Karnataka Gig Workers Bill: Why aggregators are upset with the Bill

Industry body Nasscom has flagged several provisions of the Karnataka government’s draft legislation for gig workers’ social security. Anvitii Rai explains the points of contention and how these can be resolved

What is the Bill for gig workers proposing?

THE KARNATAKA PLATFORM-BASED Gig Workers (Social Security and Welfare) Bill, 2024 (the Bill), as the name suggests, aims to put a social security mechanism for gig workers involved with aggregators such as Zomato, Swiggy, Uber, etc.  
This draft legislation consists of several key reforms, including the establishment of a welfare board with major stakeholders overseeing the implementation of the Bill; a clause on payouts to workers at least once a week, with the workers to be informed about pay deductions; greater autonomy to workers, giving them the right to refuse a certain number of jobs per week and protect themselves from exploitation; the establishment of a welfare fund to be contributed towards by the aggregator (basis either per transaction or the total turnover), the state, and the Centre; contractual security, which mandates at least a 14-day notice period prior to dismissal with valid reason; among others. The Bill is likely to be tabled during the monsoon session
of the state Assembly.

What are the industry’s objections?

NASSCOM’S LETTER TO chief minister Siddaramaiah states that gig work is different in nature from the traditional employer-employee relationship, citing the absence of accountability, commitment, and a degree of control. However, the Bill treats it as traditional work. The letter also highlights that the regulations on aggregators such as the disclosure of algorithmic monitoring and the reasons for terminations are “onerous and prescriptive obligations”, and would impede the ease of doing business in the state. It also complains that “[The Bill] has serious gaps not only from an industry perspective but also from the gig workers perspective.”
Another industry association, the Internet and Mobile Association of India (IAMAI), has raised similar concerns, and has also pointed out the lack of transparency on the proposed welfare fund to be created. Both the associations also requested the state government to extend the public consultation period from the existing 10 days to at least 60 days.

What are the existing laws for this sector?

RAJASTHAN IS THE first Indian state to have passed a law ensuring social security for gig workers, titled the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023. The Karnataka draft is quite similar to Rajasthan’s legislation, as besides the aforementioned provisions, it also mandated the establishment of a welfare board which would register all gig workers and employers, and ensure that violators are penalised. Rajasthan’s welfare board encapsulates that the workers are informed about the benefits of social security, provisions for medical emergencies, insurance cover, etc., and have access to the same. Besides this, the Centre is moving to implement four new Labour Codes passed between 2019 and 2020. These are the Code on Wages, 2019; the Industrial Relations Code, 2020; the Social Security Code, 2020; and the Occupational Safety, Health and Working Conditions Code, 2020.

How does it work in other countries?

IN EUROPE, THE laws for the gig economy have tended to be more worker-centric. Examples include the UK, where an employment tribunal mandated Uber to identify its drivers as full-time employees and not as self-employed in 2016, upheld by a UK Court in 2021. Spain is known for being hard-handed in the workers’ favour, as the Court of Justice of the European Union (CJEU) ruled in 2017 that Uber would be classified as not a mere aggregator but as a transport service, bringing it under the realm of regulation of EU member states. On the other end of the spectrum lie countries like Belgium, Finland, and New Zealand, which have designated gig workers as independent contractors.
The Philippines has also done the same, but stands out as it also has the Freelance Workers Protection Act to protect worker rights.

What can be the way forward?

AS THE NASSCOM and IAMAI letters request, any legislation for gig workers should be drafted and tabled only after thorough consultations with all stakeholders. Keeping the caveat highlighted by the Nasscom letter in mind, it must be considered that the gig economy is a rapidly evolving space that is fundamentally different from traditional employer-employee relationships, and hence, regulations for the latter cannot be applied to the former. Hard-handed regulations would only obstruct the growth of this burgeoning sector,
and hence, the ease of doing business for aggregators.
At the same time, the sector cannot be left unregulated either, as it would expose workers to exploitation. Hence, while some form of social security such as minimum wages and a basic insurance cover for contingencies falls under the workers’ basic rights, any legislation for this sector must be thoroughly discussed and regularly reviewed so that it keeps up with the rapidly evolving gig economy.