Gig Workers and Trade Unions: An Anti-trust Conundrum

-Ranak Banerji

Introduction

The Gig economy, with its unorthodox functioning, is fascinating. We are well acquainted with its digital era subset, the platform economy, e.g., Swiggy, Uber, etc. Gig workers are distinguished from employees due to their lack of a traditional relationship with their employers. This distinction from a conventional employee excludes gig workers from the various protections and benefits given to such employees. Due to the inherent nature of gig employment, a gig worker does not enjoy any job security and is usually placed at the lower end of the income spectrum. Adding to it, they are not recognised as a worker under the Industrial Relations Code, 2020, nor do they have any mandatory social security under the Social Security Code, 2020. They cannot form registered Trade Unions either. In this context, the right to collectively bargain or associate with other gig workers is imperative to protect their interests and gain higher productivity shares.

Competition law exists with a view to increase market efficiency and protect the welfare of the consumer. It can, however, have unintended effects on the gig workers’ right to associate, collectively bargain and strike. This is because a gig worker can fall within the definition of “enterprise” under the Competition Act 2002 (“the Competition Act”). Traditional employees do not fall under this definition. Thus, their actions of association or collective bargaining do not attract any scrutiny under the Competition Act. If a gig worker is considered an “enterprise” under the Competition Act, any association or Trade Union formed between them would be regarded as an “association of enterprises” under Section 3 of the Competition Act. This leads to any agreement reached by gig workers or their associations between themselves or the platforms they work for being flagged as potentially anti-competitive.

Though literature does exist on this issue, this paper incorporates more recent developments that have occurred since.

Anti-Competitive Gig Workers

Collective bargaining is a necessary method for settling industrial disputes without coercion, and is usually performed by Trade Unions. Such collective bargaining necessarily leads to reaching agreements with employers about wages, working hours and conditions, and clear delimitation of duties. Section 3 of the Competition Act disallows any agreement which has an “appreciable adverse effect on competition”. Agreements which determine prices, limit production, or lead to geographical allocation of markets are anti-competitive. Thus, any agreement reached by collective bargaining on wages, working conditions, hours or division of work would be restricted by the Competition Act. However, collective bargaining by and the agreements reached thereof have been judicially excluded from the scope of competition law. The Supreme Court stated this in CCI v. Artistes & Technicians of W.B. Film & Television as Trade Unions do not fall under the definition of “enterprise” under the Competition Act.

As described above, gig workers potentially fall within the definition of an enterprise. There does not exist any exception in the Competition Act to such definition apart from the sovereign functions carried out by the government. The right to collectively bargain becomes essential for gig workers, especially platform workers, due to their mistreatment and other reasons described above. This essential and necessary right to collectively bargain will be rendered hollow if any agreement which arises out of it is declared anti-competitive. Any agreement between the workers on a particular platform (Swiggy) or a kind of platform (food delivery services) to form an association might also be termed as anti-competitive. Though this hypothetical may seem inequitable, it is not so far from the approach preferred by the Indian judiciary.

The Competition Commission of India (“CCI”), in its , held that for collective bargaining by an association (not a Trade Union) to be legal, it must demonstrate that it has pro-competitive effects. Though, in this case, the CCI dismissed the allegations of anti-competitive conduct on FICCI’s part, the precedent set by it can be applied to collective bargaining attempts by gig workers.

In the traditional employee context, the right to associate and collectively bargain also extends to the right to go on strikes. The Supreme Court ruling in the CCI v. Artistes and Technicians of W.B. Film and Television case held that a strike by an association of enterprises was anti-competitive. It held that it specifically violated Section 3 of the Competition Act as it was prejudicial to the interests of the consumers. The CCI, in a more recent order in Informant v. Tamil Film Producer’s Council and Ors., held that an association of enterprises cannot strike in the name of collective bargaining if the strike has anti-competitive effects. The implication of these decisions is that if an association of gig workers goes on strike, their actions would be judged to be anti-competitive, as they do not enjoy the protections provided to Trade Unions.

