“Gig Economy & Labour Rights Legal Protection Under The Code On Social Security 2020”

Abstract

The growth of the gig economy in India has reshaped the contours of employment, labour rights, and social security. From delivery executives of food-tech companies to ride-hailing drivers and freelance professionals, gig workers now constitute a significant part of India’s workforce. However, the legal framework for their protection remained uncertain until the Code on Social Security, 2020 (CSS, 2020) sought to recognize and safeguard their rights. This article explores the provisions of the CSS 2020 concerning gig workers, platform workers, and unorganized sector labourers. It examines the challenges of implementation, the existing gaps, comparative insights from other jurisdictions, and the potential impact on India's labour market. Ultimately, the article argues that while CSS 2020 is a progressive step towards inclusivity, it requires robust enforcement mechanisms, better funding, and participatory governance to ensure real protection for gig workers.

Introduction

The 21st-century economy has witnessed a fundamental shift in the way work is organized and performed. The traditional employer-employee relationship is increasingly being replaced by short-term, flexible, task-based engagements, commonly referred to as the gig economy. A “gig” essentially refers to temporary, freelance, or contractual work, where workers are engaged on-demand through digital platforms or direct contracts.

India, with its rapidly expanding digital infrastructure and rising unemployment, has become a hotspot for gig and platform-based employment. Companies such as Zomato, Swiggy, Ola, Uber, Urban Company, Amazon, and Flipkart employ millions of gig workers who provide services ranging from food delivery and transportation to household repairs. According to NITI Aayog’s 2022 report, India’s gig workforce is expected to reach 23.5 million by 2030, accounting for almost 4% of total employment.

However, the biggest concern surrounding gig work is the lack of social security and labour rights. Gig workers usually function outside the scope of traditional labour laws, which were designed for employer-employee relationships. As a result, they are denied basic entitlements like minimum wages, health insurance, maternity benefits, provident fund, pension, and job security.

Recognizing this growing challenge, the Government of India introduced the Code on Social Security, 2020, which for the first time explicitly recognized gig workers and platform workers as categories entitled to social security benefits. The Code, one of the four labour codes consolidating 29 central labour laws, aims to universalize social security coverage and bring gig workers under a formal legal framework.

This article provides a comprehensive examination of gig workers’ rights under CSS 2020. It covers:

1. The rise of the gig economy in India.

2. Conceptual framework – definitions of gig workers and platform workers under the Code.

3. Key provisions of CSS 2020 concerning social security.

4. Analysis of schemes, funding mechanisms, and entitlements.

5. Comparative international perspective (UK, USA, EU).

6. Challenges in enforcement and gaps in the law.

7. Judicial interventions and case laws.

8. Policy recommendations and conclusion.

Chapter 1: The Rise of the Gig Economy in India

1.1 Evolution of Gig Work

• Traditional employment in India has historically been dominated by agriculture and manufacturing.

• With liberalization (1991 onwards) and the IT revolution, contractual work increased.

• The digital economy boom post-2010 facilitated app-based services, leading to the gig economy’s rise.

1.2 Characteristics of Gig Work

• Flexibility: Workers can choose when and how much to work.

• Task-based payment: Earnings depend on tasks completed, not fixed wages.

• Technology-mediated: Platforms act as intermediaries.

• Lack of employment contract: Absence of employer liability for long-term benefits.

1.3 Size and Scope of Gig Economy

• According to a BCG-NITI Aayog study, gig workers contribute 1.25% to India’s GDP.

• Major categories:

• Transportation (Ola, Uber).

• Food & grocery delivery (Swiggy, Zomato, Blinkit).

• Logistics (Delivery, Ecom Express).

• Freelancing (Upwork, Fiverr).

• Household services (Urban Company).

Chapter 2: Gig Workers & Platform Workers under CSS 2020

The Code on Social Security, 2020 is a landmark law as it legally defines gig workers and platform workers, thereby acknowledging them within the realm of labour welfare.

2.1 Definitions

• Gig Worker [Sec. 2(35)]: A person who performs work or participates in a work arrangement outside of traditional employer-employee relationships.

