AIOE Submits Recommendations on Labour Codes for Gig Workers to Ministry of Labour and Employment

Jan 02, 2025

• Align State Laws with Central Code on the Subject

 

NEW DELHI, 02 January 2025: All India Organisation of Employers (AIOE), an allied body of FICCI, has presented comprehensive recommendations to the Secretary of Labour and Employment, Government of India, for addressing key challenges faced by platform aggregators and gig workers under the new Code on Social Security (CoSS) and emerging state legislations on social security for gig workers.

 

AIOE commended and supported the Government of India's proactive approach in incorporating gig and platform workers into the legislative framework through the CoSS. This initiative represents a transformative step toward equitable labour rights and protections for a rapidly growing segment of the workforce operating outside traditional employment models. On the global stage, the gig economy is receiving increased attention, with international bodies emphasizing the need for fair and inclusive regulatory frameworks. The International Labour Organization (ILO) will address ‘Decent Work in the Platform Economy’ during its International Labour Conference (ILC) in June 2025. These discussions in ILO aim to establish global standards to safeguard the rights, social protections, and working conditions of gig and platform workers, recognizing their growing role in the global workforce. India, as a leader in the gig economy, will play a pivotal role in these deliberations, offering insights and experiences to shape equitable global frameworks.

 

AIOE said that India has established itself as one of the largest markets for the gig and platform economy, driven by technological advancements, widespread smartphone adoption, and changing consumer preferences. Platform aggregators in sectors such as ridesharing, food delivery, and e-commerce have become integral to this transformation, providing livelihoods for millions of gig and platform workers.

 

However, the evolving regulatory environment on social security for gig workers in India needs to balance out the workers’ welfare and the growth of the platform economy. Listing out the challenges under the current provisions of Code of Social Security, AIOE in its submission highlighted the following:

 

• The current proposal yields disproportionate contributions by aggregators: As per the current proposal, the contributions by some aggregators will be notably more than the contributions by others, despite the comparable number of GWPWs (Gig and Platform Workers) engaged. This will not only result in disproportionate burden on some aggregators but will also result in less-than-optimal contributions.
• Does not take into consideration the number of GWPWs engaged with each aggregator: Some aggregators, despite engaging lakhs of GWPWs, will be contributing less owing to relatively low turnover. As a result, contribution per GWPW by each aggregator will vary tremendously. Some aggregators will end up contributing 80X per gig worker as compared to some others - despite having lesser gig workers in totality engaged.
• Does not take into account the participation of GWPWs: It is neither linked to the number of hours of participation, nor the earnings per gig. By making the central corpus disconnected from the participation of GWPWs, the current provision has potential to impact participation in the gig economy.
• The provision does not take into account the fact that, for many aggregators, turnover is a function of various factors unrelated to GWPWs: While there are some aggregator models whereby turnover is a function of the commissions charged from GWPWs (such as cab and housekeeping aggregators), there are other models where turnover is largely independent of GWPWs (such as e-commerce, and food ordering and delivery aggregators who charge commissions from sellers, restaurants, etc). The cap of 5% payable to gig workers may be higher than 2% revenue for many home-grown companies, thereby making it redundant.

Further, while the Code on Social Security seeks to unify social security provisions for gig workers, state-level legislations such as the Rajasthan Act and Karnataka Draft Bill impose additional compliance requirements on Platform Aggregators. This dual framework risks complicating the ease of doing business and may leave gaps in social security coverage for gig workers.

 

The submission highlighted that many platform companies have taken proactive steps to support their workforce by offering benefits such as health insurance, accident coverage, and retirement savings plans. These initiatives underscore the industry's commitment to the financial and physical well-being of gig workers, even within the flexible and non-traditional nature of gig work.

 

The submission also included other suggestions like expanding the definition of ‘aggregators’ to include third parties that provide service to digital intermediaries or marketplace; having a centralized mechanism for contribution collection; alignment of state laws with central Code on Social Security and others. It was further requested to include industry bodies like AIOE and FICCI in policy discussions to ensure balanced and informed policymaking.