Benefits to Gigworkers – Code on Social Security, 2019

The gig economy in India has been growing at breakneck speed. A recent study ‘Professional Gig Economy 2018-19 Report Card’ undertaken by Flexing It, a gig platform has revealed that as many as 72% of all gig projects were in large corporates and professional services firms in 2018-19 compared with 52% two years back. Plus, most of the professional gig economy segments have seen growth double in two years[1].

What is the Gig Economy?

Till a few years back words such as Gig Economy, Gig Workers, Gig Platforms meant little or close to nothing in India. Today ‘Gig Economy’ means a temporary contractual job or short-term contract or freelance work that a person may take, on a project-to-project basis, for which the payment is made once the task is completed. A ‘Gig’ is a temporary work engagement and has been described by many as the future of work.

This recent growth of the gig workforce has been driven by the development of new technologies that enable transactions directly between providers and consumers, and the difficulty of finding traditional, stable jobs. App-based technology platforms or gig platforms such as Uber, Swiggy, Zomato, Ola are replacing people as middlemen to connect consumers and producers quickly and easily, allowing individuals to perform a variety of tasks for complete strangers based on real-time demand.

Gig workers are essentially independent contractors, on-call and temporary workers that are employed in the gig economy such as Ola, Uber drivers, delivery persons for Zomato and Swiggy etc. People who are part of the gig economy may have several benefits, including the independence to choose flexible work hours, workdays, holidays and preferred organisations.

However, the key shortcoming for a gig worker other than instability and uncertain pay schedules has been a lack of social benefits such as insurance, medical benefits and/or any statutory benefits similar to a worker in permanent employment. In the absence of any codified Indian laws for gig workers, the persons working in the gig economy, based on the nature of their engagement, are categorised as independent workers or independent contractors.

Potential Change in Law

On December 4th, 2019 the Union Cabinet of India approved the Code on Social Security, 2019 Bill (“Bill“). This was the fourth labour code that has been approved by the Union Cabinet with the first three being related to wages (first code), occupational safety, health and working conditions (second code) and the Industrial Relations (fourth code).

This move shall impact gig workers in India who may soon be eligible for suitable social security schemes on matters relating to:- (a) life and disability cover; (b) health and maternity benefits; (c) old age protection; and (d) any other benefit as may be determined by the Central Government.The Bill defines Gig Workers as a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship.