An Emerging Pattern of Forced Labour: Social Security Code’s Legal Fiction on Gig & Platform Workers

Soundarya Rajagopal[*] and Lekha Suki[**]

Introduction


‘Gig workers’ as defined under Section 2(35) of the Code on Social Security (“SSC”) are workers who participate in work arrangements outside the traditional relationship of employment. This definition may include ‘platform workers’. Section 2(60) of the SSC defines platform workers as individuals undertaking platform work, i.e., “a form of employment in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems or to provide specific services in exchange for payment”.


Typically, persons classified as ‘employees’ are paid fixed wages on a periodic basis and contracted for longer periods of time. However, gig and platform workers are hired and paid on a temporary or per-project basis. Examples of such workers in India include drivers for ride-hailing platforms like Uber and Ola and food-delivery aggregators like Zomato and Swiggy, who form the thrust of this article.


Gig workers are typically classified as ‘independent contractors’, rather than ‘employees’, despite the high degree of control exercised by platforms on the manner in which they perform their work. Through evasive contracting language, platforms present themselves as ‘middlemen’, and term their relationship with the workers as ‘partnerships’. Thus, these workers are deemed to fall outside the traditional definition of ‘employee’, enabling platforms to deny them benefits like minimum wage, paid maternity leave, social security benefits and protection from occupational and health hazards, which would have otherwise been mandatory under labour statutes.


In India, most gig and platform workers are denied overtime wages and have volatile incomes. Impacted by the COVID-19 pandemic, 87% of them are earning less than 15,000 INR ($197.33) per month. In the absence of social security and work-safety benefits, these workers also bear the costs and risks arising from their job. A study of food delivery drivers for Zomato and Swiggy showed that the companies offered them no protection or compensation if they were involved in an accident during the course of their work. Another study of Uber and Ola drivers revealed that most of them spent 16-20 hours in their cars per day, resulting in severe physical and mental health problems. However, the lack of statutory mandates on protection and employment benefits means that they receive little support from their employers.


The Supreme Court of India is currently hearing a petition in the case of The Indian Federation Of App Based Transport Workers v. Union of India (“IFAT”) that seeks recognition of gig and platform workers as ‘unorganized workers’, in order to create an obligation on platforms to provide employment benefits to them.


In this article, the authors first seek to discuss the current legal position of gig workers in India under the new SCC and further will make arguments to reflect that gig work falls within the traditional conception of “employment”. Secondly, the authors discuss the Indian forced labour jurisprudence and the concept of “decent” work as described by the International Labour Organisation, to argue that gig workers in India have been subject to forced labour.


The Current Legal Regime


The Government of India has recently introduced the SSC, which dedicates a Chapter to gig and platform workers. The provisions merely direct the Centre and State government to design State-funded welfare policies to provide insurance, pension plans, maternity and childcare benefits. While this move indicates the State’s recognition of the exploitation of these workers, it does nothing to place responsibility on the companies that they work for.


In contrast, persons classified as ‘unorganized workers' are legally entitled to receive benefits from their employers. The employer must contribute to provident funds, gratuity and maternity benefits of the employee. Employers who do not make such contributions can be imprisoned or fined.


The distinction between gig and platform workers and unorganized workers under the SSC is a legal fiction that denies legal entitlement to employment benefits for the former. Presently, the SSC does not guarantee the implementation of the government schemes mentioned, nor do workers have the right to approach courts to induce governments to sanction them. In comparison, if the employers are bound to provide these benefits, the needs of workers are guaranteed. Further, the employer is likely to be able to better administer the deployment of these benefits due to the level of control they exercise on the terms and conditions of their work. Hence, the recognition of gig and platform workers as ‘employees’ is imperative for the effective protection of their rights and dignity.


In this regard, the twin test of ‘supervision and control’ laid down in Dhrangadhara Chemical Works Ltd. v. State of Saurashtra is instructive. It states that an employer-employee relationship exists when the employer exercises supervision as well as control on the work performed by the employee and the manner in which it is done. Platforms like Uber and Swiggy determine the remuneration received by drivers, routes they take, supervise online transactions, penalize them for any violations of their terms by deducting payments and limit contact between the driver and customer. Thus, their involvement is not merely limited to being a third-party facilitator. This extensive supervision and control over the work and the manner of performance fulfil the Dhrangadhara test, thus creating an ‘employer-employee’ relationship.


