Gig concerns

In its just-released report, the NITI Aayog has highlighted the exponential growth prospects of the gig and platform economy, while raising concerns about the need to create a social security umbrella for its workforce. The gig and platform economy’s current workforce of about eight million is expected to rise to 23.5 million in a decade, forming 6.7 per cent of the non-agricultural workforce by then, against 2.6 per cent at present. The report points out that 2.7 million workers are employed in retail trade and sales and another 1.3 million in the transportation sector, with another 1.2 million spread across manufacturing, finance and insurance activities. The government defines gig workers as those engaged outside the “traditional employer-employee arrangement” (straddling multiple jobs), of whom platform workers are those “whose work is based on online software apps or digital platforms”. The report observes that “currently more than 75 per cent of the companies have less than 10 per cent gig headcount, but this proportion is bound to rise... with MNCs turning to flexible hiring options.” So, the gig workforce could increase sharply in the future as both employers as well as new worker-entrepreneurs go for this option. In theory, a gig worker can maximise her revenue through market access provided by aggregators. In a digitised economy, productivity improves manifold. By using a platform, the worker operates financially in the formal space, while having better access in principle to formal credit.

But the flip side is that she has no access to pension and insurance. The report says that the “platform worker is placed at the unique intersection of formal and informal classification”. The Social Security Code (SSC) has spoken about providing certain benefits such as accident insurance for those registered under the Aadhaar-seeded e-shram portal in particular, but much remains to be done. While there can be no grudging the optimism over the employment generated by the labour-intensive gig economy, an utterly loose and casualised workforce with few benefits actually accruing to it is not a happy prospect. While digitisation has improved deliveries, there can be no getting away from the fact that implementation of social security benefits to the unorganised sector does not evoke confidence. The report falls short of addressing implementation issues — how exactly the government will facilitate these workers’ access to PF and medical care — while advocating the importance of the SSC. The registration on e-shram should lead to such deliverables.

The report cites international precedents to suggest a protective framework — such as pension and leave in the UK and US. A number of courts, in the US and EU, have classified gig workers as employees. In India, the relationship needs to be spelt out by the courts. The Social Security Code may have been extended to the gig workers but the law needs to be precise for such definitions as ‘employee’, ‘employer’ and their relationship with each other for benefits such as PF to accrue to them. Gig and platform workers are not recognised as such in the other labour codes. With ambiguity over the legal status of these workers, it would be hard to actualise their claims. A regulatory and institutional framework to deal with the gig economy must be put in place that deals with specific issues in a holistic way.

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