Trapped in a disguised employment relationship, India’s platform workers deserve a new lease on social security

With its enactment, the Code on Social Security formalised the exploitative disguised employment relationship between digital platforms and platform workers. Despite Section 114 of the Code, which provided for framing “suitable welfare schemes”, and the e-Shram portal, the promise of social security for India’s platform workers remains unfulfilled.

AS NEW AND MYRIAD FORMS OF EMPLOYMENT COME INTO PLAY, it is essential that we critically rethink what a “traditional employer-employee relationship” means and analyse these forms by broadly interpreting an “employment relationship” under the existing labour laws.

In India, the Industrial Disputes Act, 1947 defines “workman”, in the broadest terms, “as any person” who is employed for “hire or reward” in any industry to do any “manual, unskilled, skilled, technical, operational, clerical or supervisory work.” The determining criterion for the existence of an employment relationship and the scope of the definition of “workman” has never been static. With time, as new forms of employment emerged and came to be tested against the then existing labour laws, the criterion for what constituted an employment relationship became broader, more liberal, and more aligned with the socioeconomic realities of the work. Since the 1960s, various classes of workers, such as beedi workers and contracted tailors, who were initially not considered as “workmen”, were brought under the rubric of existing labour laws and became entitled to various rights, benefits, and protections.

Alongside the tests of performing the work for someone else and being paid remuneration, the sufficient control and supervision test, the power to punish for breach of codes of conduct test, and the independent trade, occupation or business test), the integration test (that the worker is totally integrated into the work and economic organization of the other, i.e., industry), and the ownership of key assets test (that the ownership of key assets involved in the work belonged to the industry- in this case the algorithm) evolved as means for determining whether there existed an employment relationship. These crucial assessments continue to be relevant for any new form of employment.

With time, as new forms of employment emerged and came to be tested against the then existing labour laws, the criterion for what constituted an employment relationship became broader, more liberal, and more aligned with the socioeconomic realities of the work.

Disguised employment relationship

The digital platform economy is a classic example of how meticulously platforms have succeeded in disguising the employment relationship. The terms and conditions set out in the contract are decided by the platforms and the workers have no say in deciding, intervening, or effectively challenging the same.

Platforms themselves hold the power to classify their workers and thus they are referred to as anything but workers, often misclassified as partners, agents, independent contractors, and so on. Concomitantly, they (mis)classify themselves as facilitators, digital intermediaries, special technology platforms, and so on. The disguising of the underlying employment relationship disentitles the platform worker to any rights and protections from the existing laws.

International Labour Organisation’s (ILO) Employment Relationship Recommendation, 2006 (No. 198) stipulates that national policy should “at least” include measures to combat disguised employment relationships where the employer treats an individual as other than an employee in a manner that hides their true legal status as an employee and where the effect is of deprivation of rights and protections to the employees where they are due.

International instruments on social security

In this light, we now turn to the issue of the right to social security. In international law, the right to social security is strongly affirmed. Articles 22 and 23 of the Universal Declaration of Human Rights (‘UDHR’), 1948, to which India is a signatory, affirms that every member of society has a right to social security, and right to work, right to just and favourable conditions of work, right to just and favourable remuneration, right to equal pay for equal value of work, including the protection against unemployment, and also the right to form and to join trade unions, respectively.

The International Covenant on Economic, Social and Cultural Rights (1976) (‘ICESCR’) to which India is a party also recognises the “right of everyone to the enjoyment of just and favourable conditions of work”, including fair renumeration, equal renumeration for equal value of work, decent working conditions, safe and healthy working conditions, rest, leisure, reasonable limitation of working hours, and periodic holidays with pay (Article 7). Most importantly, Article 9 expressly stipulates that “the State Parties to the present Covenant recognize the right of everyone to social security.”

India, as a State Party, commits to the recognition of the right of everyone, including platform workers, to social security. It is also relevant to note that ILO Occupational Safety and Health Convention 1981 (No. 155), which India has not ratified, covers all employed persons engaged in all types of economic activities.

