GS 3 Indian Economy and issues relating to planning, mobilization, of resources, growth,development and employment.
A gig economy is a free market system in which temporary positions are common and organizations contract with independent workers for short-term engagements.
Examples of gig employees in the workforce could include:
- independent contractors
- project-based workers
- temporary or part-time hires.
- The new Code on Social Security allows a platform worker to be defined by their vulnerability not their labour, nor the vulnerabilities of platform work.
- Swiggy workers have been essential during the pandemic.
- so they have faced a continuous dip in pay and no rewards for being essential workers.
- During the last six months, many platform workers have unionised.
- just as that of Uber and Ola taxi drivers has been taking shape for a few years now.
- Under the All India Gig Workers Union and have protested day in and day out.
- deploring Swiggy for reducing their base pay from ₹35 to ₹10 per delivery order.
Stable terms of earning have been a key demand of delivery-persons and drivers through years of protests.
About gig economy:
56% of new employment in India is being generated by the gig economy companies across both the blue-collar and white-collar workforce.
Effects in the Economy:
- Gig Economy is creating lakhs of jobs, but workers don’t see a future.
- Periodic Labour Force Survey from the Ministry of Statistics and Programme Implementation indicates
- unemployment rate at a 45-year high, at 6.1%
- the highest levels of joblessness is among urban youth.
- Other reports show that
- over the past two years domestic consumption has reduced
- industrial growth has flatlined
- private investments are lower
- market volatility has hit drivers of employment.
- Including undergraduates and diploma holders now look at the gig economy as a stop-gap solution until the market turns.
- Human resources firm Team Lease estimates that 13 lakh Indians joined the gig economy in the last half of 2018-19
- registering a 30% growth compared to the first half of the fiscal year.
- 21 lakh jobs that will be created in the metros in 2019-20
- 14 lakh will be in the gig economy.
- Food and e-commerce delivery will account for 8 lakh positions
- Drivers will account for nearly 6 lakh positions.
- Delhi, Bengaluru and other metros are expected to be the biggest drivers of this sector.
- Two-thirds of this workforce will be under the age of 40.
Three new labour codes:
- Platform and gig workers as new occupational categories in the making.
- In a bid to keep India’s young workforce secure as it embraces ‘new kinds of work.
- like delivery, in the digital economy.
- The Industrial Relations Code, 2020:
- Standing orders on matters related to
- workers’ classification
- wage rates
- termination of employment
- grievance redressal mechanisms
- is mandated to establishments with at least 300 workers, instead of 100 workers.
- Prior permission of the government before closure, lay-off, or retrenchment mandated to establishments
- The threshold for negotiating council of trade unions have been reduced from 75% workers as members to 51% of workers
- Workers may apply to the Industrial Tribunal in case of dispute – 45 days after the application.
- Standing orders on matters related to
- Code on Social Security, 2020:
- Social security funds for unorganised workers, gig workers and platform workers.
- Definition of employees expanded to include more workers like
- inter-state migrant workers
- platform worker
- film industry workers
- construction workers.
- Gratuity period for working journalists reduced from five to three years.
- Penalty for unlawfully deducting the employer’s contribution from the employee’s wages is only Rs 50,000 fine with no imprisonment.
- Central government may defer or reduce the employer’s or employee’s contributions (under PF and ESI) for a period of up to three months in the case of a pandemic, endemic, or national disaster.
- Representation of central government officials in the National Social Security Board for unorganised workers increased to 10 members.
- Code on Occupational Safety, Health and Working Conditions, 2020:
- Factory definition expanded to 20 workers forpremises where the process uses power and 40 workers where the process uses no power.
- Manpower limit on hazardous conditions removed and mandates applying Code on contractors employing 50 or more workers instead of 20.
- Daily work hour limit fixed at maximum of 8 hours per day
- Women will be entitled to be employed in all establishments for all types of work and employer required to provide adequate safeguards in hazardous conditions.
- Workers earning a maximum of Rs 18,000 per month, or such higher amount deemed as inter-state migrant workers and will be allowed to avail benefits like
- Public distribution system (PDS)
- building cess
- provident fund.
- Central and state governments to maintain or record the details of inter-state migrant workers in a portal.
- The Code on Wages, 2019, tries to expand this idea by using ‘wages’ as the primary definition of who an ‘employee’ is.
- The categories and where they appear become key signs for understanding what kind of identity different workers can have under these new laws.
- Platform delivery people can claim benefits, but not labour rights.
- does not allow them to go to court to demand better and stable pay.
- main role of the laws for a ‘platform worker’ is to make available benefits and safety nets from the government or platform companies.
- Code on Social Security, 2020, platform workers are now eligible for benefits.
- eligibility does not mean that the benefits are guaranteed.
- Actualising these benefits will depend on the political will and how unions elicit political support.
- states like Karnataka, where a platform-focused social security scheme was in the making last year.
With a population of over 1.3 billion, and a majority of them below the age of 35, relying on the “gig economy” is perhaps the only way to create employment for a large semi-skilled and unskilled workforce. It is important to hand-hold this sector and help it grow. We need policies and processes that give clarity to the way the sector should function.