Legal Status of Gig Workers in India: Labour Protections in the Platform Economy

Abstract

The rise of the gig economy in India, driven by digital platforms such as Ola, Uber, Swiggy, and Urban Company, has transformed traditional employment structures by introducing flexible, task-based work. While gig work offers autonomy and income opportunities to millions, it also raises significant legal and social concerns regarding the classification and protection of these workers. This paper explores the evolving legal status of gig workers in India, questioning whether they are merely independent contractors or de facto employees deserving of labour protections. It critically examines the limitations of existing labour laws, the partial remedies introduced through the Code on Social Security, 2020, and global legal trends redefining worker classifications. The paper also highlights grassroots efforts by worker collectives and suggests a hybrid legal framework that ensures portability of benefits, algorithmic transparency, and fair deactivation processes—balancing flexibility with fundamental rights. As India navigates this digital transformation, redefining the legal framework for gig workers is vital to ensure justice, economic inclusion, and sustainable growth in the platform economy.

Keywords: Gig workers, platform economy, labour law, employee classification, Social Security Code 2020, independent contractors, worker rights, digital platforms, algorithmic control, India, labour protections.

I. Introduction

In recent years, the Indian job market has changed dramatically, shaped by the rise of digital platforms like Ola, Uber, Zomato, Swiggy, Urban Company, and many more. These apps have introduced millions of Indians to gig work—short-term, task-based assignments where workers choose when and how much they work. It sounds empowering on the surface, and for many, it really has created new income streams. But beneath this promise of flexibility lies a complicated legal puzzle: are gig workers actually “employees” entitled to labour protections, or are they simply “independent contractors” left to fend for themselves?

This article dives into that very question. It looks at where gig workers currently stand in Indian law, what protections they do (and don’t) have, and why finding the right legal framework for this growing workforce is so critical.

II. The Boom of Gig Work in India

It’s hard to miss the impact of the gig economy on everyday urban life. Hungry? Open an app, and someone brings you food. Need a ride? Tap a button, and a driver shows up. Need a plumber or a beautician? Book a slot online, and someone arrives at your doorstep.

Estimates by NITI Aayog suggest India had around 7.7 million gig workers in 2020–21—a number expected to triple to over 23 million by 2030.[1] Most of these workers are young, often migrants, and many have found in gig work a way to earn without the constraints of a traditional 9-to-5 job.

But while the technology connecting customers and workers is new, the basic challenge isn’t: how to ensure fair treatment for workers who, despite being labelled “independent contractors,” are deeply tied to the platforms that manage and profit from their labour.

III. Employee or Independent Contractor? The Legal Tug-of-War

At the heart of the debate is a simple but powerful question: should gig workers be treated as employees?

In India, laws like the Industrial Disputes Act, 1947 and the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 protect workers classified as “employees” or “workmen.” These laws give them rights like job security, minimum wages, and social security benefits.

To figure out who counts as an employee, courts typically use the “control and supervision” test. Essentially: does the employer decide how the work is done, not just what work is done?

Gig platforms argue they merely connect independent workers with customers. But in reality, platforms often exercise what experts call “algorithmic control.” They decide how work is assigned, monitor worker performance, adjust earnings dynamically through surge pricing, and can “deactivate” workers with low ratings—all without clear explanations or appeals.

Legal scholars have pointed out that this indirect, data-driven control can be just as powerful as traditional supervision. But so far, Indian courts haven’t conclusively ruled on whether this makes gig workers employees under existing laws.[2]

IV. The Gig Economy in India: Addressing the Legal Gap for Worker Rights and Protections

Because gig workers are usually classified as independent contractors, they miss out on many standard labour protections. Let’s look at what this means on the ground:

1. Job Security
A driver or delivery executive can be removed from the app overnight, often without a proper process or chance to appeal.[3]

2. Minimum Wages
Since they’re “self-employed,” there’s no legal guarantee of minimum income, and actual earnings can swing dramatically with demand, fuel prices, or platform commissions.[4]

3. Social Security
Gig workers aren’t automatically covered by schemes like provident fund, employee state insurance, or gratuity.

4. Workplace Safety
There’s usually no legally mandated insurance or support if a gig worker is injured on the job.

5. Right to Unionise
Technically, independent contractors can’t form trade unions under Indian labour law, making collective bargaining harder.[5]

As a result, gig work often ends up being precarious: it can provide income, but not the safety net workers in traditional jobs take for granted.

