January 21, 2022

Gig work is inevitable and indispensable. But social security for such workers is essential

The Supreme Court on Monday approved the inclusion of a PIL seeking Social Security benefits for gig and platform workers. The case is likely to have far-reaching implications for the Indian labor market. It will also be followed closely worldwide as Indian gig workers face problems similar to those faced by their counterparts in rich countries. The Social Security Code, 2020, first gave legal identity to the term gig worker, described as a work arrangement outside the traditional employer-employee relationship. It said gig workers were entitled to a social security fund.

Social Security is the touchstone for the dissonance between gig workers and others. For example, many countries classified work as “essential” during the first wave of Covid-induced lockdowns. Yet they were often excluded from benefits provided to other frontline workers. ILO surveyed about 12,000 gig workers worldwide in a 2021 report. On the plus side, gig work increases the opportunities for those otherwise excluded in traditional work areas. The downside is the irregularity of work and the lack of social protection. The current PIL has a global context defined by three developments in economies with a higher standard of protection.

In 2020, California in a vote allowed platforms to classify gig workers as independent contractors, meaning they didn’t get any mandatory benefits. The tide seems to be turning in 2021. The UK Supreme Court has ruled that Uber must treat its drivers as employees and not as self-employed. And last week, the EU drafted a bill that assumes at least some of the bloc’s gig workers are employees, not contractors. It could potentially cover up to 10% of the 28 million employees. India already has a disturbingly large informal workforce. Gig workers shouldn’t be swelling those ranks.

Nearly 15 months after the Social Security Code was passed by Parliament, implementation has been delayed due to the absence of accompanying notices. The PIL gives the government and states an opportunity to realize the spirit of the law that unequivocally states that gig workers need protection. The law accepts that governments must contribute to a social insurance fund, but also provides for an employer’s contribution. It is possible to set up rules in such a way that a balance is struck between the flexibility of the gig economy and allowing platforms to contribute to the fund. This stage requires careful legal preparation to close loopholes and ensure employees have a cushion.


This piece appeared as an editorial in the print edition of The Times of India.


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