“Hire and fire is a loaded word, the American system is ‘employ at will’,” said Hari T N, Head HR, Bigbasket, one of India’s largest online supermarkets. The distinction sort of escaped me. “Here we have an employment contract.”
That was just the point, as we see the continuing and substantial shift in the job market to a contract-based system. “Firms would prefer to employ at will in practice and they are trying to circumvent the hiring and firing laws by having more workers on contract,” added Vidhya Soundararajan, Assistant Professor, IIM Bangalore.
The context was a query “On paper we are not a hire and fire economy but we seem to be heading there,” at a recent webinar on Formalising the Gig Economy. A segment that is only a few years old in India but is growing bigger by the day, as more and more services move to a platform-based model, and more and more workers sign on to them to gain market access and customers.
The nearly two-month-long COVID lockdown brought tragically into the limelight two facts:
One, gig workers have no form of social security whatsoever and hence were among the hardest hit as they overnight lost all income.
And two, that the terms of conditions of their relationship with the platform were far from transparent. The platforms argue that they had no responsibility to help them out as they were not workers in the traditional legal sense but were “partners” or “independent contractors”.
What exactly do we mean by formalisation?
Here, the discussion threw up a whole host of questions which neither the existing laws nor the new draft laws in the making address. Questions like what these gig workers are letting themselves in for, how their status should be defined, ensuring fair and transparent terms of engagement with the employer or platform.
That formalisation will involve a combination of legislation, regulation and responsible corporate governance is accepted. Also, there is little argument that these platforms are a huge convenience to both customers and the workers they engage. “These gig workers are micro entrepreneurs and these platforms are providing them an easy way of procuring business and there is a push automatically for them to upskill,” said Hari.
All well and good in an earlier time. But going forward, the issue of who is the gig worker, how to ensure contracts are fair and transparent and creating a social security system for them assume greater significance.
Gig economy: New term, old problems
“The gig economy is a new avatar of contract labour which has been there for the last 30 years,” said Prof Vidhya. “And there are a number of things we can pick from the contract laws.”
Vidhya pointed out, “But before we go into social security etc, the fundamental question in formality is to know who the worker is. To create such a database is the first step in formalising. And it is easy to do since many of these workers are platform based. The state should organise this”.
One important issue that many gig workers face, especially taxi drivers who have signed up with aggregators like Ola and Uber, is the lack of transparency in the terms and conditions of their engagement. There is plenty of anecdotal evidence that there are significant variations in the kind of contracts workers sign.
Fair contracts which the worker clearly understands, which do not violate his basic rights and which offers the workers protection against unilateral change of working conditions and wages is an urgent need.
As indications are that a sizable number of MSME workers may not get back their old jobs, the chances that they will enter the gig workforce is high. And as the trend towards new kinds of apps and aggregation is likely to grow, ensuring fair contracts which the worker clearly understands, which do not violate his basic rights and which offers the workers some protection against unilateral change of working conditions and wages is an urgent need.
“The ability to raise complaints about work is absolutely necessary and is a part of the formalisation process,” added Sarayu Natarajan, founder, Aapti Institute.
Just how unfair and one-sided these contracts is best described by Tanveer Pasha, President of Ola-Uber Drivers’ and Owners’ Association.
“They don’t call us drivers as they don’t want to come under labour law. They say partners or some other term. The pandemic has hit taxi drivers hard and they are not getting any kind of help,” says Tanveer
What do Ola and Uber drivers sign?
Are the contracts fair?
“With companies like Ola and Uber whose drivers I represent, we have not signed any kind of contract. They have taken the applications through the app, saying ‘we agree to all terms and conditions’. When we try to log in, a pop up message appears saying click on ‘Agree to Terms and Conditions’,” explains Tanveer
Tanveer feels the platform companies are not ethical. He says they gave false assurances to capture the market, “In the beginning they gave a lot of false assurances — invest in a vehicle and you can earn 1 lakh or 2 lakh in a month. But after we bought the vehicle they said the plan has changed and now you can earn only Rs 50,000.” He says they take 25% of the revenue as commission, “If we complain, they say: if you are happy, work, otherwise you can leave”.
