Eternal, Amazon Welcome New Labour Laws, Say 'Business Impact Will Be Manageable'

As India enforces new labour codes to enhance workers’ social welfare, top ecommerce and foodtech companies welcomed the move. Eternal, formerly known as Zomato, on Saturday said the four labour codes will help strengthen the social security access for gig workers.

The food delivery major, in an official statement, said it does not think the financial impact on account of these rules will be detrimental to long-term health and sustainability of its business. It stated that the exact financial and operational contours of CoSS will become clear only once the corresponding Rules are notified.

“We have been engaging with the government over the years and providing inputs throughout this process, and we will continue to do so. We don’t think any financial impact on account of these rules will be detrimental to long term health and sustainability of our business. We have been anticipating and planning for these social security related contributions in our businesses for a while now,” the company said.

“The consolidation of labour laws provides clearer, more uniform, and consistent rules, which supports both the country and our ecosystem. One of these four labour codes is Code on Social Security, 2020 (CoSS) which helps strengthen the social security access for gig workers across the country, including those who power our Zomato and Blinkit businesses,” it added.

Ecommerce giant Amazon, meanwhile, said it is assessing the labour codes development. “…welcome the government’s intent of implementation of labour reforms and we are evaluating the changes which would have to be ushered in. The COSS is aligned with our existing priorities of providing safety, security, and welfare of our employees,” the company spokesperson said.

The four consolidated labour codes  formally recognise gig workers, platform workers and aggregators while creating dedicated social-security rules and funding mechanisms for them.

It requires aggregators to contribute toward worker welfare and introduces a portable, Aadhaar-linked Universal Account Number for gig and platform workers.

The four codes, the Code on Wages (2019), the Industrial Relations Code (2020), the Code on Social Security (2020) and the Occupational Safety, Health and Working Conditions Code (2020), replace and rationalise 29 older labour laws and extend social-security coverage to previously unprotected categories, including gig and platform workers.

Under the social-security framework, aggregators will be required to contribute a welfare fee of about 1-2% of annual turnover, with a mechanism that also envisages a cap of up to 5% of the amounts paid or payable to workers, to finance a Social Security Fund for gig and platform workers.

The fund will be used to run central welfare schemes for these workers, and the National Social Security Board will advise, frame and monitor such programmes.

The Code provides for issuing an Aadhaar-linked Universal Account Number (UAN) to registered gig and platform workers, making welfare entitlements portable across states and accessible even when workers migrate.

Registration (by self-declaration and Aadhaar) will be mandatory for gig and platform workers aged 16 and above to access scheme benefits. The National Social Security Board will be responsible for oversight and review of fund utilisation.

The Centre says these measures extend health, accident, maternity and old-age protections to gig workers previously outside formal social-security nets.