By Anshul Prakash
Back in 2017, when the Delhi Commercial Driver Union filed a writ petition before the Delhi High Court alleging poor working conditions faced by cab drivers and seeking recognition of such drivers as employees of cab aggregators, it was anticipated that the judiciary would finally be able to address the issue that has been dominating the employment law jurisprudence lately across several jurisdictions. However, the petition was eventually dismissed as withdrawn with an opportunity given to the petitioner to approach the government in order to make a reference of the case to the forum under the Industrial Disputes Act 1947. As such, the status of gig workers as regards their engagement by service aggregators remains largely unaddressed at present.
The issue has several ramifications for the fast-growing gig economy in India. India has myriad central and state labour laws that are primarily protectionist in nature and provide for various obligations of employers around minimum wages, timing and mode of payment of wages, working hours, leave entitlements, severance payments and benefits, and social security contributions. Accordingly, a determination on the issue can have a significant impact on the business model of service aggregators and the cost of personnel’ engagement.
Thus far, service aggregators have identified gig workers as independent contractors without any underlying employment relationship. However, gig workers contend that the control exercised on them by service aggregators is all-pervasive. From the manner and timeline of delivering services, and the fixation and collection of service charges, to the availability of personnel at the behest of the service aggregator and the regulation of their conduct under internal policies, the purported directions of service aggregators are not merely limited to what needs to be done but also how the work needs to be done, all being aspects that forms the basic tenet of employer-employee relationship.
In permanency claims, courts in India go beyond the letter of the agreement between the parties in question and inter alia look into whether the entity in question pays salary to the personnel, controls and supervises the work of the personnel, has a role in selection and appointment of the personnel, and/or acts as a disciplinary authority over the conduct and discipline of the personnel. In the context of gig workers, these tests have not been applied as yet. While there is a specific statute dealing with unorganised workforce–Unorganised Workers’ Social Security Act, 2008–it is unclear if gig workers would fall within its purview. Further, the statute does not directly provide any entitlements to unorganised workers; rather it states that the Centre shall come up with schemes for their benefit on matters relating to life and disability cover, health and maternity benefits, old age protection, etc.
The statute has lately been the subject matter of judicial scrutiny due to concerns being raised around its effective on-ground implementation.India did attempt to recognise gig-economy personnel under the Code on Social Security, 2020, which is yet to be fully implemented as law.
Even so, the code does not seek to grant the status of ‘employee’ to gig/platform workers but only envisages special social security schemes for them which ‘may be’ framed by the Union government on matters relating to life and disability cover, and health and maternity benefits, wherein contributions may be required from service aggregators. Interestingly, in parallel, the Union government also released the Motor Vehicle Aggregator Guidelines, 2020, whereby aggregators are obligated to obtain a health insurance and a term insurance for each driver engaged by them aside from ensuring that such drivers are not logged in for an aggregate of more than 12 hours on any day.
The recent development wherein the Supreme Court took cognizance of the writ petition filed by the Indian Federation of App-Based Transport Workers and issued notice to the Centre to respond to the contentions and relief sought under the writ petition within 4 weeks, thus, assumes significance. Notably, the writ petition inter alia seeks coverage of gig workers within the labour laws applicable to the organised sector and, in the alternative, demands declaration of gig workers as being covered under the UW Act.
Going by the approach of the apex court in matters of alleged misclassification of personnel, the court may adopt an integrated approach to look into a comprehensive set of factors governing the engagement of gig workers by service aggregators, particularly the actual degree of flexibility available to workers to determine their working hours, the regulation of their conduct under the service aggregators’ disciplinary mechanism, and the degree of involvement of service aggregators in determination of service charges.
It may examine the international jurisprudence on the issue, including the decisions rendered by the competent courts in the US and the UK.
Partner, Khaitan & Co Views are personal
Co-authored with Deeksha Malik, associate, Khaitan & Co