The current situation is quite bad for the drivers, “There is no guarantee on earnings. Even after working 20 hours we are unable to earn even Rs 200.”
Are regulations the solution?
Calling workers partners or whatever to circumvent labour laws that apply to workers too may “not be unfair”, feels Hari, who however admits it was wrong of these companies to raise false hopes with unsustainable offers.
Hari, however, cautioned on rushing into any new legislation and regulation. “Ultimately it has to be a good compromise between protecting the labour and allowing these platforms to survive. The requirement today definitely is not more regulation but to ensure what there is, is actually working on the ground”.
That the gig worker needs protection for the present and the future, however, is amply obvious. Yet, to expect this to be done entirely by the state may be an unrealistic expectation, especially given some of the specific characteristics of gig work like the worker can choose different platforms to work on, he can also do different kinds of work, volatility of wages, how the contracts are renewed etc.
“The thought that formalisation has to come only from the state needs a rethink,” Sarayu Natarajan pointed out. “There are many aspects that can be brought about by the corporates and platforms themselves. Empirical evidence shows that complaints are mainly against the platform and not the state.”
Sarayu cautions against viewing everything in terms of COVID, but agrees, “it does mark a shift in terms of the way we work and how we engage with society and of course the state and a lot of that is going to be mediated by technology”.
The necessity to give businesses a level playing field, to allow more of them to enter the field and grow is accepted. But workers need a level playing field too and here law and regulation is needed to deter unfair practices. Towards which a lot can and has to come from corporate governance. “Transparency is the first step”, states Prof Vidhya.
“It is necessary to hold firms responsible to some extent, as part of corporate governance, for its workforce,” adds Sarayu Natarajan. Specifically with regard to online contracts mentioned by Tanveer, she says “it resembles what is called a web trap contract. This resonates with our own empirical findings which show there is difficulty in accessing what the terms are. Also, the power differential in making these contracts cannot be ignored”.
The holy grail of social security
And then there is social security, the most important aspect of formalisation as the economy recovers. Basically, enabling workers to protect themselves when there is loss of income. In the absence of any kind of unemployment allowance from the state, the only option is for companies to introduce some kind of contributory savings scheme outside of the government legislated schemes like Provident Fund.
Hari says let the worker decide how he wants to save. “Every business has a certain capacity to pay that makes their business viable and sustainable. How you break it up between cash on hand and earnings for the future they can determine mutually”.
Unfortunately, that is the ideal situation. But given the predominant view that corporate governance is lacking in these areas there is unlikely to be any consensus on how to structure any contributory savings scheme that leaves out the state. But that such measures need to be considered, by the state and by the corporates, is more imperative and urgent now than ever, as we witness the ravages the pandemic has caused not only among gig workers but the entire range of daily wage and contract workers.
Laws cannot prevent a new entrant from offering unsustainable wages and incentives which are then snatched away without notice, as Ola and Uber did. Workers rarely tend to think too far into the future and go for the immediate gain. “If some new company comes and says they can earn Rs 5000 a day, workers will take it,” said Tanveer. “Workers need to ask companies to specify minimum earnings for a certain number of years”. And that is something the law can ensure companies build into their business plan with the right kind of regulation and enforcement.
Gender issues get short shrift, like elsewhere
The last important aspect is gender issues in the work place, especially the pay gap which is very real, and protection from sexual harassment and abuse. The problem: with an office or factory, the work place is well defined. With gig work, there is no fixed work place and the task component is very different.
“These women experience threats and insecurity as their work is done in personal and intimate spaces,” pointed out Sarayu Natarjan. “We have heard some horrific stories. Formalisation will have to address how women experience platform work”.
And we come full circle. For as with the taxi drivers and other categories of gig workers, when it comes to addressing their issues, employees, men and women, have no recourse from the platform at all.
So maybe the real question is how to make platform management responsible corporate citizens.
