Are Uber or Ola Drivers ‘Workmen’ under the Industrial Disputes Act, 1947?

[Shourya Bari is an associate with a law firm in Mumbai and Aditi Singh Kashyap a 4th year B.A., LL.B. (Hons.) student at Jindal Global Law School, Sonipat]

Introduction

This post will explore the question whether Uber or Ola Drivers fall within the scope of ‘workman’ as defined in section 2(s) of the Industrial Disputes Act, 1947 (“ID Act”) to be able to obtain the benefits stipulated under that legislation.

The first part of the post will lay down the Indian jurisprudence on ‘workman’. Second, it will discuss the nature of activities performed by the drivers. Third, it will combine the learnings from the first and second part to conclude that drivers are indeed workmen under section 2(s).  

Judicial Interpretation of the Scope of ‘Workman’ by Indian Courts

A. Dharangadhara Chemical Works v. State of Saurashtra (AIR 1957 SC 264)

The Court discussed the characteristics of a ‘workman’, which offer a standard against which facts must be tested to ascertain whether activities performed by an individual impute the identity of a ‘workman’ to that individual. The Court noted that the broad distinction between a workman and an independent contractor lies in the fact that while the former agrees to do the work himself, the latter agrees to get other persons to do the work. Personal commitment to the work is essential to be absorbed within the scope of ‘workman’ under section 2(s) of the ID Act.

B. Management of DC Dewan Mohideen Sahib v. Janab S. Ahmed Hussain & Sons (AIR 1966 SC 370)

The Court noted that a mere claim to be an independent contractor does not actuallymake anyone an independent contractor. The element of independence of an independent contractor must be verified. To be an independent contractor, the independence must realand not illusory. Real independence entails a possession of the right to insist to a certain degree how an activity is to be conducted.

C. Workmen of Nilgiri Cooperative Society Ltd. v. State of Tamil Nadu (2004) 3 SCC 514

To ascertain whether the nature of activities performed by an individual impute an identity of a ‘workman’ to that individual, the Court coined the integration testin this decision. Integration test essentially answers the question whether the concerned individual has beenintegrated into the employer’s concern or remained independent of it. A holistic view must be taken to sift through the following questions:

(a) Who is the appointing authority?

(b) Who is the paymaster?

(c) Who can dismiss?

(d) What is the extent of control and supervision?

(e) Is there any alternative service of the employee?

(f) The nature of the work?

(g) Nature of establishment?

D. Hussainbhai, Calicut v. The Alath Factory (1978) 4 SCC 257

This decision espoused the economic control testto determine whether an individual could be brought under the umbrella of section 2(s) of the ID Act. The economic control test asks the question whether an employer has economic control over the worker’s subsistence, skill and continued employment.

Now, we move on to an examination of the factual matrix surrounding Uber and Ola drivers relevant for our consideration.

How do Uber Drivers Actually Function?

A writ petition has been filed by the ‘Delhi Commercial Driver Union’ before the Delhi High Court against Uber. They have prayed for a writ of mandamus to direct Uber to comply with labor laws of India. This post shall rely on the writ petition to discuss functions performed by drivers, which is essential to determine whether they are “workmen” for the purposes of the ID Act.

Customers must download the mobile application on their phone. Once a customer makes a booking on their mobile application, Uber searches for registered drivers around the customer’s location. Uber retains sole discretion in selecting a driver to service a ride. The drivers have no say with respect to selection of a customer.

The drivers lack any meaningful independence. Once the driver accepts a ride, he is forbidden by Uber Policy to enquire about the destination. The driver cannot decline the booking after getting to know the destination. The driver lacks any voice in deciding the fare to be paid, or the route to be taken. The fare is arrived at by the computer systems of Uber, feeding on details of the trip through the phone used by the driver.

Not everyone can become an Uber Driver. A verification is conducted by Uber before selecting its drivers. Drivers are required to share personal information with Uber, such as bank account details, place of residence, family members, driving license, PAN Card No., etc.

