The problem with the Karnataka gig workers Bill

The problem with the Karnataka gig workers Bill

Context

In recent times, the rise of gig and platform-based work has become a significant trend in the global employment landscape, including India. This shift towards gig work has prompted legislative responses aimed at addressing the unique challenges and needs of gig workers.

Background:

• In line with this, Karnataka introduced the draft Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, 2024.
• This legislation seeks to provide social security and welfare measures for platform-based gig workers in the state. This move follows a similar law enacted by Rajasthan, known as the Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023.
• Both these legislative measures aim to address the growing concerns surrounding gig work and ensure better working conditions and social security for gig workers.

Relevance:

GS-02 (Government policies and interventions)

Dimensions of the Article:

• What is the New Draft Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, 2024, About?
• What are the Concerns?
• Who are Gig Workers?
• Why is Addressing Gig Workers Important?
• The Rajasthan Platform-Based Gig Workers (Registration and Welfare) Bill, 2023:

What is the New Draft Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, 2024, About?

• The draft Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, 2024, aims to provide a framework for social security and welfare for gig workers in the state.
• This bill follows the welfare board model, similar to the Rajasthan legislation, focusing on welfare measures rather than addressing employment relations directly.
• This model is more suited for self-employed informal workers and does not delve into the intricacies of employment relations, which is a pressing need in the gig economy.

What are the Concerns?

• The gig economy has seen significant growth, particularly in sectors like app-based cab services and retail delivery.
• According to a policy paper by NITI Aayog, the gig workforce in India is projected to expand to 23.5 million workers by 2030. Despite providing livelihood opportunities, the gig economy presents challenges related to revenue sharing, working hours, and other working conditions.
• Major concern: The ambiguous nature of employment relations in the gig economy.
  • Aggregators, or platform providers, often consider gig workers as independent contractors rather than employees.
  • This categorization allows them to avoid providing benefits and protections typically associated with traditional employment. However, gig workers argue that aggregators function as de-facto employers since they control the terms and conditions of work, such as pricing and working hours.
• The lack of recognition of employment relations in gig work prevents the application of protective labor laws that ensure minimum wage, occupational safety, health, working hours, leave entitlements, and the right to collective bargaining. Without these protections, gig workers are left vulnerable to exploitation and unfair treatment.

Who are Gig Workers?

• Gig workers are individuals who engage in temporary, flexible jobs, often facilitated through digital platforms or apps.
• These workers include app-based cab drivers, delivery personnel, freelancers, and other independent contractors who perform tasks on a project-by-project basis.
• Gig work provides flexibility and independence but often lacks job security, benefits, and protections found in traditional employment.

Why is Addressing Gig Workers Important?

• First, the gig economy is a significant source of employment, especially in a context of limited job creation. Second, gig workers contribute to the economy and provide essential services, making it imperative to ensure their welfare and protection. Third, fair treatment and adequate social security for gig workers can lead to better job satisfaction and productivity.
• The UK Supreme Court’s ruling that Uber drivers are employees and subject to existing labor laws highlights the need for clear employment relations in the gig economy. In India, gig and platform workers are included in the Code on Social Security, 2020, as informal self-employed workers but are not mentioned in the other three new labor codes. This lack of comprehensive legal recognition further complicates the protection of gig workers’ rights.

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:
  1. Flexibility in Work Location: The digital age has liberated work from fixed locations, enabling global talent sourcing and project-specific engagements.
  2. Shift in Work Approach: The millennial generation’s inclination towards fulfilling work rather than conventional careers has altered workforce dynamics.
  3. Start-up Ecosystem: Start-ups’ preference for contractual freelancers for non-core activities has increased gig work’s prevalence.

The Rajasthan Platform-Based Gig Workers (Registration and Welfare) Bill, 2023:

• The Rajasthan Platform-Based Gig Workers (Registration and Welfare) Bill, 2023, is a legislative initiative aimed at acknowledging and enhancing the welfare of gig workers, who play a pivotal role in the state’s economy. This bill seeks to provide essential protection and support to gig workers operating within Rajasthan’s borders.
• Primary Objective: The bill aims to extend a safety net of social security and welfare benefits to gig workers, recognizing their contributions to the economy.
• Salient Features:
  • Mandatory Registration of Gig Workers: The bill mandates the registration of all gig workers under the state’s labor regulations. The state government will create and maintain a comprehensive database encompassing the gig workers’ landscape and a unique identification (ID) will be assigned to each gig worker, enabling the tracking of employment history and entitled benefits.
  • Gig workers will gain access to a range of social security schemes, encompassing health insurance, accident coverage, and other forms of welfare support during unforeseen circumstances.
  • The bill safeguards gig workers’ rights by providing a platform for addressing grievances and concerns. This provision empowers gig workers to resolve work-related issues through a structured mechanism.
  • A dedicated board will oversee gig workers’ welfare and rights in the state. This board will consist of representatives from state officials, gig workers, aggregators, and other relevant fields. The representation aims to ensure balanced decision-making while considering the interests of all stakeholders.
  • The bill introduces a “Platform-Based Gig Workers Fund and Welfare Fee” to finance the social security measures. This fund will be directed toward providing financial support and welfare benefits to gig workers during challenging circumstances.
  • Aggregators are mandated to pay a fee for each transaction involving a platform-based gig worker. The specific percentage of the fee will be determined by the state government, contributing to the welfare fund.
  • Aggregators failing to comply will face penalties, including interest charges on delayed welfare fee payments. The state government reserves the authority to impose fines for contraventions of the Act by aggregators, promoting adherence to the law.

Way Forward

• Recognize Employment Relations: The legislation must acknowledge the employment relationship between gig workers and aggregators. This recognition would allow the application of labor laws that ensure minimum wage, occupational safety, health, working hours, and leave entitlements.
• Ensure Minimum Earnings and Regulate Working Hours: The new bill should guarantee minimum earnings for gig workers and regulate their working hours to prevent exploitation and overwork. This includes setting clear guidelines for income security and revenue sharing between aggregators and gig workers.
• Provide Comprehensive Social Security: The welfare board model should be supplemented with institutional social security benefits such as provident fund, gratuity, and maternity benefits. These benefits are essential for the long-term welfare and security of gig workers.
• Improve Implementation and Monitoring: Historical evidence suggests that welfare board models have been poorly implemented. Effective monitoring and proper utilization of funds are crucial to ensure that gig workers receive the intended benefits.
• Empower Gig Workers: Gig workers should be empowered through collective bargaining rights and representation. This empowerment would enable them to negotiate better working conditions and terms of employment with aggregators.
• Create Public Awareness: Raising awareness about the rights and protections available to gig workers is essential. This includes educating gig workers about their legal entitlements and the mechanisms available to address grievances.