International Journal of Law, Politics and Governance
DOI: 10.64823/ijlpg.2601008
labour laws in India were developed in an era dominated by factories and permanent employment. Under statutes such as the Factories Act, 1948[1], the Employees’ Provident Funds and Miscellaneous Provisions Act[2], and the Employees’ State Insurance Act, 1948[3], factory workers receive clear social security benefits: provident fund contributions, health insurance, maternity leave, accident compensation, and gratuity. These laws assume a stable employer‑employee relationship, with the employer bearing statutory obligations. Over time, this regime has been reinforced by judicial decisions, which confirmed that disguised contract arrangements cannot deny workers their provident fund rights.
The rise of the gig economy—marked by platform companies like Ola, Uber, Zomato, Blanket, Zepto and Rapido —has challenged this traditional model. Platform workers choose their hours and work through mobile apps but lack formal employment contracts. As a result, they are classified as independent contractors and do not qualify for provident fund or ESI coverage. Even the CSS code, 2020 (s2(35)[4] “gig worker”which for the first time defines and provides for gig workers, falls short by making scheme participation discretionary and failing to link these workers directly to established funds.
Research Problem: This paper addresses the core problem of how India’s legal framework creates a divide in social security and welfare between factory workers, who enjoy guaranteed benefits, and platform workers, who remain largely unprotected. The existing tests of control and supervision—developed in cases like Balwant Rai Saluja v. Air India Ltd. (2014)—are ill‑suited for digital work, leaving platform workers without access to minimum wages, gratuity, or accident compensation under statutes such as the Payment of Gratuity Act, 1972[5] and the Employees’ Compensation Act, 1923[6].
Research Question:To what extent do India’s labour laws and judicial interpretations adequately provide social security and welfare benefits to platform workers, and what legal reforms are needed to bridge the gap between factory‑sector and gig‑sector protections?
India’s regulatory framework for factory workers has evolved over decades to ensure that those engaged in industrial production receive core social security and welfare protections. At its foundation lies the Factories Act, 1948, which defines a “factory” under Section 2(m)[7] of the act as any place(premise) where Ten or more workers (with power) or twenty or more workers (without power) are engaged in manufacturing. This Act imposes duties on employers to maintain safe working conditions, regulate working hours, provide rest intervals, and offer canteens and welfare facilities. The Supreme Court many times emphasized the purposive interpretation of these provisions: in the case of Bangalore Water Supply & Sewerage Board v. A. Rajappa[8], the Court held that “industry” should be broadly construed to include quasi‑governmental undertakings, ensuring wide coverage of workers under health and safety norms. In that decision, the Court examined the scheme of the Factories Act and noted that the term “industry” must be interpreted in harmony with the purpose of the statute—protecting workers’ health and welfare—rather than narrowly according to individual ownership or function. By doing so, the judgment prevented employers from evading obligations simply by labeling their operations as non‑industrial.
Complementing the Factories Act are the core social security statutes. The EPF Act,1952 makes a contributory savings scheme under Section 6[9], mandating a 12% contribution of basic wages by both employer and employee. In Regional Provident Fund Commissioner v. Hooghly Mills Co. Ltd[10]., the Supreme Court struck down employer attempts to evade PF obligations via sham contract‑labour arrangements, affirming that any worker “employed for wages” must be included in the PF net. The Court meticulously analyzed the contractual documentation and actual working conditions, concluding that the substance of the arrangement—continuous employment under the employer’s control—overrode any contractual label of “independent contractor.” This expansive reading ensures that workers cannot be denied long‑term savings merely by issuing them short‑term or casual contracts.
The Employees’ State Insurance Act, 1948 provides health insurance, sickness benefits, and maternity cover for factory workers earning up to a prescribed wage ceiling. The Act applies to factories with 10 or more employees. Contributions (4.75% by employer, 1.75% by employee) are collected centrally and administered through State Insurance Corporations. In ESIC v. Harrison Malayalam Ltd[11]., the Supreme Court held that even casual and temporary workers in a covered factory must be enrolled, reinforcing that employer tactics cannot deny workers their statutory rights. The Court observed that the purpose of the ESI Act is “social welfare,” and interpreted “insurable employment” to include any work connected with factory operations, regardless of duration or formal status. By focusing on the nature of the work rather than contractual form, the judgment reinforced workers’ access to essential medical care and benefits.
