Beyond the Binary: The Legal Challenges in Determining the Employer-Employee Relationship in the Gig Economy and the Way Forward

Abstract

The rapid expansion of gig and platform-based services in India has created legal challenges for the protection of the workers who provide them. Although platforms treat gig workers as independent contractors, most such workers are economically dependent on a single platform for their livelihood. In practice, platforms exercise significant control over the way work is done, using algorithms to allocate tasks, determine payments, monitor performance through rating systems, and suspend or deactivate accounts without due process. Despite this level of control, the Indian legal framework recognises nothing beyond the binary of a contract of service (employer and employee) and a contract for service (employer and independent contractor), which excludes the realities of platform workers. This paper argues that the current legal framework does not adequately address the employment status of gig workers and identifies five major weaknesses. (1) The Code on Social Security, 2020 introduces the categories of “gig worker” and “platform worker” but does not extend to them the protections available to conventional employees. (2) The traditional judicial tests used to determine employment relationships, such as control, integration and economic dependence, were developed for conventional workplaces and not for algorithmic ones. (3) Workers face serious barriers in proving the extent of platform control because national labour law gives them no right to access the data or to challenge account deactivations. (4) The implementation of the new Labour Codes remains incomplete, limiting their practical effectiveness. (5) Existing workplace harassment legislation does not clearly establish whether platform workers are entitled to its protection. The paper also examines developments in the United Kingdom, California and the European Union to identify possible reforms. Drawing on these comparative approaches, it proposes that platform workers be treated as employees unless the platform can demonstrate genuine independent-contractor status. It further recommends statutory rights to algorithmic transparency, meaningful explanations for automated decisions and accessible review mechanisms, to secure accountability and protection within the platform economy.