Written by Himanshu K. Mishra

I. Introduction

The upsurge of the platform economy in India has been a catalyst for a paradigmatic shift in the organisation of labour, particularly in metropolitan agglomerations such as Bengaluru, which stands as the epicentre of the country’s digital and technological innovation. On one hand, this transformation offers a flexible income opportunity to a growing workforce, but on the other hand, it has also simultaneously entrenched systemic vulnerabilities and a disjuncture from the protective edifice of traditional labour law. It is against this backdrop of escalating industrial unrest and precarious digital employment that the Draft Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025 (hereinafter “Draft Act”) emerges as a legislative response seeking to redress the normative vacuum surrounding gig workers’ entitlements.

The legislative response to the Draft Act finds antecedents in the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023 and the policy overtures from Jharkhand and Telangana. Karnataka’s intervention is also particularly significant given the state’s disproportionate dependence on platform-based labour. This is underscored by the centrality of Bengaluru to India’s startup ecosystem. The Draft Act, introduced on June 29, 2024 and passed by the Cabinet on April 11, 2025, intends to enshrine a comprehensive regime for the social protection of gig workers. It defines core actors and stakeholders in the platform economy, mandating regulatory obligations upon aggregators, and institutionalising dispute resolution and welfare mechanisms. Yet, as will be demonstrated, the Act swings back and forth between ambitious intent and legislative ambiguity, revealing conceptual, procedural, and operational lacunae that would impede its efficacy.

To this end, the article proceeds as follows: Part II discusses the definitional architecture of the Draft Act and its implications for coverage. Part III explores the obligations imposed upon aggregators, followed in Part IV by an analysis of contract fairness and termination safeguards. Part V discusses the institutional and fiscal framework, while Part VI critiques dispute resolution mechanisms. Part VII highlights conceptual gaps and silences that undermine the Act’s efficacy, before Part VIII concludes with reflections on its transformative potential and limitations.

II. Definitional Architecture and Scope

The definitional scheme of the Draft Act reflects an attempt to encapsulate the triangular and often fragmented nature of platform labour relations. It conceptualises a “gig worker” as someone who performs work under piece-rate or time-rate arrangements mediated through a digital platform. While this definition commendably captures the essence of task-based, algorithmically assigned work, it leaves unaddressed questions about the thresholds of engagement. It does not address whether minimum hours, exclusive contractuality, or economic dependence are relevant determinants for inclusion under the Act’s protections.

Further, the term “platform” is defined in sweeping terms to include any service offered through electronic means involving algorithmic or human decision-making, thus potentially conflating traditional digital workplaces with platform-mediated labour systems that already find space. The definitional overbreadth risks collapsing meaningful distinctions between conventional employers deploying tech interfaces and those whose entire operational logic is built upon gig labour. In the absence of interpretive precision, the regulatory scope of the Act may become both under- and over-inclusive, thereby frustrating the objective of targeted protection.

III. Obligations and Regulatory Duties

The Draft Act proceeds to create a framework of duties and obligations incumbent upon aggregators, including registering their operations and the gig workers engaged through them within forty-five days of the Act’s commencement. While the registration of aggregators is a regulatory imperative necessary to subject such actors to public accountability, the imposition of data submission obligations regarding every gig worker, and the requirement to report changes in workforce size would prove administratively onerous for the organisations. Such provisions catalyse compliance fatigue, particularly for platforms operating at scale or across multiple jurisdictions, possibly incentivising misclassification or circumvention through third-party intermediaries. Notably, the Act offers no corresponding rights or safeguards to gig workers in relation to the data so collected, thereby rendering invisible the right to informational privacy, which has been recognised as a fundamental right in K.S. Puttaswamy v. Union of India.

IV. Fair Contracts and Termination Protocols

The Draft Act seeks to infuse fairness into contractual relationships between gig workers and platforms by providing that the terms of engagement must be transparent and fair, encompassing disclosures regarding payments, incentives, deductions, and the right to refuse tasks. These provisions, if effectively implemented, would represent a meaningful rupture with the status quo, where opaque algorithmic practices and unilateral modifications of contract terms remain rampant. However, the problem in the approach lies within the normative terminology employed. The use of words “fair”, “reasonable”, and “transparent” is bereft of statutory content.[1] The absence of a regulatory benchmark or illustrative criteria renders these aspirational commitments legally indeterminate and unenforceable in the Courts of law.

Moreover, the Act mandates that a fourteen-day notice be provided for termination, coupled with valid reasons in writing and adherence to principles of natural justice.[2] While this is a laudable assimilation of due process standards into platform labour law, the Act fails to establish an institutional mechanism for adjudicating wrongful terminations or reviewing the substantive fairness of termination grounds. The invocation of “natural justice” unaccompanied by procedural rules governing enquiry, representation, or appeal, we know, always results in symbolic compliance rather than substantive redress.

V. Institutional and Fiscal Framework

One of the more ambitious structural interventions proposed by the Draft Act is the creation of the Karnataka Platform-Based Gig Workers Welfare Board. This is envisaged as a body corporate headquartered in Bengaluru.[3] The Board is tasked with the implementation of social security benefits, the registration of aggregators and workers, and the oversight of welfare fund contributions. However, the Draft Act is conspicuously silent on the process of appointment and the mechanisms for ensuring stakeholder representation. Without safeguards ensuring tripartite composition, including representation of workers, aggregators, and the state, the Board risks being either unduly bureaucratised or captured by aggregators, thus subverting its protective mission in totality.

