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Abstract

Managing employee rights in the gig economy is a difficult and urgent problem with many legal obstacles and a lack of workable solutions. Gig workers frequently find themselves in a precarious situation as the nature of employment changes because they are usually categorized as independent contractors rather than regular employees. Gig workers may become vulnerable as a result of this designation if they are denied essential labor protections like overtime compensation and the minimum wage. This abstract explores possible remedies for these problems. Legislators and legal experts are looking for ways to resolve this problem, such as reclassifying gig workers as “dependent contractors,” which would provide them flexibility and certain employment benefits. Strong enforcement measures and sector-specific legislation are also being developed to support the rights of gig workers.

Introduction

A major shift in the employment landscape has resulted from the gig economy’s inception and rapid growth, posing difficult considerations about employee rights, legal complications, and the need for workable solutions. Workers in this dynamic workplace, where independent contractor arrangements frequently replace traditional employer-employee relationships, confront significant issues with regard to labor protections, benefit access, and job security. This introduction lays the groundwork for an in-depth examination of the complex legal issues and creative solutions that are essential to defending gig workers’ rights in a changing economy that is constantly redefining the nature of employment and work.

Issues faced by the Workers in Gig Economy

A slew of legal challenges, mainly related to classifying workers as independent contractors as opposed to regular employees, have been brought about by the gig economy. This difference frequently results in gig workers losing out on important labor protections including minimum wage, employee benefits, and overtime pay, which casts doubt on their capacity to make ends meet and stability in their careers. Moreover, disputes regarding work status have resulted in a significant amount of litigation, forcing courts and regulators to confront the evolving nature of labor. Comprehensive legal reform is desperately needed to address the issues of discrimination, access to social safety nets, enforcement of current labor laws, and the ambiguity surrounding the rights and responsibilities of gig workers in an economy that is continuously changing the nature of employment.

When workers are mistakenly categorized as independent contractors rather than normal employees, it has a substantial impact on their labor rights, including the ability to form unions, get overtime pay, and obtain the minimum wage. In addition to being denied essential benefits like paid time off, retirement plans, and health insurance because of their misclassification, gig workers also run the risk of experiencing financial instability. Due to these issues, there are now more legal disputes and regulatory challenges, which forces lawmakers and courts to address the evolving nature of employment and work relationships. They also highlight the need for legal reform that strikes a balance between the rights and protections of gig workers in a constantly changing labor market.

Judgements Relating to Gig Economy

Gig economy refers to employment that is not full-time but is transient and flexible. In the case of Ali Razak v. Uber Technologies, Inc.[1] the Eastern District of Pennsylvania determined that UberBLACK drivers were independent contractors, solidifying this understanding.

In India, the Balwant Rai Saluja v. Air India Ltd[2]. ruling reveals the elements that regulate the employer-employee relationship. The Supreme Court ruled in this case that a number of factors, including

1. who is the appointing authority,
2. who is the paymaster,
3. who can dismiss,
4. how long alternative service lasts,
5. the degree of control and supervision,
6. the nature of the job, such as whether it is skilled or professional work,
7. the establishment’s nature, and
8. the right to reject, have an impact on the question of employee status.

The court further decided that “effective and absolute control” was the level of control that an employee had to have.

The Supreme Court of India is considering an appeal involving the classification of agarios as either independent contractors or laborers in the matter of Dharangadhara Chemical Works Ltd vs. State of Saurashtra[3]. The agarias are expert laborers who employ seasonal showers to make salt. The appellants argued that the Industrial Tribunal and the High Court had correctly classified the agarias as independent contractors rather than laborers. The court ruled that the agarias are entitled to certain protections and rights since they are workers as that term is defined by the Industrial Disputes Act. The agarias’ position as employees is maintained and the appeal is rejected.

The workers in Ram Singh and Others v. Union Territory, Chandigarh & Ors[4] are asking for the regularization of their employment under the Chandigarh Administration’s Engineering Department. They argue that they are actually department employees and not merely contractors. As evidence that the contract workers are, in reality, department employees, the terms and conditions of the contract imply that the Engineering Department has complete control over them.

The Indian Supreme Court has received a plea from the Indian Federation of App-Based Transport Workers (IFAT) and two individual drivers in the case of Indian Federation of App-Based Transport Workers vs. Union of India and Others[5]. They contend that numerous provisions of the Indian Constitution are violated by the contracts between gig workers and service aggregator businesses like Ola and Uber. The petitioners are requesting a number of reliefs, such as the social security legislation to recognize gig workers as “workers,” the registration of gig workers on a government portal, the extension of benefits to gig workers, and adherence to the rules of motor vehicle aggregators. The petitioners contend that it is against their rights to equality, life, and freedom from forced labor for gig workers to not be recognized as employees. They contend that because gig workers are governed and overseen by service aggregators, they are entitled to social security benefits. Denying gig workers social security benefits is viewed as forced labor exploitation.

Gig’s Economy Impact on Traditional Employment Model

Traditional employment arrangements have undergone a fundamental transformation as a result of the gig economy. It has put into question the long-standing conventions of steady, full-time employment and substituted a more adaptable, project-based methodology. This has resulted in a breakdown of traditional job security, consistent benefits, and collective bargaining opportunities, which has changed the balance of power between companies and employees. Employers are turning more and more to temporary and part-time workers as a result of this gig-driven revolution, which is fragmenting the workforce and changing the nature of working relationships.

Solutions for Employee’s Rights in Gig Economy

A multifaceted strategy is required to address the complicated issue of labor rights in the gig economy. Firstly, legal reforms must to be sought in order to elucidate the classification of gig workers and possibly create a new category, such as “dependent contractors,” which guarantees access to fundamental labor protections without sacrificing flexibility. Furthermore, industry-specific laws can be put into place to customize worker rights to the particular difficulties faced by different gig economies. To further protect gig workers from exploitation, there is an increasing need for strengthened enforcement tools to guarantee adherence to these standards. Businesses, governments, and advocates of gig workers must work together to achieve a fair and equitable balance that protects the flexibility of the gig economy while giving workers the benefits and protections they are entitled to.

Conclusion

In summary, the rapid growth of the gig economy has created intricate legal issues pertaining to employee rights, necessitating creative ways to resolve the underlying inequities. Gig workers’ access to basic labor rights and benefits has been restricted due to their status as independent contractors rather than regular employees, which ultimately puts their financial stability and job security in jeopardy. In order to effectively overcome these obstacles, extensive legal reforms must be pursued. This may entail the introduction of a new category, such as “dependent contractors,” to provide gig workers with important labor protections while maintaining their flexibility. The special requirements of various gig industries should be taken into account when designing sector-specific legislation, and strong enforcement measures are necessary to guarantee compliance. Businesses, governments, and advocates for gig workers must work together to strike a fair and equitable balance that preserves the vibrancy of the gig economy while defending the rights and welfare of its workforce. Together, we can address these issues and put solutions in place to create a gig economy that is more equitable, sustainable, and advantageous to all parties involved.

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Written by- Hargunn Kaur Makhija

[1] No. 18-1944 (3d Cir. 2020)

[2] Civil Appeal Nos.10264-10266 OF 2013

[3] 1957 AIR 264, 1957 SCR 152

[4] Appeal (civil) 3167 of 2002

[5] Writ Petition(s)(Civil) No(s).1068/2021