The Code on Social Security, 2020, is making headlines for its groundbreaking attempt to define ‘platform work’ within Indian law, a provision not seen in the conventional employment category. The focus on labour falls under India’s Constitution’s Concurrent List.
Parliamentary Evolution of Labour Laws
The Parliament recently passed three labour codes on industrial relations, occupational safety, health, working conditions, and social security. This step aims to reform the country’s outdated labour laws and spur economic activity while ensuring workers’ benefits remain intact. Along with the ‘Code on Wages Act, 2019’, these labour codes are set to significantly streamline business conduct by assimilating various Central and State laws on labour into a coherent framework.
Main Provisions of the Code on Social Security, 2020
This new code is poised to supersede nine existing social security laws, which includes the Maternity Benefit Act, Employees’ Provident Fund Act, Employees’ Pension Scheme, and Employees’ Compensation Act among others. A key feature of this code is the extension of social security coverage to workers in the unorganised sector, such as migrant workers, gig workers, and platform workers.
For the first time, social security provisions will also apply to agricultural workers. The eligibility period for receiving gratuity payments has been brought down from a continuous service of five years to just one year for all types of workers.
Definition and Significance of Platform Work
In the wake of this new legislation, platform work refers to work arrangements beyond the traditional employer-employee relationship where organisations or individuals use an online platform to connect with other organisations or individuals for specific tasks, services, or problem-solving.
Platform work is crucial due to its promise of flexibility and ownership over work delivery for workers. Its importance was highlighted during the pandemic, when platform workers played a key role in delivering essential services. It also has potential for growth due to rapid urbanisation, and contributes to rural development through remittances sent by platform workers.
Concerns in the Sector
Despite the promise of flexibility, platform workers are often subject to control mechanisms set by algorithms which govern pricing per unit of work, allocation of work, and working hours. The need for vehicular assets in certain platform work sectors like ride sharing and food delivery poses a significant entry barrier for the average Indian worker. Consequently, workers rely on loan schemes often facilitated by platform aggregator companies, resulting in financial dependence on these companies, and undermining the purported flexibility and ownership. This also leads to increased contractualisation of the workforce and propagates the gig economy.
The Gig Economy and its Effects
The gig economy is a free market system characterised by temporary positions and short-term employment contracts. Greater contractualisation often results in a higher turnover rate, leading to an unstable operational environment, higher training costs, and increased incidence of errors.
Paving the Way Forward
Adopting international best practices could be one way ahead. For instance, states like Ontario and California have granted employee status to platform workers, thereby guaranteeing minimum wage and welfare benefits. Additionally, the government must ensure the easy availability of credit for platform workers.
Last Modified: February 9, 2024