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Rajasthan Gig Workers legislation: – Welfare on paper or actual welfare?

Updated: Feb 15

Authored by: Aswin Sanker, second year student at National Law University, Delhi On 24th July 2023, Government of Rajasthan passed a historic bill named ‘The Rajasthan Platform Based Gig Workers (Registration and Welfare) Bill, 2023’. The bill has been heralded as promising from many corners. While the bill does not envisage social security measures per se, the creation of a dedicated fund board as per Sec 3 of the act, would mean that the government is aiming to bring in welfare. But welfare on paper doesn’t translate to actual welfare. Also, the bill claims to have brought safety to the workers, but that doesn’t mean that the system is without loopholes and most importantly who should bear the cost of this welfare, the consumer or the aggregator is another pressing concern.


Introduction: 


There are certain sections of individuals who enable us to live our lives, but struggle themselves at various facets of employment. Gig workers are one sector of workers who belong to this category. The bill is the first of its kind in India, as it aims to provide social security to the hitherto unrepresented platform-based workers who have become integral parts of the bustling metro life. A report released by NITI Aayog titled ‘India’s Booming Platform and Gig Economy’ estimates that there were 77 lakh gig workers in 2020-21 and these figures, as per the report, were expected to go up to 2.35 crore by 2029-30. Legislation for this booming workforce is indeed the need of the hour. The Rajasthan bill is the first of its kind, no doubt, but the mechanism that it envisages needs restructuring.


What does this bill envisage: 


According to Section 2(f) of the bill, gig worker is a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship and who works on the contract that results in a given rate of payment, based on terms and conditions laid down in such contract and includes all piece-rate work. As per Section 2(a), the online intermediary that facilitates the transaction has been termed as an “aggregator” and as per Section 2(i), “primary employer” means those individuals or organizations who directly engage platform-based gig workers for a particular task against payment.


The law seeks to register all the aggregators and gig workers in the state. The database of the same shall be with the state government. The act aims to constitute a Welfare Board which will have two representatives each from among gig workers and from aggregators, apart from bureaucrats, to be nominated by the state government. This board will be led by the state labour minister and will meet once every six months, to set up a welfare fund for platform-based gig workers, to register the workers and aggregators in the state and the fund shall be used to facilitate social security for the gig workers. The primary source of funds shall be from the welfare cess, levied on every transaction that uses the service of a gig worker. The cess shall be around 1-2% of the transaction value, and to implement this measure, every transaction of such nature shall be mapped in a central platform called the CTIMS (Central Transaction and Information Management System). The welfare cess shall be levied from the primary employer or aggregator.


The need for a broader definition


Undoubtedly the main stakeholders are the workers and the way in which workers have been defined also raises concerns. The statute needs to be constructed beneficially for the benefit of gig workers who this bill aims to cover but even though the bill envisages a mechanism for social security measures, there seems to be a dearth of explanation as to what the actual welfare is. An overarching concern when it comes to any definition is the way the workers are often constructed as partners instead of workers by the aggregators. Another concern that was gauged with respect to gig workers was regarding the negligible salary they often receive, however from a critical point of view even this concern is not mitigated in this new legislation.


As per sec 2(f) of the bill, a Gig worker means a ‘person who performs work or participates in a work arrangement and earns from such activities outside of the traditional employer-employee relationship and who works on a contract that results in a given rate of payment, based on terms and conditions laid down in such contract and includes all piece-rate work’. This definition has been modelled on the definition promulgated by the central government in the draft Code of Social Security Bill of 2019 and as per section 2(35) of the passed by the central government in 2020.


This definition shall be expanded to bring the aspect of the location of the cyber workspace to tighten the scope of the same, otherwise the same could be misinterpreted. In the words of the associations, they recommend that the definition specify someone partaking in a work arrangement “mediated by any technology platform (app-based and web-based) as an intermediary.” This would expand the scope to include workers employed through subcontractors and third-party service providers.


Also, while the definition of gig worker needs improvements in both bills, there should be a look into how a platform work/worker is defined as per Sec 2(60) of the code, “platform work” means a work arrangement outside of a traditional employer-employee relationship in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems or to provide specific services or any such other activities which may be notified by the Central Government, in exchange for payment”. While the definition of gig worker is narrower in scope this definition by giving room for the government to notify and add more activities into the foray, is more inclusive in reach.


Also, recalling how aggregators and employers are defined in the act, there needs to be consonance with how they are defined in the code of Social Security 2020. The code, as per article 2(2) defines an aggregator as a digital intermediary or a market place for a buyer or user of a service to connect with the seller or the service provider.


This definition of the aggregator is not compelling the aggregators to recognise the workers as workers, and conveniently provides room to continue the usage of the word ‘partners’ instead of workers. It is a well-known fact that the digital intermediaries that are the aggregators have considerable control over the hiring and firing of the workers. They direct the workers on which order to take, they also force the worker to wear the t-shirts with their logo. The aggregator has more control over the worker than the primary employer, so why is it that the legislation fails to define the aggregator as the employer? Aggregator is the powerful force among all stakeholders that this legislation covers, aggregators are the ones who benefit from the workers, then the aggregators should also take the bigger burden and at the very least should recognise workers as workers instead of calling them ‘partners’.


Who takes the burden of welfare? : Let the aggregator pay.


