In New Delhi, Nasscom has raised concerns over the Karanataka bill on digital platform-based freelancers, saying the "onerous and prescriptive" obligations on aggregators such as the minimum notice period for dismissal, disclosures and monitoring mechanisms could affect the industry in the state.
Nasscom has written to Karnataka Chief Minister Siddaramaiah, highlighting his objections to the bill and asking that the public consultation period be extended by at least 45 working days (from 10 working days) for "meaningful consultation".
According to some estimates, close to 2 lakh workers are working with platforms and aggregators like Swiggy, Zomato, Ola, Urban Company, Uber, Porter, Amazon, Flipkart and others, in Bengaluru.
The industry body's views add to growing industry voices opposing several provisions of the Karnataka Platform-Based Freelancers (Social Security and Welfare) Bill, 2024. The bill seeks to regulate the social security and welfare of platform-based freelancers and discusses the creation of a board, a grievance cell and a social assistance fund, among other provisions.
Recently, IAMAI also urged the Karnataka government to suspend the legislative process around its bill to allow sufficient time for thorough consultations, as it flagged several concerns that could potentially negatively impact the ease of doing business in the state.
In his letter to the Karnataka chief minister, Nasscom argued that although gig work is completely different, the bill "takes for granted that gig work is part of the relationship between employer and employee".
"This assumption is fundamental to the bill and, based on it, it prescribes various obligations that may be relevant only in an employer-employee relationship," Nasscom said.
The association compared the nature of gig workers to that of "independent contractors" rather than employees, citing the absence of elements such as degree of control, commitment and responsibility.
"However, the Bill does not examine these elements and instead proposes a presumption that contract workers are like employees (contrary to the treatment in the CoSS). This presumption risks disturbing the conceptual and legal basis of the commissioned work," Nasscom said.
The bill proposes a parallel structure of social security law for platform workers, duplicating the central law - the Code of Social Security, 2020 (CoSS), he added.
It does not propose a sunset clause mechanism that would include the bill in the CoSS when it comes into force, Nasscom said.
He also noted that the bill establishes "onerous and prescriptive obligations" for aggregators, such as a minimum (indicative) notice period for termination, algorithmic disclosures, monitoring and tracking mechanisms (Central Transaction Management and Information System) and the establishment of model contract conditions with platform workers, together with the power to review such contracts."
"These obligations are incompatible with the operation of concert platforms and may negatively affect their operations in the state," he said.
The bill, Nasscom stated, has serious loopholes not only from the industry's perspective but also from the perspective of freelancers and "does not establish the end use of fees or funds collected from aggregators and platforms."
"The bill contains no safeguards to ensure that funds collected from platforms are spent within a time-bound period and only to sponsor social security schemes designed for platform workers in the state of Karnataka," Nasscom wrote.
The association said that as a result of a balanced policy approach towards industry, workers and consumers, Karnataka remains a leader in India's technology sector in terms of investments and exports.
According to Niti Aayog, Karnataka is home to 400 Fortune 500 companies, Nasscom noted.
"As you will appreciate, any proposals affecting the industry would benefit from full consultation," according to Nasscom.
Another industry body, IAMAI, in its recent presentation, highlighted several weaknesses, including the possibility of double taxation in social security coming into play. He regretted the lack of clarity on how the proposed social rate contribution by aggregators will be used to support the social security of employed workers.
It also expressed concern over what it claimed is "ambiguity in the calculation of social assistance contribution" and lamented that onerous data sharing requirements would pose significant challenges to aggregators' business operations.
Nasscom has written to Karnataka Chief Minister Siddaramaiah, highlighting his objections to the bill and asking that the public consultation period be extended by at least 45 working days (from 10 working days) for "meaningful consultation".
According to some estimates, close to 2 lakh workers are working with platforms and aggregators like Swiggy, Zomato, Ola, Urban Company, Uber, Porter, Amazon, Flipkart and others, in Bengaluru.
The industry body's views add to growing industry voices opposing several provisions of the Karnataka Platform-Based Freelancers (Social Security and Welfare) Bill, 2024. The bill seeks to regulate the social security and welfare of platform-based freelancers and discusses the creation of a board, a grievance cell and a social assistance fund, among other provisions.
Recently, IAMAI also urged the Karnataka government to suspend the legislative process around its bill to allow sufficient time for thorough consultations, as it flagged several concerns that could potentially negatively impact the ease of doing business in the state.
In his letter to the Karnataka chief minister, Nasscom argued that although gig work is completely different, the bill "takes for granted that gig work is part of the relationship between employer and employee".
"This assumption is fundamental to the bill and, based on it, it prescribes various obligations that may be relevant only in an employer-employee relationship," Nasscom said.
The association compared the nature of gig workers to that of "independent contractors" rather than employees, citing the absence of elements such as degree of control, commitment and responsibility.
"However, the Bill does not examine these elements and instead proposes a presumption that contract workers are like employees (contrary to the treatment in the CoSS). This presumption risks disturbing the conceptual and legal basis of the commissioned work," Nasscom said.
The bill proposes a parallel structure of social security law for platform workers, duplicating the central law - the Code of Social Security, 2020 (CoSS), he added.
It does not propose a sunset clause mechanism that would include the bill in the CoSS when it comes into force, Nasscom said.
He also noted that the bill establishes "onerous and prescriptive obligations" for aggregators, such as a minimum (indicative) notice period for termination, algorithmic disclosures, monitoring and tracking mechanisms (Central Transaction Management and Information System) and the establishment of model contract conditions with platform workers, together with the power to review such contracts."
"These obligations are incompatible with the operation of concert platforms and may negatively affect their operations in the state," he said.
The bill, Nasscom stated, has serious loopholes not only from the industry's perspective but also from the perspective of freelancers and "does not establish the end use of fees or funds collected from aggregators and platforms."
"The bill contains no safeguards to ensure that funds collected from platforms are spent within a time-bound period and only to sponsor social security schemes designed for platform workers in the state of Karnataka," Nasscom wrote.
The association said that as a result of a balanced policy approach towards industry, workers and consumers, Karnataka remains a leader in India's technology sector in terms of investments and exports.
According to Niti Aayog, Karnataka is home to 400 Fortune 500 companies, Nasscom noted.
"As you will appreciate, any proposals affecting the industry would benefit from full consultation," according to Nasscom.
Another industry body, IAMAI, in its recent presentation, highlighted several weaknesses, including the possibility of double taxation in social security coming into play. He regretted the lack of clarity on how the proposed social rate contribution by aggregators will be used to support the social security of employed workers.
It also expressed concern over what it claimed is "ambiguity in the calculation of social assistance contribution" and lamented that onerous data sharing requirements would pose significant challenges to aggregators' business operations.
