Platform Benevolence and State Obligations Towards Gig Workers
- Siya Nayal
- Mar 9
- 7 min read
Authored by Addepalli Aaditya Hridai, a 2nd- year law student at Hidayatullah National Law University, Raipur
Introduction
The gig economy in India has seen massive growth over the last decade, making it an integral part of the country's emerging labour market. Millions are now employed to support platform-based services, including food delivery, ride-hailing, logistics, and home services, due to their flexibility and ease of entry. But such expansion has not been accompanied by the development of proper labour protection. Rather, gig work remains in a regulatory grey zone, neither very informal nor sufficiently defended. Among the numerous exposures that gig workers endure, the risk of accidents is high.
The delivery riders and drivers work in hazardous conditions, at times with time constraints imposed by artificial intelligence. Without any institutional protective measures, a single accident will automatically have disastrous economic effects on the lives of such gig workers. It is here that the Karnataka Platform Based Gig Workers (Social Security and Welfare) Act, 2025 (“the Karnataka Legislation”) takes significance. The introduction of a compulsory welfare contribution and the express integration of accident and life insurance into a statutory framework by Karnataka promise to make discretionary corporate welfare practice more binding at the state level.
Central Laws and their Limits
The main legal framework for gig employees on the national level consists of the Code on Social Security, 2020 (“the Code”). While the Code recognises gig workers under Section 2(35) and platform workers under Section 2(60), this recognition remains symbolic, as Sections 109-114 merely empower the Central Government to frame welfare schemes without imposing enforceable obligations on platforms.
This distinction is critical because, without enforceability, recognition will only create an illusion of inclusion and fail to mitigate any inherent risks. Gig workers continue to remain exposed to workplace risks without any guaranteed accident insurance, health protection or income support. These concerns are now pending adjudication at the Supreme Court in Indian Federation of App-Based Transport Workers v. Union of India & Ors. (“IFAT”), where the lack of meaningful social security protections for gig workers has been challenged, alleging violations of Articles 14 and 21 of the Constitution. This challenge of violation of fundamental rights also underscores the inherent flaw of recognition without protection in the Code. The Code’s welfare mechanism is dependent heavily on executive functioning, making protection contingent.
The Dimension of Corporate Welfare
When there are no legal limits in place, platform companies have intervened to offer some form of welfare, including accident insurance. But these corporate policies are below par. Such insurance is usually conditional on the worker being engaged in an activity at the time of the accident. This dismisses a wide range of situations involving the emergence of risks, including travelling between assignments or waiting to receive orders. In addition, the wages provided are usually insufficient to cover medical bills or lost revenue.
Another equally troublesome issue is the absence of transparency and accountability. Employees know very little about coverage conditions, and the claims process can be difficult to understand and navigate. Above all, the policies are voluntary. Employees have no right to pursue pointless legal action because platforms can alter or revoke perks at will, without workers being able to counter it. This platform benevolence model is unstable in nature. The inadequacy of this very model is reflected in the ongoing IFAT proceedings, where workers have challenged the system that permits reliance on contractual arrangements and voluntary welfare arrangements. This system may supplement welfare, but it cannot substitute a rights-based framework.
Karnataka’s Model of Gig Worker: Institutionalising Welfare and Insurance
The point of divergence between this discretionary model and the Karnataka Legislation is that the latter lays out a hierarchical and enforceable framework of social protection to gig workers. The framework is based on the creation of a Welfare Board and, specifically, a Welfare Fund, as per Sections 3 and 19 of the Karnataka Legislation. The Board is a tripartite institution that involves government representatives, platform firms, and workers. Such a structure of the institution improves accountability and ensures that various stakeholders are included in the decision-making.
One of the main aspects of the law is the requirement to make an obligatory contribution to the welfare of platform companies, most often expressed as a percentage of each transaction. This establishes a predictable and scalable funding system that ensures social protection actions are financially viable. Above all, accident and life insurance are explicitly covered in the framework as the statutory benefits. This is a radical change from voluntary corporate practices to legal rights. The coverage no longer depends on platforms or task-dependent engagement, which means it can be more comprehensive and continuous in its protection.
