The Karnataka Gig Worker’s Protection Bill: Laudable Yet Conspicuously Imperfect

S.V. Ghopesh

Introduction

The Karnataka state government recently issued a draft of the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Bill, 2024, a rights-based bill that seeks to protect the rights of platform-based gig workers and places obligations on aggregators in relation to social security, occupational health, and safety of workers. It also acts as a means through which gig workers can access social security schemes. The bill, if passed, would be the second such legislation, after The Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023, in India that would regulate the platform-based gig economy and protect the rights of the workers in this sector. There are currently no central-level laws in India to deal with the burgeoning gig economy, and the Courts also have not had any lawmaking role in relation to the gig economy. As it stands, the gig economy is mostly unregulated across the country, save for Rajasthan, and the most affected by this state of affairs are the gig workers, which is in stark contrast to other types of workers who are protected by various legal instruments or judgments.

The central-level Code on Social Security, 2020, recognizes gig workers and defines the term as a person who performs work, or participates in a work arrangement, and earns from such activities outside of a traditional employer-employee relationship (§ 1(35)). As can be followed, the very definition of the word “gig worker” makes it clear that they are not employees, and this is relevant, as in India, most social security schemes are dependent upon “employee status,” and this makes it so that those who do not fall within the ambit of the employee status cannot access these schemes. On the other hand, unorganized workers presently enjoy social security benefits from the UWSSWA, from which also gig workers are not protected. When the Code comes into effect, the UWSSWA will be repealed, but still, gig workers will be left behind, as the Code clearly delineates an “unorganized worker” and a “gig worker”, and the latter is not included within the former’s meaning. This is a crucial distinction to note, as the Central governments and State governments are mandated to frame and notify welfare schemes for unorganized workers, but for gig workers, there is no such mandate and is impliedly discretionary. Even more, gig workers cannot access certain schemes meant for unorganized workers.

Per the latest official data, there are about 77 lakh estimated workers in the platform-based gig economy. It becomes alarming that such a large amount of the working population cannot access most social security schemes, and as such, the Bill’s importance cannot be overstated, especially as it introduces many novel crucial provisions that are not present in the Rajasthan Act. In the absence of any other law in India, save for one, and a general dearth of laws, be it legislations or cases that regulate the gig economy around the world, union, as well as other states which may frame their own laws, are very likely to be inspired by the Karnataka bill and to follow its essentials. Case in point, much of the Karnataka bill’s basic framework itself is inspired by the precursor Rajasthan Act, even if it introduces many novel crucial prospects not found in the Act. Moreover, the bill’s provisions related to social security are likely to influence the decisions of the higher courts in future cases, which will have both long-lasting practical effects as well as long-lasting implications. For these considerations, it is imperative to scrutinize important provisions of the Bill that confer social security benefits from a policy-making perspective that seeks to ensure the gig worker’s rights and protection. This paper will attempt to scrutinize, at a theoretical level, important provisions of the bill that aim to confer social security benefits, which have discernible and potential issues, and attempt to offer practicable solutions to the same

Application of the Act

First and foremost, the jurisdictional application of the bill in Karnataka raises significant concerns. § 1(3) outlines the two types of entities: an aggregator (§1(3(1)) and a gig worker and platform (§1(3)(ii)) to which the bill applies. With respect to the former, the Bill only applies to an aggregator that provides eight types of services, as listed in Schedule-1 of the Act. While the scope of the schedule is vast, §1(3) fails to account for the very nature of platform-based gig work and the digital economy in general, in that these industries rapidly evolve in terms of nature, scope, and complexity. It is very plausible that certain services may come to be in the near future that can fall outside the ambit of the schedule. It should be noted here that the word aggregator has already been defined under the Act as “a digital intermediary for a buyer of goods or user of a service to connect with the seller or the service provider, and includes any entity that coordinates with one or more aggregators for providing the services” (§(2)(b)); and this definition can accommodate the rise of any future service that may elude Schedule-1. § 1(3)(i) is perplexing, considering that § 1(3)(ii), which provides for the application of the Act on gig workers and a platform, takes the far simpler and effective route of just referring to the statutory definitions, and the Rajasthan Act, from which the Karnataka bill draws heavily, also follows the simpler route. It seems as though § 1(3)(i) was made to serve Schedule-1 when it should be the other way around. A simple revision of § 1(3)(i) to refer to the statutory definition would be forward-thinking and more inclusive.

