The National Association of Software and Service Companies (Nasscom), in a letter to the state Chief Minister Siddaramaiah, dated July 9, has raised “several serious concerns” over the Karnataka Platform Based Gig Workers (Social Security and Welfare) Bill, 2024.
The bill provides a grievance mechanism for gig workers such as taxi drivers and delivery boys and brings formal rights and social security to them. It also protects workers from arbitrary termination and aims to provide them with a basic minimum of social security. The bill is likely to be tabled during the monsoon session of the assembly.
However, in the letter, Nasscom has requested that the period of the public consultation process be extended to at least forty-five (45) working days (instead of ten working days) for meaningful consultation.
As part of the consultation, Nasscom also requested the government to hold an inter-departmental meeting (with the Department of Labour, Department of Electronics, Information Technology, Biotechnology and Science & Technology, and Department of Commerce and Industries). Such a meeting should invite the participation of platform companies operating in Karnataka, industry associations and other relevant stakeholders.
The letter stated that the Bill proposes a parallel structure of social security legislation for platform gig workers, duplicating the central law – Code on Social Security, 2020 (CoSS). It does not propose a sunset clause mechanism that the Bill will incorporate into the CoSS when it comes into force.
“A key characteristic of a gig worker is that they are an ‘independent contractor’ and not an employee, due to the absence of elements such as degree of control, diligence, and accountability,” the letter reads. “However, the law fails to examine these elements and instead proposes a presumption that gig workers are just like employees (contrary to the treatment in the CoSS).”
This assumption jeopardizes the conceptual and legal foundation of gig work. This assumption is at the heart of the bill and on this basis it prescribes several obligations that can only be relevant in an employer-employee relationship.
Nasscom said the Bill does not provide any certainty on whether the fee should be calculated on the basis of transaction or turnover. It is left to the discretion of the executive. Similarly, the Bill allows the percentage to be determined through administrative notifications. The Bill empowers the department to levy the fee as a percentage of the turnover of the platform in the state, without any cap. This will lead to uncertainty and seems like an excessive delegation. “Further, this turnover-based fee is not linked to the fees paid by the platforms to the gig workers, raising concerns that the fee could be akin to a form of tax,” the letter said.
Nasscom said the Bill imposes onerous and prescriptive obligations on aggregators, such as (indicatively) minimum notice period for termination, algorithmic disclosures and monitoring and tracking mechanisms (Central Transaction Information and Management System). It also lays down terms and conditions for template contracts with platform gig workers, along with powers to review such contracts. These obligations are incompatible with the functioning of gig platforms and may adversely impact their operations in the state.
“There are serious gaps, not only from the industry perspective, but also from the perspective of gig workers,” the letter said.
IT’S ME
Another industry body, the Internet and Mobile Association of India (IAMAI), has raised similar concerns and urged the state government to put the proposed legislation on hold for further consultations.
“While we appreciate the government’s efforts to provide social security and welfare measures for gig workers, we feel that the Bill, in its current form, raises several concerns and may hamper business operations and adversely impact the ease of doing business in the state,” the IAMAI letter said. “We recommend a more balanced and collaborative approach that aligns with existing Central Government laws and involves all stakeholders in a transparent and fair manner.”
The state government was urged to suspend the legislative process and provide a sufficient consultation period of at least 30 to 60 days.
“The gig economy is an evolving sector, and any new regulation will have far-reaching implications for workers, platforms, and the larger ecosystem,” the IAMAI letter reads. “It is therefore imperative that all stakeholders are given the opportunity to provide input and voice their concerns before such a law is passed.”
First print: Jul 12, 2024 | 6:05 PM IST