Gig economy workers need more protection of their rights

September 22, 2021

Syllabus: General Studies Paper 3

Context:

In the last few years number of giant businesses create millions of jobs but only gig economy workers with a lot of job uncertainty. There is a need to define gig workers as labour and not just contractors or partners.

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Swiggy, Ola workers and others’ jobs are not ‘jobs’ in the sense of stable and secure employment.
These so-called jobs do not provide health insurance, nor pay for overtime, let alone allow you to take sick leave.
There is usually no room for wage negotiations, and unions are mostly unheard of or absent.
Stable terms of earning have been a key demand of delivery persons and drivers through years of protests.

About gig economy:

A gig economy is a free market system in which temporary positions are common and organizations contract with independent workers for short-term engagements
Examples of gig employees in the workforce could include freelancers, independent contractors, project-based workers and temporary or part-time hires.
An estimated 56% of new employment in India is being generated by the gig economy companies across both the blue-collar and white-collar workforce.

‘Gig’ economy is creating lakhs of jobs, but workers don’t see a future:

The recent Periodic Labour Force Survey from the Ministry of Statistics and Programme Implementation shows unemployment rate at a 45-year high, at 6.1%; the highest levels of joblessness is among urban youth.
Other reports show that over the past two years domestic consumption has reduced, industrial growth has flatlined, private investments are lower, and market volatility has hit drivers of employment.
And so, not surprisingly, many, including undergraduates and diploma holders, now look at the gig economy as a stop-gap solution until the market turns.
Human resources firm TeamLease estimates that 13 lakh Indians joined the gig economy in the last half of 2018-19, registering a 30% growth compared to the first half of the fiscal year.
Better Place, a digital platform that does background verification and skill development in the informal sector, estimates that of the 21 lakh jobs that will be created in the metros in 2019-20, 14 lakh will be in the gig economy.
Food and e-commerce delivery will account for 8 lakh positions and drivers will account for nearly 6 lakh positions, says the report, based on 11 lakh profiles in over 1,000 companies.
Delhi, Bengaluru and other metros are expected to be the biggest drivers of this sector. And two-thirds of this workforce will be under the age of 40.

Indian Government Initiatives Three new labour codes: Acknowledged gig workers:

The three new labour codes acknowledge platform and gig workers as new occupational categories in the making, in a bid to keep India’s young workforce secure as it embraces ‘new kinds of work’, like delivery, in the digital economy.
Defining an ‘employee’: The Code on Wages, 2019, tries to expand this idea by using ‘wages’ as the primary definition of who an ‘employee’ is.
The wage relationship is an important relationship in the world of work, especially in the context of a large informal economy.
Even so, the terms ‘gig worker’, ‘platform worker’ and ‘gig economy’ appear elsewhere in the Code on Social Security.
Since the laws are prescriptive, what is written within them creates the limits to what rights can be demanded, and how these rights can be demanded.
Hence, the categories and where they appear become key signs for understanding what kind of identity different workers can have under these new laws. Platform delivery people can claim benefits, but not labour rights.
This distinction makes them beneficiaries of State programmes. This does not allow them to go to court to demand better and stable pay, or regulate the algorithms that assign the tasks.
This also means that the government or courts cannot pull up platform companies for their choice of pay, or how long they ask people to work.
The main role of the laws for a ‘platform worker’ is to make available benefits and safety nets from the government or platform companies.
Even though platforms are part of the idea of how work will evolve in the future, the current laws do not see them as future industrial workers.

Concerns:

The age of platform economics has created opportunities that can be a bonanza for small businesses but also entail high uncertainty.
The fact is that most people want a stable job with a salary at the end of the month. That is not the same as job security. It is about their ability to take risks. Since India has a large population below or near the poverty line, their vulnerability to an income shock (such as caused by illness in the family) is very high. So their risk-handling capacity is low and hence they display risk aversion toward entrepreneurship.
India lacks social security for the temporarily unemployed. The huge popularity of the National Rural Employment Guarantee Scheme is because it acts as a proxy for unemployment insurance.
Many farmers would rather seek jobs than subject themselves to the vagaries of weather, volatility of prices, or pests. A national survey revealed that nearly 40% would gladly leave farming if a stable job was available in industry.
A recent report indicates that farmers in India are earning more by serving as labour on someone else’s farm than cultivating themselves. But their labour does not get any protection from labour laws.
- The emerging gig economy is such that there is no employer-employee relationship.
- Rather, it is more like a business partnership, with gig workers often serving as independent contractors. This is not covered by conventional safeguards, which only apply to labour contracts.
It is as if the corporations that use gig workers do not have any responsibility towards their ‘vendors’, nor do gig workers have any rights. Nearly 90% of India’s workforce is estimated to be in the unorganized or informal sector.
- So, much of the labour law framework anyway does not apply to most Indians at work. Also, there is the worrying multi-year trend of the country’s declining labour force participation rate.

Conclusion:

With a population of over 1.3 billion, and a majority of them below the age of 35, relying on the “gig economy” is perhaps the only way to create employment for a large semi-skilled and unskilled workforce.
Therefore, it is important to hand-hold this sector and help it grow. We need policies and processes that give clarity to the way the sector should function.
The ‘platform worker’ identity has the potential to grow in power and scope, but it will be mediated by politicians, election years, rates of under-employment, and large, investment-heavy technology companies that are notorious for not complying with local laws.
But there are no guarantees for better and more stable days for platform workers, even though they are meant to be ‘the future of work’.

The Live Mint Link:

https://www.livemint.com/opinion/columns/gig-economy-workers-need-more-protection-of-their-rights-11632159154486.html

Question:

What do you understand about the Gig Economy? Discuss the various benefits and challenges of Gig economy over traditional economy?