Working Conditions

§ 17 of the bill deals with reasonable working conditions and casts an obligation upon the aggregator to provide for and maintain a safe working environment and to comply with occupational safety and health standards. This provision of the Act, while reasonable, is only one-dimensional in the sense that it is only concerned with occupational safety and health standards. It does not deal with pressing issues such as the long working hours that most gig workers are subject to. § 2(d) The Motor Vehicle Aggregator Guidelines provides that a driver cannot work for more than 12 hours and mandates a 10-hour break, but these are guidelines and are often not complied with by the aggregators due to a lack of legal liability affixed to this. This non-compliance is reflected in the still pending IFAT case, in which one of the contentions of the petitioners was to ensure aggregator compliance with this as well as other such provisions of the guidelines. Related to working conditions, the bill falls short in addressing employment flexibility and working schedules. § 12(4) touches on this by allowing the gig worker to reject a determined number of gig work requests, but does not expound further, leaving these matters in the hands of the aggregators for the most part. A progressive solution to employment flexibility would be to let employees set their flexibility as well as their own working schedules but letting the aggregator determine the maximum working hours. . The addition of a clause in § 17 that provides for either reasonable maximum working hours and mandatory breaks or a clause that lets the workers have flexible working schedules would bolster § 17. Another way to deal with the issues related to working conditions would be to guarantee certain conditions in a contract entered into by the gig worker and aggregator, which leads to the next section of this paper.

Fair Contractual Agreements

§ 12 of the Act, titled “Obligation to enter into fair contracts,” appears to be the principal provision of the Bill that is to govern contractual agreements between gig workers and aggregators. It is peculiar that § 12(1) only provides for all contracts to be compliant with the Bill and does not actually cast an obligation upon the parties to enter into a contract, considering the very namesake of the whole §. Schedule 2 of the Bill, titled “Disputes resolvable by gig worker,” is relevant here, as the first item in the schedule empowers gig workers to raise a dispute against the aggregator when a contract is not provided per § 12(2) of the Bill. § 12(2) only provides that the contracts entered into by the gig worker use simple language that is easily comprehensible and available in a language understood by the gig worker, and nowhere does it mandate the existence of a contract in the first place. Reading the first item in Schedule 2 and § 12(2) together, it would appear that a gig worker can raise a dispute only when there are comprehension and language problems in the contract, and the gig worker cannot raise disputes requiring a contract in the first place. Looking at foreign law for the situation on contracts, The Filipino Freelancer Protection Act and the American State of Illinois’s Freelance Workers Protection Act, 2023, are legislations worldwide that seek to provide protection to gig workers as distinguished from employees (these legislations protect the rights of freelance workers in their respective jurisdictions, and gig workers form part of freelance workers), and they mandate a contract to be entered into by the gig worker and aggregator for any service rendered. As can be followed, § 12 actually casting an obligation to enter into fair contracts would mean that the idea is incorporated not only in name but also in substance and would also empower the dispute power of the gig workers.

§ 13 of the Bill, titled “contract guidelines and templates”, empowers the State government to issue guidelines for contracts in specific sectors and review templates submitted by aggregators to ensure fairness. However, this delegation of responsibility raises several issues that need to be addressed. This provision, instead of setting a clear set-in-stone contract template that incorporates general essential elements of a fair contract suitable across multiple sectors, directs the state government to do it. Such delegation of responsibility is problematic for the reason that § 13 itself providing for general elements of a fair contract will make it so that there are legally enforceable rights that the workers would have, adding an extra layer of certainty to the social security conferred onto the gig workers that guidelines may not be able to provide. For a precedential backing to this line of reasoning, we can look at the landmark Right to Education case, where the Apex Court uplifted the right to education that was a directive principle (an acting guideline) to a fundamental right (a legally enforceable right) that ensured stronger protection to the right to education. The instance of the IFAT case and Motor Vehicle Guidelines, as previously discussed, highlights direct non-compliance with working conditions and also points to the lack of binding legal force that guidelines possess, especially in the context of the gig economy. Furthermore, considering administrative delays and administrative overloads, for which Indian governments have been notorious, it would also be more practical to embed these essentials into § 13.