For long‑service benefits, the Payment of Gratuity Act, 1972 under Section 4[12] entitles any “employee” rendering five or more years of continuous service to a gratuity payment upon superannuation, resignation, or termination. In Union Bank of India v. C.G. Ajay Babu[13], the Court reaffirmed gratuity as a non‑negotiable statutory entitlement, underscoring that employers cannot contract out of the Act’s provisions. The judgment delved into the legislative history of the Act, stressing that gratuity is a social welfare measure designed to reward long‑term loyalty and prevent destitution upon job loss. The Court therefore rejected attempts by employers to impose conditionality's or deductions not contemplated by the statute.
Finally, wage protection is consolidated under the Code on Wages, 2019. Its Section 2(k)[14] defines “employee,” while Chapter II mandates that no employer shall pay less than the minimum rate fixed by the central or state government. The historic decision in People’s Union for Democratic Rights v. Union of India[15], declared non‑payment of minimum wages as forced labour under Article 23[16] of the Constitution, highlighting the fundamental nature of wage protection for all factory workers. The Court undertook a detailed analysis of constitutional principles and the Minimum Wages Act, ultimately concluding that deprivation of minimum wages offends human dignity and equality guarantees. This reasoning has had far‑reaching impact, ensuring that minimum wage laws are treated as constitutional imperatives rather than mere statutory guidelines.
The rapid expansion of digital platforms has ushered in a new category of labour—platform or gig work—that contrasts sharply with traditional factory employment. Companies such as Ola, Uber, Zomato, and Swiggy connect millions of workers to consumers via smartphone applications, offering flexibility of hours and autonomy of choice. Yet, this flexibility comes at the cost of formal employment protections. Platform workers register on an app, agree to “terms and conditions” that label them as “independent contractors,” and are paid per ride or delivery without an assured minimum income, social security contributions, or statutory benefits. This model deliberately avoids the employer–employee relationship, placing the economic and regulatory burden on individual gig workers.
Despite this classification, the Supreme Court has, on occasion, looked beyond contractual labels to assess the substance of work arrangements. The Court reiterated that the true test of employment is the degree of control and the worker’s obligation to perform personally.
Empirical studies underline the scale and precarity of this workforce. A 2021 NITI Aayog report[17] estimates over 4 million platform workers in 2021, projected to reach 23.5 million by 2029. Surveys by the International Labour Organization and Centre for Internet and Society reveal that 60–70% of these workers earn below the national minimum wage, lack health insurance, and face routine income volatility. Their working conditions—long hours, exposure to road accidents, and absence of occupational safety nets—mirror those of factory workers but without legal protections.
In response to mounting concerns, the CSS code, 2020 (s2(35)[18] “gig worker”; s109–114)[19] formally defines and provides for the registration of “gig workers” and “platform workers.” Under Section 107[20], the central government may notify schemes for life and disability cover, health and maternity benefits, and old‑age protection. Section 113[21] establishes a National Social Security Board to monitor these schemes, while Section 114 creates a consolidated fund for contributions. However, absent clear mandates on employer contributions or automatic linkage with existing schemes (EPF, ESI), these provisions remain largely aspirational.
Platform workers have sought judicial intervention to secure social security. In Indian Federation of App‑Based Transport Workers v. Union of India (WP No. 1068/2021)[22], the petitioners—drivers and delivery riders for Ola, Uber, and Zomato—argue that they are “unorganised workers” under the Unorganised Workers’ Social Security Act, 2008 and entitled to benefits such as provident fund, gratuity, and health insurance. The Supreme Court, in its February 2025 hearing, questioned why gig workers are excluded from ESI and EPF schemes despite performing continuous work akin to factory employees. The petition underscores the tension between contractual labels and substantive labour contributions.
Informal collective efforts have also emerged. The Indian Federation of App‑Based Transport Workers (IFAT) and All India Gig Workers’ Union (AIGWU) have organized strikes and lobbied for statutory recognition. Yet, under the IR Code, 2020, these bodies lack formal status, as gig workers are not defined as “workers” for collective bargaining under Section 2(zl)[23], further illustrating their marginalization.
