Not Fancy Tags, Gig Workers Need Legal Rights and Protections

Legal definitions are crucial in determining the rights and liabilities of the legal person or persons involved. That means, under the legal framework, whether a person is entitled to certain rights or liable to perform certain duties will be determined by whether that person comes within the boundary of the concerned legal definition. For example, imagine a right guaranteed to a citizen in any legislation. If a person comes with the claim of such a right, the foremost question would be whether they fall within the definition of citizen. Only if that person falls within the definition of citizen, the subsequent questions would get relevance.

A striking feature of Indian labour laws is the role of definitions in protecting and enforcing rights and liabilities to the stakeholders. In most circumstances, the legal definition plays an important role in the final determination of rights and liabilities.

Globally and in India, the long-standing jurisprudential question related to platform or gig workers is about their status of workplace relationships. In simple terms, would they be entitled to be called employees or workers of the platforms in which they work? Are they entitled to the rights and benefits of employees or workers in the labour law frameworks? These two questions are extremely significant.

Generally, throughout the world, the business model of gig or platform work disregards these questions. In their business model, the people who work on the platform, such as delivery agents, freelancers, cab drivers etc., are considered independent contractors or partners, not workers in the legal sense. The contracts between platforms and the persons who work on them mention this. Further, this fact is explicitly made visible even to the customers in the language platforms use in their applications. It would be extremely rare that a customer gets a message from the app saying, ‘Our worker is on the way’. Such apps always use the words like: ‘Our delivery partner or captain is on the way.’ The contracts mentioned above or the language they use in applications are not a coincidence but a well-thought expression, which is part of their business model.

The reason behind the well-thought-out omission of worker status is to protect business interests. In jurisdictions generally and in India specifically, being a worker or employee within the boundary of legal definition enables a person to attract various legal rights. These rights are spread across multiple labour laws but cover a wide variety of protections such as wages, compensation, social security, forming or joining a union, collective bargaining etc. It also enables them as legal persons capable of utilising all the procedures within any legislation to ensure their rights in forums such as labour courts.

By disregarding the worker or employee status of people who work on platforms, the business model can successfully discredit a person from accessing the wide variety of rights available to workers and prevent them from using legal procedures to use forums such as labour courts.

One of the most important definitions of worker or employee in Indian labour law is in the Industrial Dispute (ID) Act of 1947. The definition here is of “workman” under Section 2(s) of the ID Act. The other definitions, such as “employee” and “worker”, in labour legislations, including the new labour codes, are very similar to this definition. It is one of the oldest definitions in this area, and decades of Supreme Court jurisprudence exist on its interpretation. Therefore, this definition captures the legal discussions that have occurred in India around the legal concept of worker or employee.

Evolution of Definition of Workman

The Supreme Court has made some revolutionary legal interpretations to understand employee-employer relationships as defined under the ID Act. Traditionally, this relationship was determined by a legal test called control and supervision. This means whether the employer directly controls and supervises the employee—similar to master-servant relation—was the test to identify the existence of such a relationship.

A major jurisprudential intervention and departure from the traditional viewpoint by Supreme Court was in the Case of Hussainbai Alath vs Factory Thozhilali Union, 1975. In this judgement, Justice Krishna Iyer took a liberal viewpoint to include different sections of the working class in the meaning of the definition of the workman. The case was related to the employee status of workers employed by intermediary contractors.

The court ruled that if a group of workers are engaged in labour to produce goods or services, but the ultimate recipient of these goods or services is a separate business entity, despite the presence of intermediate contractors, the core issue remains to determine the true employer of these workers. The key factor distinguishing the real employer is the extent of economic control they exert over the workers’ employment. This control encompasses several aspects, including their livelihood, skill development, and continued job security. In essence, the entity that holds such authority over these crucial factors is, in fact, the genuine employer.

Furthermore, the worker’s relationship with the intermediate contractors, though immediate and direct, does not carry a decisive weight in determining the true employer. Even if the workers interact with these contractors on a day-to-day basis due to contractual arrangements, this aspect alone is insufficient to establish them as the responsible party for the workers’ employment conditions.

