[Shreya Bhatnagar and Aatman Shukla are students of B.A. LL.B. (Hons.) at National Law University Delhi]
Today, one of the greatest drivers of the ‘on-demand employment’ economy has been the rise of platform-based apps such as UberWorks or Urban Company, which have replaced traditional paper-applications and references for seeking employment. Such platform-based apps have eliminated the ‘employer’ as middleman, putting workers directly in touch with customers for a fixed percentage of the remuneration. The workers can now take up each ‘job’ as a project at their own convenience when it comes to timings, holidays or the ability to turn down an offer, effectively giving birth to a ‘gig economy’.
However, this comes with its own challenges that must be addressed by the legal firmament, lest they spiral out of control. In the gig economy, the primary downside faced by workers is their treatment as independent contractors and not as employees. This has resulted in a lack of job security[1] or social security benefits,[2] no fixed income[3] and inapplicability of legislation on employment standards.[4] Furthermore, the lack of formal employment with a single organization precludes the workers from raising any demands for better working conditions, legally unionizing or filing for unfair labour practices.[5]
When discussing the challenges facing the workers, the International Labour Organization (ILO) voiced its fear that platform-based apps may take the labour rights movement back to the 19th century and create ‘digital day-labourers’. Across jurisdictions, the legal landscape has had to evolve to accommodate the proliferation of such non-traditional forms of employment. For instance, French labour law now extends social security coverage against accidents at work to platform workers, allowing them their right to collective action, access continuing vocational education and validates acquired experience.[6] Similarly, the European Parliament passed new rules for protection of gig and platform workers, giving them rights like predictability of workflow, the right to refuse such work and removal of exclusivity clauses.[7]
The New ‘ABCs’ of Labour Law
California and the United Kingdom[8] were the earliest jurisdictions to reorient their labour framework to accommodate for platform-based workers. In 2018, the California Supreme Court gave its judgement in the case of Dynamex Operations West, Inc. v. Superior Court of Los Angeles.[9] This was later codified into Bill AB5 and approved by the California State Legislature in September 2019. The judgment not only shifted the onus to prove a worker is an independent contractor on the hiring entity (including platforms) but also expanded the definition of ‘employees’. According to the three-pronged ABC test laid down in the case, workers are independent contractors only if they (a) are free from control and direction of the employer; (b) perform work outside the usual course of business of hiring entity, and (c) are engaged in an independently established trade of the same nature as performed for hiring entity.[10] Furthermore, all three criteria must be fulfilled and if even one of these do not apply to a worker, they are considered ‘employees’ and all concomitant rights must be given. The criteria for exclusion of certain kinds of occupation from the ABC test is defined in the Code itself.[11]
Though this is a progressive step in granting labour rights to gig workers, there are deficiencies in practical application of the Dynamex ruling, such as overlooking the needs of certain stakeholders in whose interests the law is being made. In some cases, workers employed through platforms do desire to maintain their independence from employer-employee relationships and will have to forego advantages like flexible working schedules, the ability to reject gigs given by hiring entity, receiving payment per gig rather than a fixed salary and tax deductions given to independent contractors. These workers include freelance writers, photographers, musicians and other artists who use gig work over and above their usual employment.[12] Additionally, owing to the business structure of some entities, the inadvertent effect of this test exposes the employer to the risk of misclassification of workers along with a range of penalties and dues.[13] The approval of this Bill was met with protests by various associations including journalists, truck owners and other independent workers who will come under the wide ambit of this law.
Space for Technology in Indian Labour Law
Hitherto, the classification of workers into employees or independent contractors was determined by tests introduced by the judiciary. Out of the four Labour Codes sought to be implemented in India, only the Code on Social Security makes a reference to platform or gig workers and seeks to provide social security schemes to such workers. However as these are in the chapter related to unorganized workers, they are unlikely to get mandated employee social security benefits like employee provident fund or state insurance and gratuity.
