On June 29, 2024, the Labour Department, Government of Karnataka issued the draft of the Karnataka Platform based Gig Workers (Social Security and Welfare) Bill, 2024 (‘Bill’). The Bill proposes to inter-alia protect the rights of platform-based gig workers, and imposes obligations on aggregators regarding social security, occupational health and safety, and working conditions of such gig-workers in Karnataka.

A summary of the key highlights of the Bill is set out below:^[1]

1. Definitions and Applicability:

i.    The Bill defines the term ‘aggregator’ to mean a digital intermediary that connects a buyer and seller of any goods or service, and includes an entity which coordinates with one or more aggregators to provide services. The provisions of the Bill are applicable to all aggregators in Karnataka engaged in providing ride-sharing services, food and delivery services, logistics services, e-commerce marketplaces, professional services, healthcare, travel & hospitality, and content & media services (‘Aggregators’).

ii.   According to the Bill, a ‘gig-worker’ includes a person who performs work or participates in a work arrangement for a given rate of payment, or piece-rate work and whose work is sourced through a platform in the specified services (‘Gig-Worker’). Therefore, unlike the Code on Social Security, 2020 (‘COSS’) which defines and regulates both ‘gig workers’ and ‘platform workers’ separately, the Bill regulates only the subset of platform-based gig-workers.

2. Welfare Board: The Bill provides for the establishment of a ‘Karnataka Platform Based Gig Workers Welfare Board’ (‘Board’) at the State-level, for securing welfare of Gig-Workers. The duties and functions of the Board are also prescribed under the Bill.

3. Registration: The Bill mandates that all the Aggregators and Gig-Workers be registered with the Board within 60 days of its commencement as an Act. For this purpose, the Bill empowers the Board to collect databases from Aggregators of all Gig-Workers registered with them.

4. Fair Contracts: The Bill provides that the Aggregators must (i) provide fair contracts to Gig-Workers written in a language understood by the Gig-Worker; (ii) provide 14 (fourteen) days advance notice for change in terms; (iii) terminate contracts only on pre-defined grounds with 14 (fourteen) days advance notice; and (iv) allow them to refuse work without adverse consequences, etc.

5. Transparency: Upon a request from the Gig-Worker, an Aggregator must share details of parameters of work allocation, work distribution, assessment of the work carried out by the Gig-Workers, rating systems, personal data processing and grounds for denial of work to Gig-Workers. The Bill also requires the Aggregators to provide the Gig-Worker the details of the process to seek information regarding automated monitoring and decision-making systems employed by the Aggregator which have an impact on their working conditions, including fares, earnings, customer feedback, etc.

6. Welfare Fund and Welfare Fees: The Bill provides for setting-up of The Karnataka Gig Worker’s Social Security and Welfare Fund (‘Fund’) for the benefit of registered Gig-Workers. Among other contributions, the Fund will be credited with a welfare fee charged from the Aggregators (‘Welfare Fee’) to be determined based on the pay of the Gig-Worker in each transaction, or on the annual State specific turnover of the Aggregator, as notified by the Government.

7. Grievance Redressal: The Bill requires Aggregators having more than 50 Gig-Workers, to constitute an Internal Dispute Resolution Committee before which Gig-Workers can raise grievances against the Aggregator regarding entitlements, payments, benefits, etc. Additionally, the Bill also provides the Gig-Workers an option to seek resolution of their disputes through the mechanism provided under the Industrial Disputes Act, 1947 (‘ID Act’).

Impact of the Bill

The Bill is likely to have far-reaching implications as it introduces some first-of-its-kind welfare measures for Gig Workers and onerous compliance requirements for Aggregators. Provisions such as dispute resolution through the mechanism prescribed under the ID Act may be challenging to implement given that the ID Act is a law which is fundamentally based on (and which provides a dispute resolution framework in the context of) an employer-employee relationship.

Besides, clarity on the interplay of the Bill with the COSS vis-à-vis various aspects, most importantly, the duplication of contributions for gig-workers by aggregators in Karnataka would be crucial to the industry.

As the Bill has presently been issued for public comments, any suggestions / objections to the Bill can be submitted to the Principal Secretary, Department of Labour, Government of Karnataka latest by July 12, 2024.

[1]     These are only the key highlights of the Bill. For detailed information, please refer to a copy of Bill dated June 29, 2024,  here.