As mentioned before in the introduction, the welfare that it tries to bring in can be used to effectively put the burden on the consumer and not the aggregator. How does this happen? Because the source of Fund defined in Sec. 12 of the act, is through a cess levied on every transaction that uses the service of a platform-based worker and this is being levied from the primary employer/aggregator. For this purpose, every payment including its break up of commission charged, payment made to Platform Based Gig Workers, Goods and Services Tax (GST) deducted and welfare cess deducted will be recorded on the Central Transaction Information and Management System (CTIMS) for each transaction related to Platform Based Gig Worker. This would mean that all transactions conducted in platforms that use gig workers shall be mapped onto this system thus enabling robust monitoring. But this could also mean that the cess money is being charged from the customer and the aggregator paying the government out of this money.


And at the same time, the idea that the consumer should pay for welfare is problematic from many angles. The consumer has been benefitting from the works of the gig worker, undoubtedly yes, but again who takes in more benefit? Undoubtedly it is the aggregator platforms like Zomato and Swiggy which pockets from these workers. This brings with it a responsibility on the aggregator, to provide for the social security of the worker and any chance to evade the same is an act of running away from this responsibility. The worker who wears the uniform of the aggregator company, the worker who brands his car with ads for the aggregator company essentially has some responsibility on the workers and that has to be complied with. It is perverse to conclude that this responsibility could be transferred to the consumer.


Rajasthan CM Ashok Gehlot has already announced that the government is providing a seed fund of 200 hundred crores to the welfare board, but the government’s duty should not end there. The government as a regulator should place the burden on the aggregators. How is this possible? The answer is the CTIMS which has already been covered in the legislation. Instead of transaction management, use CTIMS as a platform to register the workers and make the re-registration of workers compulsory every year, also charge the aggregators with a certain amount as reregistration fee and the fund received through this can be used to conduct welfare activities for the gig workers.


The concerns regarding the burden doesn’t end there, Sec 11(1) (ii) mentions the contributions made by gig workers as a source of the welfare fund. A preliminary level interaction with these workers would make us understand that they are paid only a meagre amount as salary. The gig workers union demands that the burden of payment of funds shall only be on the aggregator and not on the workers owing to the inadequate nature of their pay. A 2022 report by the Mumbai based Centre for Internet and Society, and the Azim Premji University, on gig workers highlight that over 50% of the workers interviewed opined that the salary received is barely sufficient to cover basic expenses. Considering these findings, it is quite problematic to construe the welfare fund as a contributory fund.


Burden on the welfare board?


The essential and most important characteristic of the law is to create a board for the welfare of the gig workers. The burden of welfare boils down to the success of these welfare boards. But, the creation of welfare boards is not a new phenomenon, the construction workers’ board is an example. The success of these boards is also debatable. An example is that of the Building and Construction workers welfare boards of different states. In the FY 2022-’23, around 38,000 crore collected as building and construction workers’ welfare cess remains unused, which points towards the failure of the welfare board.


Also, even for a second, if we assume that the board is working properly, there needs to be clarity and direction as to what welfare activities are to be done. The law speaks about a welfare board, but where is the actual welfare? For example, the Kerala Building and Other Construction Workers Welfare Board is constituted by the Government of Kerala under the ‘Building and Other Construction Workers’ Welfare Act,1996. The benefits provided by this board include pension, accident insurance of ₹4 lakhs, medical aid, scholarship for children and around 15 other benefits. In Kerala, the board even runs an old age home for ‘retired’ construction workers in Thiruvananthapuram, perhaps the only such initiative in the country.


As of now, the Rajasthan welfare board isn’t envisaging anything of this model. To implement actual welfare there needs to be mandatory requirements including social security pensions, accidental insurance cover etc. Also, considering the disproportionate number of women involved, there should be measures implemented to bring in gender inclusivity. Considering the nature of the work which includes continuous commute using a two wheeler, it is implied to focus on mechanisms where vehicle insurance is also provided by the aggregator. Welfare done(?), but Salary? This leads us to the question of meagre salary being paid to these workers. The legislation is trying to bring in welfare, but the question of minimum wages and enforcement of the same is also a question that the legislation should have addressed. The workers are compelled to advertise themselves as working for the aggregator then why are the aggregators like Swiggy and Zomato not the employers but the shop owners becoming the primary employers? There could be hundreds of workers collecting the food from a restaurant. It is not possible for this shop owner, who is the primary employer, to pay them, but it is not a herculean task for companies like Swiggy and Zomato. Hence, the bill could also have inducted provisions of minimum wages/salaries and put more burden on the aggregators.


Conclusion: 


There is no doubt that gig workers will become a powerful force among India’s informal workforce and it is important to give them a statutory definition. With that being said, there should be a positive definition of who a gig worker is and stress should be there to ensure that the corporate platform that reaps the most benefits from the workers does not escape from the burden of paying for their welfare.


The government of Rajasthan has taken a bold move by bringing in this legislation. Whether election motivated or not, legislative action to strengthen the gig work force is the need of the hour. Taking cue from Rajasthan legislation, the Congress government in Karnataka is also working on a draft legislation for the Gig workers and as per CM Siddaramaiah, the seed fund for the same shall be Rs 3000 crores. It is expected that more states follow the Rajasthan model and come up with similar legislations, considering the growth of the gig economy. However, at the same time, introspection shall be made about the success of the welfare boards. Welfare board model needs restructuring to ensure that the fund is used for what it was intended for.    

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