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India’s Gig Work Law Refusal Explained
INDIA’S REFUSAL TO UPHOLD A GLOBAL GIG WORK LAW
Why in the News?
- On June 12, 2026, the International Labour Conference (ILC) in Geneva adopted ILO Convention No. 193: “Decent Work in the Platform Economy”, the first legally binding international treaty protecting the rights of platform (gig) workers.
- The Convention aims to establish minimum labour standards for gig workers such as app-based drivers, delivery personnel, pickers, and data labellers, addressing ethical considerations that institutional investors and asset managers increasingly factor into their investment decisions.
- The Convention was adopted with 406 votes in favour, 8 against, and 36 abstentions, reflecting broad international support and evolving investor preferences toward social responsibility.
- India abstained from voting on the Convention.
- Under the International Labour Organization’s (ILO) tripartite voting system, each country is represented by three delegates—one each from the government, employers, and workers.
- While India’s employer and worker representatives voted in favour, the government delegate abstained, resulting in India’s official abstention.
- India’s decision has attracted attention as it distances the country from a landmark global framework on gig workers’ rights despite the rapid expansion of its platform economy, which has drawn significant interest from international investment funds and fund managers evaluating market capitalisation trends.
What did India forgo by abstaining from ILO Convention No. 193?
- Universal rights for platform workers: The Convention guarantees a minimum floor of labour rights to all platform workers, irrespective of whether they are classified as “employees”, “independent contractors”, or any other designation by companies—a values-based screening approach that aligns with ethical standards increasingly demanded by ethical investing frameworks.
- Guaranteed core labour protections: It ensures:
○ Minimum wages (statutory or negotiated)
○ Timely payment of wages
○ Occupational safety and health
○ Social security benefits comparable to those available to other workers.
- Regulation of algorithmic management: For the first time, the Convention addresses digital management systems by requiring platforms to:
○ Disclose significant automated decisions,
○ Explain algorithm-based decisions in writing, and
○ Ensure meaningful human oversight in decision-making—principles that mirror the ethical screening process used in sustainable investing and ESG-focused indices.
- Correct classification of workers: Article 9 mandates that workers be classified based on the actual nature of their work, rather than contractual labels assigned by platforms, helping prevent misclassification—an ethical screening criterion similar to those applied by responsible investment products.
- Protection for India’s expanding gig workforce: With India’s gig workforce projected to grow from 7.7 million (2020–21) to 23.5 million by 2029–30 (around 6.7% of the non-agricultural workforce), the Convention would have established minimum labour standards for a rapidly expanding segment of workers, a development closely monitored by institutional investors assessing market valuation and non-financial risks in the platform economy.
- Addressing poor working conditions: The Convention seeks to improve conditions for gig workers who often face:
○ Long working hours,
○ Low and uncertain incomes,
○ Self-funded operational expenses (e.g., fuel),
○ Lack of overtime compensation,
○ Limited social security coverage (only about 15% currently have any form of social protection).
- Stronger social security framework: While India’s Code on Social Security, 2020 recognises gig and platform workers and mandates aggregator contributions (1–2% of annual turnover, capped at 5% of worker payouts), implementation remains weak due to:
○ Absence of clear benefit structures,
○ Undefined eligibility criteria,
○ Delayed operationalisation of welfare schemes.
- Missed opportunity for a robust national framework: In the absence of comprehensive implementation at the national level, meaningful reforms have largely been driven by States such as Rajasthan (Platform-Based Gig Workers Act, 2023) and welfare initiatives proposed by Karnataka and Telangana, reflecting purpose-driven investing principles at the state level.
Key Provision: Convention No. 193 establishes a universal minimum floor of rights for platform workers, ensuring that labour protections depend on the actual nature of work performed, rather than the contractual classification used by digital platforms—an approach that resonates with ethical investment criteria and thematic investing frameworks focused on sustainable business practices.
India’s approach towards ILO Conventions
- Pattern of abstention: India’s decision to abstain on ILO Convention No. 193 reflects a broader policy of withholding ratification until domestic laws are fully aligned with international obligations.
- Founding member with selective ratification: Although India is a founding member of the International Labour Organization (ILO), it has ratified only six of the eight core ILO Conventions.
- Key conventions yet to be ratified:
○ Convention No. 87 – Freedom of Association and Protection of the Right to Organise.
○ Convention No. 98 – Right to Organise and Collective Bargaining.
○ Convention No. 190 – Violence and Harassment in the World of Work.
- Reason for non-ratification of Conventions 87 and 98: India maintains that these conventions could extend the right to strike and collective bargaining to government employees, which is inconsistent with existing domestic service rules.
