Gig Economy and Labour Legislation: An Analytical Study

8. 3 LABOUR LAW- II
Final Draft

Submitted by

Kushagra Pandya

UID: UG2019-61

4th Year- 8th Semester

Academic Year: 2022-23

Submitted to

DR. JAGDISH KHOBRAGADE

(Assistant Professor of law)

May, 2023

MAHARASHTRA NATIONAL LAW UNIVERSITY, NAGPUR

 Contents
Introduction.................................................................................................................................I

Research Design.........................................................................................................................I

Research Methodology...............................................................................................................I

Aims and Objectives..................................................................................................................II

History and growth of Gig Economy.........................................................................................3

Types of Non-Standard Workers...............................................................................................4

Provisions deal with gig economy in India................................................................................4

International regularisation of Gig Economy.............................................................................5

United Declaration of Human Rights.....................................................................................5

International Covenant on economic social and cultural rights.............................................5

International Labour Organisation.........................................................................................5

Development of Gig Economy in other countries......................................................................7

United States of America........................................................................................................7

United Kingdom:....................................................................................................................7

Legal development of Gig economy in India.............................................................................8

Problems with respect to Gig Workers in India.........................................................................8

Possible solutions to protect the rights of Gig Workers in India...............................................9

Critical Analysis.......................................................................................................................10

Conclusion................................................................................................................................11

Bibliography...........................................................................................................................XII

I
Introduction
Gig-economy is different from the traditional practice of full-time workers. The gig economy
includes involving independent contractors and freelancers for a short period or on a project-
to-project basis. It is a non-standard form of work where the freelancers or independent
contractors doesn’t have usual hours of work, fixed holidays, and fixed salary. According to
the Cambridge dictionary, gig economy refers to a form of work that is based on people
having temporary jobs or doing separate pieces of work, each paid separately rather than
working for an employer. The gig economy gets its name from each piece of work being akin
to an individual ‘gig’. The gig economy is not a new concept it was coined a few decades
earlier however has gained prominence due to the advent of technology, no intent of the
organization to retain employees for a long period, or multi-party transaction. 1 The concept of
the gig economy can be witnessed in various sectors like social media marketing, legal
consultancy, content writing, art, and designing, etc.
In a gig economy, a consultant or a worker must keep on updating his skill and knowledge to
remain relevant in this business for a long period. Along with having several benefits, there is
a negative side of the gig economy include instability in the job, lack of social security
benefits, unusual hours of work, and uncertain pay schedules. However, due to the emergence
of the entrepreneurial generation many people moving towards exploring different
opportunities other than the formal standard contracts. Therefore people started providing
their professional services on their flexible terms. There has also been the emergence of
various gig platforms like Fiverr, Upwork, and Guru which enable the organisation or
individuals to recruit freelancers. Digitalisation has contributed significantly to the growth of
the gig economy. Due to the advent of technology, many skilled professionals are joining it
so that they can serve international clients in the comfort of his/her home countries. Due to
such unmatched benefits, there is a fundamental shift from a standard form of work to a non-
standard form of work. 
Research Design
The method of research chosen by a researcher is the first part of any research. Under this,
the researcher chooses the design that he is going to undertake, the aims and objectives of his
research and the research questions which will be answered at the conclusion of his research.

1
. India: Gig Economy- Legal Development by Manishii Pathak and Natatsha Sahni.

I
Research Methodology
For this research, the researcher has adopted the doctrinal or non-empirical method as this
method uses the secondary sources of data already existing on the concerned topic. An
empirical method of research is more credible but the same was not possible for the paucity
of time and expertise. Reliance has also been placed upon germane secondary sources that
include data from books and articles in addition to the journals. For fair research, the
researcher has tried to read this data after eliminating all the biases and prejudices pertaining
to any of these topics as failure in doing so can lead to fallacious research and
consequentially a flawed paper. Secondly, the researcher has used an amalgam of the
descriptive and analytical approaches to come up with the paper.
Aims and Objectives
 To study the meaning gig economy.
 To study the International regularisation of Gig Economy.
 To study the Development of Gig Economy in India and other countries.
 To know the Problems and its solution with respect to Gig Workers in India 
Research questions
 What are International regularisations of Gig Economy?
 How Gig economy developed in India and other countries?
 What are the Problems and its solution with respect to Gig Workers in India?

