Author – Nikita Patidar Student at Institute of Law, Nirma University
TO THE POINT
The article discusses whether gig workers in India, such as Uber, Swiggy, and Zomato workers, should be treated under the law as employees or independent contractors. It discusses Indian laws including the Social Security Code, 2020, and judicial tests including the control test and economic dependence test. Indian and overseas court cases indicate that even though the gig workers are termed “independent,” they end up working under control similar to that of an employer. The current IFAT case before the Supreme Court and recent state legislations in Karnataka and Rajasthan indicate an increasing desire for legal protection and recognition of gig workers.
ABSTRACT
This article critically analyses the legal status of gig workers in India in the wake of the emergence of platforms such as Uber, Swiggy, and Zomato. It examines whether gig workers must be considered as employees or independent contractors according to Indian labour laws and the implications for social protection and the rights of workers. The analysis assesses major statutes, court judgments, and new attempts by states such as Rajasthan and Karnataka to regulate gig work.
USE OF LEGAL
The article examines legal provisions including the Social Security Code, 2020 (ss. 2(35), 2(61)), the Industrial Disputes Act, and the EPF Act. It uses judicial tests in cases like Dharangadhara Chemical Works Ltd v State of Saurashtra (AIR 1957 SC 264) and Ram Singh v Chandigarh (2004) 1 SCC 126 to determine employment classification. It also examines the pending IFAT case before the Supreme Court and constitutional claims under Articles 14, 21, and 23.
THE PROOF
Legal argument on the standing of gig workers is supported by unambiguous factual evidence of control and economic reliance. Uber, Swiggy, and Zomato, among other platforms, exert considerable algorithmic management over workers — fixed rates, customer ratings, and fines for not performing — that are closer to employer-worker relationships than independent contract. This centralized management framework disallows the assertion that gig workers are “independent.”. The Indian Federation of App-based Transport Workers (IFAT) case, which is pending in the Supreme Court, has highlighted the lack of statutory social protection for gig workers and maintains that such deprivation runs contrary to Article 21 of the Constitution. The UK Supreme Court’s landmark ruling in Uber BV v Aslam [2021] UKSC 5 also lends support to this position by finding that Uber drivers were “workers” who were entitled to a minimum wage and holiday pay as a result of the substantial control wielded by the company. At the state level in India, active measures have been initiated — with Rajasthan passing the Gig Workers Welfare Act (2023) and Karnataka creating a welfare board — demonstrating an increasingly policy acknowledgment that gig workers can’t be completely left out of the protective umbrella of labor law.
INTRODUCTION
The growing gig economy in India, propelled by apps like Uber, Swiggy, Zomato, and Urban Company, has created a new class of employees—being referred to as “gig,” “platform,” or “delivery” workers—who do not fit well into the formal employment paradigm. Platforms generally classify these workers as “independent contractors” or “partners,” thus avoiding statutory obligations under labour legislation like the Industrial Disputes Act, PF Act, and ESI Act. This categorization has far-reaching ramifications: it excludes platforms from fundamental requirements like minimum wages, social security, notice of termination, and rights of resolving disputes. With the gig economy settling into the Indian economy, the courts and legislatures are increasingly under pressure to determine whether platform workers can be treated as employees, independent contractors, or an intermediary third category of protected rights.
DEFINING GIG WORKERS AND LEGAL AMBIGUITY
Indian labour law earlier had only two categories—”employee” and “independent contractor”—with scant distinction for contract-based work, on-demand work, and digitally mediated work. The Code on Social Security (2020) boldly introduces separate definitions of “gig worker” and “platform worker” under sections 2(35) and 2(61), and requires access to social security schemes. The Code falls short, however, of providing employee-level protection or benefits, and it has yet to be implemented across several provisions. Although respecting the existence of gig work, critical rights such as minimum wage or maternity leave are still kept out even by the Code. State-wise, there is Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023 that creates a welfare board and fund for registered gig workers, but its enforcement is awaited.
LEGAL TESTS FOR EMPLOYMENT STATUS
The decision whether a gig worker is an independent contractor or de facto employee is based on judicial tests: economic dependence, integration, and control. In Dharangadhara Chemical Works Ltd v State of Saurashtra, the Supreme Court established that the degree of control and supervision by the employer determines employee status. Analogously, Ram Singh v UT Chandigarh underscored integration to core business and economic dependence as determinative factors. Under the gig economy, platforms dictate key elements—algorithmic assignment of work, price, performance measurement, and deactivation—implying high levels of control behind contractor labels.
International precedent supports Indian concerns. The UK Supreme Court in Uber BV v Aslam ([2021] UKSC 5) decided Uber drivers were “workers”—i.e. qualify for minimum wage and holiday pay—beyond contracts that described them as contractors, highlighting the substantive control Uber had over drivers’.