The Supreme Court of the United Kingdom recognised this relationship based on the unilateral and pervasive control that platforms exercise on the performance of work in Uber BV v. Aslam & Others. Courts in Spain, Netherlands and France have concurred. Furthermore, the EU’s draft rules to protect platform workers from December 2021, establish a legal presumption of employment if a platform worker’s manner of performing work is controlled by the platform.


In line with these developments, India ought to recognise the true nature of gig work. The legal significance of the recognition of this relationship as employment is not limited merely to the SSC but extends to the payment of minimum wages and protection and compensation for occupational hazards under the Occupational Safety and Health and Working Conditions Code. Holistic recognition of gig and platform workers’ labour rights under the Codes is essential to cull the exploitation they are currently prone to.


Dimensions of ‘Forced Labour’ and ‘Decent Work’ in India


Article 23 of the Constitution of India establishes a fundamental right against ‘forced labour’. In People’s Union for Democratic Rights v. Union of India, the Indian Supreme Court interpreted it to hold that the threat of starvation and lack of economic safety may force workers to accept any job that comes their way, despite low wages and exploitative working conditions. This nuanced view of coercion in labour markets breaks down the notion that forced labour only occurs when no compensation is paid. Further, the Court held that this right can be horizontally applied, which means that private employers can also be held responsible for creating working conditions that amount to forced labour.


In another instance, the Court affirmed that the Indian Constitution goes beyond the mere prohibition of forced labour and envisages a social order that promises equity and meaningful participation of workers. This is reflected in the Directive Principles of State Policy, which guide the government’s policy making to achieve social-welfare goals. Article 39 emphasizes the role of the State in ensuring that everyone has adequate means of livelihood so that they are not forced to endanger their health due to economic necessity. Further, Articles 42 and 43 direct the government to create legislation promoting just and humane conditions of work to ensure a respectable standard of life and enjoyment of leisure and social and cultural opportunities for all.


This constitutional promise echoes Article 23 of the Universal Declaration of Human Rights and the International Labour Organization’s (“ILO”) indicators of ‘decent work’. This brings fair wages, decent working hours, occupational safety and the provision of social security benefits within the ambit of workers’ basic rights. Additionally, India has ratified ILO’s Abolition of Forced Labour Convention, 1957 which prohibits States from using labour for the purpose of economic development in Article 1(b).


Therefore, the Indian State’s creation of legal fictions that prevent the application of employment rights to gig workers is emblematic of the use and exploitation of labour for economic development, contrary to its constitutional aspirations and international commitments.


In this light, the conception of gig and platform workers’ rights cannot be reduced merely to the application of minimum-wage laws. It extends to ensuring that the platforms they work for are held legally accountable for providing them safe working conditions and social security benefits in order to secure a dignified standard of life.


To this end, the government has a duty to proactively identify and prevent exploitative practices that amount to forced labour. In Bandhua Mukti Morcha v. Union of India, the Indian Supreme Court held that the government cannot repudiate this duty by citing a lack of court orders on the exploitation of the workers represented by the petitioner. Rather, it is obligated to actively take cognizance of incidents of exploitation and implement measures to protect workers.


Conclusion


With the gig economy set to create 90 million jobs in India, the IFAT petition comes at a crucial time for governmental intervention. Under the Constitution, the government is duty-bound to ensure that companies cannot hide behind evasive terminology to deny them their rightful pay and benefits. Limited employment opportunities, coupled with economic insecurity, force gig and platform workers to enter into contracts that deny them minimum wage and social security benefits. Amending labour statutes to bring them within the ambit of ‘unorganized workers,’ depending on the true nature of their work, would alleviate these conditions by entitling them to basic protection and benefits from their employers. At the very least, the threat of sanction upon legal recognition as ‘unorganized workers’ will force employers to create better working conditions and offer minimum statutory benefits. While true equity in the labour market is a distant dream in a developing country bullish about investments at human costs, this is a necessary first step.


 

[*] Soundarya Rajagopal is a third-year student at Gujarat National Law University, Gandhinagar. [**] Lekha Suki is a fourth-year student at School of Law, Christ University, Bangalore.


Views are personal.