On July 24, 2023, the Rajasthan government passed the Rajasthan Platform Based Gig Workers (Registration and Welfare) Bill, 2023. The Bill aims to address the realities of modern-day labour practices.

While the enlargement of the gig economy has resulted in a demand for low and medium skilled work, concerns about the true nature of the ‘elasticity’ provided by such work, that strives away from standard employment relations, have been aplenty.

The Bill gives gig workers statutory recognition. Rajasthan becomes the first state to do so. But beyond the pioneering effort, the Bill does not little to provide social security benefits to such workers.

The Bill succeeds in laying down a framework to aid the formulation of specific social security schemes for gig workers.

How does the Bill define gig workers?

A gig worker has been defined as a person “who performs work or participates in a work arrangement and earns from such activities outside of traditional employer–employee relationship and who works on contract that results in a given rate of payment, based on terms and conditions laid down in such contract and includes all piece-rate work.”

Three things emerge from this definition. One, that gig workers function outside traditional work arrangements. Second, their terms of engagement are defined by their contract. Third, gig work includes all work that is compensated on a piece-rate basis.

Meanwhile, the NITI Aayog has described gig workers with a brief and negative definition as those “engaged in livelihoods outside the traditional employer–employee arrangement” in its policy brief titled India’s Booming Gig and Platform Economy published in June 2022.

According to the policy brief’s estimate, India had 77 lakh gig and platform workers in 2020–21 and the workforce is expected to expand to 2.35 crore by 2029–30.

The Bill defines an “aggregator” as a digital intermediary connecting a user with a seller or a service provider, and includes any entity that coordinates with an aggregator for providing services. For example, Zomato, which connects users and restaurants.

In a slight contrast, a “primary employer” has been defined as an individual or organisation that directly engages platform-based gig workers for a particular task against payment. For example, Urban Company, which employs people for specific tasks such as plumbing and pest control.

What protections does the Bill provide to gig workers?

Grievance redressal

The primary protection the Bill provides is a mechanism for grievance redressal for platform-based gig workers, which is significant since such workers are not covered under the Industrial Disputes Act, 1947, which contains provisions for raising and settling workplace disputes.

As per the Bill, a worker may file a petition in person through an online portal or before an office designated by the state government for the purpose. The dispute may relate to any grievance arising out of entitlements, payments or any other benefit provided under the Bill.

All gig workers will have the right to have an opportunity to be heard for any grievance, though the exact procedure for disposal of petitions will be laid down by the Rules to be made after the Bill acquires the consent of the governor.

The officer authorised for the purpose will have the power to dispose of a worker’s petition by directing an aggregator or primary employer to pay appropriate compensation.

This obviates the uncertainty experienced by gig workers while approaching labour courts in absence of a clear employment relation.

However, unlike the Industrial Disputes Act, the Bill does not include any provision enabling workers to engage in collective bargaining. Since grievances about adequate compensation are frequent and workers engaged with an aggregator work under the same or similar contracts, a provision enabling class-action complaints could have been beneficial.

Welfare and gig workers database

The Bill provides for the creation of a welfare board for the implementation of its provisions. Among the duties of the board will be registering platform-based gig workers, aggregators and primary employers.

Aggregators and primary employers will be legally obligated to provide information to the board on platform-based workers employed with them. Importantly, the onus on intimating the board about a worker is on the aggregator, and not the worker.

All platform-based gig workers will be provided a unique identification (ID) applicable across all platforms, which would be valid in perpetuity.

In using the phrase “onboarded by one or more aggregators or primary employers” in the provision on unique ID, the Bill recognises the possibility that a gig worker may be attached to more than one aggregator at the same time.

For example, a driver may switch between Ola and Uber during the course of a day depending upon the short-term incentives provided by one of them.

For any gig workers who cannot or is not willing to initiate a claim under any law, the bill makes a provision enabling the board to nominate any person or officer to act on behalf of that gig worker in such proceedings.

Social security schemes

The board will formulate and notify schemes for social security of gig workers and ensure that workers have access to benefits as per schemes formulated by the board.

Schemes towards health and accidental insurance, and immediate assistance in case of accident and medical emergencies may be formulated by the board.

Earlier this month, Karnataka became the first state to propose a life insurance cover of ₹2 lakh and accidental insurance of another ₹2 lakh to gig workers. The entire insurance premium would be borne by the state government, it was stated during the presentation of the budget for 2023–24.

The board may also constitute a committee for review and implementation of schemes. Such a committee will have to “search for convergence” between Union and state social security schemes for gig workers.

The relevance of this may be seen in the context of Code on Social Security, 2020 which includes a section on gig workers. Under the code, an aggregator will have to contribute 1–2 percent of their annual turnover to a fund for social security and welfare of unorganised, gig and platform workers. However, the code is yet to be implemented.

Where will the funding for schemes made by the board come from?

The Bill imposes a surcharge on all transactions executed through an aggregator application, which shall be between 1–2 percent of the value of each transaction.

This surcharge will be levied on the aggregator. However, aggregators have not been barred from shifting this burden to the consumers.

It shall be the duty of the board to ensure that the welfare cess deduction mechanism is integrated with the functioning of the application of the aggregator or the primary employer.

The board has also been mandated to set up a monitoring mechanism to certify that welfare cess is being duly deducted.

A fund called the ‘Rajasthan Platform Based Gig Workers Social Security and Welfare Fund’ will be created for the benefit of gig workers and money received from the welfare cess will be transferred to the fund.

All other money received as grant-in-aid from the state government, or by way of grants or donations and contributions made by gig workers, will also be pooled into the fund.

Significantly, in the provision on rights of gig workers, the Bill states that all such workers will “have access to general and specific social security schemes based on contributions made as may be notified by the board”.

It may either be interpreted to mean that access to schemes formulated by the board would be conditional upon contributions to the fund or that the extent of access to the schemes may only be proportionate to the contribution made to the fund.

The fund will be utilised and managed in such a manner as may be determined by the board.

What are the penalties proposed by Bill?

Any aggregator or primary employer who contravenes or fails to comply with the provisions of the Bill or rules made under it would be liable to fine.

In case of an aggregator, the fine may extend up to ₹5 lakh for the first contravention and up to ₹50 lakh subsequently.

In case of a primary employer, the fine may extend up to ₹10 thousand for the first contravention and up to ₹2 lakh subsequently.

The reason for the difference in the quantum of the fines that may be levied against aggregators and primary employers is not apparent.

In case of non-payment, the fine can be recovered by the procedure prescribed in the Rajasthan Land Revenue Act, 1956.

What lies ahead?

Once the Bill acquires the assent of the governor and the welfare board instituted under it begins to function, it is expected that specific schemes such as those granting accidental insurance and maternity leaves may be put in place.

While important, these schemes would not be able to address the primary question of employment status, through which other protections such as maximum working hours and minimum wages flow.

For that, amendments by the state assembly would be required.

(Tushar Kohli is a Staff Writer with The Leaflet. Courtesy: The Leaflet, an independent platform for cutting-edge, progressive, legal & political opinion, founded by Indira Jaising and Anand Grover.)