- Principle before obligation: India’s established approach is to endorse international labour principles in principle but ratify conventions only after ensuring full conformity of domestic legislation.
- Federalism concerns: Since labour is a Concurrent List subject, the Union Government argues that ratification requires harmonisation between Central and State laws before assuming international obligations.
- States taking the lead: Despite the Centre’s cautious stance, several States have already initiated reforms for gig workers, including:
○ Rajasthan through the Platform-Based Gig Workers (Registration and Welfare) Act, 2023.
○ Karnataka and Telangana, which have proposed welfare frameworks and welfare boards for platform workers.
- Key criticism: Critics argue that abstaining from international labour standards does not strengthen federalism but instead delays the extension of internationally recognised labour protections to India’s growing gig workforce.
Implications of India’s abstention from ILO Convention No. 193
- Limited legal recourse for gig workers: By not ratifying the Convention, India forgoes an internationally backed framework that could strengthen workers’ ability to seek legal remedies against digital platforms, a concern that affects ethical preferences of socially conscious investors.
- Continued worker misclassification: The absence of binding obligations allows platform companies to continue classifying workers as independent contractors, limiting access to labour protections and employer responsibilities—practices that increasingly face scrutiny from asset managers applying ethical screening processes.
- Lack of algorithmic accountability: Digital platforms are not required to disclose or justify algorithm-driven decisions such as work allocation, pay determination, performance ratings, or account deactivation.
- Slower adoption of international labour standards: Abstention delays the incorporation of globally accepted labour protections for India’s rapidly expanding gig workforce into domestic law, potentially affecting the country’s attractiveness to international investment funds focused on sustainable investing.
- Competitive disadvantage for Indian gig workers: As countries adopting the Convention strengthen labour protections, Indian platform workers may receive fewer rights and safeguards than their counterparts in other jurisdictions.
- Growing significance of the issue: According to the World Bank, 154–435 million people worldwide already earn through digital platforms, with India expected to have around 23.5 million gig workers by 2030, highlighting the increasing need for a comprehensive regulatory framework that addresses both climate change adaptation and social responsibility in the evolving economy.
- Broader policy concern: Critics argue that abstaining from the Convention signals a preference for maintaining regulatory flexibility for digital platforms over extending stronger legal protections to gig workers, even as the platform economy becomes an important source of employment and attracts significant market capitalisation from both domestic exchanges like the National Stock Exchange and international markets.
Way Forward
- Ratify and implement ILO Convention No. 193: Align India’s labour laws with global standards to provide minimum rights and protections for gig and platform workers, demonstrating commitment to ethical standards that resonate with thematic investing trends.
- Operationalise the Code on Social Security, 2020: Notify pending rules, establish welfare boards, and ensure effective implementation of aggregator contributions and social security schemes—structured investment solutions that could be supported through passive investment products like ETFs and index funds focused on social impact.
- Ensure universal social protection: Extend health insurance, accident insurance, maternity benefits, disability cover, pension, and life insurance to all gig workers through portable and contributory schemes that align with sustainable business practices.
- Regulate algorithmic management: Mandate transparency in algorithm-based decisions relating to work allocation, ratings, incentives, and account deactivation, along with a right to human review—principles similar to those applied in thematic index construction by entities like NSE Indices Limited.
- Prevent worker misclassification: Adopt clear legal criteria based on the nature of work, rather than contractual labels, to determine employment status and applicable labour rights—an ethical screening approach that mirrors values-based screening in responsible investment products.
- Strengthen collective bargaining: Recognise gig workers’ associations, facilitate social dialogue among platforms, workers, and governments, and establish effective grievance redressal mechanisms.
- Build on State-level innovations: Scale up successful initiatives such as Rajasthan’s Platform-Based Gig Workers Act, 2023, while encouraging other States to adopt similar welfare frameworks that reflect green economy companies’ commitment to worker welfare.
- Create a national gig worker database: Ensure universal registration through platforms such as the e-Shram portal to improve policy targeting, benefit delivery, and portability across platforms—equity investment strategies that could attract exchange traded funds focused on social impact.
- Promote cooperative federalism: Foster coordination between the Union and States to develop a harmonised regulatory framework while respecting the Concurrent List status of labour.
- Balance innovation with labour rights: Develop a regulatory ecosystem that protects workers without undermining the growth and competitiveness of India’s digital platform economy, ensuring that free-float market capitalization considerations do not override fundamental worker protections and that non-financial risks are adequately addressed in corporate governance frameworks.
UPSC GS Paper II (Governance & Social Justice)
India’s abstention from ILO Convention No. 193 raises concerns over labour rights in the platform economy. Critically examine its implications and suggest measures to ensure decent work for gig workers. (15 Marks, 250 Words)
