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Department of Labour Interaction Program: Online Business Platforms

Posted by Bharath Gururagavendran at Oct 29, 2019 06:05 AM |
The Department of Labour convened an interaction program of sorts at Vikas Soudha in Bangalore on 21st October, 2019 to hear the issues plaguing the emergent gig economy.

The blog post was edited by Ambika Tandon.


The meeting was called to hear and address the grievances of gig workers, (employed by online business platforms) in the presence of their employers. The meeting was presided by the esteemed Labour Minister, Shri. Suresh Kumar, and the Secretary to the Labour Department, Shri Manivannan. The Minister began by disclosing that union members and delivery partners employed by online delivery companies (Swiggy, Zomato, Ola, Flipkart, etc.) had approached his office, with several complaints pertaining to the legal treatment or lack thereof, of gig workers across the nation. They also further identified the day-to-day concerns that they had to face (i.e. health & pay-related issues) as a consequence of their non-recognition under the labour law frameworks in the country.

"The majority of the delivery boys that aggregators (e.g. Swiggy, Ola, Uber, etc.) employ are full-time workers who depend solely on these companies for their income." That was the refrain of most of the spokespeople supporting the cause of gig workers. These were some of the representatives who spoke on behalf of the gig workers employed by online aggregators:

  1. Mr. G. S. Kumar (Food Delivery Partners Association)
  2. Mr. Tanveer Pasha (Ola driver)
  3. Mr. M. Manjunath (Auto Chalaka Okkuta)
  4. Mr. Amit Gupta (Brand Strategist)
  5. Ms. Kaveri (Researcher)
  6. Mr. Basavaraj (Food Delivery Association)

"The delivery partners employed by online aggregators should be treated as full-time employees"

Mr. G.S Kumar, an office-bearer at the Food Delivery Partners Samithi set the context for the conversation, by identifying at the very outset that the term "delivery partners" is a misnomer and that they are largely full-time employees. They are further straddled with family commitments, health concerns, and dwindling pay structures. As such, he proclaimed that they are deserving of the protections statutorily available to employees (in the traditional sense of the term) under the extant labour legislations. It was also specifically highlighted by Mr. K.S. Kumar, that in status quo, delivery boys cannot avail of ESI, or PF benefits.

Furthermore, the protections the companies make available are also quite abysmal, for instance a Rs. 2 lakh accidental cover that's rarely ever paid. The practical exigencies of their itinerant lifestyles inhibit them from maintaining strict compliance with the protocols that are unfortunately condition precedents to obtaining the benefits they so desperately require. The language of these policies in the fine print often contains conditions that are quite hard to satisfy, and as such, the benefits remain inaccessible to the vast majority of drivers employed by these online business platforms. Adding value to this criticism of Mr. K.S. Kumar, Mr. Basavaraj later clarified that conditions such as requiring 24 hours of admittance for the processing of insurance claims, makes it nigh impossible for drivers plying the roads to ever materially avail of health or accidental insurance.

"Ola/Uber drivers face serious health risks, as they ply the roads of Bangalore, and require functional insurance"

Tanveer Pasha, a member of the Ola/Uber Drivers Association, discussed the lived experiences of these delivery boys who ply the road, travelling nearly fifteen to twenty kilometres for each trip in peak Bangalore traffic. He narrated stories of trauma and violence faced by drivers, such as instances of heart attacks and accidents, which made the conversation a little heated. The minister then deftly interjected, by requesting them to be solution-centric, while discussing their grievances, as this aids the government's ability to balance the competing interests of both the aggregators and the gig workers.

"A Government ombudsman is required to address the grievances of gig workers"

To that effect, M. Manjunath from the Auto and Taxi Association asserted that insurance is a basic right that should be provided to the employees. Amit Gupta, Brand Strategist, spoke on behalf of his sister, previously employed at Swiggy, and stated that an ombudsman empowered to take complaints, even from gig workers, should be created. He believed this was imperative given that aggregators are de facto free to violate the terms and conditions prescribed in the employment order, as they have the resources to see the case through in court, whereas employees don't have much recourse, outside of trade unions. He concluded that for these delivery partners devoid of the right to collectivize, it becomes crucially important to maintain at the very least, a Government ombudsman.