In a study conducted across the European Union, a multitude of terms like ‘gig work’, and ‘crowdwork’ were used to denote the use of online platforms for work. It defined platform work as “a form of employment that uses an online platform to enable organisations or individuals to access other organisations or individuals to solve problems or to provide services in exchange for payment”.[14] An identical definition is employed in the Indian Code.[15] Also, the scope of gig worker is quite broad as it includes any work arrangement outside the “traditional employer-employee relationship”.[16] This oversimplification of ‘gig work’ does not address nuances in the formats of employment, like online and offline tasks, nature of services, outsourcing to temporary staffing firms, etc. This might lead to uniform regulatory mechanisms for, say, freelance writers and delivery workers, who are subject to different occupational hazards. Therefore, clear and distinct legislation are needed to address the heterogeneity of platform work, especially owing to the constantly changing nature of platform models.
The Code further defines ‘aggregator’ as “a digital intermediary or a market place for a buyer or user of a service to connect with the seller or the service provider.” While the Code requires that schemes for platform and gig workers contain “the manner of administration of the scheme; the agency or agencies for implementing the scheme; the role of aggregators in the scheme and the sources of funding of the scheme”,[17] such a definition of aggregators is misleading as it downplays the control and interference of these ‘intermediaries’ over workers and key aspects of their work.
The role of platform owners in regulating workers brings us to the elements of control and supervision which are established tests for determining employer-employee relationship.[18] The myriad formats in which online platforms operate reflect varying degrees of control exerted by the employer. The need for regulation of online platforms arises primarily because even an app with an algorithm of matching workers’ skills with appropriate jobs exerts control over the workers, often by employing tracking mechanisms, rating systems and job-scheduling. For instance, drivers are incentivized to work in certain areas or at certain times by algorithm driven mechanisms like surge pricing, or are penalized for ‘logging off’ from the platform for a certain period of time or on the basis of ratings. Not only this, sometimes their tasks and method of performing them are surveilled, but the worker remains in the dark as to how these data-driven decisions are taken and usually have no avenue of appeal. If all platform workers are termed as employees, there is a risk of over-inclusion of workers and their misclassification, as well as disruption of the digital economy model as is evidenced in other jurisdictions. Hence, it is imperative that platform workers are not lumped with either employees or independent contractors which may not cater to the interests of either platform owners or workers.
An example of evolution of categories of workers is the adoption of the ‘dependent contractor’ doctrine as practiced in Canada.[19] In order to establish themselves as dependent contractors, the workers must establish that they have been regularly employed by the hiring entity to perform their tasks, reminiscent of the erstwhile standard of economic dependency as an indicator of employer-employee relationship that was law in India. Also, they must be authorized as representatives of the hiring entity (such as by wearing uniforms, or Uber sticker on cars) as a part of their daily course of work. The status of dependent contractor allows one to retain flexibility of working hours, independence from ‘employee’ status and receive payment per gig, while giving security as they are protected by the Minimum Wage Act and Working Hour Regulation Act.[20]
Way Forward – Regulation of Online Platforms
The surging unemployment rates in India, in addition to a sizeable chunk of population involved in low skilled work, only contributes to the vulnerability of such workers at the hands of online platforms. Therefore, there lies a need not only for reclassification of workers employed through platforms, but also regulating the means of working of such platforms themselves. In such circumstances, labour law must evolve with the times in recognizing how developments in technology and customer behavior are playing a key role in the sidelining and misclassification of the workforce, while preserving stability in the digital economy model.[21]
The ILO recently published a research paper, comprehensively covering the technical construction of “labour platforms”, detailing how digital platforms create technical barriers to curtail workers’ independence and favour market efficiency and consumer satisfaction over the needs of workers.[22] It argues that, for any kind of regulation to actually enhance worker’s rights and simultaneously not obstruct the working of platforms, it must also control the platforms and not just the workers’ status. The need for such regulation is evidenced by Uber’s ‘Project Luigi’ where it is solidifying its case of workers being independent contractors. Under this, the drivers can reject a trip without penalty and will also be able to view fares before such rejection or acceptance.[23] Solely focusing on worker’s status as opposed to the practices of the digital platforms allows them to exploit loopholes against the workers.