Closely linked to the Board is establishing a dedicated Gig Workers Social Security and Welfare Fund, funded through contributions by aggregators amounting to between one and five percent of the payout made per transaction.[4] The Act stipulates that this welfare fee shall be counted as the aggregator’s contribution under the Social Security Code, 2020. While aiming to ensure harmonisation, this provision would create accounting ambiguities regarding statutory compliance. Moreover, the quantum of contribution is left to be notified by the state government. With no statutory guidance on the methodology of such determination the author wonders how this would be charted. Further, the conferral of broad discretion without intelligible differentia is vulnerable to arbitrariness and may deter investment or lead to regressive cost-passing onto consumers or workers.

The Fund will be monitored by a “Payment and Welfare Fee Verification System,” a mechanism designed to ensure transparency in contributions and distributions. However, the Draft Act fails to specify the technical, legal, or institutional contours of such a system. There is no indication of whether the system will be interoperable with existing payment gateways, whether it will allow for third-party audits, or how it will protect against data breaches. Without these major operational details, the Fund may suffer from the same institutional inertia and opacity that have characterised many state welfare boards in India, reducing it to a paper tiger.

VI. Dispute Resolution and Enforcement Gaps

Another significant feature of the Draft Act is its requirement that platforms establish an Internal Dispute Resolution Committee (IDRC) to address worker grievances. While this provision, at least nominally, acknowledges the need for institutionalised redress, the fact that the committee is constituted and managed by the platform undermines its independence. In the absence of an impartial forum or appellate mechanism, the IDRC would function as a perfunctory compliance unit rather than as a genuine site of dispute resolution. The Draft Act imposes financial penalties for violations, including fines and interest on delayed payments, but these remain largely symbolic without a robust enforcement architecture.

VII. Conceptual Gaps and Legislative Silences

At the same time, the Draft Act is replete with grey areas and unanswered questions that underscore its premature legislative articulation. For instance, the definitional ambiguity surrounding what constitutes a “platform” raises critical issues of inclusion and exclusion. Does the Act extend to firms operating hybrid models of employment? Does it apply to brick-and-mortar businesses that use tech for logistics but not task allocation? Similarly, the Act is conspicuously silent on the question of employer responsibility in scenarios involving staffing firms or third-party vendors. Who bears responsibility for compliance – the aggregator or the vendor – if a manpower agency technically employs a delivery rider but works exclusively for a platform? The absence of a deeming provision or statutory presumption of employment renders this question legally fraught.

Moreover, the Draft Act lists several industries in Schedule I including logistics, healthcare, media, and content services, without providing sectoral definitions or delimitations. This legislative laziness invites confusion. For instance, does “healthcare” include telemedicine providers, diagnostic labs, ambulance aggregators, or even home care services? Such open-ended categorisation, devoid of interpretive scaffolding, paves the way for inconsistent application and potential litigation.

What remains unaddressed is the rationale or incentive for platforms and aggregators to voluntarily internalise this regulatory architecture. While the Act imposes obligations and sanctions, it does not contemplate any positive incentives to encourage adoption, be it tax reliefs, compliance credits, or preferential access to state procurement. This omission is particularly problematic in a sector where regulatory compliance often intersects with questions of economic viability and investor sentiment.

VIII. Conclusion

Following its enactment and enforcement, the Draft Act will necessitate a radical reengineering of business models, contract templates, and operational workflows. Platforms will have to remodel their standard form contracts to conform with the Act’s requirements of transparency, notice, and fair termination. Internal grievance mechanisms will also have to be institutionalised and documented. Accounting systems may require modification to calculate, deposit, and reconcile welfare contributions. Perhaps most fundamentally, platforms may be compelled to rework their pricing models and profit margins to absorb the compliance burden. As lawyers are people with hope, let us say these cascading changes will have a transformative, if not disruptive, effect on the contours of India’s platform economy.

While the Draft Act embodies a long-overdue legislative recognition of gig work as a distinct labour formation warranting state protection, it ultimately also reflects a tension between regulatory ambition and statutory incompleteness. It aspires to humanise platform labour but does so through imprecise definitions, underdeveloped institutions, and procedural vacuums. Unless these are addressed through consultative rule-making process and an interpretative judicial interpretation, the Act risks becoming a symbolic gesture rather than a substantive intervention. As Indian labour law stands at the cusp of digital transformation, what is required is not merely legislative intervention in terms of the black letter law, but also jurisprudential imagination. We require an ability to reconstitute the normative framework of employment for an era in which the algorithm has replaced the foreman and the platform has supplanted the factory.

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[1] See, for example, Section 12, Draft Karnataka Platform Based Gig Workers (Social Security and Welfare) Bill, 2024.

[2] Section 15(2), Draft Karnataka Platform Based Gig Workers (Social Security and Welfare) Bill, 2024.

[3] Section 3, Draft Karnataka Platform Based Gig Workers (Social Security and Welfare) Bill, 2024.

[4] Section 20-21, Draft Karnataka Platform Based Gig Workers (Social Security and Welfare) Bill, 2024.