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Issues faced by gig workers in India

GS Paper 3

 Syllabus: Indian Economy and related issues

 

Source: IE

 Context: A parliamentary panel has asked the Ministry of Labour and Employment (MoL&E) to formulate and implement welfare schemes for gig and platform workers and unorganised sector workers at the earliest.

 

Why?

Since such workers do not come under the purview of the Employees’ Provident Fund and Miscellaneous Provisions Act, appropriate/ specific welfare schemes for them need to be put in place by the government.

 

What is a gig economy?

  • It is a labour market that relies heavily on temporary and part-time positions filled by independent contractors and freelancers rather than full-time permanent employees.
  • Gig workers gain flexibility and independence but little or no job security.
Gig workers
Gig workers refer to workers outside of the traditional employer-employee relationship. There are two groups of gig workers.
Platform workers Non-platform workers
When gig workers use online algorithmic matching platforms or apps to connect with customers, they are called platform workers.Those who work outside of these platforms are non-platform workers, including construction workers and non-technology-based temporary workers.

  

Gig economy in India: According to the NITI Aayog estimates, nearly 23.5 million workers will be engaged in the gig economy by 2029.

  

Issues faced by gig workers:

  • Since the gig economy falls outside the scope of traditional, full-time employment, gig workers usually lack basic employment rights such as
    • Minimum wages,
    • Overtime pay,
    • Medical leave, and
    • A statutorily bound resolution of employer-employee disputes.
  • Gig workers display characteristics of both employees and independent contractors → as a result fall outside the ambit of statutory benefits under –
    • the Minimum Wages Act 1948, EPF Act 1952 and the Payment of Bonus Act 196 (for employees)
    • the Contract Labour (Regulation and Abolition) Act 1970 (for contract labourers)

 

What is the proposed law for gig workers?

  • The Code on Social Security 2020, which has proposed social security schemes for gig workers and platform workers on matters relating to –
    • life and disability cover,
    • accident insurance,
    • health and maternity benefits,
    • old age protection, etc.
  • However, the Code is yet to come into force.

  

Other efforts:

A MoU has been signed between the MoL&E and the NLSIU (Bangalore) for assistance in framing a new scheme for the gig and platform workers as well as workers in the unorganised sector.

 

Concerns:

  • Out of the four new labour codes proposed, gig work finds reference only in the Code on Social Security.
    • Hence, they cannot create legally recognised unions and access a national minimum wage that applies to all forms of employment.
    • They also remain excluded from accessing the specialised redressal mechanism against their employers.
  • Gig workers are excluded from the category of ‘unorganised workers’ or ‘wage workers’.
  • They also do not have the right to collective bargaining – a fundamental principle of modern labour law.
  • All the above leads to the violation of their fundamental rights under Articles 14 and 21 and comes within the meaning of forced labour under Article 23.

 

Best practices:

  • The Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act 2023: Rajasthan has become the first state in the country to pass a law for the welfare of lakhs of gig workers earning their livelihood through online platforms (Ola, Swiggy, etc).
  • Germany’s Temporary Employment Act provides for equal pay and equal treatment of gig workers.
  • Singapore has also proposed legislative changes to extend work injury insurance and pension coverage to such workers.

 

Conclusion: A specific scheme for such workers, as recommended by the Standing Committee on Labour, Textiles, and Skill Development may resolve the above concerns.

 

Insta Links:

Gig economy

 

Mains Links:

How globalization has led to the reduction of employment in the formal sector of the Indian economy? Is increased informalization detrimental to the development of the country? (UPSC 2016)