There are several highly pressing concerns, such as immediate medical costs arising from accidents, income loss during periods of incapacity and financial insecurity faced by dependents in the event of a worker’s death, that Karnataka manages by incorporating insurance into a statutory system. It guarantees universal coverage, reduced disparity across platforms, transparency through institutional scrutiny, and a stable funding base. By doing so, it makes protection against accidents no longer a voluntary perquisite of a person but a benefit that he or she is assured of.
The Absence of Centralised Protection for Gig Workers
The strategy used in Karnataka is a sharp contrast with the larger picture of the entire country, which is one of disunity and imbalance. Most states have not implemented any substantial framework for gig workers, whereas Rajasthan has already done so. In a number of territories, gig labourers still work without official legal recognition and access to organised social support systems.
Labour welfare and social security fall within the Concurrent List under entries 23-25, permitting both Parliament and State Legislatures to legislate. This creates space for innovation, but also risks fragmentation. The current position reflects precisely that tension. This shows large discrepancies: employees with the same job have very different levels of protection depending on where they are. Such disparities raise concerns under Article 14, particularly where access to basic social protection depends purely on territorial competence rather than principled legislative design.
The model offered by Karnataka is important not only for the protections it provides but also for the broader shifts in thinking about regulation it represents. First, it delegates worker welfare not to individuals, but to an institutional mechanism. Given that the gig economy's business model is built on the flexibility of labour, it requires platforms to make contributions, as social protection is a necessary counterbalance. Second, it transcends the constraints of customary labour law, which is based on definite employer-employee relations.
The law is responsive to platform-based work by developing a parallel regime of rights without reference to formal classification. Lastly, it lays the groundwork for policy-level innovations and demonstrates that substantive regulation of the gig economy is both possible and necessary.
There also exist federal complications. Karnataka’s model currently complements, rather than directly conflicts with, the Code. However, if the Central Government operationalises a more comprehensive national framework under the Code, questions of overlap and potential repugnancy under Article 254 may emerge. The constitutional issue is therefore not merely one of functionality and design but also of harmonisation.
Policy Solutions: The Way Forward
Although Karnataka's framework is a big step, it is not a one-size-fits-all solution to fix the structural problems of gig work across the country. Protection will require a multi-layered, coordinated approach to create a holistic system. One of the initial steps that must be taken critically is to create a national gig worker insurance framework. The central government should go beyond the enabling arrangements prescribed under Sections 109-114 of the Code and implement mandatory programs that ensure accident, health, and income coverage during periods of incapacity, as a constitutional imperative flowing from Articles 14 and 21.
This kind of structure would provide a minimum level of security applicable in every state, eliminating regional inequalities. Also, platform contributions should be standardised on a national level. States are not required to eliminate the dynamics of improving benefits, but establishing a contribution floor would create consistency and avert regulatory arbitrage, which incentivises platforms to relocate their operations to areas with weaker regulations. No less crucial is the portability of advantages.
Since the gig work is a fluid entity, social security systems should enable workers to retrieve benefits across platforms and states. The integration of a centralised digital registry linked to worker identification may enable easy portability and enhance administrative efficiency. Regulatory controls would also be required regarding corporate policies. It is necessary to determine minimum standards for transparency, coverage, and claims processing because such policies should serve as an addition to statutory roots rather than a demolition.
Lastly, the reforms should go beyond insurance to address other problems, such as income security, algorithmic accountability, and collective representation. Although insurance can alleviate the immediate impact of accidents, it is not a long-term solution, and a more comprehensive approach to labour rights is needed.
Also Read - 'The Legality of Quarantine Powers: A Cross Country Analysis in the Light of Constitutional Safeguards'
Conclusion
The Karnataka Legislation, though a right step, is not without its limitations, particularly regarding effective enforcement and the practical accessibility of welfare benefits for workers navigating bureaucratic processes. Further, mandatory contribution obligations may generate unintended economic consequences if platforms transfer these compliance costs onto workers or consumers, thereby undermining the legislation’s protective objective. Overall, by institutionalising welfare and making insurance compulsory, it transcends the confines of voluntary corporate policy and symbolic legal designation. Nevertheless, its real importance lies in the fact that it could serve as a template for the larger reform.
The current situation, driven by disjointed state action and incomplete central structures, is insufficient to meet the challenges of the gig economy. Unless combined efforts are undertaken, most gig workers would remain in an arrangement where flexibility alone offers workers no protection. The challenge now is to use Karnataka's model and implement the provisions within a logically structured country framework.
Insightful article, must read.