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App delivery workers missing out on social security benefits file petition in Supreme Court

The petition by a body representing 35,000 gig workers argues that they pass all the tests to be declared as employees.

“The mere fact that their employers call themselves “Aggregators” and enter into the so-called “partnership agreements” does not take away the fact that there exists a jural relationship of employer and employee; master and servant,” argues a petition filed by the Indian Federation of App-Based Workers (IFAT) in the Supreme Court on September 21. 

The petition demands that gig workers be declared as unorganised workers by the court and hence, be entitled to social security benefits under the Unorganised Workers Act 2008. 

Courts across the world, including in the UK, Netherlands, and France have declared that gig workers are employees. This petition could pave the way for similar legislation in India, bringing platform workers under the ambit of legal protections and social security benefits currently available to unorganised workers. 

Platforms are in an employer-employee relationship with gig workers: Petition

The Code on Social Security 2020 defines a gig worker as a person who performs work ‘outside of a traditional employee-employer relationship. In its petition, IFAT, which claims to have 35,000 gig workers as members, refutes this definition. The petition argues that there is a clear employee-employer relationship at play:

[…] there is total control and supervision exercised by the aggregator upon their drivers, and this would necessarily mean that an App-based worker shares an Employer- Employee relationship with the Aggregator —IFAT petition

To give weight to this argument, the petition points out several themes common to the terms and conditions of aggregators’ work arrangement with gig-workers:

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1. Mandatory use of company equipment: The petition argues that gig workers are mandated to use company equipment, resembling an employee-employer relationship:

  • Ola: In cases where Ola leases vehicles to the driver, they are fitted with a GPS which must be switched on at all times and must only be used for Ola rides. Maintenance can be carried out only after written consent from Ola.
  • Zomato: Zomato provides phones and bags to delivery partners which delivery workers are mandated to use to carry out their services.
  • Swiggy: It is compulsory for Swiggy’s delivery workers to carry bags and wear the company’s uniform.

2. Control over the manner of work: Aggregators have significant control over the manner in which work is carried out, the petition argues:

  • Ola: During COVID, drivers were required to sanitise their vehicles at an Ola location. The company is also entitled to install wearable devices and dashboard cameras in the vehicles of the drivers for supervision. 
  • Zomato: The drivers are required to adhere to a strict timeline for deliveries and are expected to make themselves available when a request for delivery is received. They are also mandated to use the Zomato DP (delivery partner) platform for deliveries.
  • Swiggy: Delivery workers are not allowed to uninstall the Swiggy app without notice to the company. The workers are penalised if they reject an order assigned to them. If they fail to deliver within 120 minutes, they are not entitled to any payment. They are also expected to comply with uniform and hygiene codes set by the company.

3. Charges fixed by Aggregators: Listing out the terms and conditions of aggregators, the petition argues that gig workers have no control over charges and payments, making the aggregators akin to traditional employers:

  • Zomato: The delivery charges are decided, collected, and processed entirely by Zomato. Delivery partners are not allowed to charge users above the charges fixed by Zomato. 
  • Swiggy: Earnings from orders are decided by Swiggy’s payout scheme, to which the delivery executive is not entitled to object. The company calculates this amount based on the number of hours logged by workers and the number of deliveries completed. 

How do you define an employee-employer relationship?

The Supreme Court has time and again wrestled with defining an employee-employer relationship, the petition notes, and come up with tests to ascertain which relationships fit this definition:

  • Supervision and control over the manner of work: The Supreme Court has established that the prima facie test for a master-servant relationship is if the master controls not just what work is done, but the manner in which it is done, in Dhrangadhara Chemical Works Ltd. vs State of Saurashtra & Ors on November 23, 1956.
  • Services produced for the business of another: In another judgement in 1978, the petition argues, the court established that the test for an employee-employer relationship is when a worker produces services for the business of the employer, who has economic control over the workers’ subsistence and continued employment.
  • The integration approach: The Supreme Court has also observed that an integrated approach is required to determine an employee-employer relationship, the petition points out. The key factors as laid down by the court in Ram Singh v/s Union Territory of Chandigarh (2004) include:
    1. whether the worker is integrated into the employer’s concern or remains independent
    2. who has the power to select and dismiss workers, pay remuneration, deduct insurance, organise the work and supply tools to carry out the work

Based on the parameters laid down in all three judgements, the petition argues, gig workers are in an employee-employer relationship with aggregators.

What benefits are gig workers currently missing out on?

Currently, gig workers not getting benefits under social security schemes for organised and unorganised workers. The petition’s main demand is to be recognised as unorganised workers under the Unorganised Workers Act 2008, which would entitle them to the following benefits:

  • Life and disability cover
  • Old age protection
  • Provident fund
  • Employment injury benefit
  • Housing
  • Educational schemes for children
  • Old age homes

Current social security for gig workers: To provide equivalent benefits to gig workers, the government devised the Code on Social Security 2020. Under this code, social security schemes can be funded by the government, aggregators, the state government, or CSR. The code, however, is yet to be put into effect. 

Which countries have declared that gig workers are employees?

  • Netherlands: Uber drivers are employees and not contractors, an Amsterdam District Court ruled on September 13, in a case filed by the Federation of Dutch Trade Unions (FNV). 
  • UK: The UK Supreme Court unanimously ruled February 19 that Uber drivers are employees. Over 70,000 Uber drivers in the United Kingdom were entitled to a minimum wage, paid holidays, and pension after the ruling. The workers, however, did not retain the right to flexible hours. 
  • France: The French Supreme Court upheld an Uber driver’s right to be considered an employee in a judgement on March 4, 2020. 
  • California: The state of California in the US passed a bill in September 2019, that would require workers for companies like Uber to be reclassified as employees. Uber tried to resist the judgement with a ballot measure, which was quashed as unconstitutional by a ruling on August 21, the Guardian reported

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