Should Gig Work Be Treated as Employment? Ola’s Case in Karnataka HC Reignites the Debate

A division bench of the Karnataka High Court today (October 4) has paused a judgment passed by a single judge bench. The judgment passed by the single judge bench on September 30 indicated that ANI Technologies Private Limited, which operates the taxi service Ola, is considered an employer of its drivers. 

Thus, if complaints are filed against the drivers of Ola, the company must follow laws that would protect women from sexual harassment in the workplace, as per the judgment by the single judge bench. 

Halting the judgment, the Karnataka High Court reportedly said that the matter requires consideration, as per LiveLaw. The court will hear the case again on October 28. The single judge bench judgment, which was hailed by many, has brought two discussions into the spotlight: the old debate about whether a gig worker should be an employee, and if the halted judgment is at all passed, will it bring more accountability for the corporations? 

Let’s first understand the case in question. 

Background of the Case

The case was filed by a woman who used an Ola cab to commute from Yelahanka to JP Nagar in Bengaluru in August 2018. The petitioner alleged a case of sexual harassment against the driver who made her feel uncomfortable and didn’t stop the cab despite her repeated plea. 

While Ola highlighted that the company had blacklisted the driver, the woman demanded harsher punishment. Following this, she filed a complaint under the PoSH Act. 

Following the complaint, Ola indicated that it is merely a transmitter and thus labor laws cannot be applied to them as the drivers are independent employees.

However, the court countered the argument and highlighted that the definition of "employee" under Section 2(f) of the PoSH Act is broad. The court ruled that an “employer” and “employee" relationship does exist between Ola and its drivers. 

The court reportedly observed, “Nowhere in the subscription agreement or in the customer agreement available on the website of Ola is there any categorical mention that Ola would not take responsibility for any complaints or incidents during a ride, as its 'driver-partners' were not its employees.” 

Read: What Keeps Bhavish Aggarwal Up at Night—Founder’s Fetish or Place in History?

While finding Ola's Internal Complaints Committee (ICC) guilty of neglecting the issue and failing to conduct a proper investigation, the court directed Ola to compensate the victim with a sum of Rs 5,000

PoSH Act's Broad Definition Includes Gig Workers, Say Experts

Speaking about the judgment, experts highlight that the PoSH Act clearly provides a definition that covers individuals employed at a workplace on a regular, temporary, or ad hoc basis. This definition includes individuals working on a voluntary basis, whether the terms of their employment are explicit or implied. 

“I agree with this argument because, if gig workers are classified as employees, the places where they provide services would also fall under the definition of a workplace under the PoSH Act. The Act specifies that any place visited by the employee during the course of employment, including transportation provided by the employer, qualifies as a workplace. Therefore, gig workers' workplaces would be wherever they provide services,” says Germaine Pereira, Partner, Solomon & Co. 

Altaf Fathima, Partner at Saraf and Partners, says that the argument that Ola cannot act against its drivers under the PoSH Act as they are not employees is not a valid argument from the perspective of the PoSH Act. “Section 2(f) of the PoSH Act has a wide ambit, and a plain reading of it clearly and unambiguously indicates that it intends to cover all possible means and modes of engagement of a person as an ‘Employee’ at his workplace and definitely includes drivers in this case,” says Fathima. 

Judgment Sparks Discussion on Employee Status

The judgment, as mentioned before, has reignited the age-old debate- Is a gig worker an employee?

Fathima highlights that Section 2(35) of the Code on Social Security, 2020, defines "gig worker" as a person who performs work or participates in a work arrangement and earns from activities outside of a traditional employer-employee relationship. So, a gig worker is not tied to any company per se. They are therefore free to choose their own working hours and are not required to report at any certain location, time, or day, nor are they required to do any additional actions that might be construed as punching the clock, add experts. While the good side of it is the fact that employees have more autonomy to work and have flexible timings, the flip side of it is the fact that gig workers do not get access to social security benefits in India. 

This comes at a time when the country is expected to have 23.5 million by 2029-30, as per a NITI Ayog report. This is a sharp increase from the 7.7 million gig workers in 2020-21. 

Gig workers associations such as the Indian Federation of App-based Transport Workers (IFAT) have hailed the recently stalled judgment. 

As per Moneycontrol, Shaik Salauddin, general secretary, IFAT, said that the recent landmark judgment has called Ola drivers an employee, something that they have been advocating for a long time. Salauddin further added that this judgment indicates that the employers have responsibilities towards both the riders and the drivers.

In terms of gig workers bill, Rajasthan was the first state in the country that introduced the bill which eventually became an act. Meanwhile, the Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill is in a draft stage. However, the bill does not have a proper definition of a gig worker. Read: Nasscom, IAMAI Flag Key Issues in Karnataka Gig Workers Bill

The bill defines a gig worker as “a person who performs work or participates in a work arrangement that results in a given rate of payment, based on terms and conditions laid down in such contract and includes all piece-rate work, and whose work is sourced through a platform, in the services specified in Schedule-1.” While trade unions have asked for more inclusion in the definition, industry body Nasscom has highlighted that a gig worker is an independent contractor, and the Karnataka bill instead highlights that a gig worker is an employee. Amid the ongoing debate, it remains to be seen what the Karnataka High Court says about the ongoing case.