Author: Shaan Shaikh, Kirit P Mehta School of Law Navi Mumbai (NMIMS)
To the Point
This article critically examines the growing gig economy in India powered by platforms like Zomato, Swiggy, and Uber etc. and the legal challenges it presents. It explores whether the Code on Wages, 2019 and other labour reforms adequately protect the rights of gig and platform workers, who often operate in a grey zone outside traditional employment frameworks. The piece aims to highlight the urgent need for a tailored legal approach that ensures fair wages, social security, and dignity of work in this new-age economy.
Use of Legal Jargon
Gig Worker / Platform Worker – Individuals engaged in work outside the traditional employer-employee relationship, often via digital platforms.
Contract for Service vs. Contract of Service – A key distinction in labour law: gig workers are usually engaged under a contract for service (independent contractor), unlike employees under a contract of service.
Statutory Rights – Rights guaranteed under specific labour laws like the Code on Wages, 2019, including minimum wages and payment timelines.
Social Security Code, 2020 – A labour code proposing social welfare measures for unorganised and gig workers, though its implementation remains limited.
Employee vs. Independent Contractor – A legal dichotomy that affects entitlement to benefits like PF, ESI, gratuity, and leave encashment.
Precarious Employment – Employment lacking stability, legal protections, and adequate social benefits characteristic of gig work.
Collective Bargaining Rights – The right to unionize and negotiate with employers, often denied to platform workers.
Unorganised Workers’ Social Security Act, 2008 – A precursor legislation aimed at informal sector welfare, now absorbed into the labour codes.
Employer-Employee Relationship Test – Legal criteria (like control, supervision, integration) used by courts to determine if a worker qualifies as an employee.
Vicarious Liability – A doctrine under which employers may be held liable for acts of employees—contentious when applied to platform-mediated services.
The Proof
Rise of the Gig Economy in India
According to NITI Aayog’s 2022 report, India had 7.7 million gig workers, projected to grow to 23.5 million by 2030. Every day, lakhs of workers power platforms like Swiggy, Zomato, Urban Company, and Ola yet they do so within a system that offers little protection and oversight.
Absence of Traditional Employer-Employee Relationship
Gig workers are typically treated as independent contractors, denying them benefits under traditional labour laws. Courts often rely on the “control and supervision” test to determine employment status, but platform-based arrangements blur this distinction.
The Code on Wages, 2019
While this code promises universal minimum wage coverage, it does not explicitly recognise gig workers as beneficiaries, leaving their protection open to interpretation and implementation-level discretion.
Social Security Code, 2020
This code acknowledges gig and platform workers and provides for framing schemes on life and disability cover, health benefits, maternity benefits, old age protection, etc. However, implementation is slow, and most benefits remain aspirational.
Judicial Observations
In a landmark 2021 ruling, the UK Supreme Court in Uber BV v. Aslam recognized Uber drivers as ‘workers,’ affirming their right to minimum wage and paid holidays a major step toward securing fair treatment in the gig economy.
In India, delivery riders of Swiggy have approached labour courts demanding recognition as employees, but clear precedent is yet to emerge.
The California Proposition 22 (2020) also sparked global debate on categorising gig workers legally.
Legislative Gaps and Enforcement Challenges
Despite the Unorganised Workers’ Social Security Act, 2008, and the e-SHRAM portal, there is limited integration of gig workers into mainstream labour welfare schemes. Enforcement of labour codes across states remains weak due to lack of political will, administrative complexity, and lobbying by tech giants.
International Labour Organization (ILO) Reports
The ILO has warned that digital labour platforms are leading to new forms of exploitation, recommending that states extend social security and fair wage protections to all workers, regardless of classification.
Abstract
The rapid expansion of the gig economy in India fuelled by digital platforms such as Zomato, Uber, and Swiggy etc. has redefined the traditional employer-employee relationship. While offering flexibility and entrepreneurial opportunities, this new form of work raises critical concerns regarding job security, fair wages, and social protection. This article examines whether the existing legal framework, particularly the Code on Wages, 2019, adequately addresses the rights and welfare of gig and platform workers. By analysing statutory provisions, judicial trends, and global practices, the paper highlights the legal vacuum surrounding this workforce and advocates for a more inclusive and enforceable legal regime. The study concludes that while labour codes mark a progressive step, they fall short of ensuring equitable protections in the evolving digital labour landscape.
Case Laws
Zomato Workers Union v. Zomato India Pvt. Ltd. (Pending Various Forums)
In this ongoing case, gig workers have filed complaints demanding recognition as “workmen” under the Industrial Disputes Act, 1947. They seek access to fair wages and social security benefits. The case exemplifies the growing legal uncertainty in India around the classification of platform workers and their entitlement to protections under existing labour laws.
