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

Chapter 1: The Legal Ambiguity of the Platform Economy

The rapid emergence of the digital platform economy has fundamentally reshaped India’s labour landscape, creating a significant cohort of workers in sectors like food delivery and ride-sharing.{1} This workforce is projected to increase substantially, growing from 1 crore in FY 2024–25 to an estimated 2.35 crore by 2029–30.{2} This massive shift exposes workers to precarious conditions, including inconsistent income and acute lack of job security, as traditional labour protections fail to cover the unique structure of platform work.{3}

1.1 Definitional Challenges and Misclassification

The primary legal hurdle is the definitional ambiguity surrounding platform workers. The Code on Social Security, 2020 (CSS 2020), legally defines ‘gig workers’ as those engaged in work outside of the traditional employer-employee arrangement, with ‘platform workers’ being a subset using online algorithmic platforms.{4}

Platform companies exploit this structure by labeling workers as ‘independent contractors’ or ‘partners’. This practice of misclassification allows aggregators to evade providing essential employer responsibilities, such as minimum wages, health insurance, and paid leaves.{5} This policy choice, implicit in the statutory definitions, prioritizes corporate “flexibility” over worker vulnerability.{6}

1.2 The Failure of the Traditional “Control Test”

Traditional labour law relies on the ‘control and supervision’ test to determine an employment relationship.{7} For gig workers, this test fails. While platforms maintain the contractual fiction of independence, they exert de facto control over pricing, task allocation, and performance evaluation through proprietary algorithms. {8} The economic reality of dependence is obscured by this digital structure, leaving the worker to absorb all associated market risks, including job instability and denial of compensation upon sudden de-listing.{5}

Chapter 2: The Evolving Central Legal Framework: Code on Social Security, 2020 (CSS 2020)

2.1 Statutory Recognition and Scope

The Code on Social Security, 2020 (CSS 2020), is a pivotal legislative action that provides legal recognition and formal definitions for gig and platform workers for the first time in Indian law.{9} The Code consolidates and simplifies nine pre-existing central labour laws and explicitly extends social security benefits to this distinct category of workers, alongside the organized and unorganized sectors.

2.2 Mechanism for Social Security

The CSS 2020 empowers Central and State Governments to frame specialized schemes covering vital life-cycle protections, including Provident Fund, pension, Employees’ State Insurance (health, disability, accident cover), Gratuity, and Maternity benefits.{9}

The funding architecture dictates that social security benefits will be financed through contributions from three parties: the government, the aggregators/platforms, and, in some instances, the workers themselves.{2} It mandates the establishment of a Social Security Fund and a National Social Security Board.

2.3 Implementation Delays and the Welfare vs. Rights Gap

The CSS 2020 is primarily a welfare framework, addressing social safety nets{2} rather than core industrial rights such as minimum wages or protection against unfair dismissal.{10}.This distinction is undermined by significant delays in implementation. Despite the Code’s enactment in 2020, key operational mechanisms remain incomplete. Schemes covering Provident Fund, pension, Employees’ State Insurance, and Gratuity require specific framing and launch. Furthermore, the planned healthcare coverage for platform workers under the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) is yet to be launched.{^2} This gap between legislative intent and executive action subjects workers to continued economic instability.

Chapter 3: Judicial Scrutiny and Constitutional Imperatives

3.1 The Landmark IFAT v. Union of India Petition

The Supreme Court of India is currently hearing the landmark case, The Indian Federation of App Based Transport Workers (IFAT) v. Union of India.{11}.The central question is whether gig workers should be classified as ‘unorganised workers,’ making them immediately eligible for social security benefits under existing statutes, notably the Unorganised Workers’ Social Security Act, 2008.{11}.The petition names major platforms, including Zomato, Swiggy, Uber, and Ola, accusing them of misclassification.{6}

3.2 Constitutional Arguments

The petitioners argue that the denial of social security violates fundamental rights guaranteed by the Constitution of India, 1950: {12}

1. Violation of Article 14 (Right to Equality): Misclassification as ‘partners’ denies gig workers the social security benefits enjoyed by similarly situated workers, violating the constitutional guarantee of equality.
2. Violation of Article 21 (Right to Life and Livelihood): Low pay and denial of social security infringe upon the fundamental right to life, dignity, and a secure livelihood, which guarantees the right to decent and fair conditions of work.{12}
3. Violation of Article 23 (Prohibition of Forced Labour): The economic compulsion to work long hours coupled with non-existent benefits is argued to amount to exploitation akin to forced labour.

The Supreme Court has already issued notice and strongly criticized the Central Government for implementation delays, asserting publicly that gig workers’ rights “cannot be denied”.{13}

Chapter 4: Regulatory Gaps and Denial of Core Labour Rights

A fundamental legal deficit persists due to the exclusion of gig workers from core industrial labour legislation:

• Industrial Disputes Act, 1947 (ID Act): Since they are not recognized as ‘workman’ under the Act, they possess no formal mechanism to challenge unfair labour practices related to job security, such as abrupt account deactivation without due process.
• Minimum Wages Act, 1948 (MW Act): Gig workers are not entitled to a guaranteed national minimum wage floor or fixed working hours, leading to inconsistent and exploitative pay structures.
• Trade Unions Act, 1926: Exclusion from the definition of ’employee’ prevents gig workers from obtaining formal recognition under the Trade Unions Act, denying them the right to form trade unions and collectively bargain with platforms, exacerbating the inherent power asymmetry.{10}

Chapter 5: Algorithmic Management and Digital Accountability

The reliance on algorithmic management, which replaces human supervision, is the central source of precarity.{8}

Workers operate under algorithmic opacity—they lack understanding of the metrics that lead to crucial decisions like pay reduction or account deactivation.{1} This opacity acts as a mechanism of legal evasion, shielding platforms’ management methods from judicial scrutiny and denying workers effective legal recourse.{8} While Karnataka introduced a law attempting to mandate algorithmic transparency,{14}.critics note that without a right to human review for punitive ratings or critical decisions, this right remains largely symbolic.{15}

Chapter 6: Comparative Legal Models and India’s Policy Pathways

In shaping a sustainable regulatory model, India must draw lessons from global jurisdictions and its own state-level actions, which have rejected the binary classification of employment.