II
History and growth of Gig Economy

The first emergence of the gig economy was witnessed in 1915 a jazz musician who was paid
money on the basis of their individual performances for the first time used the word gig. The
growth of the gig economy was witnessed in the second world war due to uncertain times the
organisations weren’t willing to employ people for a long period of time and therefore they
employed people on a short-term basis.2 However, post the world war importance of the gig
economy started to decrease and people preferred having permanent and long-term jobs as
compared to short-term.
The next major event that contributed to the growth of the gig economy was by Mr. Craig
Newmark started an advertisement website that provided services of gigs in various sectors
on short terms basis. After receiving success, it expanded to various cities of the United
States and Canada and now it covers over 70 cities. Post the 1900’s in the United States 10%
of Americans started considering alternate sources of Income. In the years 1999 famously,
the known site now is known as Upwork then was known as Elance which connected those
organisations and individuals who required services and professionals who were willing to
provide their service. A major push in the growth of the gig economy was witnessed in the
initial years of the 2000s where Amazon started hiring a gig workforce. The post-2000s can
be considered as decades of “apps” because a lot of new app-based platforms were started
which benefitted the gig workforce. In the year 2008, Airbnb started its operation and thus
increased the employment opportunities of the gig workforce. Uber started its ridesharing
service in the year 2010 where people could get to taxi customers from their own vehicle.
Many people in international countries started viewing the gig economy as a part-time source
of income.
In India, the emergence of the gig economy was a little late as compared to other
international countries. Post the 2010s the growth and emergence of the gig economy were
witnessed in India. Where a lot of international companies ventured their business in India.
Due to which many Indian entrepreneurs started developing their own apps in different fields
thus contributing to the growth of the gig workforce. Initially, in India, it was viewed as a
part-time job but now people are viewing it as a source of full-time employment. According
to the global gig economy index, India is among the top 10 countries which are outsourcing
professionals. The ranking is only going to improve it is expected that the gig economy in
2
Gig Economy in India: Problem and Prospects by Premilla D’Cruz and Ernesto Noronha.

3
India would create 90 million jobs in the next 7 to 8 years. Therefore, such a paradigm shift
has benefitted the interests of both the organisations and the working professionals.3  

Types of Non-Standard Workers 

1. Part-time work: A person who only works for a few hours of the day is comparatively
lesser than the full-time employee of the company. Generally, people take up a part-
time job to pay education fees, to support their families. There are engaged with the
organisation for only a temporary period of time. These workers aren’t eligible for
benefits like health insurance or retirement plans like any other non-standard worker.

2. On-call workers: An employee which is supposed to report to the organisation

whenever required by the company is known as an on-call employee. They don’t have
fixed hours of work. These employees are paid on basis of the hours that they work
and aren’t given a salary on monthly basis like other employees.

3. Platform workers: It means a worker working for an organisation that provides

specific services using an online platform directly to individuals or organisations.
Platform work includes food delivery or ride-sharing. These workers aren’t eligible
for benefits like health insurance or retirement plans like any other non-standard
worker.

4. Dependent self-employment: It is a form of employment that lies between self-

employment and employment. These workers only earn income from one employer
further the worker is also provided by one employer. Legislation providing them
benefits is quite limited. 
Provisions deal with gig economy in India
Social security code defines gig worker as “a person who performs work or participates in a
work arrangement and earns from such activities outside of traditional employer-employee
relationship” in section 2(35).4
Section 45 provides Schemes for unorganised workers, gig workers and platform workers.
Chapter 9 deals in social security for unorganised workers, gig workers and platform
workers.
Section 112 deals in Helpline, facilitation centre, etc., for unorganised workers, gig workers
and platform workers.

3
https://cll.nliu.ac.in/regulating-the-gig-economy/ last visited on 5th feburary, 2022.
4
Social Security Code, 2020.

4
Section 113 deals in Registration of unorganised workers, gig workers and platform workers.
Section 114 deals in Schemes for gig workers and platform workers.