In sum, platform work in India represents a double‑edged sword: it offers entry into the digital economy but without the safety nets of traditional labour law. Despite landmark precedents suggesting courts could reclassify app‑based workers, legislative measures have not kept pace. The ensuing chapters will critically examine how India’s new labour codes address—or fail to address—these challenges and explore comparative models from the UK, EU, and US.
The transformation of work through digital platforms has challenged India’s labour code architecture leading to the promulgation of four comprehensive labour codes in 2020. Of these, three codes are of direct significance for platform workers: If the 2020 CSS code, the 2020 IR Code and the 2020 Occupational Safety, Health and Working Conditions Code. Though every code has made token mention of platform or gig workers in its definitions, none has fully integrated them into the protective orbit that factory workers have long enjoyed. In this chapter, I explore how each code deals with the unique needs of platform workers.
The CSS code, 2020 (henceforth “CSS”) is perhaps the first piece of legislation that acknowledges gig and platform workers in the country. Under Section 2(35)[24], the gig worker is one who works or participates in work arrangement in a manner that is outside of the traditional employer-employee relationship, whereas Section 2(61)[25] recognises the term “platform worker.”
However, recognition is only a first step. Chapter IX[26] of the CSS (Sections 109–114) empowers the central government to formulate welfare schemes—life and disability cover, health and maternity benefits, old‑age protection, and children’s education allowances—for gig and platform workers. Despite these provisions, the CSS does not automatically extend established social security benefits—such as provident fund contributions under the EPF Act, 1952, or health insurance under the Employees’ State Insurance Act, 1948—to platform workers. Instead, gig workers may only access new schemes if and when they are notified. This discretionary approach has already delayed implementation: as of May 2025, only the registration portal under Section 107 (for issuing unique IDs) is functional, while substantive schemes are yet to be notified. Critics argue that without mandatory aggregator contributions and clear timelines, platform workers will remain in a legal limbo, excluded from the very social protections that the CSS purports to provide.
The IR Code, 2020 (IRC) consolidates laws governing trade unions, industrial disputes, and conditions of service. Yet, its protections extend only to those defined as “workers” in Section 2(zl)[27]—persons employed in an industrial establishment to perform manual, clerical, technical, or supervisory tasks for hire or reward. Platform workers, though performing continuous labour, are excluded because there is no formal employer–employee contract with the digital platform.
This exclusion has critical consequences. Without employee status, platform workers cannot form or join registered trade unions under the Trade Unions Act, 1926, nor can they access collective bargaining, conciliation, or adjudication mechanisms provided by the IRC Informal groups such as the Indian Federation of App‑Based Transport Workers (IFAT) thus lack legal recognition and cannot engage in statutory dispute-resolution processes. The IRC’s narrow scope effectively silences platform workers in negotiations over pay rates, working conditions, and algorithmic management practices—areas where factory workers have long exercised collective power through registered unions.
The OSH Code, 2020 merges thirteen statutes which is connected to the workplace safety, welfare, and working hours—including the Factories Act, Contract Labour Act, and Mines Act—into a single framework. The OSH Code applies to “establishments” such as factories, mines, plantations, and construction sites, defined in Section 2(d)[28]. It imposes on employers obligations to provide safe machinery, protective equipment, rest intervals, and welfare facilities such as canteens and first‑aid rooms.
Platform workers, however, typically operate outside these defined “establishments.” Their workplaces are cars, motorcycles, or private homes, and their schedules are dictated by algorithms rather than factory supervisors. Since there is no physical “establishment” under an employer’s control, neither the platform company nor any state authority can enforce OSH Code obligations. This gap has practical consequences: in the event of a traffic accident, road hazard, or assault during a delivery, platform workers have no recourse under statutory occupational safety laws. Even though some platforms purchase third‑party accident insurance for their workers, these arrangements are private, time‑limited, and devoid of the comprehensive coverage mandated by the OSH Code for factory employees.
