By Fawaz Shaheen
The Haryana Government has recently indicated that it is going to introduce legislation establishing a welfare board for social security of gig workers. This comes after Rajasthan in July 2023 became the first state in India, and among the first places in the world, to legislate social security measures for platform based gig workers. Even though the law is yet to be notified, it was hailed as an important milestone in providing gig workers with a measure of social security and rights against platforms. Several labour organisations, including the largest union of gig workers in India, also welcomed it as a crucial step forward. It is interesting to note that the Social Security Code, enacted by parliament in 2020, also contained similar provisions for welfare of gig workers. While the scheme under the Social Security Code has yet to be notified, the Rajasthan law seems to have drawn its basic outline from the Social Security Code and fleshed it out with more detail. The proposed law in Haryana may also take a similar route, according to a public statement made by the state’s Deputy Chief Minister. The ruling party in Karnataka had also promised a similar model in their manifesto during the state assembly polls last year. The model of a welfare board, with minor modifications, seems to be emerging as the accepted framework to deal with challenges of the gig economy in India. It is important to take a look at its basic contours and how it might impact the governance of digital platform-based businesses in India.
One of the most important debates surrounding gig work is on the question of their status as employees. Platform companies are able to build competitive and viable business models due to the flexible nature of what is also known as ‘on-demand’ work. Not having to categorise their workers as employees saves them a fortune on benefits like healthcare, provident fund and paid leave, etc. The absence of formal employment and termination procedures also facilitates easy hiring and firing of workers for specific, time-bound tasks. This in turn allows companies to be adaptable in rapidly shifting market scenarios, a huge advantage that gives platform based companies a definite edge over traditional businesses.
However, these same conditions make gig work extremely precarious for those who are actually carrying it out. The flexibility and adaptability prized by platform companies make gig work an unreliable source of regular income. This is despite the fact that much of the conditions of their work exhibit characteristics of regular employment. This includes the centrality of their work to the platform’s core business, the amount of control platforms exert over their work, both through rules and regulations and the functioning of algorithms, and limits on their ability to take up other employment.
Emerging Legal Framework in India
Under the Social Security Code, 2020, ‘gig workers’ are defined as those who perform work outside of ‘traditional employer-employee relationship’ (Section 2(35), Social Security Code, 2020). The Rajasthan law has taken the same essential definition and added specifically that such work is carried out as part of a contract and results in a given rate of payment, or ‘piece-rate’ work. This definition seeks to adopt a pragmatic approach to defining ‘gig-work’ without getting into the debate of whether these are employees or independent contractors. However, by not explicitly recognising them as employees, it effectively validates the contention of platform companies that these workers are not their employees, and therefore their work conditions will not be governed by traditional labour law principles.
Another crucial aspect is the manner in which the Rajasthan law seeks to operationalise the social security schemes of gig workers. It calls for the setting up of a government controlled Welfare Board, that will have broad powers to formulate and administer schemes for gig workers. The Board will have representatives of gig workers as members, but these will be nominated by the state government and not elected by the unions or workers groups. This is again similar to the provision for welfare of gig workers provided under the Social Security Code, 2020, which also envisions a National Social Security Board, consisting of members nominated by the central government, as the central agency for governing social welfare schemes for gig workers.
A number of questions have been raised with regards to enacting social security through the medium of welfare boards. For instance, the welfare board model ties the social security of gig workers to contributions made by them and their employers, instead of creating guaranteed entitlements. And by tying the welfare measures to individual transactions between the platform and the consumer, it also fails to distinguish between the kinds of work that are carried out on different platforms. For instance, a transaction on a food delivery or cab-hailing platform usually entails the involvement of only one gig worker in the form of the rider or the driver. But one order on an e-commerce platform might involve several workers at different stages from the order packing, handling, transportation to delivery. If the law recognised both of them as one transaction, with social security benefits tied to the contributions made by the platform on the basis of the number of transactions, the gig workers on an e-commerce platform would be at a significant disadvantage compared to workers carrying out similar tasks on a food delivery platform.
Gig Work and Digital Rights
One area which hasn’t yet received much attention is the manner in which these laws will impact informational privacy and digital rights of the gig workers. From a data protection perspective, the scheme laid out in the law raises a number of concerns, some of which are:
Registration of all workers on a State govt database: The law requires all gig workers to be registered on a government-run database and assigned a Unique id. This Unique id will be used to track all the work they undertake for various platforms, and become the basis for determining the kind of benefits they receive under any social service scheme notified by the government. The law does not specify any purpose limitation for data collected under this head. This is important for several reasons, since the data would allow anyone – including current and prospective employers – to map out the trajectory of a worker’s entire employment history. It also does not specify confidentiality or limiting access of the data to the Board. Without ensuring confidentiality and limiting the purposes for which it can be used, the aggregation of data concerning a worker’s jobs across different platforms could place them at a significant disadvantage. This is especially relevant considering recurring concerns about unfair and non-transparent deactivation practices of employers.
Payments Monitoring and Tracking System: The law requires the setting up of a system for tracking all payments made on a platform. It is not clear why a separate payments tracking system is needed to operationalise the law, especially since all platforms are already tax-paying entities whose financial records are available with the government. This again contains significant potential for abuse of data, especially due to lack of purpose limitations on how this data on payments can be used.
Fails the least intrusive means test: The Supreme Court in Puttaswamy has laid down a clear standard of minimal intrusion for situations where private data of citizens is being collected and recorded by the state for welfare and for other necessary functions. This standard requires the state to find the least intrusive means of operationalising a particular scheme or program, so that the data being collected can be minimised. In the present case, the operationalisation of the entire scheme is predicated upon registration and tracking of payments made to the gig workers. This is precisely the opposite of the least intrusive means standard laid down by the apex court.
Conclusion
While the move to set up welfare boards for platform based gig workers across different states represents a crucial step forward in ensuring some level of social security for a very precarious class of workers, it still leaves many important questions unanswered. Much will depend on how the welfare boards function and the kinds of welfare schemes they introduce after they are notified. But ultimately the law itself is set up to entrench their status as temporary workers whose social security will be dependent on external inputs from the welfare board, and not guaranteed by virtue of their employment. It also fails to address the imbalance of technological power between the digital platforms and their workers, leaving them vulnerable to violations of informational privacy and subject to opaque data-driven decision making.
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