International regularisation of Gig Economy  

From the perspective of rights and protection of gig workers, some of the international
documents which protect their rights are as follows:

United Declaration of Human Rights

In this legal document, the framers didn’t differentiate between non-standard and standard
forms of workers. Under Article 23 it is mentioned that everyone should right to just and
favorable conditions of work. Remuneration should be made on the concept of equity.
Everyone is entitled to social protection and human dignity. Further, everyone has the right to
join and form a trade union.5

International Covenant on economic social and cultural rights 

The legal document under Article 7 obligates the state parties certain basic rights to everyone
they include
1. Remuneration to all workers
2. Providing a decent standard of living and
3. Providing proper rest and leisure to the employee.
Further Article 8 also protects the rights of the labourers it allows them to form and join a
trade union and allows them to go on a strike.
The above provisions are also applicable to gig workers because there is no differentiation
between the non-standard and standard forms of workers.6

International Labour Organisation

ILO on various occasions has expressed their concerns on the fact that when self-employed
persons are generally excluded from the application of employment and labour laws, leading
to exclusion of workers from their essential right to work. A recent document published by
ILO on a non-standard form of work mentioned plugging regulatory gaps with respect to
Non-standard employment it discussed the following points where legislative developments
are required:

5
UNLOCKING THE POTENTIAL OF THE GIG ECONOMY IN INDIA by Boston Consulting Group.

6
Id.

5
  Equality of treatment: The equal remuneration convention, 1951 of the ILO
mentions that a person should be remunerated on the basis of the work that they
perform and distinction should be made on the ground of gender.  The convention
on Discrimination (Employment and Occupation), 1958 mentions that no
discrimination in a workplace can be made on the grounds of sex, race, social
opinion, or political opinion. These conventions indirectly protect a non-standard
form of workers. In Employment, relationship recommendation calls state to
formulate policies elimination distinction and protecting workers interest.

 Minimum hours and other safeguards for a non-standard form of workers: On this
issue, minimum regulations are passed to protect the interest with respect to gig
workers. ILO recommendation No 182 no of hours, the work time should be
established according to the needs and interests of the workers. Further in family
responsibility and recommendation, 1981 mentions that efforts should be taken to
improve working conditions and also mentioned flexible working conditions.

 Social Insurance for a non-standard form of workers: The ILO part-time work
convention mentions social insurance for workers working with multiple
employers. The insurance is granted to the workers on the grounds of hours of
work and earnings.

 Unemployment Insurance system: If the non-standard workers are unemployed,

the state should take efforts to provide vocational training and guidance to improve
the skill of the worker this is covered under The Employment Promotion and
Protection against Unemployment Convention, 1988.

 Facilitate care of parents and elders of non-standard workers: ILO Family

Responsibilities Convention, 1981 mentions that the state should adopt measures
to protect and take care of parents and elder of non-standard workers. In Reduction
of Hours of Work Recommendation, 1962 mentions accommodating workers’
personal and family responsibilities.

 Collective bargaining and forming association: In Private Employment Agencies

Convention, 1997 mentions about rights of workers with respect to collective
bargaining, freedom to form an association. The convention imposes a duty on the
employer to provide these benefits to the employee.

6
A publication made by ILO on the topic of non-standard workers mentions plugging
legislative gaps with respect to Provisions on collective bargaining, Strengthening social
protection and condition, and standard of work. For digital workers ILO has given a guideline
and held that they should also have access to universal labor rights, social protection, and
collective bargaining to platform workers, ensuring fair competition, fair data use, and
improved data protection.

Development of Gig Economy in other countries 

United States of America
The first major emergence of the gig economy was first witnessed in the United States. In the
United States, there has been tremendous legal development in the field of the gig economy.
In the year 2019 California passed a bill titled “AB5” which has come into effect on 1
January 2020. The act aimed in providing protection to independent contractors as employees
the classification is made on the basis of three tests that were laid down in Dynamex
Operations West, Inc. v. Superior Court of Los Angeles. 
 The organisation does not control and direct the worker with regard to their
performance
 The worker can perform work outside the employment
 The worker is customarily engaged in an independently established trade,
occupation, or business of the same nature as the work performed for the hiring
entity.
Under this act thus by recognizing independent contractors as employees impose a burden on
the employer to provide the benefits that are provided to any other employee.
Various rulings passed by the labour commissions of different states have positively impacted
gig workers such as the Labour commission of California ordered reimbursement to Uber
drivers and considered Uber drivers as Uber employees. Similarly, Oregon’s labour
commission Uber drivers are economically dependent on Uber and they should be considered
as separate employees of Uber. In California, there is an employer who is supposed to
provide insurance to gig workers of 1 million which can be claimed if the person gets injured
during the course of employment. In the United States, some states have adopted laws with
respect to gig workers and given them protection but some states such as have shown restrain
they include states like Texas and New York City and haven’t allowed any protection to gig
workers. 