Sushilaben Indravadan Gandhi v. The New India Assurance Co. Ltd., (2020)
In this Supreme Court judgment, the Court distinguished between a contract of service (employee) and a contract for service (independent contractor), emphasizing the significance of control and supervision in determining the nature of employment. This distinction is crucial in evaluating whether gig workers fall within the ambit of employee protections under Indian labour statutes.
Daily Partap v. Regional Manager, LIC, AIR 1994 SC 241
This case reaffirmed that the actual substance of an employment relationship such as regularity of work and the degree of control outweighs mere contractual labels. Even if a worker is termed a “partner” or “contractor,” they may still be considered an employee if the facts support such a relationship. This principle supports the argument for re-evaluating the employment status of gig workers.
Uber BV v. Aslam & Others, [2021] UKSC 5 (UK Supreme Court)
In this landmark UK case, Uber drivers sought classification as “workers” entitled to minimum wage and paid leave. The UK Supreme Court ruled in favour of the drivers, emphasizing the significant level of control Uber exercised over their work. This landmark judgment has echoed far beyond the UK, inspiring global conversations and adding weight to the growing call for stronger rights and protections for gig workers in India.
Dynamex Operations West, Inc. v. Superior Court, 4 Cal. 5th 903 (California, 2018)
This case led to the adoption of the ABC Test in California to determine whether a worker is an employee or an independent contractor. By shifting the burden onto employers to prove that a worker is truly independent, the test helps tip the scales in favour of protecting gig workers’ rights. It offers a comparative legal framework that India could consider for better classification of platform workers.
Vegan Food Delivery Case – Spain (2021)
Following the Spanish Supreme Court’s ruling that food delivery workers were misclassified, Spain enacted a law formally recognizing them as employees. This case reflects a broader international trend of extending formal labour protections to gig economy workers, reinforcing the urgency for similar regulatory reforms in India.
Conclusion
The emergence of the gig economy in India presents both an opportunity and a challenge. While it offers flexibility, innovation, and income avenues for millions, it also exposes workers to legal vulnerabilities due to the absence of formal employment protections. While the Code on Wages, 2019, aims to be progressive, it falls short by not clearly including gig and platform workers leaving many stuck in a legal grey zone without guaranteed protections.
Without a clear statutory framework that recognizes the unique status of gig workers, they continue to be denied access to minimum wages, social security, and collective bargaining rights. Judicial trends and international precedents indicate a growing recognition of the need to balance technological advancement with fundamental labour protections.
To ensure inclusive and equitable growth, India must move beyond traditional binaries of “employee” and “independent contractor” and adopt a new legal architecture that reflects the realities of platform-based work. Legislative reforms, coupled with robust enforcement mechanisms and worker representation, are essential to deliver justice to the invisible workforce powering the digital economy.
FAQS
1. Who are considered gig workers in India?
A. Gig workers are individuals who work outside the traditional employer-employee relationship, typically engaged in short-term, task-based work through digital platforms like Zomato, Swiggy, Ola, and Urban Company.
2. Do Indian labour laws truly recognize and protect gig workers?
A. While traditional labour laws do not explicitly mention gig workers, the Social Security Code, 2020 is the first legislation in India to define and provide for gig and platform workers. However, implementation remains limited and fragmented.
3. Does the Code on Wages, 2019 apply to gig workers?
A. The Code on Wages promises universal coverage but does not expressly include gig or platform workers under its protective provisions like minimum wages, overtime, or equal remuneration. Their inclusion depends on future notifications and interpretations.
4. What are the key challenges faced by gig workers?
Lack of fixed wages or income security
No formal social security (PF, ESI, gratuity)
Absence of collective bargaining rights
Unclear legal classification (not employees, not independent contractors in the full sense)
No job protection or dispute resolution mechanism.
5. Has any court in India ruled on the legal status of gig workers?
A. Indian courts have yet to deliver a landmark ruling directly classifying gig workers as “employees.” However, cases are pending in labour courts, and courts have previously used the “control and supervision” test to determine worker status.
6. How does India’s stance compare with global legal trends?
A. Countries like the UK, Spain, and California (USA) have ruled in favour of recognizing gig workers as workers or employees entitled to basic labour rights. India is still at a nascent stage and lacks binding judicial precedent or robust legislation.
7. What reforms are needed to protect gig workers in India?
There’s a need for clear legal recognition of gig workers as a distinct category, so their rights and protections aren’t left open to interpretation.
Mandatory inclusion in social security and wage protection schemes
Better grievance redressal and representation rights
Stronger enforcement of labour codes at the State and platform level
