The rise of platform-based work has exposed a structural gap in labour law: legal frameworks built around a binary distinction between ‘employee’ and ‘independent contractor’ sit uneasily with a workforce that is neither straightforwardly one nor the other. This article examines how gig work is defined under Indian law, the classification tests courts and regulators have applied to determine worker status, and the sharply divergent outcomes reached across the United Kingdom, the United States, and the European Union. It concludes that the inconsistency in current approaches reflects the limits of applying twentieth-century labour categories to a platform-mediated economy, and considers the reforms most commonly proposed to close that gap.
Introduction
The ‘gig economy’ describes the growing practice of workers offering services on a temporary, task-based, or freelance basis, typically mediated through digital platforms such as Uber, Airbnb, TaskRabbit, and Fiverr. Such workers are variously described as independent contractors, freelancers, or self-employed. The model offers real advantages: flexibility, autonomy, variety, and lower costs for consumers. It also poses a direct challenge to labour law, which developed around a stable, bilateral relationship between employer and employee, and which struggles to accommodate a workforce that sits between the two established categories. This article considers how that challenge has been defined, tested, and answered across several major jurisdictions.
Defining the Gig Worker: The Indian Position
Indian labour law formally recognised the category for the first time in the Code on Social Security 2020, which defines a gig worker as a person who performs work or participates in a work arrangement and earns from such activities outside of a traditional employer-employee relationship.[1] The Code further distinguishes a platform worker — a gig worker who accesses organisations or individuals through an online platform to provide services — and establishes a framework for social security schemes covering life and disability insurance, health and maternity benefits, and old-age protection, funded in part through contributions from aggregators. The practical reach of these provisions remains limited, since several of the funding mechanisms they contemplate have yet to be notified.
The Classification Problem: Employee or Independent Contractor?
The central legal difficulty is one of classification. Whether a gig worker is treated as an employee or as an independent contractor carries significant consequences for entitlement to minimum wage, overtime pay, social security contributions, health and safety protections, collective bargaining rights, and protection against discrimination. Workers classified as independent contractors are typically responsible for sourcing and financing their own benefits, leaving them without the safety net available to employees in the event of illness, injury, or retirement.
Courts and regulators have generally approached this question through a multi-factor test, examining the degree of control the platform exercises over the worker, the worker's integration into the platform's business model, the worker's economic dependence on the platform, and the degree of personal investment and risk the worker assumes. These factors translate imperfectly to platform work: gig workers often draw income from multiple platforms simultaneously, are managed through algorithmic rather than direct supervision, retain some autonomy over scheduling while remaining constrained by market demand and platform policy, and bear most of the operational costs and risks associated with their work. The result has been considerable inconsistency in how the same underlying facts are characterised across different courts and regulators.
Divergent Judicial and Regulatory Responses
A. United Kingdom — Uber BV v Aslam
In Uber BV v Aslam[2], the UK Supreme Court unanimously held that Uber drivers were ‘workers’ within the meaning of section 230(3)(b) of the Employment Rights Act 1996, rejecting Uber's argument that its contractual documentation placed drivers in a direct relationship with passengers. The Court emphasised that the degree of control Uber exercised over fares, contract terms, and the manner of service delivery meant the drivers' true status had to be assessed by reference to the reality of the working relationship rather than its contractual label. The judgment entitled drivers to the national minimum wage and paid annual leave for the periods during which they were logged into the app and available to accept trips.
B. United States — the ABC Test and Assembly Bill 5
California adopted a markedly stricter test. In Dynamex Operations West Inc v Superior Court of Los Angeles County[3], the Supreme Court of California adopted the ‘ABC test’, under which a worker is presumed to be an employee unless the hiring entity proves all three of the following: (A) that the worker is free from the hiring entity's control and direction in performing the work; (B) that the work falls outside the usual course of the hiring entity's business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed. The California legislature codified this test the following year in Assembly Bill 5,[4] which presumptively classifies most gig workers as employees unless the hiring entity can satisfy each limb of the test.
C. United States — the National Labor Relations Board
At the federal level, the outcome has differed. In an Advice Memorandum concerning Uber Technologies Inc[5], the Office of the General Counsel of the National Labor Relations Board applied the common-law agency test set out in SuperShuttle DFW Inc[6] and concluded that Uber drivers possessed sufficient ‘entrepreneurial opportunity’ — control over their own schedules, work locations, and methods of generating income — to be classified as independent contractors rather than statutory employees, and were accordingly outside the protection of the National Labor Relations Act. The Advice Memorandum is not binding precedent, but it illustrates how the same underlying facts can support opposite conclusions depending on the statutory test applied and the regulatory body doing the applying.
D. European Union — Airbnb Ireland
A related but distinct question arose in Airbnb Ireland[7], where the Court of Justice of the European Union considered not the status of individual workers but the regulatory character of the platform itself. The Grand Chamber held that Airbnb's intermediation service qualified as an ‘information society service’ under the E-Commerce Directive, rather than as a real estate agency service, and that France could not require Airbnb to hold an estate agent's professional licence without having notified that requirement to the European Commission. While the case concerned platform regulation rather than worker classification, it illustrates the same underlying pattern: existing regulatory categories, developed for earlier forms of commercial activity, apply only imperfectly to platform-mediated business models.
Toward a Coherent Regulatory Approach
These divergent outcomes are not simply the product of differing facts; they reflect the difficulty of applying legal frameworks designed for a stable employer-employee relationship to a workforce defined by its fluidity. The resulting uncertainty affects platforms and workers alike, both of whom face different rules and obligations depending on where they operate. Several approaches have been proposed to close this gap, including the following:
Developing an intermediate legal category, distinct from both employee and independent contractor status, that reflects the specific features of platform work;
Adapting existing labour standards, or creating new ones, tailored specifically to gig and platform work;
Extending social protection and security coverage to gig workers through public or private schemes;
Facilitating collective representation for gig workers through unions or worker associations; and
Promoting structured dialogue among platforms, workers, consumers, and regulators to develop shared standards.
Conclusion
The gig economy is not a passing feature of the labour market; it is a structural development that existing labour law was not designed to accommodate. The comparative experience surveyed here — from the UK Supreme Court's functional approach in Uber v Aslam to California's codified ABC test and the contrasting federal position taken by the NLRB — shows that jurisdictions are still experimenting with how to draw the line between employment and self-employment in a platform-mediated economy. What is required going forward is not simply the application of old categories to new facts, but a considered reassessment of whether those categories remain fit for purpose.
[1]Code on Social Security 2020, s 2(35). Text available at https://indiankanoon.org/doc/58854254/.
[2]Uber BV v Aslam [2021] UKSC 5. Text available at https://www.bailii.org/uk/cases/UKSC/2021/5.html.
[3]Dynamex Operations West Inc v Superior Court of Los Angeles County (2018) 4 Cal 5th 903.
[4]Assembly Bill No. 5, ch 296, 2019 Cal Stat (Cal).
[5]Uber Technologies Inc, NLRB Division of Advice, Case Nos 13-CA-163062, 14-CA-158833 and 29-CA-177483 (16 April 2019). Case record available at https://www.nlrb.gov/case/13-CA-163062.
[6]SuperShuttle DFW Inc 367 NLRB No 75 (25 January 2019).
[7]Case C-390/18 Airbnb Ireland UC EU:C:2019:1112. Judgment available at https://curia.europa.eu/juris/liste.jsf?num=C-390/18.