• Platform Worker [Sec. 2(60)]: A worker engaged in or undertaking platform work, i.e., work outside a traditional employment relationship, and who earns from online platforms.

• Unorganised Worker [Sec. 2(86)]: Includes workers in the unorganized sector, home-based, self-employed, or wage workers not covered under any other labour law.

2.2 Recognition of Rights

• For the first time, Indian law acknowledges gig and platform workers as distinct categories deserving state-sponsored welfare schemes.

Chapter 3: Social Security Benefits under CSS 2020

The Code aims to extend universal social security through a mix of Central Government, State Government, and private contributions.

3.1 Benefits for Gig & Platform Workers

The Code provides for the following:

• Life and disability cover.

• Health and maternity benefits.

• Old age protection and pension.

• Provident Fund & Gratuity (to be notified).

• Education and skill development.

3.2 Funding Mechanism

• Central & State Government Schemes: Governments may frame schemes specifically for gig/platform workers.

• Platform Aggregator Contribution: Section 114 mandates aggregators to contribute 1-2% of their annual turnover (subject to a cap of 5% of total worker payments).

• Worker Contribution: Not mandatory, but voluntary contributions can be made.

3.3 Registration

• Gig workers must register on a centralized online portal with Aadhaar verification.

• Aggregators are obliged to provide worker details for registration.

Chapter 4: Judicial and Policy Developments

4.1 Judicial Recognition

• In Uber BV v. Aslam (UK Supreme Court, 2021) – Drivers classified as “workers” entitled to minimum wage and

paid leave.

• In India, courts have not yet decisively ruled on gig workers’ employment status, but cases are emerging.

4.2 Policy Reports

• NITI Aayog Report 2022 recommended universal health insurance, accident cover, and skill training for gig workers.

• ILO Reports emphasize the need for social dialogue and fair work principles in gig economy regulation.

Chapter 5: International Comparison

• United Kingdom: Gig workers classified as “workers,” entitled to statutory minimum wage, paid holidays, and pension schemes.

• European Union (2022 Directive): Presumes platform workers as employees unless proven otherwise.

• United States: Varied state laws – e.g., California’s AB-5 law recognizing gig workers as employees, though contested.

• China: Platforms like Didi required to provide social insurance for drivers.

India’s approach is middle path: not granting full employee status, but at least ensuring basic social security benefits.

Chapter 6: Challenges in Implementation

Despite its progressive framework, CSS 2020 faces multiple hurdles:

1. Lack of clarity on employment status – Gig workers are neither employees nor independent contractors fully.

2. Aggregator resistance – Companies argue higher costs may threaten business sustainability.

3. Registration hurdles – Many gig workers lack digital literacy or Aadhaar-linked access.

4. Funding inadequacy – 1-2% contribution by aggregators may not be enough.

5. Fragmented enforcement – Implementation depends on Centre-State coordination.

6. Absence of minimum wage guarantee – Code does not cover fair wages.

Chapter 7: Case Studies in India

• Ola & Uber Drivers: Demand for minimum wage, fuel

subsidies, and accident insurance.

• Swiggy & Zomato Delivery Agents: Strikes for better per-delivery rates and social security.

• Urban Company Workers: Filed cases against unfair contract terms, leading to partial recognition of rights.

These cases highlight the urgency for legal intervention beyond symbolic recognition.

Chapter 8: Way Forward

To ensure CSS 2020 becomes effective, the following reforms are crucial:

• Statutory Minimum Wage for gig workers.

• Health Insurance Coverage funded jointly by state, aggregator, and workers.

• Robust Grievance Redressal system for gig workers.

• Awareness Campaigns to educate workers on their rights.

• Tripartite Dialogue (Government–Platforms–Workers) for fair negotiations.

• Clear Employer-Employee Tests to determine liability in disputes.

Conclusion

The gig economy in India represents both an opportunity and a challenge. It provides flexibility and income opportunities for millions but also exposes them to vulnerability, insecurity, and exploitation due to the absence of legal protection. The Code on Social Security, 2020 is undoubtedly a progressive milestone, as it formally recognizes gig and platform workers and extends basic social security benefits to them. However, recognition on paper must translate into real-world welfare.