7
United Kingdom:
 It is another country that has had a significant legal development in the field of the gig
economy. A directive has been issued in the European parliament to provide standard
working conditions for on-demand employees or short-term employment. The criteria are
employees should be working for 3 hours per week or 12 hours per 4 weeks on average. The
directive obligates the employer to fulfill the terms of the contract, provide proper working
conditions, and restrict the employer from committing adverse treatment against the
employee. Recently a landmark judgment was passed by the UK Supreme Court where they
held that people working as Uber drivers should be considered as workers and would get
legal protection as another worker. According to the UK Supreme Court Uber had the
authority to monitor driver performance and also had the capacity to terminate them. So,
working for Uber is a classic form of subordination that is a characteristic of an employment
relationship. However, this comes as a relief for only platform workers and not self-employed
workers.

Legal development of Gig economy in India 

In India just like emergence, the legal development of the gig economy was started late. The
legal development of the gig economy began after various judicial pronouncements were
made on this topic. In Dhrangadhara Chemical Works v. the State of Saurashtra, the court
laid the test of control and supervision test to determine the employer-employee relationship.
A further similar test was adopted by the Supreme Court in the case of Ram Singh and Ors.
v. Union Territory, Chandigarh and Ors the worker was considered as an employee because
the employer had control over his action, the employer was paying his wages thus the court
termed it under an employer-employee relationship.7 
Due to a significant rise in the number of gig workers in India the legislature was prompted to
pass a law that can protect their interests. There in 2020 Social Security code was passed in
both the houses of the parliament and also received assent from the president. The law is
named as Social Security Code, 2020 the act provides protection to gig workers. Under the
act, a gig worker is defined as a person who performs work or participates in a work
arrangement and earns from such activities outside of the traditional employer-employee
relationship. After mandatory registration, they would be entitled to various social security
benefits

7
Gig Economy in Indian Perspective by Akansha Tyagi.

8
  Life and disability cover;
 Accidental insurance;
 Health and maternity benefits;
 Old age protection. 

Problems with respect to Gig Workers in India 

The inclusion of gig workers under the social security code and the National minimum wage
scheme comes as a welcome step.8 However, this should not be the last effort to protect the
rights and interests of the gig workers still a lot of work is required to eliminate their
problems. Some of the problems faced by gig workers are as follows
 No law on gig workers mentions Occupational safety and decent working
condition: Proper health facilities and decent working are basic requirements for
any kind of employee. For any employee to provide a productive performance
requires decent working conditions and occupational safety. 

  No law on gig workers which mentions collective bargaining and Trade Union:
The current Indian Laws doesn’t have any provision on right to form and
collective bargaining for gig workers. The International Labour organisation
considers the right to form an association and collective bargain as fundamental
rights. Trade union represents employees in situations where their rights are
breached by the action of the organisation. Further collective bargaining provides
the right to the employees to initiate negation with the management. If these rights
aren’t recognized then the management will abuse their power. Thus, these are
essential rights that need to be recognized for gig workers.

 No Laws which protect discrimination against gig workers: In India, there is no

law that obligates the employer to provide equal treatment of the non-standard
workers. ILO regulation mandates that workers should be treated equally and no
unfair discrimination should be made. To avoid this issue a law needs to be passed
to avoid unfair discrimination.9

 No Law which obligates an employer to provide minimum wages to the non-

standard form of worker: International labour organization considers fair wages as

8
Gig Economy: Challenges and Opportunities in India by Dr. Vijeta Banwari.
9
India’s Emerging Gig Economy: Shaping the Future of Work for Women Ruchika Chaudhary.

9
 a human right. If an employee is not granted a minimum wage rate for his/her
service is clear exploitation. Therefore, efforts should be taken by the legislature to
eliminate this exploitation by passing a law. 

