Protecting Gig Workers and Gig Economy
Everyone knows that the odious tussle between the employers and the gig workers has reached the courts. A response has been demanded by the apex court from the Centre to a PIL that was effectively filed by the Indian Federation of App-Based Transport Workers (IFAT).
The IFAT has strongly put on the table its demand which effectively includes much-needed pension, health insurance, social security benefits, pension, and cash transfers amounting to Rs 1,175 per day. These have been demanded for the app-based drivers and Rs 675 per day effectively for others.
The timeline for such cash transfers has been provided till December 31. The association has also argued that the cash transfers can also effectively continue till the pandemic subsidies to support its workers, who have been hard hit by the arduous pandemic.
Do the demands of IFAT end here? It is to be noted that there is more to the story. In fact, most importantly, the IFAT wants gig workers to be recognized as unorganized workers. This should be done as per the Unorganized Workers’ Social Welfare Security Act of 2008.
Tipping scale in favor of the gig workers.
- Globalization has integrated economies around the world, so much so that Westernization has found its huge impact on the policies and laws in the eastern and developing countries like India. Precisely due to this reason, given the dramatic turn of events in some Western economies, the scales appear to be tipped in favor of the gig workers in the Indian economy.
- To quote an example, in a turn of recent events in the UK, the Supreme Court had emphatically upheld an earlier ruling by the employment tribunal. This ruling had stated that the 25 drivers who had effectively filed a case against Uber were employees and not mere contractors.
- But what was the impact of the same, you might ask? It is to be noted that this landmark decision by the supreme court had earned the drivers a minimum wage, pension, and holiday pay.
- Thus, one can argue quite well that the welfare of the workers was upheld in the UK. Given that UK, a western country, that upholds the moral of capitalization, held the judgment in favor of the workers, India, being a welfare economy, is all the more required to abide by the rules of welfare and prosperity.
- In fact, the topic of the welfare of workers has taken the European Union by storm as a draft proposal to make companies like Instacart, Uber, and Amazon effectively categorize their gig workforce as employees.
- This will positively lead the corporate giants to provide the workers more benefits, which is especially the need of the hour given the financial standing of many workers in the economy has been crippled by the onset of the pandemic.
But has the welfare trend caught upon all the western nations?
- Apparently not. Platform companies in the US have been successfully able to stall such welfare legislation, but AB5 in California has been vehemently and emphatically aiming at reclassifying the gig workers as employees.
- Thus, one can pliantly state that the tide is turning. The turning tide in the US can be guaranteed by the fact that it is being seconded by the US labor secretary Marty Walsh, who has been working towards recognizing the workers as employees.
- The main reason given for the same is that the humungous profits being accrued by the corporates In America should be trickled down to the workers as well.
- This has led to the blockade of the Trump era rule of classifying gig workers as of individual contractors in America. Thus, America might emphatically encounter a paradigm policy shift for the gig workers.
Upsetting news for the economics of aggregators
- Though, one can argue that the legislation will be a welcomed step for the gig workers, can the same be stated for the employers? Apparently not. In Fact, the legislation might come as a piece of upsetting news for the economics of aggregators.
- This is mainly due to the fact that such legislation will lead to higher operating costs and will definitely pressure the profit margins of the corporates. Given that the corporates love profits, the introduction of such legislation is sure to upset many money-mongering entrepreneurs and CEOs.
- The operating cost is anticipated to shoot up mainly due to the fact that permanent employees can be twice as expensive as contract hires. Though, given the propensity of enactment of such legislation, the Platform employers will effectively try to point out the strength of their model.
- This strength of the model lies in the fact that it provides an ability to the corporates to use the services of large numbers of workers. Thus, this leads to timely payment for a specific task for many workers in the economy, and this way they are emphatically and efficiently paying for the specified job done during the defined period.
- Thus, this ensures productivity and efficiency of the gig workers in the economy and subsequently keeps the costs down. Given the aforementioned argument, is the legislation the need of the hour?
- While one cannot deny the arguments being put forward by the corporate workers, it cannot be forgotten that a big section of gig economy workers belongs to the more vulnerable sections of society.
- Thus, they have a higher need for a stable income and much more than subsistence wages. Given the remunerations that are being paid to the workers are not enough to sustain the pandemic or the livelihood of the workers.
- Also, /another problem that poses itself in such a scenario is that such informal contractual agreements don’t hold up well in a court of law.
- Thus, even though employers might insist and assert that flexibility in the workplace is a humungous advantage but the truth lies in the fact that in a country like India, workers strongly prefer to be employed with one company in return for assured benefits. Thus, will the scale tip in favor of the gig workers? Guess, we’ll have to scrutinize as the matter unfolds.
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