The court pointed out that to ascertain the genuine employer, one needs to lift the veil of formal contractual arrangements and analyse the broader picture of the employment structure. It is essential to look beyond surface appearances and delve into the actual dynamics governing workers’ employment. If the ultimate business entity has significant control and influence over workers’ subsistence, skill development, and work opportunities, it becomes evident this entity, not the intermediate contractor, is the true employer.

In summary, according to the judgment, the crux of the matter is that the management or business entity that exercises substantial economic control over the workers and directly impacts their employment conditions should be recognised as the actual employer, irrespective of the presence of intermediate contractors in the arrangement.

In Ram Singh vs Union Territory, Chandigarh 2004, the court emphatically ruled that control and supervision is not the sole test, even though important to understand the employee-employer relationship. The court mooted an integrated approach.

It held that the normal relationship of employer and employee does not exist between an employer and a contractor, as well as the servants of an independent contractor. However, if the employer retains or assumes control over the means and methods by which the work of a contractor is performed, it may create a relationship akin to employer and employee with the servants of the contractor. In such a scenario, the mere existence of a formal employment agreement with an independent contractor will not shield the employer from liability if the servant is considered an employee.

In such cases, the court may deem the independent contractor arrangement as a subterfuge, and the employee would be regarded as a servant of the principal employer. Determining whether a particular relationship between an employer and an employee is genuine or camouflaged through the mode of a contractor is a matter of fact. The court would base its decision on various factors, including the features of the relationship, the written terms of employment (if any), and the actual nature of the employment.

Gig or Platform Workers and Workman Status

The gig economy, characterised by on-demand work without formal contracts, has gained momentum with the success of platform-based companies like Uber, Swiggy, Zomato, and many others. Over 200 million people are part of the global gig workforce, with higher participation in developing countries. India’s gig economy could potentially create up to 9 crore or 90 million jobs and add around 1.25% to the country’s GDP.

The large gig workforce in India faces multi-dimensional issues related to their workplace, including low income, longer working hours, lack of social security etc. But the central question of their existence in the workforce revolves around their status as employees or workmen.

One major effort in this regard has been taken in the proposed code on social security 2020, which defines a ‘gig worker’ as a person who “performs work or participates in a work arrangement and earns from such activities outside of [a] traditional employer-employee relationship”.

‘Platform work’ is defined as a “work arrangement outside of a traditional employer-employee relationship in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems or to provide specific services or any such other activities which may be notified by the Central Government, in exchange for payment”.

While this code acknowledges the existence of gig workers, including platform workers, it establishes a clear distinction between employees and gig workers. For employees, the code mandates various benefits such as gratuity, compensation, insurance, provident fund, and maternity benefits. However, in the case of gig workers, the code delegates the responsibility of designing appropriate social security schemes to the central and state governments. These schemes are intended to address matters concerning life and disability coverage, accident insurance, health and maternity benefits, and old age protection, among others.

The code fails to answer the fundamental question of employee or worker status and instead creates another separate category to ensure the rights of the workers on platforms. The trade unions working among the gig and platform workers are demanding they be identified as workers or employees. The creation of a separate legal entity outside the worker/employee category is exactly the opposite of this demand.

In this context, the long history of Supreme Court jurisprudence on the subject is of utmost importance. Once we investigate this evolution from the 1950s to the 21st century, the trajectory of jurisprudence is shifting from the traditional idea of command and obedience to the determination of economic control to assess the employee-employer relationship.

Once we lift the veil of fancy tags given by platforms such as partnership, agency, captain etc., what is revealed is the economic dependency of the workers in platforms over their employer. In such a reality, within existing jurisprudence, giving worker status to gig workers under the labour law framework will not be untenable. Various studies from the government and others have already established the abysmal working conditions of gig and platform workers. The Supreme Court’s rulings on how to define a workman can be the leading light to create legal policies that protect the rights and interests of gig workers in India’s labour laws.

Sudeep Sudhakaran is an assistant professor of law at St Joseph’s College of Law, Bangalore, and Tanvi Malpani is a final-year law student at St Joseph’s College of Law, Bangalore. The views are personal.