6.1 International Hybrid Models

Internationally, the most sustainable solution involves adopting a hybrid or dependent contractor status. The UK “Worker” Model, established in the Uber v. Aslam (2021) case, classified drivers as “workers”—a hybrid category entitled to core rights such as the National Minimum Wage, paid annual leave, and rest breaks, based on the economic reality of platform control.{16}.Similarly, the European Union’s proposed Platform Work Directive suggests a rebuttable presumption of employment, where a worker is presumed to be an employee if a platform meets control criteria, shifting the burden of proof to the company.{17}

6.2 Pioneering State-Level Regulation: The Rajasthan Model

The Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023, is India’s first dedicated state-level law and offers an exemplary funding model.{10}. This Act establishes a Welfare Board (with worker representation) and a Welfare and Development Fund (initialized with ₹200 crore). Critically, it mandates the imposition of a Welfare Cess (fee) on aggregators based on the value of every transaction, providing a stable, dedicated revenue stream for welfare.{18}.Aggregators who fail to remit this cess face steep penalties, ranging from ₹5 lakhs for a first offence up to ₹50 lakhs for subsequent violations.{19}.This pioneering financial mechanism addresses the funding ambiguity that plagues the central CSS 2020.

Chapter 7: Recommendations for Sustainable Legal Reform

Comprehensive reform must synthesize legislative, financial, and digital governance strategies to achieve an equitable platform economy:

1. Operationalize and Finance CSS 2020: The Central Government must immediately accelerate the establishment of the Social Security Fund. To ensure financial sustainability, the government should nationalize the Rajasthan model by implementing a mandatory, uniform Welfare Cess applied as a percentage of every transaction by the aggregator. {20}
2. Legislative Amendments for Rights: Legislate a clear, defined Dependent Contractor status, separate from both ’employee’ and ‘independent contractor.’ This status should guarantee foundational rights, including a statutory minimum wage floor and basic procedural fairness regarding termination. Additionally, the right to association and collective bargaining must be extended to platform workers by amending relevant labour codes. {10}
3. Mandate Algorithmic Accountability: Establish a clear legislative mandate requiring platforms to disclose key algorithmic parameters (allocation, pricing, rating) and guarantee a statutory Right to Human Review and Appeal against all significant automated decisions, particularly account deactivation. {21}

Conclusion

The legal trajectory for gig workers in India has moved toward statutory recognition via the Code on Social Security, 2020, but remains incomplete due to its focus on welfare over core labour rights. The ongoing judicial scrutiny in IFAT v. Union of India underscores the urgency. The most effective path forward involves synthesizing the pioneering state-level financial models (like the Rajasthan cess) with robust digital governance requirements (like the right to human review). This synthesis must culminate in the legislative creation of a clearly defined, hybrid Dependent Contractor status, guaranteeing both fundamental social security and essential labour rights necessary for stability and dignity in the digital workplace.

Citations

1. Lawrbit, Gig Workers in India: Analyzing the Legal Framework (2025).
2. Press Info. Bureau, The Code on Social Security, 2020 (Aug. 30, 2025).
3. Worker Protections in the Gig Economy: Challenges for Indian Labour Law, IJLMH (2025).
4. The Rules Governing India’s Gig Economy, IBA (2024).
5. India Today Digital, India Gig Economy (2025); See also Jus Corpus, The Invisible Workforce: Legal Recognition of Gig Workers in India’s Labour Framework (2024).
6. Filling the Lacuna in Legislation by Judiciary, IJFMR (2024).
7. The Rules Governing India’s Gig Economy, IBA (2024).
8. A Comprehensive Analysis of India’s Gig Economy Legal Frameworks, IJLSSS (2025).
9. DMD Law, The Social Security Code, 2020 (2020).
10. Jus Corpus, The Invisible Workforce: Legal Recognition of Gig Workers in India’s Labour Framework (2024).
11. The Indian Federation of App Based Transport Workers v. Union of India, SCObserver (2021).
12. The Indian Federation of App Based Transport Workers v. Union of India, SCObserver.
13. India: Apex court asserts gig workers’ rights cannot be denied, criticises Centre’s delay on social security protections, Bus. & Hum. Rts. Rsch. Ctr. (2025).
14. India: Karnataka’s gig worker law introduces algorithmic transparency, Bus. & Hum. Rts. Rsch. Ctr. (2024).
15. India: Karnataka’s gig worker law introduces algorithmic transparency, Bus. & Hum. Rts. Rsch. Ctr. (2024).
16. Shoosmiths, What does the Supreme Court decision in the Uber case mean for employers (2020); See also A Comprehensive Analysis of India’s Gig Economy Legal Frameworks, IJLSSS (2025).
17. EU Rules Gig Work, World Econ. Forum (2023).
18. Law Journals, Summary Provisions of the Bill and their Analysis (2025).
19. DMD Law, Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023 (2023).
20. Promise and Precarity, Fin. Express (2025).
21. A Comprehensive Analysis of India’s Gig Economy Legal Frameworks, IJLSSS (2025).