Freelance, Food Lead Gig Economy Apps Ranking
Of the seismic workforce changes that have reshaped the economy in recent years, gig work is perhaps the most meaningful. As successive disasters and economic collapses converge with digital collaboration, an entirely new breed of part-timers has emerged around gig apps.
PYMNTS’ latest Provider Ranking of Gig Economy Apps reveals the power players and those jockeying for chart position as the gig economy expands substantially post-pandemic.
The Top 5
DoorDash takes the No. 1 spot in the latest rankings on the strength of several creative COVID-era partnerships and new concepts like the DashMart mobile convenience store. At No. 2 this month is gig titan Uber Driver whose wider platform applications are proving a strength as ridesharing remains depressed. Taking the No. 3 spot is personalized grocery delivery service Instacart, followed at No. 4 by Fiverr, an online marketplace for freelance services. Rounding out this month’s Top 5 at No. 5 is Australian crowdsourcing marketplace web service Freelancer.
The Top 10
Hourly worker staffing app Snagajob snagged the No. 6 spot on the latest Provider Ranking of Gig Economy Apps, with Lyft Driver picking up the No. 7 chart position, followed by freelance marketplace Upwork at No. 8., pet car services app Rover at No. 9, and mobile order-ahead aggregator GrubHub making the cut for gig work apps by grabbing the No. 10 spot.
Gig Worker Attacks a Big Labor Ploy – InsideSources
Uber has announced its intention to merge with Postmates, giving the ride-hailing and restaurant-delivery networking company a foothold in the growing grocery-delivery market.
Since the outbreak of pandemic COVID-19, grocery delivery has surged as travel has collapsed, so Uber saw diversification as its path to survival.
Also seeing diversification as a path to survival is Big Labor, which has, through worker centers like Working Washington — a front group for Big Labor principally funded by the Service Employees International Union (SEIU) and its local affiliates — opened an all-out offensive against the so-called “gig economy.”
Part of that economy are companies like Uber, Postmates, DoorDash, and GrubHub (to name only a few) that rely on independent contractors to deliver food from restaurants and items from stores to customers; these workers set their own schedules, contribute their own capital, and direct their own work, unlike most conventional employees.
Big Labor sees this as a problem and are engaging in a campaign to undermine the thriving gig economy before it gets any larger.
Under federal law, unions of independent contractors cannot force contracting companies to engage in monopoly collective bargaining. So, as COVID-based restrictions on normal human life and the general consumer benefits of application-based services create growth in the sector, labor unions are going all-out to benefit themselves at the expense of consumers, independent workers, and the companies that support those workers and consumers.
Approach one is a frontal assault, most notably via legislation that characterizes independent contracting workers as true employees.
First enacted through California’s controversial Assembly Bill 5 (AB5), , this type of legislation is poised to all-but-eliminate freelance writing and content creation and owner-operator trucking in addition to the targeted “gig economy” application-based services.
At the national level, union-backed House Democrats passed the PRO Act, legislation that would make several Big Labor-empowering changes to employment law, perhaps foremost among them a nationwide expansion of California’s “classification” law under AB5.
The second approach is the old-fashioned corporate campaign, the SEIU-perfected tactic of harassing a large business into not opposing unionization on the threat of brand damage.
Leading the charge is Working Washington, the SEIU-funded activist “worker center” that fronts campaigns for the union in Washington State. Working Washington has led campaigns against DoorDash and Postmates; for good measure, the Postmates campaign also targeted Chipotle, an SEIU unionization target.
For now, the stated goals are health and safety regulations and higher guaranteed pay, but the SEIU’s ties to Working Washington indicate a clear intention to bring independent contractor delivery workers into the union as dues-paying members.
A majority of Working Washington’s board are current or former SEIU officials; Working Washington and SEIU 775NW, the union’s militant Seattle-area local, reportedly share office space.
And while adding new union members might be SEIU and Working Washington’s ultimate goal, killing the application-based model — a model that has helped keep restaurants afloat and paying workers and helped consumers tolerate otherwise-intolerable “social distancing” diktats — would also serve to increase union power.
If Instacart goes bust because it cannot operate under Big Labor’s employment model, well, then the unionized supermarkets’ in-house delivery services will prosper.