§ 13 could draw inspiration from Filipino and Illinois laws dealing with freelance workers. § 4 of the Filipino law mandates listing out essentials such as itemization of services, details of compensation and other worker’s benefits, period of employment, etc., in the contract. Similarly, § 15(b) of the Illinois law mandates essentials such as the value of products and services rendered by the freelance worker and the date on which the contracting entity must remunerate the other party to be included in the contract. Revising § 13 of the Karnataka bill to explicitly incorporate such similar essentials as provided in the foreign laws that go beyond specific industries and are applicable to all, would be forward-thinking and bolster not only this provision but also § 12 of the bill. However, even a well-thought-out fair contract may not be enough to guarantee comprehensive social security to the gig workers due to the influence wielded by often skewed and biased algorithmic and automated decision-making systems, leading to the next topic of concern covered within this paper.

Termination and Payment Deduction in Light of Algorithmic System

§ 15 of the bill addresses the grounds for termination and mandates that aggregators provide valid reasons in writing 14 days prior to termination. While this provision is effective in what it sets out to do it does not fully account for the algorithmic and automatic decision making system’s influence on the problem of arbitrary and immediate deactivation of the gig worker’s ID. The Amsterdam Dutch Court ordering reinstatement of drivers terminated on the decision solely based on automatic processing systems highlighting the problem of automated profiling  and the landmark Uber vs Aslam case which recognized the potential for coercive automated systems  (¶129) are relevant here as there are very few case laws worldwide that even deal with matters concerned with the gig economy and two major cases recognizing the potential for skewed algorithms is noteworthy . While it is clear that § 15 is intended to cover for the issues caused by such skewed algorithms, mandating human monitoring and supervision over all terminations would leave no scope for unfair terminations by the algorithm – a loophole that might persist under the current wordings of § 15. For this, inspiration can be drawn from Article 22 of the EU GDPR which forbids platform based workers from being subjected to any decision solely taken by automated processing including profiling that produces legal or practical ramifications.  Tangentially, § 16(1) of the bill which mandates the aggregator to provide reasons for deduction of payment similarly while well intended, suffers the same potential loophole as § 15 considering the massive algorithmic influence on deducted payment.  It is worth noting here that the Bill does deal with regulating automated systems in the form of § 14 which seeks to ensure transparency on the working of such systems. § 14 however does not deal with the decision making power of algorithms and concerned problems therewith and considering § 14(3) already takes cognizance of automated profiling it would make sense to incorporate a provision which embeds the principles enshrined in article 22 of the EU GDPR. Therefore, addition of clauses to §15 and §16 emulating the EU approach would be a major advancement in terms of curbing skewed algorithmic impact on livelihoods.

Conclusion

Different jurisdictions across the world have opted for varied methods to handle the protections of gig workers – with the EU seemingly heading towards giving gig workers full benefits as regular employees, California giving gig workers the presumption of employee status unless proved otherwise by the hiring parties as per the AB5 test, and Illinois and the Philippines protecting gig workers under the umbrella accorded to freelance workers as aforementioned. With the Bill and the Rajasthan Act, India’s approach is clearly headed towards separating gig workers from employees and unorganized workers, as seemingly envisioned by the Social Code. The potential impact these developments can have on the previously mentioned IFAT case, where the petitioners sought the Supreme Court to declare gig and platform workers to be classified as unorganized workers within the meaning of the UWSSA, is interesting. Digressing, it becomes even more important that such laws made to protect gig workers are as airtight as possible. To summarize, the Bill, while laudable in its approach towards protecting gig workers, especially in regard to its precursor law, still has some potential for gaps and drawbacks and this paper has attempted to highlight some of the potential issues and has offered solutions so as to strengthen the theoretical legal framework.

The author is a second year student at Tamil Nadu National Law University (TNNLU).