Nasscom writes to Karnataka CM, raises concerns over draft gig workers bill

It says the Bill lays down onerous and prescriptive obligations on aggregators like the minimum notice period for termination, algorithmic disclosures, monitoring and tracking mechanisms

The National Association of Software and Service Companies (Nasscom) has raised several “serious concerns” over a platform-based gig workers Bill proposed by the Karnataka government, asserting that has “serious gaps” and can adversely impact the functioning of gig platforms in the state.

The draft of the Karnataka Platform Based Gig Workers (Social Security and Welfare) Bill, 2024 provides a grievance redress mechanism for gig workers such as cab drivers and delivery people and brings formal rights and social security to them. It also protects workers from arbitrary termination and aims to ensure basic minimum social security for them. The Bill is likely to be tabled during the monsoon session of the Assembly.

 

In a letter to Chief Minister Siddaramaiah dated July 9, Nasscom asked for the public consultation period to be extended to at least 45 working days (from 10 working days) for a meaningful consultation.

As part of the consultation, it also asked the government for an interdepartmental meeting (involving the Department of Labour, Department of Electronics Information Technology Biotechnology and Science & Technology, and Department of Commerce and Industries). Such a meeting should invite the participation of platform businesses operating in Karnataka, industry associations and other relevant stakeholders.

The Bill proposes a parallel structure of social security law for platform gig workers, duplicating the central law – Code on Social Security, 2020 (CoSS). It does not propose a sunset clause mechanism that will subsume the Bill into the CoSS when the same comes into force, the letter said.

“A key feature of a gig worker is being an ‘independent contractor’ and not an employee because of the absence of elements like degree of control, commitment and accountability. However, the Bill does not examine these elements and instead proposes a presumption that gig workers are like employees (contrary to the treatment in the CoSS),” it said, adding that his assumption risks unsettling the conceptual and legal basis of gig work.

Nasscom said the Bill did not provide certainty whether the fee is to be calculated on a per transaction basis or turnover basis. It is left at the discretion of the executive. Similarly, the Bill leaves the percentage to be decided through executive notifications. It gives an option to the department to levy the fee as a percentage of the turnover of the platform in the state, without any upper cap on this. This will lead to uncertainty, it said.

“Further, this turnover-based fee is not pegged in relation to the fees paid by the platforms to the gig workers, raising concerns that the fee could be akin to a form of taxation,” said the letter.

The Bill lays down onerous and prescriptive obligations on aggregators like (indicative) minimum notice period for termination, algorithmic disclosures, monitoring and tracking mechanism (Central Transaction Information and Management System), Nasscom said. It also lays down terms of template contracts with platform gig workers along with the power to review such contracts. These obligations are incompatible with the functioning of gig platforms and can adversely impact their operations in the State, it said.

“It has serious gaps not only from an industry perspective but also from the gig workers perspective,” said the letter.

IAMAI

Another industry body, the Internet and Mobile Association of India (IAMAI), has also raised similar concerns and urged the state government to put the proposed legislation on hold for further consultation.

“While we appreciate the government's efforts to provide social security and welfare measures for gig workers, we believe that the Draft Bill, in its current form, raises several concerns, and could hinder business operations and negatively impact the ease of doing business in the state,” said the IAMAI letter.

“We recommend a more balanced and collaborative approach that aligns with existing Central government laws and involves all stakeholders in a transparent and equitable manner,” it said.

It urged the state government to put the legislative process on hold and give a sufficient period of consultation of at least 30 to 60 days. 

“The gig economy is an evolving sector, and any new regulations will have far-reaching ramifications for workers, platforms and the larger ecosystem. It is thus imperative that all stakeholders have an opportunity to provide inputs and voice their concerns before such a law is enacted,” said the IAMAI letter.

Key issues
 

Bill does not propose a sunset clause mechanism that will subsume it into the CoSS
 

No certainty whether the fee is to be calculated per transaction basis or turnover basis
 

It proposes presumption that gig workers are like employees and not ‘independent contractors’
 

Raises concerns that turnover-based fee could be akin to a form of taxation