Nasscom Raises Concerns Over Karnataka Gig Worker Bill

New Delhi, Jul 12 (PTI) Nasscom has raised concerns over Karanataka's draft bill on digital platform-based gig workers, saying "onerous and prescriptive" obligations on aggregators like minimum notice period for termination, disclosures, and monitoring mechanisms could hit the industry in the state.

Nasscom has written to Karnataka Chief Minister Siddaramaiah, highlighting its objections to the draft bill and calling for the public consultation period to be extended by at least 45 working days (from 10 working days) for a "meaningful consultation".

According to some estimates, close to 2 lakh gig workers work with platforms and aggregators such as Swiggy, Zomato, Ola, Urban Company, Uber, Porter, Amazon, Flipkart and others, in Bengaluru.

The industry body's views add to the growing industry voices opposing various provisions of the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Bill 2024. The draft legislation seeks to regulate the social security and welfare of platform-based gig workers and moots the creation of a board, grievance cell, and welfare fund, among other provisions.

Recently, IAMAI also urged the Karnataka government to put on hold the legislative process around its draft bill to give sufficient time for thorough consultations, as it flagged several concerns that can potentially negatively impact the ease of business in the state.

In its letter to Karnataka's chief minister, Nasscom argued that although gig work is entirely different, the bill "assumes gig work to be a part of the employer-employee relationship".

"This assumption is core of the Bill and basis this, it prescribes several obligations which may be relevant only in an employer-employee relationship," Nasscom said.

The association likened the nature of gig workers to 'independent contractors' and not employees and cited 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). This assumption risks unsettling the conceptual and legal basis of gig work," Nasscom said.

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 added.

It does not propose a sunset clause mechanism that will subsume the Bill into the CoSS when the same comes into force, Nasscom said.

It also noted that the draft 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) and laying down terms of template contract 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.

The Bill, Nasscom claimed, has serious gaps not only from an industry perspective but also from the gig workers' perspective and "fails to state the end-use of fees or funds collected from aggregators and platforms".

"The Bill does not contain safeguards to ensure the funds collected from platforms are spent in a time-bound manner and only for sponsoring social security schemes designed for gig platform workers in the state of Karnataka," Nasscom wrote.

The association said as a result of a balanced policy approach toward industry, workers and consumers, Karnataka remains a leader in India's technology sector in terms of investments and exports.

As per Niti Aayog, Karnataka is home to 400 Fortune 500 companies, Nasscom pointed out.

"As you will appreciate, any proposal that impacts industry would benefit from extensive consultations," as per Nasscom.

Another industry body IAMAI, in its recent submission, highlighted various pain points, including the possibility of dual levy coming into play on social security. It had rued a lack of clarity on how the proposed welfare fee contribution from aggregators to support the social security of gig workers will be utilised.

It also expressed worries over what it claimed is "ambiguity in calculation of welfare fee contribution", and lamented that onerous data-sharing requirements would pose significant challenges to the business operations of aggregators.