The future of India’s gig economy depends on how effectively CSS 2020 is implemented. Strong enforcement, adequate funding, and the political will to protect workers’ dignity are essential. If properly operationalized, CSS 2020 could transform the gig economy into a model of inclusive growth, ensuring that workers driving India’s digital revolution are not left without a safety net.

However, recognition on paper is only the beginning. The challenges of actual implementation are immense. Registration of gig workers on government portals has been slow, awareness of entitlements remains low, and resistance from digital platforms has been visible in their reluctance to contribute financially. Moreover, the contribution structure under Section 114—where aggregators contribute 1–2% of annual turnover—may not generate sufficient resources to provide meaningful benefits such as pensions, comprehensive health coverage, or disability insurance. Without strong enforcement mechanisms and transparent governance, the lofty objectives of the Code risk being reduced to symbolic promises rather than concrete improvements in workers’ lives.

Another major limitation is that the Code stops short of addressing the employment status of gig workers. While other jurisdictions such as the UK, EU, and California have moved towards recognizing gig workers as employees (or at least “workers” entitled to minimum wage and paid leave), India’s framework takes a middle path by granting only partial social security without conferring full labour rights. This means gig workers continue to remain outside the scope of protections like minimum wage laws, collective bargaining rights, or unfair dismissal safeguards. In the long run, this halfway approach may create more ambiguities, leading to disputes, litigation, and unrest among workers who see themselves exploited despite being recognized by law.

Here are some questions and answers on the topic:

Q1. Who are “gig workers” and “platform workers” as

defined under the Code on Social Security, 2020, and why is this recognition significant?

Answer: The Code on Social Security, 2020 (CSS, 2020) is the first Indian law to provide legal recognition to gig workers and platform workers.

Gig Worker [Sec. 2(35)]: A person who performs work or participates in a work arrangement outside of the traditional employer–employee relationship. Example: a freelance delivery agent or driver.

Platform Worker [Sec. 2(60)]: A worker who performs work using an online platform, where technology acts as a mediator between service provider and customer. Example: Ola, Uber drivers; Zomato, Swiggy delivery partners.

Significance of Recognition:

For the first time, workers outside the formal sector are covered by social security.

It bridges the gap between informal and formal labour categories.

Opens the door for benefits like health insurance, disability cover, old-age protection, and maternity benefits.

Acknowledges that technology-driven work still requires

legal safeguards for human dignity.

Q2. What are the major social security benefits provided to gig and platform workers under the Code on Social Security, 2020?

Answer: The CSS 2020 provides for universal social security schemes to cover workers in different categories. For gig and platform workers, the Code envisages the following:

Life & Disability Insurance – to cover accidental deaths or permanent disability during service.

Health & Maternity Benefits – to provide financial support during illness, medical emergencies, or maternity.

Old Age Protection – including pensions and provident fund schemes (to be notified).

Education and Skill Development Schemes – to enhance employability and career mobility.

Other Schemes – may include housing, child care, and livelihood support depending on central or state schemes.

Q3. How is the social security fund for gig workers created under the Code?

Answer: The Code provides for the creation of a Social Security Fund for gig and platform workers.

This fund is partly financed through contributions from aggregators/platform companies (like Ola, Swiggy, Zomato, Uber).

Aggregators are required to contribute 1% to 2% of their annual turnover, subject to a cap of 5% of the total payments made to gig workers.

The fund is utilized to extend social security schemes to gig workers, ensuring financial protection and welfare benefits.

Q4. What is the significance of including gig workers under the Code on Social Security, 2020?

Answer: The inclusion of gig workers under the Code is significant because:

It recognizes gig and platform workers as a distinct workforce in the Indian labour market.

It provides them legal protection and access to social

security schemes, bridging the gap between traditional employees and informal workers.

It ensures financial stability and protection against risks like illness, maternity, accidents, or old age.

It reflects India’s response to the changing nature of work in the digital economy, aligning labour laws with global trends.

Disclaimer: The content shared in this blog is intended solely for general informational and educational purposes. It provides only a basic understanding of the subject and should not be considered as professional legal advice. For specific guidance or in-depth legal assistance, readers are strongly advised to consult a qualified legal professional.