Daily News Analysis

Gig Economy and Recent Developments in Karnataka

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Why in the News?

The Karnataka government recently published the draft Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, which aims to address the welfare and rights of gig workers in the state. This bill is part of a broader trend to improve social security for gig economy workers.

About the Bill

 Welfare Board:

  • Establishment: The bill proposes the creation of a 'Welfare Board' at the state level dedicated to securing the welfare of gig workers.
  • Functions: The board would be responsible for overseeing and implementing welfare measures specifically tailored for gig workers.

Welfare Fund:

  • Composition: The fund will be established from a welfare fee levied on transactions between gig workers and aggregators, as well as contributions from both Union and State governments.
  • Purpose: This fund aims to provide financial support and social security benefits to gig workers.

Rights-Based Provisions:

  • Protection of Rights: The bill is designed to safeguard the rights of gig workers, including their social security, occupational health, and safety.
  • Obligations on Aggregators: Aggregators (platforms) will have specific obligations related to the welfare and treatment of gig workers.

Additional Features:

  • Safeguards Against Unfair Dismissals: The bill includes provisions to protect gig workers from unjust terminations.
  • Grievance Redressal Mechanism: It establishes a two-tier grievance redressal system to address issues faced by gig workers.
  • Transparency: The bill mandates transparency in automated monitoring and decision-making systems used by platforms.

Issues with the Bill

Disclosure of Algorithmic Monitoring:

  • Impact on Business: Requiring disclosure of algorithmic monitoring and reasons for terminations could potentially complicate business operations and affect the ease of doing business.

Minimum Wages and Working Hours:

  • Absence of Regulation: The bill does not address crucial issues like minimum wages or working hours for gig workers, which are essential for ensuring fair compensation and working conditions.

Welfare Board Model:

  • Limited Scope: While the welfare board provides some benefits, it does not fully replace institutional social security benefits such as provident fund, gratuity, or maternity benefits.

Scope of Regulation:

  • Subset of Workers: Unlike the Code on Social Security, 2020 (COSS), which defines and regulates both gig workers and platform workers separately, the Karnataka Bill focuses only on platform-based gig workers. This narrower focus may limit the bill's overall effectiveness in addressing the needs of all gig economy participants.

Comparative Context

Rajasthan’s Legislation:

  • Pioneering Approach: Rajasthan is currently the only state with legislation specifically addressing the welfare of gig workers, setting a precedent in the area of gig worker rights and benefits.

Code on Social Security, 2020 (COSS):

  • Broad Framework: The COSS provides a more comprehensive framework by regulating both gig workers and platform workers, which may offer a more robust approach compared to state-specific legislation.

Gig Workers and Policy Initiatives

Definition and Categories of Gig Workers

Definition:

  • Code on Social Security, 2020: Gig workers are defined as individuals who perform work or participate in a work arrangement and earn from such activities outside of the traditional employer-employee relationship.

Categories:

  • Platform-Based Gig Workers: These individuals work through online software apps or digital platforms. Examples: Delivery workers for companies like Zomato or Uber.
  • Non-Platform-Based Gig Workers: These include casual wage workers in conventional sectors, either part-time or full-time. Examples: Domestic workers, freelance artisans.

Drivers of Growth in the Gig Economy

  • Technological Advancements: Innovations in digital platforms and apps have enabled the growth of gig work.
  • Urbanization: Increased urbanization has created a demand for on-demand services.
  • Rising Middle-Class Consumption: Growing consumer demands for flexible services.
  • Shifts in Consumer Preferences: A trend towards on-demand and convenience-based services.
  • Work-Life Balance: Workers seeking greater flexibility in their work arrangements.

Challenges for Gig Workers

  • Digital Divide:
  • Issue: Unequal access to internet services and digital technologies.
  • Impact: Limits the opportunities available to gig workers, especially in rural or underdeveloped areas.
  • Data Protection:
  • Issue: Lack of transparency in how platform companies collect, store, and share personal data.
  • Impact: Affects the right to privacy of workers.
  • Lack of Employee Status:
  • Issue: Gig workers are not considered employees under traditional labor laws.
  • Impact: Results in challenges such as the inability to form unions and potential exploitation.
  • Uncertain Nature of Jobs:
  • Issue: Job security and regularity of wages are often unpredictable.
  • Impact: Creates financial instability for gig workers.
  • Lack of Social Protection:
  • Issue: Absence of traditional employment benefits like health insurance and provident fund.
  • Impact: Workers lack crucial safety nets.
  • Algorithmic Management:
  • Issue: Workers are subject to performance evaluations based on algorithms and ratings.
  • Impact: Can lead to stress and pressures related to job performance.

Steps Taken for Gig Economy in India

  • Code on Social Security, 2020:
  • Provision: Extends social security benefits to gig workers.
  • Code on Wages, 2019:
  • Provision: Establishes a universal minimum wage and floor wage applicable to both organized and unorganized sectors, including gig workers.
  • e-SHRAM Portal:
  • Function: A national database for unorganized workers, including gig workers.
  • Pradhan Mantri Suraksha Bima Yojana (PMSBY):
  • Benefit: Provides accidental insurance cover of Rs. 2 lakh per year for eligible registered unorganized workers, including gig workers.
  • Collaboration with National Law School of India University (NLSUI):
  • Purpose: Assisting in the development of new schemes for gig and platform workers.
  • Partnership: MoU with Employees Provident Fund Organisation (EPFO).

Way Forward

  • Proper Estimation of Gig Workers:
  • Action: Conduct separate enumeration exercises to accurately assess the number of gig workers.
  • Catalyze Platformization:
  • Proposal: Introduce initiatives like "Platform India" to support self-employed individuals in accessing broader markets.
  • Accelerate Financial Inclusion:
  • Action: Provide institutional credit to vulnerable gig workers through tailored financial products, leveraging FinTech innovations.
  • Enhancing Social Inclusion in the Digital Economy:
  • Action: Enable access for diverse groups, including women and persons with disabilities, through skill development and financial support.
  • Skill Development for Platform Jobs:
  • Action: Implement outcome-based, platform-led models for skilling and job creation.
  • Integration: Combine employment and skill development portals with ASEEM portal for comprehensive support.
  • Universal Social Security Coverage:
  • Action: Extend social security measures, including paid sick leave, insurance, and pension plans, as outlined in the Code on Social Security 2020.
  • Tripartite Dialogue:
  • Action: Foster discussions among governments, platform unions, and employer bodies on labor issues and worker well-being in the platform economy.

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