Labour Law & Emerging Employment Frameworks
Author: Nandini Shekhawat, Nirma University, Ahmedabad
To the Point
India is home to the world’s second-largest gig economy, with an estimated 7.7 million workers currently engaged in platform-based employment across sectors including ride-hailing, food delivery, freelance services, and e-commerce logistics. Yet despite their economic indispensability, gig workers occupy a deeply precarious legal position — classified neither as employees nor as independent contractors in any definitive statutory sense. The four Labour Codes enacted between 2019 and 2020 acknowledged their existence for the first time, yet the implementing rules remain incompletely notified across most states. Rajasthan’s pioneering Platform Based Gig Workers (Registration and Welfare) Act, 2023 marked the first state-level attempt at a dedicated welfare framework. The central question confronting Indian labour jurisprudence today is whether platform companies — Ola, Uber, Swiggy, Zomato, Urban Company — are merely technological intermediaries or de facto employers, and what liability flows from that determination.
Use of Legal Jargon
The legal discourse around gig work engages several overlapping statutory and jurisprudential concepts:
• Employment Relationship & Subordination Test — The classical test for an employer-employee relationship examines control, integration, economic dependence, and substitutability. Gig workers, subject to algorithmic supervision, performance-based deactivation, and platform-dictated pricing, arguably satisfy the subordination test notwithstanding formal contractual disclaimers.
• Unorganised Workers’ Social Security Act, 2008 — Prior to the Labour Codes, this statute provided the only partial safety net for informal workers. Gig workers were not expressly covered, creating a statutory vacuum that persisted for over a decade.
• Code on Social Security, 2020 (CSS) — Section 2(35) defines ‘gig worker’ as a person who performs work or participates in a work arrangement outside of traditional employer-employee relationships. Section 114 mandates the central government to frame welfare schemes covering life and disability cover, health and maternity benefits, old age protection, and education. Aggregators are required to contribute between 1% and 2% of annual turnover, capped at 5% of the wage bill, to a Social Security Fund.
• Aggregator Liability — Section 2(1), CSS defines aggregators as digital intermediaries connecting buyers and sellers of services. The Code stops short of classifying them as employers but imposes welfare contribution obligations, creating a sui generis third category of labour relationship.
• Algorithmic Management & Constructive Dismissal — Automated deactivation of worker accounts without prior notice or hearing raises questions of natural justice and may constitute constructive dismissal under the Industrial Disputes Act, 1947, to the extent it applies.
• Vicarious Liability — Under tort law, an employer is vicariously liable for wrongs committed by employees in the course of employment. Whether platforms bear vicarious liability for gig worker conduct — including accidents, theft, or assault — remains unsettled and turns on the employment characterisation question.
• Contract of Service vs. Contract for Service — The foundational distinction in labour law: the former denotes employment; the latter, independent contracting. Platform terms of service universally characterise gig arrangements as the latter, a characterisation increasingly challenged in domestic and foreign courts.
• Welfare Board Mechanism — Borrowed from the construction and beedi worker models, this mechanism enables social security delivery outside the formal employment framework — a model now adopted by the Rajasthan Act, 2023 for platform workers.
The Proof
The evidence of gig workers’ legal vulnerability and platforms’ de facto employer conduct is well-documented:
• NITI Aayog Report, 2022 — Titled India’s Booming Gig and Platform Economy, the report projected gig workers would constitute 4.1% of India’s total livelihood by 2029-30, reaching approximately 23.5 million workers. It expressly recommended extending social security, formalising welfare contributions, and creating portable benefit systems — none of which have been fully implemented at the central level.
• Rajasthan Platform Based Gig Workers Act, 2023 — India’s first dedicated gig worker legislation established a welfare board, mandated platform registration, and introduced a transaction-based welfare fee of 1–2% levied on platforms. It also provided for a grievance redressal mechanism. The Act remains a model statute, though implementation has been gradual and enforcement capacity limited.
• Algorithmic Deactivation Data — Studies by Fairwork India and the Indian Federation of App-based Transport Workers (IFAT) document that workers are routinely deactivated without explanation, face unilateral commission restructuring, and have no institutional forum to challenge platform decisions. Surge pricing fluctuations can reduce effective hourly earnings below minimum wage thresholds, yet no statutory minimum applies to gig arrangements.
• Supreme Court of India — Writ Petition (Civil) No. 1068/2021 — A PIL filed by IFAT before the Supreme Court sought statutory recognition of app-based transport workers as unorganised workers entitled to social security. The Court issued notice to the Union of India and directed a response on the implementation status of the CSS, 2020 — signalling judicial receptiveness to the workers’ claims even absent a definitive ruling.
