Context: 50 women partners of Urban Company’s (UC) salon and spa vertical are protesting against policy changes that will come into effect from January 2022. These, they claim, will affect their ability to earn and are therefore unfair labour practices.

Key Issue

• UC, India’s largest home-services provider, has filed a lawsuit in Gurugram’s district court against the protests. The judgement in this case could have an impact on the future of employment in India’s gig economy.
• A joint report by the Boston Consulting Group and Michael & Susan Dell Foundation in March 2021, pointed to the potential of India’s gig economy.

Labour Code for Gig Economy
Existing Legislation: The Code on Wages, 2019, provides for universal minimum wage and floor wage across organised and unorganised sectors, including gig workers.

• The Code on Social Security, 2020, recognises gig workers as a new occupational category.
• It defines a gig worker as a person who performs work or participates in work arrangement and earns from such activities, outside of the traditional employer-employee relationship.

Associated Issues in the Security Code
No Guarantee of Benefits: In the Code on Social Security bill , 2020, platform workers are now eligible for benefits like maternity benefits, life and disability cover, old age protection, provident fund, employment injury benefits, etc.

• However, eligibility does not mean that the benefits are guaranteed.
• None of the provisions secure benefits, which means that from time to time, the Central government can formulate welfare schemes that cover these aspects of personal and work security, but they are not guaranteed.

No Fixed Responsibility: The Code states the provision of basic welfare measures as a joint responsibility of the Central government, platform aggregators, and workers.

• However, it does not state which stakeholder is responsible for delivering what quantum of welfare.

Key Importance

• Gig economy in India has the ability to sustain up to 90 million jobs in India’s non-farm economy alone, besides adding 1.25% to the GDP.

Key Reasons Gig Economy’s Exponential Growth

• In the digital age, the worker need not sit at a fixed location—the job can be done from anywhere, so employers can select the best talent available for a project without being bound by geography.
• The millennial generation seems to have quite a different attitude to careers. They seek to do work that they want to do rather than have careers that may not satisfy their inner urges.
• Heightened migration and readily available job training.

Issues related to the Gig economy

• Platform businesses have to manage a workforce that they see as less committed, given its temporary engagement, and also consider it to be ‘less productive’.
• Exploitative rating system: Platform companies also appraise the performance of gig workers on a rating system based on customer feedback. While companies use this feedback to improve performance, gig employees often reject it. This is particularly true for service-dominated platform businesses, where close engagement between a service-provider and the recipient results in a high possibility of negative feedback from the customer.
• Enculturation of workforce: Sometimes the gig platforms expand into new cities and countries. This presents another challenge in terms of the enculturation of geographically-dispersed temporary workers.
• Contractors, not full-time employees: Platform companies like Uber and Amazon have frequently been questioned in the UK and European Union, wrt their stance on treating gig employees as ‘contractors’.  Being contractors, they are not given the attendant benefits such as minimum wages, holidays and pensions.
• Recently, the U. K’s Supreme Court upheld a previous ruling by the employment tribunal by stating that the 25 drivers who had brought a case against Uber are indeed employees and not contractors.

Road Ahead

• Reforming the exploitative rating system: A better way to rate them can be to take the onus for any poor performance and then work to improve ratings by training and motivating workers. This would also ensure the loyalty of the gig workforce.
• Tackling enculturation problems: For this, the companies will need to ‘imprint’ its cultural norms, so that even temporary workers come to possess shared values.

By: Shubham Tiwari