V. The Social Security Code, 2020: A Step Forward?

Recognising these challenges, Parliament passed the Code on Social Security, 2020, which, for the first time, formally names “gig workers” and “platform workers” in Indian law.[6]

The Code defines:

Gig workers as those doing work outside traditional employment.
Platform workers as those working through digital platforms.

It promises to set up social security schemes funded by governments, platforms (called “aggregators”), and possibly workers themselves. The benefits could include life and disability cover, accident insurance, health support, and old age protection.

While this sounds encouraging, there are important caveats:

• Gig workers are still not treated as employees, so they don’t get protections like minimum wages or unfair dismissal safeguards.
– The schemes’ details depend on future rules by central and state governments—many of which haven’t yet been created.
– Platforms are expected to contribute only around 1–2% of their turnover, raising concerns about whether this will be enough to provide meaningful benefits.

In short, the Code is a recognition of gig workers’ needs—but it’s far from a complete solution.[7]

VI. From Contractors to Employees: How the World is Rethinking Gig Work

Around the world, courts and policymakers have started rethinking the classification of gig workers.

In 2021, the UK Supreme Court ruled in Uber BV v. Aslam that Uber drivers are “workers,” not self-employed contractors, which means they’re entitled to minimum wages and paid leave.[8] Spain has passed a law classifying food delivery riders as employees. Even in the US, while California’s Proposition 22 created exceptions, there’s growing debate about how to better protect gig workers.

These changes show a shift from asking “are they employees in the traditional sense?” to asking “are they economically dependent on these platforms?”

In India, there’s been no comparable Supreme Court ruling yet. But some states are experimenting: Rajasthan, for instance, passed a law in 2023 to create a welfare fund specifically for platform-based gig workers, funded partly by platforms.

VII. Organising in the Gig Economy

Another big challenge is that gig workers are scattered, often working alone and often fearful of being removed from the platform if they speak out.

Despite this, new collectives have emerged:

• Indian Federation of App-based Transport Workers (IFAT)
– All India Gig Workers’ Union (AIGWU)
– TWDWU in Tamil Nadu

These groups are pushing for clearer rules on pay, insurance, and transparency around how platforms rate and penalise workers. Some have even gone to court, arguing that gig workers should be recognised as “workmen” under existing labour laws.[9]

VIII. Rethinking Protections: Beyond the Old Employee–Contractor Model

The big question is: should the law stick to the old binary—either employee or independent contractor—or create something new for the gig economy?

Experts suggest hybrid approaches, such as:

1. Portable Benefits
Instead of tying benefits to one employer, workers could have social security accounts funded by all the platforms they work for.

2. Sector-Specific Standards
Setting minimum earnings and safety rules for gig sectors like transport and delivery.

3. Transparency Requirements
Forcing platforms to explain how algorithms affect job allocation and pay.

4. Fair Deactivation Processes
Making sure workers can contest unfair removal from a platform.

5. Data Rights
Giving workers access to their performance data so they can challenge unfair ratings.[10]

Such measures could protect workers while keeping the flexibility many value in gig work.

IX. The Human Cost of the Gig Economy: Why Fairness Can’t Wait

At first glance, gig work seems like the future: fast, tech-driven, and flexible. But behind every app notification is a real person—often a migrant, sometimes the sole earner for their family—trying to navigate an unpredictable income without safety nets.

As the gig economy becomes part of everyday life in India, ensuring fair treatment isn’t just about law—it’s about dignity, justice, and sustainability.

Policymakers face a delicate task: preserve the flexibility that makes gig work attractive, but add guardrails to stop workers from falling through the cracks.[11]

X. Conclusion

India’s gig economy is growing fast, and millions rely on it for their livelihoods. Yet in legal terms, gig workers occupy a grey zone: they’re called “partners” or “independent contractors,” but in practice, they’re heavily dependent on platforms that control when and how they work.

Current Indian labour laws largely don’t cover them, and while the Social Security Code, 2020 is a promising start, it leaves many gaps. Meanwhile, the rest of the world is moving towards more inclusive approaches that look at real economic dependence, not just formal contracts.

For India, the challenge is clear: adapt the law to protect gig workers without dismantling the flexibility that made gig work popular in the first place. That might mean rethinking old definitions and building new protections tailored for a digital age.