A driver functions under stringent performance standards set by Uber. A driver’s access to the Uber platform will be suspended by logging him off his mobile application, if he declines three trips in succession. A driver is rated by customers on a scale of 0 to 5. If a driver’s ratings fall below 4.5, his registration with Uber is deactivated.

An enormously significant aspect of the functioning of drivers is that they cannot share their Driver ID with a fellow driver as his right to use the mobile application is not transferable. They are barred from carrying with them a co-driver during the ride. In short, a driver must be personally engaged in rendering services.

Analysis: Should Uber Drivers be Treated as Workmen under section 2 of the ID Act?

Now, the functions performed by drivers and their working conditions must be legally tested against the jurisprudence discussed earlier in this post.

First, the Dharangadhara decision specifically utilizes the criterion of personal commitmentto distinguish between an independent contractor and a workman. Therefore, the question is, do drivers personally commit to their work? The answer is an unequivocal yes. Not only do drivers personally commit to their work, they do so not by choice but under compulsion. Their agreement with Uber requires to them to do so.  

This requirement bears serious consequences. Drivers cannot let anyone else drive in their place. If a driver is unable to drive their car for a few days owing to any compelling circumstance, they would have to forego their earnings for those few days, as Uber does not allow any substitute.  Therefore, drivers fulfill the criterion of personal commitment.

Second, the DC Dewan decision elicits an inquiry into whether the independence of an independent contractor is real or illusory.Therefore, an examination of a driver’s independence is necessary. At the outset, not anyone can become a driver. Possession of driving skill and a vehicle aren’t enough. One needs to qualify the extensive verification conducted by Uber. One needs to share their multiple personal details with Uber. Post qualification as a driver, serious constraints are imposed on how they function. A driver who accepts a ride is forbidden from enquiring about the destination. Once made aware of the destination, the driver is prohibited from cancelling the ride. A driver has no voice is deciding the fare to be charged. It’s calculated by Uber’s computer systems. Furthermore, a driver is rated based on his performance by the passengers.

An independent driver ideally should possess the right to inquire about a passenger’s destination before accepting a ride. The driver should be able to determine the fare to be charged, and should not be deprived of registration if the driver’s ratings drop below a specified threshold. Most importantly, an independent driver would not subject oneself to a rating system which constantly puts the driver on the edge. An Uber Driver nevertheless puts up with all these stringent conditions. Such a driver is precluded from taking decisions which affects material aspects of the work they perform. Therefore, the drivers possess no independence.  

Third, these indicators also satisfy the test of integrationcoined by the Nilgiri Cooperative decision. Drivers are integrated into the company. They don’t function independently, but on terms set out by Uber or Ola. Those terms are not mere formalities but cast a direct and strong effect on the core aspects of a Driver’s work.

Finally, we must consider the economic effect of the Hussainbhai decision. Uber collects the payment on behalf a driver. They deduct their share and disburse the rest to the driver on a weekly basis. This is an example of direct economic control. Apart from that, by precluding a driver’s voice in deciding a ride’s fare or prohibiting him from using a substitute in case the driver is not able to drive, the company indirectly impacts a driver’s economic sustenance. Therefore, in more ways than one, Uber or Ola exercises economic control on their drivers.

Conclusion

The outcome of this analysis is that a driver neatly satisfies all conditions imposed by Indian courts to qualify as an ‘workman’ under section 2(s) of the Industrial Disputes Act, 1947. The ID Act did not, at the time of its creation, envisage an activity of this nature. However, its objective to protect rights of workmen is equally relevant even today. For the legislation to stay relevant, it must adapt to a developing world, where several activities are being conducted through the Internet.

Considering that, we conclude with the argument that drivers should come within the scope of a ‘workman’ under section 2(s) of the ID Act.

–Shourya Bari & Aditi Singh Kashyap