In B. Shiva Rao v. National Thermal Power Corporation[29], the Supreme Court underscored the protective purpose of workplace safety laws and held that procedural loopholes should not defeat substantive safety rights. Yet, without a legal duty imposed on platform aggregators under the OSH Code, such judicial pronouncements cannot extend to app‑based labour. The result is a bifurcated safety regime: factory workers enjoy clear, enforceable health and safety standards, while platform workers remain largely unprotected in their daily tasks.
By contrast, platform workers—who are usually classified as self-employed—are in practice excluded from most of these regimes. This section analyses five main laws: the EPF Act, 1952; the Employees’ State Insurance Act, 1948; the Payment of Gratuity Act, 1972; the Code on Wages, 2019; the Unorganised Workers’ Social Security Act, 2008, underscoring the way these all protect IEs’ welfare while leaving gig workers in a legal vacuum.
Under the EPF Act, 1952, any establishment employing twenty or more persons must register with the Provident Fund organisation. Section 6[30] mandates that both employer and employee contribute 12% of the employee’s basic wages to the Provident Fund, which accumulates retirement savings and provides pension benefits. In Regional Provident Fund Commissioner v. Hooghly Mills Co. Ltd[31], the Supreme Court held that sham contracting—labeling workers as “contractors” to evade PF contributions—cannot deny employees their statutory rights. The Court emphasized the substance-over-form approach, ruling that workers “employed for wages” must be included, regardless of the contractual label. Platform workers, however, are denied EPF coverage because aggregators classify them as independent contractors and refuse to register them as “employees,” cutting them off from both provident savings and pension entitlements.
The Employees’ State Insurance Act, 1948 (“ESI Act”) extends medical care, sickness benefits, and disability pensions to factory workers earning below a prescribed wage ceiling. Defined by Section 2(9)[32] as “insurable employment,” the Act applies to factories and establishments with ten or more employees. Employer and employee contributions—4.75% and 1.75% of wages, respectively—fund a state-administered insurance scheme. In ESIC v. Harrison Malayalam Ltd[33], the Supreme Court reaffirmed that even casual or temporary workers engaged in factory operations must be covered under ESI, prioritising the Act’s social welfare purpose over technical exemptions. Gig workers, whose services are mediated through apps and who lack a formal employer relationship, are not enrolled in ESI. As a result, they bear the full financial burden of medical emergencies, workplace injuries, and maternity care—risks factory workers face only after a modest co-contribution.
Under the Payment of Gratuity Act, 1972, any “employee” rendering five or more continuous years of service in a scheduled establishment is entitled to a lump-sum gratuity payment upon resignation, retirement, or death. Section 4[34] calculates gratuity at fifteen days’ wages for each completed year of service. In Union Bank of India v. C.G. Ajay Babu[35], the Supreme Court emphasised that gratuity is an inalienable welfare right, rejecting employer attempts to impose additional conditions or penalties. Gig workers do not qualify as “employees” under Section 2(e) of the Act, regardless of the duration or regularity of their work for a platform. Consequently, they receive no terminal benefit or reward for long-term service, adding to their financial insecurity at the end of their engagement.
The Code on Wages, 2019 consolidates the Minimum Wages Act and the Payment of Wages Act and defines “employee” under Section 2(k)[36] to include any person employed in any industry. Chapter II mandates that no employer shall pay less than the minimum wage fixed by central or state authorities, and Section 16 prohibits unauthorized deductions. In People’s Union for Democratic Rights v. Union of India[37], the Supreme Court held that non‑payment of minimum wages amounts to forced labour in violation of Article 23[38] of the Constitution. Despite this, most platform companies maintain per-task or per-kilometre payment models without guaranteeing a floor hourly or daily rate. Since platform workers are not formally recognised as employees, there is no legal basis to enforce minimum wages or prevent exploitative deductions, leaving them vulnerable to poverty-level earnings.
Finally, the Unorganised Workers’ Social Security Act, 2008 was intended to extend welfare to India’s vast informal sector, defining “unorganised worker” under Section 2(m) to include home-based and self-employed persons. However, the Act’s reliance on state-level welfare boards and voluntary registration limited its impact. Gig workers rarely register, and benefits such as life insurance, health coverage, and pension remain inaccessible. The CSS code, 2020 subsumes this Act and formally includes gig and platform workers under Section 2(35)[39]. Yet, unlike the EPF and ESI Acts, it does not confer automatic rights; rather, it empowers the government to notify welfare schemes without mandating their effective rollout. As a result, platform workers remain in legal limbo—recognised on paper but devoid of enforceable social security rights.