The goal of the attack on application-based services is simple: Big Labor wins; workers and consumers lose.
The Gig Economy: A New Battleground for Cybersecurity
The gig economy, whereby workers are paid for each individual project or job that they do, has accelerated exponentially in the last couple of years. Prior to the COVID-19 crisis, it was estimated to account for more than 4.7 million workers, or more than 10% of working-age adults.
In this era of smart devices, the workforce is becoming more mobile and work can increasingly be done from anywhere. As a result, job and location are being decoupled. That means that freelancers can select among temporary jobs and projects around the world, while employers can select the best individuals for specific projects from a larger pool than what is available in any given area.
The average UK workplace now comprises of a mix of full-time, part-time and short-term workers. Gig economy workers allow companies to ensure they can remain nimble, cost-effective, and able to adapt to changing market conditions in a fast-paced, technology-led environment.
Finding the security vulnerabilities
Businesses’ increasing tendency to employ independent contractors and freelancers instead of full-time workers is making IT contracting an increasingly common gig economy role, with the recent suspension of IR35 due to the pandemic extending this trend.
It’s a development that is line with how modern enterprises approach IT in general. Being able to deploy more or less IT resources as required is considered best practice for using cloud services. It’s quick, it’s versatile, and it meets the changing needs of the business.
It’s not inherently secure, however. The risk model has moved from a model built around controlled environments, i.e. corporate networks. The perimeter – the first line of defense – was a known entity and yes, it had flaws, but IT departments were usually aware of where the weak points were.
In modern IT environments however the perimeter can be described as ‘distributed’ at best, and at worst non-existent. Simply put, the risk is that companies can no longer enforce security on the end device, as they may have no jurisdiction or control over it.
IT workers play fundamental roles in 21st century organizations because every business is reliant on information and technology in order to function. Large amounts of critical data and at least a few critical assets will need to be stored and managed in order for most business to serve customers, meet production deadlines, and more. It is therefore common for permanent IT employees to be subject to strict security supervision. When these roles are performed by remote third parties, short-term contractors or non-permanent staff however, security must also adapt.
Polishing the security armor
Plugging into an organization’s network to access critical company systems from beyond the physical boundaries of the workplace is now commonplace. Companies need to ensure they have stringent security measures in place to better manage the high risk that this entails. They must also limit the access of contractors to only what they need, instead of trusting them with sweeping access to everything. Risk factors include accessing networks from personal devices that lack enterprise-grade security, or from home networks that could be easily compromised.
In this scenario we are a long way from a world where security teams are able to enforce policy on devices within the traditional network. Now, often they will have no control at all over the device being used by the external party to connect in and, similarly, not being able to ensure the security of the location where the device is connecting from; for instance a home WiFi network.
Our previous research indicates that 90 percent of organizations with more than 250 users grant third party vendors access to their critical systems, and 72 percent position third party access in their top 10 security risks, indicating it’s a familiar problem for security teams.
That doesn’t mean it is being acted upon though. The majority of organizations use strategies that are just not optimized for efficiency, and don’t systematically enforce corporate security policies across on-site and cloud infrastructure. Any solution for third party privileged access must provide basic security best practices that mirror established policies for internal employees.
Technical advances also mean the shortcomings of obsolete technologies – such as VPNs – to secure remote workers can now be overcome with relative ease. Usage of biometrics and Zero Trust policies should be employed to reliably authenticate remote vendor access to the most sensitive parts of the corporate network. This can be achieved with the flexibility and ease-of-use that modern remote workers need by using the remote workers’ own mobile devices for biometric and multifactor authentication.
In the world of work today, the physical boundaries of our workplace have become increasingly blurred. This is especially the case as we move into a post COVID-19 workplace, where flexible working is expected to be the new norm. In such environments, endpoint devices may have varying levels of security and the office environment may be a café, car or home office. Hence, cybersecurity needs to match the flexibility of modern working.
The place where organizations can reliably enforce policy is at the point of connection and the access that they require into systems. This needs to be acknowledged and implemented.
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