Right to social security in India

On the plane of the meaningful realisation of the nation's grundnorm, i.e., the Constitution, the situation is no less bleak. Article 21 of the Constitution, which refers to protection of life or personal liberty, has been broadly interpreted to include right to health and right to decent living conditions. In Consumer Education & Research Centre & Others v. Union of India, 1995 SCC (3) 42, it was held that the right to health and medical care, to protect health and vigour while in service or post-retirement, is a fundamental right of a worker under Article 21, read with Articles 39(e), 41, 43, and 48A of the Constitution. Needless to say, the said fundamental rights extends to platform workers as well.

The ILO Equality of Treatment (Social Security) Convention 1962 (No. 118) lists out nine branches of social security.* The statutory realisation of fundamental right to health and medical care of a worker, along with the nine components of social security as delineated by the ILO, can be found in the Employee State Insurance Act, 1948 (‘ESI’), Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (‘EPF’), Payment of Gratuity Act, 1972 (‘PoGA’), and the Maternity Benefit Act, 1961 (‘MBA’), alongside various other sectoral labour laws.

These legislations are applicable only to those who are recognised as “workers” and all the legislations lay down a minimum threshold for the number of workers in that particular establishment/ industry for the statute to apply (10 for ES1, 15 for EPF, 10 for PoGA, and 10 for MBA). These limitations are carried forward with the passing of the CoSS.

Section 114 of the CoSS provides for framing of “suitable welfare schemes” for platform workers and lists out matters on which such schemes are to be made in the most generic and simplified of ways. Four points glare at us on a meaningful reading of Section 114 of the CoSS as against the nationally and internationally recognised right to social security.

Addressing PM-JAY specifically

It is claimed by the Central Government that the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojna (‘AB-PMJAY’) is applicable to platform workers. Though it is one of the thirteen social security schemes integrated with the e-SHRAM Portal, it does not cover ‘platform workers’ as a class. Each individual platform worker has to meet the eligibility criteria of the scheme to avail its benefits.

PMJAY seeks to provide a cover of Rs. 5 lakhs per family per year for secondary and tertiary care hospitals covering public and private empanelled hospitals in India. In 2022-23, the scheme covered 58.8 crore individuals with a budget of Rs. 12, 000 crores. Its services are limited to approximately 1,929 procedures across 27 medical specialties. Usually, the costs are shared between the Central and State Government in the ratio of 60:40.

Though states have the flexibility of expanding the coverage in line with the existing healthcare schemes, most states are facing a financial crisis. For instance, Maharashtra has made budgetary cuts in the health schemes as a result of which it has been unable to settle the bills of private hospitals since July 2024. Due to non-payment of hospital bills, many of the beneficiaries are being denied the benefits under PM-JAY.

Be that as it may, despite the National Health Policy, 2017 having ‘Universality’ of healthcare as one of its key principles, PM-JAY, by design, is an exclusionary scheme, even as it claims/ aspires to be a universal scheme, and by any extension, not a healthcare scheme that is framed with the needs and working conditions of platform workers in mind. Therefore, it is apparent that even PM-JAY, which is the only security which the platform workers can have access to, is beyond their reach and therefore platform workers have no meaningful access to effective social security schemes.

Conclusion

Years of disguising the employment relationship has solidified into the text of the law, i.e., CoSS, as platform workers are now placed “outside of a traditional employer-employee relationship.” Even as platform workers are so placed, nationally, the platforms must be required by law to monetarily contribute their share in state social security measures.

The failure of the State to regulate these platforms has given them a free pass to continue keeping platform workers virtually under material conditions of forced labour. What is even more egregious is that the platforms are not even bound to disclose the basic data regarding the staff they employ. The opacity that surrounds the algorithms deployed by the platforms also keep the conditions of work and underlying logic of automated decisions under secrecy.