Thus, on a holistic view, it appears that a gig worker does not possess a right to associate, collectively bargain or strike due to the effect of the current competition jurisprudence in the country. This cannot be the intended effect of competition law since it leaves gig workers without any effective tools to enforce better pay, working conditions or hours. It’s obvious that this ambiguity needs to be addressed. For guidance, recourse could be had to how other jurisdictions have dealt with this issue.

A Multi Jurisdictional Analysis

This issue exists in other jurisdictions due to the nature of gig or platform workers being somewhere mid-way between a conventional employee and a self-employed person. If particular platform workers are recognised as employees, their actions would not be considered anti-competitive. The UK Supreme Court recognised Uber drivers as employees in Uber BV v. Aslam, which has this effect. Due to this, Uber drivers in the UK cannot have any anti-competitive effect if they associate among themselves to collectively bargain. The issue arises when it becomes difficult to establish whether a platform worker is closer to an employee or a self-employed person.

An example is the state of Seattle in the USA, via an ordinance which gave the right to unionise to all taxi drivers and drivers operating via ride-hailing apps like Uber, Lyft, etc. This was challenged on the grounds of being anti-competitive and leading to horizontal price-fixing among drivers who were considered independent contractors and not drivers. The ordinance was stayed and had to be replaced by a law allowing drivers to unionise but not reach agreements on pricing. Another example is the European Court of Justice identifying providers of professional services, like doctors, as independent contractors and their actions to be violative of competition law.

This issue of identifying which gig workers resemble independent contractors and which resemble employees for the purposes of antitrust law has been adequately dealt with in Europe. The Dutch competition regulator, ACM, published guidelines which precisely delineate which groups of self-employed people fall outside the mandate of competition law. Any agreement reached between these groups within themselves or their employers, even if about fixing prices, is not considered to have any anti-competitive effect. The first such group is that of self-employed people who undertake work usually done by employees and cannot be de facto differentiated from traditional employees. Any sort of agreement on price reached by them does not violate competition law. The second exclusion is of self-employed people reaching agreements on price for sustenance or securing their “means of existence”. Such agreements do not violate competition law. Though these exceptions have been identified in terms of horizontal agreements, it is extended to vertical agreements too.

The European Commission has recently adopted guidelines which exempt agreements by “solo self-employed” persons from antitrust scrutiny. This exemption operates for self-employed people not employing anyone else under them. They can reach collective agreements for better working conditions. These Guidelines are similar to the Dutch Guidelines as they also exclude the application of antitrust law from self-employed people whose working conditions resemble those of employees and the ones in a weak negotiating position.

Recommended Approach

Gig and platform workers in India earn a far lower income and have more precarious work conditions than the ones in Europe. argued that employee protections should be extended to platform workers, and the government does seem inclined towards this move, . The government has allowed optional social security schemes for gig workers to be formed by the appropriate State level authorities. India’s nascent and developing competition jurisprudence should not restrict a gig worker’s right to associate, bargain and strike. It is thus recommended that the government introduces an exception to the Competition Act, similar to those introduced by the Netherlands or the European Commission. Collective actions by platform workers similar to traditional employees should not constitute a breach of competition law. Furthermore, This level could be determined by the prevailing price level of goods, average consumption and other necessary economic indicators. This would perform a balancing exercise between their interests and the ones protected by competition law. This exception to anti-competitive agreements would be similar to the notion of “means of existence” identified by the Dutch competition regulator. Such exceptions would remove unnecessary obstacles to gig or platform workers unionising for their betterment.

Conclusion

Gig workers in India exist in a situation of limbo where the protections given to traditional employees are not provided to them, but they earn similar wages without job security. An effort to strike or collectively reach agreements on price is anti-competitive under the existing law. This issue, even in other jurisdictions, arises primarily from the blurred lines between an employee and an independent contractor. Exceptions have been carved out by the antitrust regimes in other countries and should be replicated by India too. The actions of platform workers similar to employees or the ones collectivising for sustenance should be exempted from the ambit of competition law.

The author is a student of  West Bengal National University of Juridical Sciences (NUJS), Kolkata.