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As India defers labour codes, social security benefits to gig workers get delayed

The four labour codes were earlier expected to be rolled out by April 1.

April 08, 2021 / 06:54 PM IST
(Image: Zomato)

(Image: Zomato)

The deferment of labour codes beyond April 1 brought a much-needed respite to the employers and companies who were struggling to quickly remodel the human resource policies and compensation structures.

The delay in the implementation of the four labour codes has been due to delay by the state governments in finalising the draft rules.

But the postponement in the implementation of the Codes in not essentially a great news for the gig and platform workers.

Of the deferred codes, is the Code on Social Security which for the very first time extended the social security benefits like maternity leave, disability insurance, gratuity, health insurance, old age protection to the workers in the country’s flourishing gig economy space.

The Code proposes for the creation of a social security fund for extending these benefits to the workers in the unorganised sector. The scheme for the social security fund envisages that the platforms and aggregators like Swiggy, Zomato, Ola, Uber, Urbanclap and others will make contributions to the fund which would be either 1-2 percent of the turnover or 5 percent of the worker’s wages. The central and the state governments can also contribute to the social security fund.

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The delay in the enactment of the codes has therefore also delayed the benefits to the gig workers.

The four labour codes were earlier expected to be rolled out by April 1.

Prashant Singh, Vice President and Business Head-Compliance and Payroll Outsourcing, TeamLease Services said, "The delay in codes roll out nationally by a quarter has given breather to industry to introspect and be future ready as far as administrative and financial implications are concerned but at the same time it has delayed the benefits and support which was supposed to get announced and implemented for gig workers under social security ambit."

With elections in five states, resurgence of COVID in many states and states not ready with draft yet, this would take another three to five months to get formalised and implemented, Singh added.

Twenty nine central labour laws governing occupational safety, minimum wages, and social security have been consolidated into four codes.

The Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020, were passed by Parliament in 2020, whereas the Code on Wages was passed during the monsoon session of Parliament in 2019.

Shaik Salauddin, Founder & State President, Telengana, Gig and Platform Workers Union argued, "The government clearly has no intention of doing any good for the platform workers. For so many years, the gig workers have been deprived of many security benefits. And now too, the codes have been delayed because the government is under the pressure of the companies."

Salauddin further said, "1-2 percent of the turnover is too little, when these platform companies charge commission per ride. The government should increase it to at least 5 percent."

A representative from the Indian Federation of App-based Transport workers (IFAT), said, "There are reports that the codes are delayed because of COVID-19 and elections, but had the government really wanted to help us, they would have finalised the draft rules and implemented the codes."

Sahil Sharma, Co-Founder & CEO, GigIndia noted, "While all 4 labour codes have the potential to positively reform the state of the gig economy in India the impact will be contingent on the rules formulated and executed by the state governments. Hence, it is acceptable if the state governments need more time to draft these rules, especially since this will also have a related impact on the number of people who will enter the gig economy in future."

That being said, a timeline should be communicated with stakeholders in order for employers to prepare and plan accordingly, Sharma added.

The draft rules on Code on Social Security were released in November 2020. It integrates nine previous regulations relating to social security.
Shreeja Singh
first published: Apr 8, 2021 06:54 pm

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