A RECENT tripartite discussion on the implementation and future of the Jharkhand Gig Workers Act brought to the surface a fundamental question: who should regulate the rapidly expanding gig economy, and in whose interests should that regulation operate?

Representatives of the gig economy companies and their associations raised questions about the legal validity of the Jharkhand legislation following the introduction of the Central Rules under the Code on Social Security (CoSS). Their principal argument was that the power to collect the cess required for financing gig-worker welfare rests with the Centre, and that without such a cess there can be no independent welfare mechanism under a state legislation. On this basis, the demand was raised that the Jharkhand Act should be repealed.

This argument cannot be accepted without examining what the Jharkhand legislation actually seeks to achieve. The Act is not merely a mechanism for collecting a welfare cess or distributing social-security benefits. It attempts to recognise gig workers as a distinct and vulnerable category of workers and provides for institutional mechanisms to address their problems. Importantly, it envisages a grievance-redressal mechanism and provides a basis for developing a mechanism for determining minimum wages for gig workers. These provisions address precisely those aspects of the gig economy that existing labour-law frameworks have failed to adequately regulate.

The need, therefore, is to defend and preserve these progressive provisions while addressing any questions of legislative overlap or competence arising from the Central legislation. The objective should be to strengthen the Jharkhand Act rather than allow its dilution or repeal in the name of legal technicalities.

The opposition from the companies, however, goes much beyond the question of legislative competence. A familiar argument was advanced: this is the age of deregulation; excessive regulation will undermine the ease of doing business; and moving towards an employer-employee relationship would supposedly destroy the gig economy itself.

Such arguments present regulation as if it were an external burden imposed upon an otherwise free and competitive sector. The reality is very different.

The gig economy is already one of the most tightly controlled segments of the labour market. The companies determine the terms on which workers enter the platform, control access to work through algorithms, decide incentives, determine ratings and performance parameters, and possess the power to suspend or deactivate workers. Complaints from customers can affect a worker's ability to earn. The platforms can determine who gets access to orders and who does not. Workers have little or no ability to negotiate any of these conditions individually.

The companies also determine the price paid by the consumer and the amount ultimately transferred to the person described as a “partner”. They therefore exercise substantial economic and managerial control while simultaneously denying the corresponding responsibilities of an employer.

This is the central contradiction of the gig economy's business model: control is retained by the platform, while responsibility is transferred to the worker.

The language of “flexibility” and “partnership” conceals this relationship. A worker may technically be free to log in or log out, but such formal flexibility cannot obscure the material dependence created by the platform's control over access to work, incentives, earnings and continued participation. The absence of a conventional factory floor does not mean the absence of managerial control.

There was also an argument that imposing minimum wages could actually reduce workers' earnings because companies would respond by restricting the number of workers allowed on their platforms. This turns the problem upside down. If workers' earnings are so precarious that even a legally guaranteed minimum threatens the business model, the answer cannot be to deny workers a minimum wage. It demonstrates the need to regulate the business model itself.

The same applies to the argument that providing social security and other rights to all registered workers would require companies to restrict onboarding. At present, the companies benefit from maintaining a large pool of workers while shifting the consequences of inadequate demand onto the workers themselves. The resulting underemployment is treated as an individual worker's problem rather than a consequence of the platform's business model.

This is precisely where the demand for “deregulation” has to be understood differently.

The gig sector does need deregulation - but not deregulation of workers' rights. What needs to be dismantled is the system through which a handful of platforms exercise extensive control over workers while avoiding the obligations traditionally associated with that control. The real question is whether workers should remain trapped in an arrangement where the companies regulate almost every aspect of their working lives while claiming that there is no employment relationship.

The argument that regulation will destroy the sector is equally misleading. The gig economy has grown precisely because platforms have been able to organise a massive labour force while externalising a large part of the cost of employment onto workers and society. Social security, healthcare, occupational safety, income security and other protections cannot indefinitely remain individual burdens simply because the employment relationship is mediated through an app.

Trade unions have consistently argued that technological change cannot be allowed to become a means of reversing labour rights won through decades of struggle. Algorithms cannot be permitted to replace labour law.

It is in this context that the Jharkhand Gig Workers Act assumes importance. Its provisions relating to social security, grievance redressal and wage determination represent an attempt - however incomplete - to bring a rapidly expanding and largely unregulated labour market within a framework of rights and accountability. Any deficiencies in the legislation should be addressed through amendments and stronger rules, not by abandoning the attempt altogether.

The larger issue is not merely whether a particular state Act survives a conflict with the Central framework. It is what kind of labour regime is being constructed in the country.

Under the present neoliberal policy framework, “ease of doing business” is repeatedly invoked to demand fewer obligations from capital, while the flexibility imposed upon workers is presented as modernisation. The burden of adjustment is consistently transferred to labour. What is described as deregulation for business frequently becomes intensified control and insecurity for workers.

The gig economy is therefore an important testing ground. If the state accepts that a company can exercise extensive control over a worker without assuming corresponding responsibility, this model will not remain confined to delivery workers, drivers and other platform workers. It will become a template for wider casualisation and informalisation of employment. The recent Supreme Court judgement on the definition of ‘industry’ to be redefined under Labour Code regime provides an indicator of what is to come. 

The struggle around the Jharkhand Gig Workers Act must consequently be seen as part of the broader struggle for the rights of workers in the emerging economy. The demand is not to prevent technological development or destroy the gig sector. It is to ensure that technology and new forms of enterprise do not become instruments for dismantling workers' rights.

The future of work cannot be built on the denial of work itself. Flexibility for business cannot mean insecurity for workers. What is required is not deregulation of labour, but regulation of capital and protection of workers' rights.