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How a Dutch court’s ruling in favour of Uber drivers contrasts with Indian gig economy

After a Dutch court ruled that Uber drivers are not contractors, here’s a look at how Indian law addresses gig workers.

Uber drivers are employees of the company, and not self-employed contractors, the Amsterdam District Court ruled on September 13, in a case filed by the Federation of Dutch Trade Unions (FNV), according to a Reuters report. FNV had argued that Uber’s 4,000 drivers in Amsterdam are employees of a taxi company, and demanded benefits in line with the taxi sector, the report added.

The ride-hailing company was disappointed with the decision and was planning to appeal against it, Reuters reported.

IThe world has marched swiftly towards a gig economy in the last decade but it remains ignorant of gig workers who toil without labour protections or fair wages. Uber, which many consider being at the heart of the economic model, has come under severe criticism over the treatment of its workers. It has led to several challenges, legal and social, being mounted all over the world to improve the working conditions of gig workers. The latest order is in favour of gig workers and could have a ripple effect across the world.

What did the court say in its verdict?

“The legal relationship between Uber and these drivers meets all the characteristics of an employment contract,” read the ruling.

The Dutch court affirmed that Uber drivers fall under the collective labour agreement for taxi transportation. The decision will result in a wage increase for workers and provide entitlements such as sick pay, and severance, TechCrunch explained.

The judges imposed a fine of 50,000 euros for failing to implement the terms of the labour agreement for taxi drivers. They also decreed that Uber drivers are entitled to back pay in certain cases.

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The Amsterdam court rejected Uber’s defence that it’s merely a technology platform that connects passengers with taxi service providers. It said that the drivers are only self-employed “on paper”, TechCrunch revealed.

India’s social security law for gig workers

India seems to be moving in a different direction than the U.K. and the Netherlands given its Code on Social Security, 2020, which guarantees certain benefits to gig and platform workers but does not confer the tag of ‘employees’ upon them. The lack of a tag makes it difficult for gig workers to lobby for benefits reserved for employees.

The Union government has defined an aggregator as a digital intermediary or market place for a buyer/user of a service to connect with the seller/service provider. The categories include:

  • Ride-sharing services
  • Food and grocery delivery services
  • Logistic services
  • e-Market place (both market place and inventory model) for wholesale/retail sale of goods and/or services (B2B/B2C)
  • Professional services provider
  • Healthcare
  • Travel and hospitality
  • Content and media services
  • Any other goods and service provider platform

The Centre claimed that it will formulate social security schemes for gig workers and platform workers around life and disability cover, accident insurance, health and maternity benefits, old age protection, creche, and other benefits the government may determine as necessary, under the law.

The new code said that social security schemes can be fully or partially funded by the government, by aggregators, in part by the state government, or funded by CSR, or “any other source”.

Aggregators will have to contribute between 1-2% of their annual turnover, excluding taxes or cess payable to the central government, as a contribution to the social security fund for gig and platform workers.

Trade unions, civil society raise concerns

However, a group of 23 trade unions, civil society organisations and members of academia raised concerns about the law. Their concerns were about the burden of registration of workers, workers’ data privacy, and overall ease of accessibility to benefits. The law fails to address how aggregators refer to “platform workers” as contractors and agents in their legal documents, according to the joint submission made by the group.

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They recommended that the Code should have:

  1. Specified that all workers associated with any of the nine aggregator categories be treated as platform workers
  2. Provided clarity on which ministry and legislation will aggregators function and operate under
  3. Provided clarity on how contributions of aggregators would be collected and managed

Uber’s run-ins with the law

March 2021: The Supreme Court of the United Kingdom struck down Uber’s appeal of a 2016 employment tribunal ruling that its drivers should be classified as workers. It paved the way for over 70,000 Uber drivers in the UK to be designated as workers, providing them with at least a minimum wage, paid holidays, and pension.

May 2021: The U.S. Supreme Court rejected Uber’s bid to avoid a lawsuit over whether drivers are employees and not independent contractors in a case brought by its drivers who worked for the company’s limousine platform UberBLACK. The Court was reviewing a lower court’s 2020 ruling that dismissed the verdict delivered in favour of Uber. The case is under litigation.

November 2020: Uber successfully managed to lobby Proposition 22 as it was approved by California voters in a referendum. It was a ballot measure that allowed companies like Uber and Lyft to retain their drivers and other workers as “independent contractors” instead of “employees”, Indian Express reported. The California court struck down the ballot proposition in August this year, terming it as unconstitutional and unenforceable.

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