After all, the strength of any economy is measured not just by how fast it grows, but by how fairly it treats those who keep it running.

References

[1] NITI Aayog, India’s Booming Gig and Platform Economy (June 2022) https://www.niti.gov.in; International Labour Organization (ILO), The Role of Digital Labour Platforms in Transforming the World of Work (2021) https://www.ilo.org; Ankur Mehta, ‘The Legal Status of Gig Workers in India’ (2021) 64(2) Indian Journal of Labour Economics 235.
[2] Industrial Disputes Act 1947; Employees’ Provident Funds and Miscellaneous Provisions Act 1952; Workmen of Nilgiri Cooperative Marketing Society Ltd v State of Tamil Nadu AIR 2004 SC 1639; Jeremias Prassl, Humans as a Service: The Promise and Perils of Work in the Gig Economy (OUP 2018); Uma Rani and others, ‘Digital Labour Platforms and New Forms of Control’ (International Labour Office, 2021) https://www.ilo.org; Ayush Soni, ‘India’s Gig Workers Still Wait for Clarity on Labour Rights’ (The Wire, 24 July 2023) https://thewire.in.
[3] Vasanthi Srinivasan and Ashwini Kiran Kumar, Regulating the Platform Economy: India’s Gig Workers and the Need for a Legal Framework (Observer Research Foundation, 2022) https://www.orfonline.org; Aditi Surie and Ajay Narayanan, ‘Flexibility or Precarity? Perspectives of App-Based Workers in Urban India’ (2021) Indian Institute for Human Settlements https://iihs.co.in.
[4] ILO, Decent Work in the Platform Economy: Global Trends (2021) https://www.ilo.org.
[5] Trade Unions Act 1926, s 2(h); see also Anumeha Yadav, ‘India’s Gig Workers Demand Rights and Recognition’ The Wire (New Delhi, 15 September 2023) https://thewire.in.
[6] Code on Social Security 2020, s 2(35) and s 2(61); Ministry of Labour and Employment, Code on Social Security, 2020 — Overview https://labour.gov.in.
[7] Code on Social Security 2020, Chapter IX; ILO, World Employment and Social Outlook 2021: The Role of Digital Labour Platforms in Transforming the World of Work (2021) https://www.ilo.org; International Labour Organization, India: Social Protection for Platform Workers (Policy Brief, 2022) https://www.ilo.org; Ministry of Labour and Employment, Annual Report 2022–23 https://labour.gov.in; Ashwini Deshpande and Shalini Grover, ‘India’s Social Security Code and the Gig Economy: Promise or Peril?’ (2021) Vol 56(6) Economic and Political Weekly 14.
[8] Uber BV v Aslam [2021] UKSC 5.
[9] Rina Chandran, ‘India’s Gig Workers Fear Retaliation for Demanding Rights’ Thomson Reuters Foundation (New Delhi, 28 April 2022) https://www.context.news; Aditi Surie, ‘Organising in the Gig Economy: Case Studies from Urban India’ (2022) Indian Institute for Human Settlements https://iihs.co.in; Indian Federation of App-based Transport Workers (IFAT) v Union of India, Writ Petition (Civil) No. 11759/2021 (Delhi HC).
[10] ILO, Innovative Approaches for Providing Portable Benefits to Platform Workers (2022) https://www.ilo.org; Urvashi Aneja and Shazeda Ahmed, Governing the Platform Economy: Problems, Paradoxes, and Possibilities (Digital Futures Lab 2021) https://digitalfutureslab.in; Santosh Mehrotra and Jajati K Parida, ‘Why India Needs Algorithmic Accountability in the Gig Economy’ The Hindu BusinessLine (Chennai, 22 May 2023) https://www.thehindubusinessline.com; Fairwork India, Fairwork Ratings 2023: Labour Standards in the Platform Economy (2023) https://fair.work/en/fw/publications.
[11] Rupal Oza, ‘The Invisible Labour Behind India’s Gig Economy’ The India Forum (15 March 2022) https://www.theindiaforum.in; Guy Standing, The Precariat: The New Dangerous Class (Bloomsbury Academic 2011); Urvashi Aneja and Shivangi Narayan, Worker Well-being in the Indian Platform Economy (Digital Futures Lab 2022) https://digitalfutureslab.in.