"Aggregators should not profit off of the positive network effects gained through delivery partners, and simultaneously deny their right to protest unfair business practices"

Ms. Kaveri, a researcher on the conditions of gig workers, brought to light some of the more egregious problems that are faced by these workers. For instance, they are removed from employment, at a moment's notice if they attempt to protest, and to that effect, she stated that Zomato had fired an employee that very day because he was supposed to participate in the meeting and make his case. She further specified that it was patently unfair to allow these aggregators to profit off of the positive network effects gained solely because of the delivery partners, and subsequently engage in cost-cutting practices like reducing the incentives that they receive.

In response to these claims, the Labour Minister invited representatives of online platforms to shed some clarity on the concerns raised by the gig workers they employ.

These were some of the representatives who spoke on behalf of the online aggregators:

  1. Mr. Manjunath (Flipkart)
  2. Mr. Panduranga (Legal Team, Swiggy)
  3. Mr. Ashok Kumar (Zomato)

"Flipkart does provide significant benefits to its fixed-term contractors"

Mr. Manjunath clarified his position on these issues, with regards to Flipkart, by stating that there is a tripartite classification amongst people who work there:

a)      Full-time employees

b)      Fixed Term Contractors (e.g. 8 or 10-month contract)

c)      Interns

He further affirmed that even for fixed term contractors, Flipkart offers ESI, and PF benefits. He also specified that they don't hire more employees or fixed-term contractors during peak season, but rather hire only interns to meet demand, as it offers the inexperienced interns a chance to gain industry exposure as well.

"Swiggy empowers the agency of its delivery partners, and provides necessary benefits"

Mr. Panduranga, from the legal department at Swiggy, in direct response to the concerns about Swiggy, stated that the gig economy is emergent and that Swiggy and other such aggregators are merely technology platforms, facilitating end-to-end services (between different stakeholders, e.g. customer-driver-restaurant). In that sense, he clarified that the delivery partners they employ have the right to accept or deny deliveries and that there is no compulsion to commit to the work. Moreover, he specified that merely logging off the app frees up a delivery partner of his or her time. He opined that they have the freedom to work for multiple companies, and the process of joining and leaving is highly flexible. In that sense, he stated that a large number of students and after-office hours employees are the ones employing these apps as a means to generating quick cash flows (and as such, should not be treated as full-time employees). He also mentioned that there is up to 1 lakh for medical expenses, (which are currently being disbursed), and Rs. 5 lakhs for accidental death coverage as well. Mr. Ashok Kumar from Zomato also reaffirmed the statements of Mr. Panduranga.

"Incentive and disincentive structures coercively compel gig workers to work hours akin to full-time employees"

Mr. Basavaraj from the Food delivery Association/Samithi, along with all the other representatives clarified that it is extremely unlikely that the majority of gig workers are part-time and only in it for generating quick money. Instead, the majority of gig workers work 9-12-hour workdays, and in that sense, are really no different from traditional employees. Basavaraj stated that an examination of the travel logs of delivery partners will make it clear whether the majority of workers are part-time or full time. He also pointed out that incentive and disincentive structures coercively compel drivers to work long hours with poor working conditions. For example, drivers who don't operate during peak hours do not receive the incentives they are promised. Further, the manner of advertisement of these jobs is itself insidious, as the salary offering is inclusive of the money one would receive if they also met their incentive-targets. Basavaraj specified that the deceptive advertising of these companies is what leads to massive hordes of gig workers working, in essence, full-time jobs, and as such, they must require the protection of their rights enshrined under labour legislations.

There was also collective agreement from the spokespeople making a case on behalf of the gig workers, that the benefits provided on paper (health insurance for accident cases) are rarely ever provided, and that the process of acquiring the same is rife with hassles. However, this was met with fervent opposition from the spokespeople representing the online aggregators, who contended that these insurance payments were being sanctioned freely without inconvenience.

Concluding Observations of the Labour Minister

The Labour Minister, Shri. Suresh Kumar, identified that this is an emergent issue; one that requires serious consideration, as the gig economy is here to stay. He reaffirmed the social responsibility of the Government to inspect this matter and set up a legal framework, as it concerns the deprivation of agency for lakhs of people working as gig workers in the state, and across the country. He also affirmed that he is cognizant of the business interests at play. To that effect, he declared that the Deputy Labour Commissioner, Shri. Balakrishnan would examine the relevant data at hand, hold necessary meetings with both parties, and submit a report on the creation of a prospective framework to regulate gig economies within one month. He stated that the Government will set up a framework with governing rules and regulations, based on the report submitted. He concluded by emphasizing the necessity for both parties to be trusting of one another and not render the working dynamic adversarial, however oppositional their competing interests maybe, as trust is a constitutive component of conflict resolution.

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