CONSTITUTIONAL PERSPECTIVES: ARTICLE 21 & THE RIGHT TO LIVELIHOOD
The exclusion of gig workers from employment structures gives rise to constitutional concerns. Gig workers typically rely on Articles 14 (equality), 21 (right to life & livelihood), and 23 (forced labour) to plead inclusion under protective labour legislation. The IFAT v Union of India (in ongoing petition filed by the Indian Federation of App-Based Transport Workers) pushed the Union to explain why it was delaying the implementation of the Social Security Code, which brings platform workers under pavilion Chapter IX schemes. The Court cautioned that gig workers continue to be in legal limbo and averred they must be recognized as “unorganised workers” under the 2008 Act or the Code, or they will suffer violations of constitutional rights.
Petitioners contend that withholding payments of social security—health, pension, and disability insurance—during a pandemic is a contravention of their rights under Article 21 to equitable work and livelihood, and a violation of Article 23 [5] forcing them into labour. Such constitutional protection underlies calls for legal recognition.
SOCIAL SECURITY AND WELFARE OBLIGATIONS
Statutory benefits like provident fund, health insurance, gratuity, and minimum wage are dependent on the status of employment. As gig workers are classified as independent contractors, they are outside the scope of the EPF Act (1952), ESI Act (1948), and Minimum Wages Act. In Regional Provident Fund Commissioner v Hooghly Mills Co Ltd, the Supreme Court disapproved of disguised contracts of employment that circumvent PF obligations.
Although in theory the Social Security Code (2020) encompasses gig workers, few provisions have been implemented as yet, making welfare measures discretionary and optional. Rajasthan and Karnataka have started framing legislation and welfare boards—but implementation and release of funds are patchy. Tamil Nadu initiated an e-scooter subsidy scheme and accidental insurance for gig workers, covering thousands—but the schemes are limited in extent and finance.
NEW STATE LEGISLATION AND INSTITUTIONAL ACTIONS
Some states have implemented path-breaking legislation to close policy loopholes. Karnataka’s Platform-based Gig Workers (Social Security & Welfare) Ordinance, 2025 levies a cess on platform transactions (1–5%) to finance a welfare corpus that is projected to generate ₹150 crore per annum for about 30,000 workers. The cess is levied on consumers, gig workers, and platforms, and makes it mandatory for platforms to have transparency and redressal of grievances—but issues relating to wage protections, unilaterally reducing payouts, and representation of workers remain.
In Rajasthan, the 2023 Platform Workers Act requires welfare boards, welfare funds, and grievance redressals, but remains partially enforced. Jharkhand, on the other hand, is progressing with its Platform Workers Bill (2025) to enhance state-level protection through registration, welfare fund establishment, and board oversight.
The Supreme Court, by way of IFAT, still pushes the Union government to operationalise provisions of social security code for gig workers, highlighting the lack of legislative or executive intervention. In the meantime, courts have very much on an implicit level acknowledged gig workers’ vulnerability and urged speedy regulation.
ISSUES AND CONCERNS
Notwithstanding legal and legislative progress, several issues remain:
Misclassification and contract terms: Businesses continue to write contracts referring to workers as partners, capping liabilities while keeping management in the hands of companies.
Fragmented implementation: Schemes are in theory but are implemented unevenly at the state level, and are not data-transparent—there is no central database for tracking gig workers, prices, gender or caste access.
Limited worker agency: Gig workers are not granted trade union recognition and collective bargaining according to current labour laws, restricting systemic bargaining power.
Algorithmic opacity and platform power: The workforce is not given visibility into rating algorithms, deactivation rules, or minimum remuneration setting. Unilateral deactivation with no appeal can be tantamount to unjust dismissal.
Duplicative regulation: National Code, state legislations, and current labour laws might overlap in jurisdiction and application, leading to regulatory complexity and potential litigation.
CONCLUSION
India’s gig economy offers opportunities and legal issues. As it offers flexible sources of income, it has institutionalized precarity by way of ambiguity of classification. Current structures—the Social Security Code and new state legislations—demonstrate awareness, but not substantive protection to platform workers. Courts are compelling government action via petitions such as IFAT’s, based on constitutional promise under Article 21. India must reclassify gig workers as employees or create a third category of law providing fundamental protection—minimum wage, social security, notice prior to termination, and access to grievance—while maintaining flexibility in order to be consistent with international best practices and meet developing labour realities. Absent such reform, gig workers are socially and legally marginalized in a labor regime that does not treat them as rights-bearers.
FAQs
Q1: Are gig workers employees within Indian law?
A: No, they’re typically categorized as independent contractors.
Q2: Do gig workers receive social security benefits?
A: Only partially, under pending schemes such as the Social Security Code, 2020.
Q3: Does there exist any court case on gig workers’ rights in India?
A: Yes, the IFAT v Union of India case is pending with the Supreme Court.
Q4: Have any states implemented measures to safeguard gig workers?
A: Yes, Rajasthan and Karnataka have enacted gig worker welfare legislation.
