Gig Work or Employment? Why India Must Rethink Labour Rights in the Platform Economy

On New Year’s Eve, a planned nationwide strike by platform and gig workers brought an unresolved legal and moral question back into sharp focus: what exactly is the relationship between digital platforms and the people who work through them? Is it a simple contract between equals, or is it an employment relationship that demands protection under labour law? How India answers this question will determine whether millions of workers remain exposed to exploitation or gain enforceable rights in the digital economy.

Why the classification question matters

Labour laws across the world rest on a foundational insight: employers and workers do not bargain on equal terms. Those who own capital and control production have far greater power than those who must sell their labour to survive. Left to contract law alone, this imbalance would routinely produce unfair outcomes.

That is why the State intervenes — to guarantee minimum wages, protect against arbitrary dismissal, ensure safe working conditions, and enable collective bargaining. These protections apply not to every service contract, but specifically to relationships of employment, where one party exercises significant control over how work is done.

Platform companies argue that their workers fall outside this category. By calling drivers and delivery workers “partners” rather than employees, platforms seek to place the relationship firmly within contract law, and beyond the reach of labour protections.

Control in the digital workplace

A closer look at platform work, however, reveals that this classification is deeply misleading. Through their apps, platforms exercise extensive and continuous control over workers’ lives. They determine pay rates and incentives, allocate tasks, track performance through constant surveillance, and retain the unilateral power to suspend or “deactivate” workers without meaningful explanation or appeal.

Access to work itself is conditional and opaque. Algorithms decide who gets orders, when, and on what terms. Yet platforms resist transparency, citing competition law and trade secrets, even as workers’ livelihoods depend entirely on these hidden systems.

In substance, this looks remarkably like a traditional employment relationship — only digitised.

The myth of flexibility

Platform companies often defend themselves by pointing to flexibility. Workers can log in and log out at will, reject tasks, or leave the platform altogether. But labour law has long recognised that formal freedom does not equal real freedom.

In theory, almost all workers are free to quit their jobs. In reality, economic necessity makes that freedom illusory. For a majority of platform workers in India, gig work is not a side hustle but a primary source of income, chosen in the absence of viable alternatives. Episodic work and task-based pay do not negate dependence; they simply repackage it.

Courts around the world have recognised this reality. From Latin America to Europe, judges have pierced the contractual veil to examine how work is actually organised — and have concluded that platform workers are entitled to labour protections. The most prominent example is the UK Supreme Court’s ruling that Uber drivers are “workers” under labour law, despite contractual language to the contrary.

What Indian law gets wrong — and right

India’s legal framework has not yet caught up. The new labour codes acknowledge platform workers only marginally, offering limited social security without recognising them as employees. Some States have gone a step further, but still stop short of extending core labour rights such as minimum wages, protection from unfair termination, or collective bargaining.

This halfway approach reflects a deeper hesitation: the fear that recognising platform workers as employees might disrupt innovation or business models. But history suggests otherwise. Labour law has always adapted to new forms of work — from factories to offices to home-based labour. The digital economy is no exception.

Why charity cannot replace rights

Suggestions that consumer tips, corporate goodwill, or voluntary welfare schemes can address gig workers’ hardships fundamentally miss the point. Rights are not acts of generosity. They are legal guarantees, enforceable against power.

Without such guarantees, workers remain vulnerable to sudden income loss, arbitrary exclusion, and algorithmic punishment — all without recourse. No amount of “flexibility” can compensate for that insecurity.

The road ahead

The New Year’s Eve strike was not an act of disruption for its own sake. It was a reminder that India’s labour law framework must evolve to reflect how work is actually performed today. Recognising platform workers as employees — or at the very least as workers entitled to core labour protections — is not radical. It is consistent with global legal trends and with the basic logic of labour regulation.

If the law continues to lag behind reality, exploitation will remain built into the platform economy. Correcting this imbalance is not about stifling innovation. It is about ensuring that technological progress does not come at the cost of human dignity.