Together, these statutes underscore a clear disparity: factory workers operate within a legally enforceable safety net upheld by liberal judicial interpretations, while platform workers, despite performing equivalent labour, are excluded from fundamental welfare protections. This divide highlights the urgent need for legal reforms that extend mandatory social security contributions, minimum wage guarantees, and terminal benefits to all categories of workers, irrespective of the platform through which they are engaged.
Although India’s labour codes and legacy statutes theoretically recognise both factory and platform workers, in practice a stark disparity persists across three key dimensions: social security coverage, welfare benefits, and worker rights. Factory employees enjoy mandatory contributions to provident and insurance schemes, statutory accident and maternity benefits, and the ability to unionise and claim minimum wages. In contrast, platform workers—despite performing comparable labour—remain excluded by virtue of their classification as independent contractors and the discretionary nature of gig‑worker provisions under the new Codes.
First, with respect to social security coverage, factory workers are compulsorily enrolled in the EPF Act, 1952 under Section 6[40], which fixes a 12% employer and employee contribution to the Provident Fund and Pension Fund. They are likewise covered by the Employees’ State Insurance Act, 1948 under Section 2(9)[41] (“insurable employment”), entitling them to medical care, sickness benefits, and disability pensions financed by a combined 6.5% contribution. The Supreme Court, in Regional Provident Fund Commissioner v. Hooghly Mills Co. Ltd[42], held that sham contract arrangements could not exclude workers from PF coverage, and in even temporary factory workers must be insured. Platform workers, however, are not treated as “employees” under either Act and therefore receive no automatic PF savings or ESI benefits. Although the CSS code, 2020 defines “gig worker” in Section 2(35)[43] and authorises the government to notify dedicated schemes, these schemes are not yet operational, and there is no binding requirement for aggregators to contribute. Thus, app‑based drivers and delivery agents remain without retirement savings, health coverage, or insurance against disablement.
Second, under welfare benefits, factory workers enjoy statutory maternity leave under the Maternity Benefit Act, 1961, accident compensation under the Employees’ Compensation Act, 1923, and gratuity under the Payment of Gratuity Act, 1972. In Union Bank of India v. C.G. Ajay Bab[44]u the Court emphasised gratuity as a non‑ derogable social right, and in B. Shiva Rao v. National Thermal Power Corporation[45], underscored strict employer liability for workplace injuries. Platform workers, by contrast, receive only ad hoc insurance offers—often limited in duration and scope—and no guaranteed maternity, injury, or terminal benefits. Because they are not “employees” under these Acts, they have no legal recourse for compensation, medical care, or long‑service rewards, intensifying their economic and social precarity.
Third, in terms of worker rights, factory employees can form registered trade unions under the Trade Unions Act, 1926, and invoke the IR Code, 2020 to collectively bargain and resolve disputes. They are also protected by the Code on Wages, 2019, which defines “employee” in Section 2(k), enforced through penalties for non‑compliance. The Supreme Court’s landmark ruling in People’s Union for Democratic Rights v. Union of India[46] equated non‑payment of minimum wages with forced labour. Platform workers, however, are explicitly excluded from these definitions and provisions:IRC’s omits gig workers from its scope, and the Wage Code does not extend minimum‑wage coverage to independent contractors. Informal collectives like the Indian Federation of App‑Based Transport Workers have sought recognition but lack statutory standing, leaving gig workers powerless to negotiate pay floors or challenge unfair deductions.
These interconnected gaps illustrate a two‑tiered labour system: factory workers operate within a well‑defined, enforceable safety net, buttressed by liberal judicial interpretations, while platform workers remain in a legal vacuum—acknowledged on paper yet deprived of substantive protections. Without immediate legislative or judicial intervention to mandate social security contributions, guarantee welfare benefits, and extend collective and wage rights to platform workers, India risks perpetuating inequality and undermining its constitutional commitment to equality (Article 14) and social justice (Directive Principles).
