefits for gig workers.
Way Ahead
The Jharkhand Gig Workers Bill represents a positive step forward, especially in the absence of any central legislation currently in force to protect the rights of gig workers. While many provisions align with the Rajasthan Gig Workers Act—the first such law in India—there are some notable differences. By offering social security benefits to workers operating outside traditional employment structures, the state has acknowledged the shifting dynamics of the labour market and is promoting a more inclusive economy.
However, while it is crucial to support gig workers, placing too much focus on their needs may unintentionally burden aggregators, potentially affecting their business operations. A balanced approach is vital to ensure both gig workers and platforms thrive in a mutually beneficial environment.
Leave a Reply