Ensuring a proper social safety net for the gig worker
Context:
The article discusses about Gig workers and the need to provide social protection to them. It also throws light on the Union Ministry of Labor and Employment’s initiatives to secure the interests of the Gig community.
Relevance:
GS-03 (Economy)
Dimensions of the Article
- The Gig Economy
- Gig Economy’s Significance in India:
- Understanding Gig Workers and the Social Security Gap
- The Proposed Law for Gig Workers
- Labor Codes and Gig Workers
- Major concerns
The Gig Economy:
- The gig economy has emerged as a significant phenomenon in the modern world of work, characterized by its reliance on temporary and independent work arrangements.
- Gig workers, as outlined by the Code on Social Security, 2020, encompass individuals engaged in work outside traditional employer-employee relationships.
- Several factors have catalyzed the expansion of the gig economy:
- Flexibility in Work Location: The digital age has liberated work from fixed locations, enabling global talent sourcing and project-specific engagements.
- Shift in Work Approach: The millennial generation’s inclination towards fulfilling work rather than conventional careers has altered workforce dynamics.
- Start-up Ecosystem: Start-ups’ preference for contractual freelancers for non-core activities has increased gig work’s prevalence.
Gig Economy’s Significance in India:
- Blue and White-collar Contributions: The gig economy significantly contributes to both blue-collar and white-collar employment sectors.
- Projected Economic Contribution: The gig economy’s potential to provide 90 million jobs in non-farm sectors and contribute 1.25% to the GDP is crucial in achieving India’s economic goals.
- Government Initiatives: NITI Aayog’s report highlights the expected expansion of India’s gig workforce to 2.35 crore by 2029-30.
Understanding Gig Workers and the Social Security Gap
- Gig workers fall under the grey zone (outside formal labor protection). And although economy is rapidly expanding, they lack social security like health insurance, retirement savings, and protection under traditional labor laws.
- Aggregators like Uber and Ola benefit from these workers but often categorize these workers as independent contractors, avoiding legal obligations.
The Proposed Law for Gig Workers
- The government is planning to bring in for companies (aggregators) to contribute 1%-2% of their revenue to a social security fund.
- It is also planning to register gig workers under national portal (e-Shram) to access benefits.
- The setting up of welfare boards and dispute resolution mechanisms to protect worker rights is also one of the proposals.
Labor Codes and Gig Workers
- India has already simplified its labor laws by merging 29 central labor laws into four codes: wage, social security, industrial relations, and occupational safety.
- The Social Security Code 2020 recognizes gig workers and places them in the informal sector but without extending any formal benefits.
Major concerns:
- There does not exist a clear definition of what constitutes a Gig Worker.
- The Social Security Code 2020 places them outside the traditional employer-employee relationship, which leaves them vulnerable.
- Gig workers do not enjoy maternity leave, minimum wages, or workplace safety regulations.
- The lack of clear relationship between gig workers and aggregators, allows aggregators to evade legal responsibilities.
Way Forward
- Define Employment Relations Clearly: The government should draft a policy that clearly defines gig workers and draws a clear demarcation between them and the aggregators.
- Extend Full Social Security Benefits: The gig workers should be brought under the social security net to allow them to access maternity leave, minimum wage and other safety measures.
- Outside examples: India can learn from the UK Supreme Court’s ruling on Uber, where Uber drivers were classified as workers, and the company had to comply with labor laws.
