Ayan Sharma and Raisa Pinto
On June 29, 2024, the Karnataka State Government released the draft of the Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, 2024 (“Bill”). This proposal represents a crucial move toward regulating India's rapidly growing technology sector. Presented as a ‘rights-based bill,’ the Bill is designed to safeguard the rights of platform-based gig workers by imposing obligations on the aggregators in relation to social security, occupational health and safety, and working conditions of gig workers within Karnataka.
Why was this Bill necessary?
Arbitrary terminations have been a persistent issue for gig workers, who frequently report being blacklisted or dismissed without a fair hearing. Such actions are often carried out through automated systems that monitor worker performance, earnings, and customer feedback. Workers claim these systems are biased towards customers, pressuring them to prioritize customer satisfaction and ratings at all costs. The absence of human intervention in these processes leaves gig workers with limited options for the redressal of their grievances.
Applicability: The Bill applies to aggregators and gig-workers, as explained below:
Aggregators engaged in providing services connected with ride-sharing; food and grocery delivery; logistics; e-marketplace; professional services; healthcare; travel and hospitality; and content and media (“Specified Services”), would come under the ambit of the Bill.
"aggregator" means a digital intermediary for a buyer of goods or user of a service to connect with the seller or the service provider, and includes any entity that coordinates with one or more aggregators for providing the services.
"gig worker" means a person who performs work or participates in a work arrangement, that results in a given rate of payment, based on terms and conditions laid down in such contract and includes all piece-rate work, and whose work is sourced through a platform, in the Specified Services.
From a reading of the definition of a gig worker, it may be pertinent to highlight, that while the Code on Social Security, 2020, defines and recognises ‘platform workers’ and ‘gig workers’, as two separate categories of workers, the Bill applies only to ‘platform-based’ gig workers. This approach is akin to the Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023.
A Brief Guide to the Bill: The Bill establishes a framework to regulate the relationship between aggregators and platform-based gig workers in the State of Karnataka. Set out below are the key highlights of the Bill.
1. Karnataka Platform-Based Gig Workers Welfare Board (“Board”):
A key feature of the Bill is the proposed establishment of the Board, which shall consist of government officials, as well as representatives of the aggregators, gig workers, and civil society. The Board will inter-alia handle the registration of aggregators and gig workers; set up monitoring mechanism to certify that welfare fees are being duly collected; ensure implementation of general and specific social security schemes based on contributions made and disburse the social security benefits through individual social security accounts linked to unique ids allocated to platform-based gig workers; engage with workers associations working with gig workers and hold regular open consultations with them; and seek aggregated data from aggregators and platforms on the work done via their platform.
This will in turn enable the Board, to maintain a comprehensive database, which will help the Board to ensure/monitor compliance of the aggregators, with the provisions of the Bill once it is an Act.
2. Fair Contracts and Autonomy:
The Bill requires aggregators to provide fair contracts to gig workers. These contracts must be written in clear language which is easily comprehensible by the gig workers. Aggregators are required to give a 14-day prior notice for any contract changes; and cannot penalize workers for refusing/rejecting assignments for reasonable cause, thereby protecting their autonomy and work-life balance.
3. Social Security and Welfare Fund:
The Bill proposes to set up the Karnataka Gig Workers' Social Security and Welfare Fund (“Fund”) for the benefit of the registered platform-based gig workers. The Fund shall comprise of monies received from welfare fees; contributions made by the individual platform-based gig workers; grant-in-aid from the State and Central Governments; grants, gifts, donations, benefactions, bequests or transfers; and other sources as may be prescribed.
All payments generated on platforms are to be mapped onto a Central Transaction Information and Management System, administered by the State Government and monitored by the Board.
4. Grievance Redressal Mechanism:
The Bill introduces a grievance redressal mechanism, wherein a registered platform-based gig worker, can file a petition in person before the grievance redressal officer, notified by the State Government or file a petition through the web portal, in relation to any grievance arising out of entitlements, payments and other benefits proposed to be provided under the Bill once it is an Act.
Additionally, aggregators employing more than 50 platform-based gig workers must establish an Internal Dispute Resolution Committee for the resolution of the scheduled disputes. Further, gig workers can also seek redressal through the mechanism outlined in the Industrial Disputes Act, 1947, thereby ensuring accessible avenues for resolving disputes related to entitlements, payments, and working conditions.
5. Transparency and Payment Timeliness:
Transparency is a cornerstone of the Bill. Aggregators must disclose information about work allocation, rating systems, and personal data processing upon request. They must also make timely payments, at least weekly, and provide clear reasons for any deductions. This ensures gig workers receive their due compensation without unnecessary delays.
6. Work Environment and Safety:
The Bill emphasizes the importance of maintaining a safe working environment for gig workers. Aggregators must prioritize the health and safety of their workers, ensuring that the work environment is safe and free from risks to health and conducive to their well-being. The aggregator is obligated to comply with sector-specific occupational safety and health standards, as may be prescribed.
7. Penalties for Non-Compliance:
The Bill outlines strict penalties for non-compliance, ranging from INR 5,000 to INR 1,00,000, with additional fines for continued violations. This stringent enforcement framework underscores the government's commitment to fair treatment and protection for gig workers.
Impact on Gig Workers:
While the Bill offers significant improvements to the social security and welfare of gig workers, providing protections and benefits that have long been overdue, it has its ambiguities. The definition of a gig worker and the nature of their work arrangement remain vague, with "work arrangement" not being clearly defined. This could lead to inconsistencies in the Bill's application and enforcement. Moreover, the Bill does not address whether gig workers should be classified as employees or independent contractors, potentially leaving them without the full range of rights and protections enjoyed by traditional employees.
Challenges for Aggregators:
The Bill presents substantial compliance challenges for aggregators. The need to register with the Karnataka Platform-Based Gig Workers Welfare Board, disclose algorithmic monitoring practices, and justify worker terminations in detail may be seen as burdensome. These obligations could increase operational costs and complexity, potentially affecting the ease of doing business in Karnataka. Furthermore, there are concerns about overlapping with existing laws, such as the Code on Social Security, 2020, especially regarding the requirement for aggregators to contribute to the welfare fund, potentially leading to double contributions and financial burdens on businesses.
Industry Reactions and Criticisms:
The Bill has garnered mixed reactions from industry stakeholders. NASSCOM and the Internet and Mobile Association of India (IAMAI) have expressed concerns about the Bill's approach to regulating the gig economy. They argue that gig work fundamentally differs from traditional employment, lacking elements like accountability, commitment, and control. They also worry that the Bill's detailed regulations, such as transparency in algorithmic monitoring and contract terms, could stifle innovation and competitiveness. Moreover, concerns have been raised about the lack of transparency in the creation and management of the proposed welfare fund. Industry associations have called for a longer public consultation period, suggesting that the initial 10-day period was insufficient for thorough review and feedback. This request highlights the need for more comprehensive stakeholder engagement in the legislative process.
In conclusion, the Bill signifies a pivotal shift towards enhancing the rights and protections of platform-based gig workers, in Karnataka. While it promises crucial improvements in social security and fair working conditions, its effectiveness will hinge on resolving ambiguities and balancing compliance demands for aggregators. The Bill represents a significant advancement in worker welfare, yet its success will depend on nuanced implementation and ongoing stakeholder engagement.