Logical Reasoning Questions for CLAT | QB Set 27

The problem with the Karnataka gig workers Bill

Last month, Karnataka introduced a new Bill, called the draft Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, 2024, seeking to provide social security and welfare measures for platform-based gig workers in the State. The government shared the draft in July. In the recent past, a similar law was also enacted by Rajasthan called the Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023. The Karnataka Bill has a distinct similarity with the Rajasthan legislation in the sense that both are based on a welfare board model. This model does not address employment relations as such and is more appropriate for self-employed and informal workers. In the case of gig work, addressing employment relations is the need of the hour.

The rise of gig work versus work issues

The number of gig and platform workers is on the rise, more so in the last decade with developments in the app-cab and retail delivery sectors. In its 2020 working paper on the gig economy, NITI Aayog has made projections of the gig workforce expanding to 23.5 million workers by 2030. Given the expansion of the gig economy, employment generation based on gig work is one sector that is providing a livelihood to an increasingly large number of job-seekers. Such trends are also visible in other countries.

Gig work has also placed on the present as an alternative to traditional forms of work, starting with working hours and various other working conditions at times different from informal work, so it needs a special set of rules. The legal framework on employment relations in the gig economy is also absent in India at present. Labour laws applied to the traditional framework in employment is being bypassed here.

However, the gig work arrangement has certain relationships attached to its classification as well as compensation. Those who manage employment prefer to call themselves as aggregators and consider gig workers as independent contractors/workers. Aggregators believe that they are providing the technology and bringing together independent workers and consumers. Independent workers are masters of their own work, according to aggregators.

On the other hand, workers in the gig economy consider aggregators as their employers as the economics of contracts and the terms of employment are set by the aggregators. For example, in an app-cab operation, the price of the ride is determined by the aggregator, and workers enjoy neither ownership of conditions and terms for the ride are decided by the app company. In this context, workers seek fair treatment, recognition, and acknowledgment, and access to social security as legal entitlement.

U.K. ruling

In a similar kind of a situation, in Britain, the United Kingdom Supreme Court ruled that Uber drivers are to be considered not independent contractors but employees. This judgement has important significance for app cab workers. In India, gig and platform workers are included in Code on Social Security 2020 but no mention of such employment was made in other important labour codes, namely, Code on Wages, Industrial Relations Code and Occupational Safety, Health and Working Conditions Code. The Rajasthan and Karnataka pieces of legislation are recent additions to this legal landscape.

Like the Rajasthan Act, the Karnataka Bill has also skirted the issue of defining employment relations in gig work. It has preferred a welfare board model as its mechanism to protect gig worker. Without recognition of an employer-employee relationship, there is inadequate legal framework to enforce important labour laws that affect gig workers, such as regulation of working hours, minimum wage entitlements, occupational health and safety, leave entitlements, and so on. These important legal entitlements cannot be applied without addressing employment relations.

There is no regulation on minimum earnings from gig work even when a worker is available for the greater part of the day. There is no regulation on working hours also. There are regular incidents of overworked app cab drivers being involved in accidents late in the night or early in the morning, jeopardising their own lives along with that of passengers.

Employment relations do exist in gig work, and regulators should acknowledge this. Aggregators are de-facto employers as they determine the entire scheme of employment. While they may present the platform as a tool connecting workers and consumers, aggregators determine the pricing mechanism, standards and terms. The platform is merely a tool, and it is not the tool determining work conditions, rather the company. In this context, aggregators should be recognised legally as employers.

Core issues

The welfare board model adopted by Rajasthan and Karnataka provides some welfare schemes for gig workers, but it does not replace the requirement of defining employer-employee relations. The present system is therefore ineffective and largely irrelevant as the employment relations are poorly implemented or bypassed.

The Rajasthan Workers’ Welfare Act and the Karnataka Bill are based on the idea of welfare boards, whereby a certain cess is levied, and funds were allocated but inadequately used. Historical experiences in India show that the issue of minimum earnings or working hours for gig workers was never taken up. The Karnataka Bill also fails to address this. It defines employment relations in a very general manner, without spelling out the obligations of the aggregator. The issue of work agreements, or measures safeguarding gig workers, is also missing.

The Rajasthan law, through Section 16(2) of the Rajasthan Gig Workers Act, mentions that gig workers are entitled to grievance redressal, but the Bill is vague in terms of specifying time-bound mechanisms. The Karnataka Bill, like the Code on Social Security 2020 and the Rajasthan Act, also fails to properly address the need to establish employment relations or clearly specify employer-employee legal obligations, making it difficult to fully protect workers’ rights.

Question -1

Statement: The welfare board model adopted by Rajasthan and Karnataka for gig workers is ineffective because it does not provide institutional social security benefits.
Question: Which of the following strengthens the statement above?
A. Most gig workers are unaware of their entitlements under the welfare board model.
B. There is a historical precedent of inadequate fund utilization under similar welfare board models.
C. Gig workers prefer flexibility over institutional benefits like provident fund and gratuity.
D. The gig economy is projected to grow substantially by 2030, increasing the need for social security measures.

Question -2

Statement: The Karnataka Bill, like the Rajasthan legislation, uses the term ‘aggregator’ instead of ’employer’ to describe app companies in relation to gig workers.
Question: Which of the following is a potential implication of using ‘aggregator’ instead of ’employer’?
A. It aligns with the global trend of recognizing app companies as mere technology providers.
B. It absolves aggregators of legal responsibilities towards gig workers.
C. It facilitates easier registration of gig workers under existing labour laws.
D. It reflects a shift towards recognizing gig workers as independent contractors.

Question -3

Statement: Employment relations in the gig economy are complex and often misunderstood.
Question: Which statement, if true, weakens the above argument?
A. Most gig workers prefer the term ‘independent contractor’ over ’employee’.
B. The UK Supreme Court has ruled that Uber drivers are employees, not independent contractors.
C. Gig workers have access to social security benefits under the Code on Social Security, 2020.
D. App companies often provide training and set standards for gig workers.

Question -4

Statement: The Karnataka Bill fails to address minimum wage issues for gig workers.
Question: Which of the following can be inferred from the statement above?
A. Minimum wage laws are not applicable to gig workers in Karnataka.
B. Minimum wage regulations are considered irrelevant by most gig workers.
C. The Karnataka government does not prioritize wage issues for gig workers.
D. The Karnataka Bill does not guarantee a minimum income for gig workers.

Question -5

Statement: The welfare board model adopted by Rajasthan and Karnataka for gig workers focuses on providing social security benefits rather than addressing employment relations.
Question: Which statement, if true, strengthens the argument above?
A. Gig workers are satisfied with the social security benefits provided by the welfare boards.
B. Employment relations are less relevant in the gig economy compared to traditional employment sectors.
C. Similar welfare board models have been successful in other countries with large gig economies.
D. The majority of gig workers prefer flexible working hours over fixed employment contracts.

Question -6

Statement: The UK Supreme Court’s ruling on Uber drivers as employees contrasts sharply with the legal framework for gig workers in India.
Question: Which of the following, if true, would most undermine the above statement?
A. India has ratified international conventions advocating for workers’ rights in the gig economy.
B. Many Indian states are considering legislation similar to the Rajasthan and Karnataka Bills.
C. The Code on Social Security, 2020, explicitly excludes gig workers from its provisions.
D. The legal definition of ’employee’ varies widely across different jurisdictions.