IMPACT OF THE SOCIAL SECURITY CODE��ON PLATFORM WORKERS

The rise of digital platforms over the previous decade has resulted in a significant jump in the requirement for more platform workers. This sudden requirement is coupled with a need for better laws which can provide adequate protection to this growing work force. The existing labour and employment laws are dated and do not regulate the employment of such platform workers. As it stands, the platform workers are not recognised under any existing laws and moreover, they do not fall within the scope of the terms ‘workmen’ and/or ‘employees’, as is provided under the existinglabour and employment laws and traditionally have not been provided statutory benefits at par with the conventional employees.

However, as per the provisions of the Code on Social Security, 2020 (“Code”) (which is yet to be implemented), platform workers along with gig workers have now been afforded recognition as new categories of workforce in India. According to Section 2(60) of the Code, ‘platform work’ means “a work arrangement outside of a traditional employer-employee relationship in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems or to provide specific services or any such other activities which may be notified by the Central Government, in exchange for payment”[1] and ‘platform workers’ are the workers engaged in such platform work [2]. 

In essence, the drivers engaged on platforms like Ola and Uber and the riders engaged on platforms like Swiggy and Zomato, etc., can be classified as platform workers. Such workers do not have a traditional employer-employee relationship with the platform that engages them and are often contracted on temporary assignments only on a need basis (i.e., work is assigned to them when the platform worker signs up for assignments on the application of the platform). Consequently, they are not entitled to access the several rights and protections that are usually available to regular employeesthat perform work on a daily basis. The lack of protection under current labour and employment laws is a result of misclassification of platform workers as independent contractors or self-employed persons. However, the changes brought about by the Code intend to offer better social security to such platform workers.  

The following are some of the major changes introduced by the Code with respect to platform workers:

1. Registration Requirement: Every platform worker must register themself by making an application to the Central Government. Such registration is subject to the platform worker havingcompleted 16 (sixteen) years of age. Upon registration, each such platform worker will be assigned a distinguishable number. This process will lead to easy identification of platform workers and the Government can formulate schemes accordingly.

2. Social Security Schemes: As per the Code, the Central Government will formulate and implement various social welfare schemes for platform workers on matters relating to life and disability cover, accident insurance, health and maternity benefits, old age protection, creche, etc. Every platform worker that has procured registration under the Code may avail the benefits of such schemes. The National Social Security Board constituted under the Code shall inter alia (a) recommend to the Central Government on suitable social welfare schemes for platform workers, and (b) monitor such social welfare schemes which are being administered by the Central Government. 

3. Social Security Fund: The Central Government will establish a social security fund for the social security and welfare of the platform workers. One of the primary sources for such fund is contribution received from the aggregators (i.e., platforms such as Ola, Uber, etc), rangingbetween 1 (one) to 2% (two percent) of the annual turnover of such aggregator subject to a cap of 5% (five percent) of the amount paid or payable by an aggregator to such platform workers. 

Although the introduction of the Code and the recognition of platform workers under such Code is a step in the right direction, the new labour codes lack adequate mechanisms to address the various issues faced by such platform workers. The disparity between the regular employees and the platform workers continues to remain, which results in various benefits and protections not being extended to the platform workers. Further, platform workers do not have access to the benefits provided under the other labour codes such as the Industrial Relations Code, 2020 (“Industrial Relations Code”), Code on Wages, 2019 (“Wages Code”), etc. 

The Industrial Relations Code empowers the employees and trade unions with collective bargaining powers which in turn gives them the right to negotiate with their employers on unfavourable terms. Since platform workers are not covered within the scope of such code, despite being in such big numbers, they do not have such bargaining power against their employers. The Wages Code on the other hand ensures that the employees are paid fixed minimum wages for the work performed by them. 

However, due to exclusion of platform workers from the scope of such code, the platform workers may be subject to uncertain or varying wages which could often be below the minimum wages prescribed under the Wages Code. Moreover, the benefits related to overtime pay, leaves, etc., may not be accessible by such platform workers. 

Although the practical impact of the changes introduced by the Code regarding platform workers isyet to be seen, it appears that they will continue to find themselves in a vulnerable position. That said, some of these critical aspects must be reassessed to ensure better social protection for such workers. Several states are in the process of preparing the draft rules for the Code and the true impact can be assessed only once finalized. 

References:

1. Section 2 (60) of the Code on Social Security, 2020.

2. Section 2 (61) of the Code on Social Security, 2020.