Employee Relations in Gig & Platform Economy: Emergence of Legal Framework in India.
| Author | Mohapatra, Bighnesh Dash |
Introduction
India has caught the global attention as an emerging and vibrant economy in the 21st century; paradoxically the standards and security of employment have been continuously exacerbated. Globally, formal employment has sharply declined over the years as flexible, temporary, and part-time jobs are widely demanded across industries. During the 2000s, temporary jobs saw a new height with the advancement of communication technology, and labor cost reduction enforced by the global financial crisis (Hall, 2010). The term 'gig' originally coined by the Jazz musicians in the 1920s, used to perform on a contract basis and shared role. The phrase "gig economy" was coined during the great recession in the USA to explain the scenario of a labor market crowded with temporary agencies, part-time jobs, or freelancers (Brown, 2020). The gig work became a buzzword globally with the spread of freelancing and crowdsourcing companies viz; Upwork, Airbnb, UberLyft, and Amazon Turk (Rachel, 2013; Richardson, 2015; Drahokoupil & Fabo, 2016). The notion of a gig workforce emerged in between the dichotomy of the individual contractors and traditional employees who are neither legally protected nor officially recognized and collaborated for a bargain at work (Van Dijck et al., 2018). The business model of the platforms replaces the standard employment relations with a triangle worker-platform-customer relationship while empirical evidence across the globe shows hardly any intermediate spaces of regulation for such workers (Stewart & Stanford, 2017). Since the gig economy is prolonged as an umbrella construct, the development of a unified theoretical paradigm is challenging with distinct promises and paradoxes (Acquier et al., 2017). The research in the field of the gig economy has reached up to conceptualization of work but hardly any progress concerning employment regulations practice (Alex et al., 2020). At this juncture, as a sizeable portion of the workforce engaged in low paid and ondemand gig work, the existent non-standard employee relation is worth studying.
As a consequence of neoliberalism, industrial relations has changed like never before which releases firms from many labor compliances, transfers the obligations to the individuals in a business process, and condenses the interest of workers for more benefits to consumers and investors (Bray & Underhill, 2009). Long-established taxonomies of employment exclude gig workers, rather consider them as independent contractors while the labor process in the gig economy is more complicated to define clearly the employment status (Kennedy, 2014). The expansion of the gig economy is claimed as the product of great recession in the West while considered the collateral effect of high unemployment in the low income countries (De Stefano, 2015). While the gig economy has shaken the enduring employment relations by lessening the scope of decent work, present labor laws are not effective to regulate the diverse business model of the platforms (Hannah & Land-Kazlauskas, 2018). Scholars named the platforms as "digital sweatshop" as independent workers are not entitled to get sick leave, overtime, disability, and retirement benefits (Harris & Krueger, 2015). These platforms have a positive effect on overall employment by higher matching efficiency and reducing barriers but have an adverse labor market substitution in the form of quality of employment (Prassl, 2018). Scholars have proposed mainly three alternative paths of the labor law reform suitable for the gig economy, namely, a brand new category of workers between employees and independent contractors rather than rigid division, reformation of the major labor laws through the lens of the gig economy, and drafting of a new mechanism for platform economy and gig workers which seems most feasible (Healy et al., 2017). While some of the driving factors (e.g., digitalization, young workforce, demand for work-life flexibility, and rationalization of labor laws) have created a burgeoning public interest in gig works, the power dynamics and structural factors in developing countries are yet to be addressed (Kasliwal, 2020). Later in this study, the rationale of regulatory mechanism for non-standard work arrangements is discussed from the gig workers' perspective in India.
Present Status & Prospects in India
The magnitude of gig economy transactions is projected to grow by a compound annual growth rate (CAGR) of 17% and amounts to $455 billion by 2023 as 350 million gig jobs in India by 2025 present a huge work dynamics (India Brand Equity Foundation, 2021). The estimated growth of sharing economy is from $14 to $ 335 billion between 2014 and 2025 with a huge young workforce, wide-ranging demand for services, and digital lifestyle in developing countries (Yaraghi & Ravi, 2017). India is the fifth largest country as per the total gig workforce after the USA, China, Brazil, and Japan. An investigation by United Nation Development Program (2019) reported an array of positive countervailing effect of technology while adverse impact on new forms of employment is comprehended in low-income countries. Moreover, the evolution of work from home, digitalization, tech-savvy generation, and virtual transactions collectively sets a positive note to flourish gig platforms. Although algorithmic arrangement in the gig economy tends to offer workers a high level of flexibility, work diversity, and sharing the mechanisms of controlling personnel are criticized due to lower pay, psychological exhaustion, social insecurity, and institutional separation (Wood et al., 2019). A McKinsey Global Institute survey reported nearly 20-30% of the workforce is engaged in some sort of employment in the gig economy. Boston Consultancy Group (2021) reported that the burgeoning gig economy has the potential to generate 90 million jobs and contribute 1.25% to India's Gross Domestic Product in the long run but incongruously these workers lack minimum wages, arbitrary penalization, efficient grievance mechanism, and basic social security presently. ILO (2020) reported India's labor freedom index is 42 while trade and business freedom indexes are 73.4 and 65.6 respectively. This signifies that the monetary and fiscal measures taken by the government have favored the business to excel in contrast to declining labor welfare. Gig work arrangement can be visualized with adequate data on labor market but quantitative specification and classification of tasks and service providers are still grey areas to consider.
Evolving Regulatory Landscape
The existing legal landscape for gig workers and platforms is diverse but comparable to a certain extent. Since the last few decades debate over informality supplemented by the gig economy as many scholars assume this is old wine in a new bottle. As discussed at the G20 Summit (2020), platform economy has been effective to create avenues for formal work accessing new markets, increasing tax revenue, and remote service opportunities in some countries. In the growing discussion between workers and self-employed, the legal framework of EU member states is based on a binary classification accepting two major categories without a third option; i.e., wage employment and self-employment (Gyulavari, 2020). The US Supreme Court stated clearly that where the core work is done following the usual pattern as an employee marking them as an independent contractor shall not prohibit the legislative protection of these workers (Singletary, 2021). The state of California has passed a landmark decision named Assembly Bill 5 (AB5) permitting businesses to apply for exemption from gig employers rather than considering workers as freelancers or individual contractors given that they have missed the scope to negotiate the price, direct communication with customers and increased earning (Thomas et al., 2020). AB5 approved the drivers' plea not to be classified as independent contractors since their work is not tangential but rather centrally regulated by the guidelines of platforms and almost no bargaining power for the fee due to possessing some special skills. The Uber drivers in Canada are now eligible for minimum wage, vacations, and overtime pay as Ontario's Employment Standard Act 2020 has provisions for their mediation and arbitration (Cheselina, 2017). In Italy, Spain, and some other European countries certain occupation specific legal framework has been developed (Daugareil, 2019). The social security of gig workers in France is considered the social responsibility of platforms rather than legal obligations (Stewart et al., 2017). In Austria, a clear...
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