Unfair order: Gig -workers deserve a better agreement in cases of corporate insolvency

Copyright © HT Digital Streams Limit all rights reserved. India’s Insolvency Act must balance the interests of all stakeholders. (Mint) Summary So far, only half -hearted steps have been taken to protect their rights. The insolvency and bankruptcy code should not overlook how their essence in the IBC claims is not only unfair, but it can also stretch against India’s economy. India’s Insolvency and Bankruptcy Code (IBC) Amendment Bill, 2025, intends to iron out contradictions. However, it does not adequately address an important constituency: that of gig workers who are currently classified as ‘operational creditors’. India’s urban economy relies a lot on them. Delivery riders weave through traffic, couriers move packages and drivers’ ferry passengers, all on behalf of digital platforms they call ‘partners’, but still as anything but. If a platform crashes, gig workers can notice that their place in the insolvency rope is at the end, far from that of formal employees. The blind place becomes more dangerous. By 2030, India may have 90 million action. Their legal status remains ambiguous. In insolvency proceedings, they run the risk of losing unpaid fees, incentives and contributions on social safety. It is not just an ethical failure, but an economic danger. Deregulation in the developed world in the 1970s and 80s, combined with globalization and automation, accelerated the action economy. America’s railroad workers, for example, still nominal permanently, were placed on a call like actions. Truck drivers were reclassified as independent contractors, with fuel and maintenance costs while earning less than minimum wage. Now automation and artificial intelligence (AI) GIG work threaten. Worldwide, robots deliver pizzas and driverless taxis on streets. The lesson from Britain’s industrial revolution is sober: Wages for artisans have collapsed for decades before recovering. India is daring to have similar depression. Our ranks of gig workers have partly swollen because of a high unemployment in youth – more than 40% of Indians between 20 and 24 years are unemployed and many graduates satisfied with delivery work. Some appreciate the flexibility, but for most, gig work is full -time, low paid and uncertain. Workers are suspended because they have taken water outages in hot summers, women have harassment of clients, musculoskeletal injuries from long hours on bikes are frequent and platforms can deactivate work relations based on opaque ratings, with little profession available. Half -hearted steps were taken. The code on Social Security 2020 (COSS), although not yet notified, defines action and platform workers and advocates the creation of a welfare fund. Rajasthan, Karnataka and Telangana went on. Still, the COSS places gig workers outside the traditional framework for employer and employee. Under the IBC, the omission is sharp. Wages of ‘workers’ are high in the payment waterfall, but the fees of action, on the other hand, such as those of other operational creditors, are a low priority and are often incompatible. Furthermore, Article 151 of the Coss harms them. This gives preference to claims related to provident funds, insurance and gratuity during insolvency, but it excludes chapter IX, which covers social security for disorganized, actions and platform workers, leaving them without protection. Indian courts have long interpreted the term ‘worker’ and lifted the corporate veil when businesses hide behind the contractors, as in the case of Hussainbhai, Calicut vs Alath Factory tozhilali. Supreme Court rulings in cases ranging from salt-workers in Dharangadhara Chemical Works Ltd vs State of Saurashtra to Beedi rollers in Messrs. PM Patel & Sons vs Union of India suggests that gig workers can be considered well as employees under a functional test of control and integration. The EU passed a richteline, which applies from December 2026, and suspected that gig workers are employees. This applies to all administrative and judicial proceedings. Mexico reclassified them as employees with certain conditions for insolvency protection. British Columbia in Canada has granted equivalent rights and Ontario makes directors liable for unpaid claims of gig workers in insolvency. In Canada, the bankruptcy of Foodora led to a financial settlement with couriers after being recognized as ‘dependent contractors’. In the Netherlands, help cleaners were considered temporary agency workers. The rights of gig workers in insolvency cases must be addressed, because if a platform fails, thousands of workers can be unpaid. When gig workers, who are very dependent on microloos and unsecured credit, miscalcientic repayments, rise the non-performing assets of banks. Lower disposable income can consume only when India needs such a demand to stimulate its economic growth. State governments, confronted with tension, may be tempted to give fiscal freebies that weaken public finance. Some workers move back to farming and reversing decades of urbanization. India’s Insolvency Act must balance the interests of all stakeholders. According to the low priority of gig workers, India ventures an imbalance. Three reforms are a must. First, edit the IBC to recognize gig workers as ‘workers’, at least where economic dependence on a single platform is clear. Second, review the COSS to ensure their claims are prioritized. Third, institution rules that cover gig workers as a separate class. Conditions such as ‘Partner’ or ‘Independent Contractor’ should not affect the fate of a worker. The law must pierce contractual facades and look at control, dependence and integration. India will only pick a demographic dividend if we invest wisely. It is unwise to treat tens of gig workers as spending creditors in bankruptcy. Gig workers have kept so low in the pichol they not only fail, it can also fail our economy. The author is an insol and interim leader. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #insolvensie Code #Gig Economy Read Next Story