Statutory Recognition and Extension of Existing Acts
Introduce a “dependent contractor” category—either by amending the new labour codes or enacting a standalone Gig Workers’ Welfare Act—that captures the hybrid nature of platform work. This category should explicitly appear alongside “employee” and “independent contractor” in legislation, drawing on the CSS’s definitions of “gig worker” (s2(35))[47] and “platform worker” (s2(61))[48]. Simultaneously, amend the EPF Act, 1952 (extend “employee” in s2(f))[49], the ESI Act, the Payment of Gratuity Act, 1972 s 2(e)[50], and the Maternity Benefit Act, 1961[51] to include dependent contractors. By doing so, platform workers automatically qualify for provident fund contributions, health insurance, gratuity, and maternity leave—placing them on par with factory workers.
Mandatory Aggregator Contributions and Fast‑Track Scheme Implementation
Amend the CSS code, 2020 to require platform companies to contribute to existing social security schemes at the same rates as employers—12% to the EPF and 4.75% to the ESI—rather than relying on discretionary new funds. At the same time, urgently notify the welfare schemes under CSS. (life/disability cover, health and maternity benefits, old‑age protection) with clear timelines and funding sources. Empower the National Social Security Board with gig‑worker representatives, impose strict penalties for non‑compliance, and mandate regular audits to ensure that contributions are collected and benefits disbursed without delay.
Strengthened Collective Rights and Judicial Guidelines
Amend the IR Code, 2020 (s2(zl)[52] “worker”) and the Trade Unions Act, 1926 to recognise registered associations of platform workers for collective bargaining on pay, working conditions, and algorithmic transparency. Complement these legislative changes by urging the Supreme Court and high courts to apply purposive interpretation— Dharangadhara Chemical Works Co[53].—to platform work disputes. The courts should develop clear tests for control, economic dependence, and employment status in gig work, ensuring that algorithmic management does not become a shield against worker rights.
Data Transparency, Social Audits, and Worker Awareness
Mandate that platforms submit anonymised data on worker earnings, hours, accident rates, and benefit uptake to labour authorities on a quarterly basis. Use this data for public social audits and to publish dashboards tracking compliance with labour and social security laws. Simultaneously, launch nationwide awareness campaigns—partnering with labour departments and NGOs—to educate platform workers about their newly enshrined rights, registration procedures under the CSS, and grievance‑redressal mechanisms. Equip labour inspectorates with digital monitoring tools to proactively inspect platform operations and enforce standards.
the contrast between India’s protected factory workforce and its vulnerable platform workforce highlights a profound inequity in our labour law framework. Factory workers, regulated by laws like the EPF Act, 1952, the Employees’ State Insurance Act, 1948, and the Payment of Gratuity Act, 1972, enjoy guaranteed retirement savings, health coverage, maternity leave, accident compensation, and terminal benefits—rights that have been reinforced through purposive judicial interpretations in cases like Hooghly Mills and Harrison Malayalam. Platform works still be regarded as independent worker and not able to get benefit from these legacy schemes and left to navigate inconsistent, discretionary benefits under the new CSS code, 2020. The absence of mandatory aggregator contributions, the failure to extend minimum‑wage and collective‑bargaining rights, and the omission of app‑based labour from the Industrial Relations and OSH Codes leave gig workers without a reliable safety net. This legal divide undermines India’s constitutional commitment to equality and social justice. To remedy this, our labour laws must evolve: by creating a “dependent contractor” category that draws platform workers into existing welfare statutes, mandating contributions to provident and insurance funds, and empowering them with collective rights, India can ensure that no worker—regardless of the platform through which they earn—remains without fundamental social security and dignified working conditions.
The author declares that no Artificial Intelligence (AI) tools or AI-assisted technologies were used in the conception, research, drafting, analysis, editing, or preparation of this manuscript. The entire work, including legal research, analysis of statutes and judicial precedents, interpretation, writing, and final revision, was independently carried out by the author.
The author is solely responsible for the conception of the research topic, formulation of the research objectives, collection and analysis of primary and secondary legal sources, examination of statutory provisions and judicial precedents, comparative legal analysis, drafting of the manuscript, preparation of recommendations, and final revision. All intellectual contributions to this manuscript are exclusively those of the author.
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