• Comparative Evidence — The UK Supreme Court’s landmark ruling in Uber BV v. Aslam [2021] UKSC 5, which held Uber drivers to be ‘workers’ entitled to minimum wage and paid leave, has been cited in Indian academic and advocacy literature as persuasive authority. Similarly, the California Supreme Court’s engagement with Proposition 22 and the European Commission’s proposed Platform Work Directive (2021) collectively demonstrate a global legal trend toward reclassifying platform workers.
• Accident Liability Gaps — In multiple instances involving delivery worker road accidents, courts and consumer forums have grappled with whether the platform bears any liability to third parties or to the worker. The absence of mandatory employer’s liability insurance for gig workers leaves them without compensation for occupational injury — a gap directly attributable to the unresolved employment classification question.
Abstract
India’s gig economy, projected to employ over 23 million workers by 2030, operates in a legal grey zone where statutory protections remain aspirational rather than enforceable. The Code on Social Security, 2020 introduced the category of ‘gig worker’ and imposed welfare contribution obligations on aggregator platforms, yet the absence of notified implementing rules has rendered these provisions largely inoperative. Rajasthan’s 2023 Act represents the only operationalised legislative framework, leaving workers in all other states without a dedicated remedy. This article examines the definitional ambiguity surrounding gig employment, the liability framework applicable to aggregator platforms, and the judicial and legislative developments shaping this evolving area of Indian labour law. Drawing on domestic legislation, NITI Aayog findings, ongoing Supreme Court proceedings, and global comparative jurisprudence, it argues that India must urgently move from acknowledgement to enforcement — and that the platform-as-intermediary fiction can no longer insulate aggregators from their welfare obligations.
Case Laws
The following cases and legislative precedents form the judicial and comparative framework of gig worker rights in India:
Case / Authority
Year
Key Legal Significance
Uber BV v. Aslam (UK Supreme Court)
2021
Held Uber drivers to be ‘workers’ entitled to minimum wage and holiday pay; rejected the contractual fiction of independent contractor status; cited as persuasive authority in Indian advocacy.
IFAT Writ Petition (Civil) No. 1068/2021 (Supreme Court of India)
2021–Ongoing
PIL seeking recognition of app-based transport workers as unorganised workers; Court issued notice to Union of India on CSS implementation status.
Dynamex Operations West Inc. v. Superior Court (California Supreme Court)
2018
Established the ABC test for worker classification, placing the burden on platforms to prove independent contractor status; influenced global legislative frameworks including India’s policy discourse.
Rajasthan Gig Workers Act, 2023 (Legislative Precedent)
2023
First Indian statute to operationalise a welfare board for platform workers; established transaction-levy mechanism and grievance redressal; model for proposed central-level legislation.
Consumer Complaints against Ola/Uber (Various State Consumer Forums)
2018–2024
Consumer forums have repeatedly held platforms liable under the Consumer Protection Act, 2019 for service deficiencies caused by drivers, implicitly treating driver conduct as attributable to the platform.
Bandhua Mukti Morcha v. Union of India (Supreme Court of India)
1984
Established that the right to live with dignity under Article 21 encompasses fair labour conditions — a principle directly applicable to gig workers denied minimum wage, insurance, and grievance access.
Conclusion
The legal status of gig workers in India is no longer merely an academic question — it is an urgent constitutional and statutory one. Over seven million workers today perform labour that sustains urban consumer economies, yet they are denied the minimum wage protections of the Code on Wages, the social security entitlements of the Code on Social Security, and the collective bargaining rights of the Industrial Relations Code — all because their engagement is characterised, by contractual design, as something other than employment.
The Code on Social Security, 2020 was a significant first acknowledgement, creating a legal category and imposing welfare obligations on aggregators. But acknowledgement without enforcement is hollow. Four years after enactment, central implementing rules under the CSS remain unnotified. Welfare fund contributions have not been operationalised. The registration portal for gig workers envisaged under the Code does not fully function. Rajasthan’s 2023 Act stands alone as proof of concept, not as national policy.
Three reforms are imperative. First, the central government must urgently notify implementing rules under Chapter IX of the CSS, 2020, activating the welfare scheme mandate and the aggregator contribution mechanism. Second, a uniform floor of protections — minimum effective earnings, occupational accident insurance, and algorithmic transparency in deactivation — must be legislated, either through a standalone central statute or through amendments to the existing Codes. Third, a dedicated, accessible grievance redressal forum must be created, since neither civil courts nor labour courts currently offer gig workers a practically viable remedy.
The platform-as-intermediary fiction has served aggregator business models well. It has served Indian workers poorly. As the Supreme Court’s engagement with the IFAT petition signals, the judiciary is watching. The question is whether Parliament will act before the courts are compelled to.
