Gig Worker Compliance For Digital Platforms.
I. Concept of Gig Workers and Platform Work
1. Meaning
A gig worker is a person who performs work or participates in a work arrangement outside the traditional employer–employee relationship, typically through digital platforms such as ride-hailing, food delivery, logistics, and freelance marketplaces.
A platform worker is a subset of gig workers who access organisations or individuals through an online platform to provide services.
II. Statutory Framework Governing Gig Workers
1. Code on Social Security, 2020
This is the first Indian legislation to formally recognise gig and platform workers.
Key features:
Separate legal category distinct from employees and contract labour
Entitlement to notified social security schemes
Shared responsibility of Central Government, State Government, and aggregators
2. Other Relevant Laws
Industrial Disputes Act principles (classification disputes)
Minimum wage and welfare jurisprudence
Data protection and algorithmic management norms (emerging)
III. Legal Status: Employee vs Independent Contractor
1. Classification Challenge
Digital platforms generally classify gig workers as independent contractors, but courts examine the real nature of the relationship, including:
Degree of control and supervision
Economic dependence
Integration with platform business
Ability to reject work
IV. Tests Applied by Courts
Control and supervision test
Economic reality test
Integration test
Multiple-factor test
No single test is conclusive.
V. Judicial Approach to Gig and Similar Workers
Case Laws
(a) Hussainbhai v. Alath Factory Thozhilali Union
Courts must look beyond contractual form
Economic control and dependency determine true employer
Intermediaries cannot be used to deny labour welfare
This principle is often applied in gig-worker disputes.
(b) Workmen of Nilgiri Cooperative Marketing Society Ltd. v. State of Tamil Nadu
No rigid formula to determine employment relationship
Multiple factors such as control, supervision, and nature of work must be considered
Substance prevails over labels
(c) People’s Union for Democratic Rights v. Union of India
Welfare legislation applies even where work is outsourced
Principal entity cannot avoid obligations by contractual structuring
Used by courts to examine platform accountability.
VI. Social Security Obligations of Digital Platforms
1. Statutory Duties Under Social Security Code
Platforms may be required to:
Contribute to social security funds
Share worker data with authorities
Facilitate registration of gig workers
Comply with notified welfare schemes
Case Law
(d) Regional Provident Fund Commissioner v. Hooghly Mills Co. Ltd.
Social security obligations are statutory and non-waivable
Financial or business model constraints are no defence
Principle relevant to future gig-worker contribution disputes.
VII. Minimum Wages and Fair Remuneration Issues
1. Wage Protection Debate
While gig workers are not yet fully covered under minimum wage laws, courts increasingly examine:
Algorithmic wage determination
Arbitrary deductions and penalties
Unilateral changes in compensation
Case Law
(e) Unichoyi v. State of Kerala
Minimum wage laws are welfare measures
Employer’s capacity to pay is irrelevant
This reasoning influences arguments for wage floors for gig workers.
VIII. Occupational Safety, Health and Welfare
1. Platform Responsibility
Emerging expectations include:
Insurance for accidents
Health and disability coverage
Safe working conditions (digital and physical)
Case Law
(f) Consumer Education and Research Centre v. Union of India
Right to health and safety is part of Article 21
Entities benefiting from labour owe a duty of care
Applied analogically to platform-based work.
IX. Collective Rights and Representation
1. Right to Association
Gig workers increasingly seek:
Recognition of associations
Collective bargaining rights
Case Law
(g) Bangalore Water Supply and Sewerage Board v. A. Rajappa
Broad interpretation of “industry”
Welfare statutes must adapt to changing forms of work
Provides constitutional backing for extending labour protections.
X. Compliance Risks for Digital Platforms
Reclassification as employer
Mandatory social security contributions
Penalties under labour codes
Data-sharing and disclosure obligations
ESG and reputational risks
Litigation over unfair termination (de-platforming)
XI. Best Practices for Gig-Platform Compliance
Transparent contractual terms
Voluntary social security contributions
Accident and health insurance coverage
Fair and explainable algorithms
Grievance redressal mechanisms
Periodic legal audits
XII. Gig Workers Under Labour Codes – The Road Ahead
Social Security Code enables scheme-based protection
Possible future extension of wage and OSH protections
Increasing judicial sensitivity to platform power imbalance
Digital platforms must prepare for progressive regulation rather than binary employee classification.
XIII. Key Takeaways
Gig workers are a statutorily recognised category in India.
Classification depends on substance over form.
Social security is the primary compliance obligation.
Courts apply traditional labour-law principles to new work models.
Platform control and economic dependence increase legal exposure.
Gig-worker compliance is a strategic legal and ESG priority for digital platforms.
RELATED Blog
comments