Possible solutions to protect the rights of Gig Workers in India 

The legislature in the recent social security code has made a separate category for gig
workers so that they can claim social security benefits. However, a better solution could have
been enacting separate legislation which only covers the benefits and rights of non-standard
workers. In the social security code, different non-standard workers are included under the
definition of gig workers and all of them are provided common benefits thus creating
ambiguity. Non-standard workers like on-call workers or part-time workers don’t require old-
age insurance benefits, life cover, etc. Therefore, proper differentiation should be made types
of non-standard workers and should be which is required by them to protect essential rights.
In the new legislation, separate definitions should be given for different non-standard workers
such part-time workers, platform workers, on-call workers, self-dependent workers. The
legislation should provide certain basic rights which can be claimed by all forms of non-
standard workers they include a provision on the elimination of discrimination, a guarantee of
minimum wages, collective bargaining, and occupational safety. Differentiation among non-
standard workers should be made in categories of decent working conditions which need to
be provided to on-call or temporary workers. Further social security needs to be provided to
platform workers. Further maternity benefits for platform workers. Training benefits to the
platform or part-time workers.
The legislation should obligate the employer to provide these benefits to the non-standard
form of workers if acted ultra vires would be liable to pay heavy penalty. The legislation
should mention the mechanism where the non-standard workers can enforce their rights. Thus
separate legislation on non-standard workers would encourage many people to join the gig
economy which would directly contribute to the growth of our country. 

Critical Analysis 
India in the near future is going to become a hub of gig workers. As per a report by
ASSOCHAM, the gig economy is substantially growing in India and is expected to have an
increase of 455 billion dollars by 2024. It is also estimated that the gig economy in India will
generate 350 million jobs. Therefore it is essential to protect the rights of these workers or
else they would be exploited by the organisation which is in a dominant position. The
legislature expressed its intent to protect the rights and interests by passing the social security

10
code 2020. However, it was a half-hearted attempt to protect the rights and interests of gig
workers.  
There are three ways that a legislature can adopt First: The legislature makes amendments in
the existing legislature and insert the word gig workers, Second: No effort from the
legislature Supreme Court would interpret gig workers as employees on the basis of
supervision and control test, Third: The legislature should pass new legislation which would
only mention about rights of non-standard workers The third is the best solution which would
eliminate any future ambiguity in the other two scenarios there would be future ambiguities
and would increase the burden of the courts.
India has recognized various international conventions which protect the rights and interests
of gig workers. If no conflicting municipal law prevails in the country the domestic country
can adopt ratified international law. ILO has on various instances urged the state members to
pass laws that can protect the rights and interests of gig workers. Though India is one of the
countries where the growth of the gig economy was a little late now because of Covid-19, a
change in mind set, flexible hours of work has flourished the growth of the gig economy in
India. Thus, legislation is required which protects the right of the gig workers so that the gig
economy keeps flourishing in India.  

Conclusion
India compared to the other countries is backward when it comes to passing legislation to
protect the interest of non-standard forms of workers. The Social Security code that is passed
has still not come into effect. Gig workers also play a key role in contributing to the growth
of the country and organization and recognizing their basic rights is very important. The
legislature should not become pro and not pass legislation because the organisation wants
limited regulations but instead be pro gig workers so that they would be motivated to work
and positively contribute to the growth of the economy. Due to the continuous growth of the
gig economy in our country, it is expected that legislation should take appropriate efforts so
that suitable benefits are provided to them which would protect their basic rights. 

11
Bibliography

Articles
1. Gig Economy in Indian Perspective by Akansha Tyagi
2. Gig Economy in India: Problem and Prospects by Premilla D’Cruz and
Ernesto Noronha
3. India: Gig Economy- Legal Development by Manishii Pathak and Natatsha
Sahni
4. Gig Economy: Challenges and Opportunities in India by Dr. Vijeta Banwari
5. India’s Emerging Gig Economy: Shaping the Future of Work for Women
Ruchika Chaudhary

Report

UNLOCKING THE POTENTIAL OF THE GIG ECONOMY IN INDIA by Boston

Consulting Group

Webliography

1. https://cll.nliu.ac.in/regulating-the-gig-economy/.

XII