A mechanism that could help in ensuring continuity of labour for workers without disrupting the digital economy model would be mandating portability of information and reputational mechanisms of workers between platforms to enhance their opportunities.[24] Finally, the Government should not hesitate to foist some obligations on the platforms such as limiting worker surveillance, allowing for inter-worker networking for making collective demands, and allowing for appealability of algorithm-driven decisions like visibility of workers or assignment of work, which significantly impact the continued employment and sustenance of the worker.
- Shreya Bhatnagar & Aatman Shukla
[1] David Weil, The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It, Harvard University Press (2017).
[2] Id.; Molly Tran and Rosemary Sokas, “The gig economy and contingent work: an occupational health assessment”, 59(4) J. Occup. Environ. Med., e63–e66 (2017).
[3] “Report on the Economic Well-Being of U.S. Households in 2018”, Federal Reserve Board (May 2019), available at: https://www.federalreserve.gov/publications/files/2018-report-economic-well-being-us-households-201905.pdf
[4] Janine Berg, Marianne Furrer, Ellie Harmon, Uma Rani and M. Six Silberman, “Digital labour platforms and the future of work: Towards decent work in the online world”, International Labour Organisation (2018).
[5] Sarva Shramik Sangh v. Indian Smelting and Refinery Co. Ltd. and Ors., (2003) 10 SCC 455. See also, 29 U.S.C. (Labor) §§203(g), 206(a) and 207(a).
[6] Title III, Law 2016–1088 Relating To Work, The Modernization Of Social Dialogue And The Security Of Professional Careers.
[7] “MEPs approve boost to workers’ rights in the gig economy”, Press Release, European Parliament, April 16, 2019, available at: https://www.europarl.europa.eu/news/en/press-room/20190410IPR37562/meps-approve-boost-to-workers-rights-in-the-gig-economy.
[8] Uber BV v. Aslam, [2018] EWCA Civ 2748.
[9] (2018) 4 Cal. 5th 903.
[10] Id.
[11] §2750.3, Labour Code, California.
[12] David Wagner, “Here’s How AB5, California’s New Freelancer Law, Could Affect You”, LAist, December 31, 2019, available at: https://laist.com/2019/12/31/ab5_california_gig_economy_workers_uber_lyft_freelance_writers_musicians_dynamex_lorena_gonzalez.php
[13] Gregg Fisch, Sheppard Mullin, Chris Bell and Chris Parker, “Unintended consequences of Dynamex decision could affect California’s health care employers”, San Francisco Business Times, October 8, 2019, available at: https://www.bizjournals.com/sanfrancisco/news/2019/10/08/unintended-consequences-of-dynamex-decision-could.html
[14] “Employment and working conditions of selected types of platform work”, EuroFound, Publications Office of the European Union, Luxembourg (2018), available at: https://www.eurofound.europa.eu/sites/default/files/ef_publication/field_ef_document/ef18001en.pdf
[15] The Code on Social Security 2019, Ministry of Labour & Employment, Government of India, §2(55).
[16] Id., §2(35).
[17] Id., §114.
[18] Dhrangadhara Chemical Works v. State of Saurashtra, 1957 LLJ 478; D.C. Dewan Mohideen Sahib & Sons v. Industrial Tribunal, Madras, AIR 1966 SC 370.
[19] Ontario Labour Relations Act, S.O. 1995, c 1, sch. A, §1 (Can.); Keenan v. Canac Kitchens Ltd., 2016 ONCA 79 (CanLII); Glimhagen v. GWR Resources Inc., 2017 BCSC 761; Rosen v. BMO Nesbitt Burns Inc., 2016 ONSC 4752 (CanLII).
[20] Id.
[21] Kim T, “The Gig Economy is Coming for Your Job”, The New York Times, January 10, 2020 at 6.
[22] “The architecture of digital labour platforms: Policy recommendations on platform design for worker well-being”, International Labour Organisation (2018), available at: https://www.ilo.org/wcmsp5/groups/public/—dgreports/—cabinet/documents/publication/wcms_630603.pdf.
[23] Faiz Siddiqui, “Uber’s secret project to bolster its case against AB5, California’s gig-worker law”, The Washington Post, January 6, 2020, available at: https://www.washingtonpost.com/technology/2020/01/06/ubers-secret-project-bolster-its-case-against-ab-californias-gig-worker-law/.
[24] Report by ILO (above).