“Your Order Has Been Delayed” Due To Late Labour Reform | Explaining the Loophole

Strike mode: On

Zomato, Swiggy, Blinkit, Zepto, Amazon & Other Platforms’ Gig Workers to Hold All-India Strike on 25th December and 31st December.
The action has been called by the Indian Federation of App-Based Transport Workers (IFAT) in coordination with the Telangana Gig and Platform Workers Union (TGPWU).

 

The strike brought back a long-running question to the table—are delivery workers partners or employees? And more importantly, who benefits when they are labelled as “partners”?

The Gig Model and the Escape Route

Food-delivery platforms classify workers as independent contractors, not employees. By doing so, companies avoid statutory duties that traditional employers must follow under:

• Industrial Disputes Act, 1947 – protections against unfair termination, right to form unions, grievance redressal.

• Minimum Wages Act, 1948 – ensures fixed minimum earnings per hour/day.

• Employees’ State Insurance Act, 1948 and Employees’ Provident Fund Act, 1952 – social security, medical cover, retirement funds.

• Payment of Bonus Act, 1965 and Payment of Gratuity Act, 1972 – benefits linked to tenure and performance.

Calling them “delivery partners” sounds friendly and rosy, but it is a clever move to turn legal responsibility into a grey zone. Workers need to bear fuel costs, vehicle maintenance, accidents, and even penalties for late deliveries because the giant platforms argue they only provide technological facilitation, not employment.

Lets understand the difference in detail.

When a worker is treated as an Employee

The company becomes an employer, which means legal responsibility increases. Employees are entitled to labour law protections.

Key features

• Fixed working hours may apply

• Salary/wages are assured

• Employer must provide PF, ESI, gratuity, bonuses, paid leaves

• Covered by Industrial Disputes Act, Minimum Wages Act, Social Security laws

• Employer has control over how the work is done

• Can be unionised and raise disputes

• Termination requires a proper procedure

• Employer is liable for workplace safety, harassment, accidents, compensation

• Vicarious liability applies – company is responsible for employee’s actions in course of employment

In short: Workers get rights + job security and employer bears responsibility.

When the worker is called a Partner/Independent Contractor

This is how Zomato/Swiggy label gig workers. Companies reduce responsibility and shift risk onto workers.

Key features

• Considered self-employed, not staff

• No guaranteed income—paid per task/order

• No PF, ESI, maternity benefits, gratuity or paid leaves

• No protection under Industrial Disputes Act

• Worker bears cost of tools (bike, fuel, phone, maintenance)

• Company controls outcomes, but denies controlling method to avoid the employee tag

• Can be easily deactivated/terminated without due process

• No social security unless government provides under specific schemes

• Liability rests on the worker (accidents, delay, damage etc.)

In short: There is freedom on paper, but insecurity in reality. Company escapes legal obligations.

The loophole exists due to the narrow definition of “workman” and “employee” under pre-existing labour laws like the Industrial Disputes Act, 1947, Minimum Wages Act, 1948, and the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. These statutes were drafted for traditional factory or organisational employment models and require elements of control, supervision and a contract of service for an employer-employee relationship. Platform companies cleverly avoid these duties by making service agreements instead of employment contracts, designating workers as “partners” or “independent contractors”, hence giving them no socio-legal protections.

The contractual structuring allows companies to escape obligations under Section 2(s) of the Industrial Disputes Act, Section 2 of the Employees’ Provident Fund Act, Payment of Gratuity Act, 1972, Factories Act, 1948, Employees’ State Insurance Act, 1948, and other protective legislations.

Although the Code on Social Security, 2020 introduced statutory recognition of gig workers and platform workers it created a third category of labour, neither employee nor contractor, thereby indirectly validating the stand of platform aggregators who deny employee status.

Supreme Court tests for determining employment

Two important cases help decide if a person is an employee:

Dharangadhara Chemical Works Ltd. vs. State of Saurashtra (23.11.1956 – SC) : MANU/SC/0071/1956

The court created the “control and supervision test” – if a company decides what work is to be done and how it must be done, then there is a master-servant relationship.

Ram Singh And Others vs Union Territory, Chandigarh & Ors- AIR 2004 SUPREME COURT 969

The court added another dimension: just control is not enough. One must see if the worker is integrated into the company’s business. If they are deeply woven into core operations, they are practically employees even if labelled differently.

Applying these tests, gig workers seem integrated—delivery is the backbone of Zomato/Swiggy—yet companies still deny them employee status.

The Way Forward

1. Establish a Legal Category: “Dependent Contractor”

Not fully employee, not fully independent.
Several countries (like Canada and the EU) already explore this model.

Rights under this category can include:

• Minimum base wage per hour or per order

• Mandatory accident and health coverage

• Grievance redressal mechanism

• Platform-funded social security contributions

India’s Code on Social Security, 2020 mentions gig and platform workers but does not create enforceable rights so, this category can fill that gap.

2. Mandate Social Security Contributions

Platforms may contribute a small percentage commission per transaction to a welfare fund.

Like:

• PF-like savings account

• Insurance/medical emergency fund

• Retirement and disability cover

Similar to States’ Welfare Cess on construction workers, an e-commerce/gig cess could work.

3. Algorithm Transparency & Fair Pay Formula

Workers shouldn’t be left guessing how earnings fluctuate.

Policies could require platforms to disclose:

• How incentives are calculated

• Surge pricing logic

• Minimum earning guarantee per hour/delivery

This reduces exploitation of the workers.

4. Data Rights

Delivery partners should have access to their own performance data.

Why?

• They can challenge wrongful deactivation

• It creates transparency in ratings and penalties

• Allows mobility between platforms

5. Mandatory Accident & Life Insurance

Immediate relief measure without major disruption.

Funded through:

• Platform contribution split per order

• Optional top-up by worker

Quick implementation, big impact.

6. Government–Platform–Worker Council

Establishing a board that:

• Sets periodic wage standards

• Reviews worker grievances

• Ensures compliance and audits

Like EPFO or Labour Welfare Boards, but for gig economy.

Conclusion

Our food reaches hot, but their rights remain cold. Before we complain about late orders, we should ask why worker reform is delayed. Policy intervention today will decide whether gig work becomes exploitation or a dignified livelihood.

If they can deliver to us, the law must deliver to them.

References

1. Swiggy, Zomato Gig Workers Call For All-India Strike On December 25, 31- By NDTV

2. Zomato, Swiggy, Blinkit, Zepto, Amazon & Other Platforms’ Gig Workers To Go on Nationwide Strike Today, 25 Dec- By GoodReturns

3. The Invisible Workforce | Gig Workers and the New Code on Social Security, 2020- By Taxmann

4. Kumar, A., & Sahu, R. (2024). The Growing Gig Economy – Prospect and Challenges. SSRN. https://ssrn.com/abstract=5096475