The Karnataka HC stands by declaring the drivers to be employees of the startup

The Karnataka High Court has stayed a ruling that recognized Ola’s relationship with its drivers as an employer-employee relationship.

Earlier, a single-judge bench ordered Ola’s parent ANI Technologies to pay compensation of INR 5 lakh to a customer who allegedly suffered sexual harassment by Ola’s taxi driver in 2018.

The order, classifying Ola’s relationship with drivers as an employer-employee relationship, could have an impact not only on the passenger transportation startup, but also on the entire gig economy in the country.

In a relief to Ola, a vacation bench of the Karnataka High Court has reportedly stayed an order that classified the passenger transport startup’s relationship with its drivers as an employer-employee relationship.

Previously one judge ordered the bench of Justice MGS Kamal Ola native ANI technologies pay compensation of INR 5 lakh a woman who was allegedly sexually harassed in 2018 by one of the company’s taxi drivers. The order also stated that drivers would be deemed employees under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act). .

However, a bench of Justices SR Krishna Kumar and MG Uma, in an interim order dated September 30, upheld the previous order while hearing Oli’s appeal against it, news agency PTI reported.

Ola’s lawyer argued in court that drivers are independent users of the platform and cannot be treated as employees.

The case dates back to 2018, when a passenger accused Ola’s driver of sexual harassment, which resulted in a complaint to the police and further legal actions under the POSH Act.

Apart from damages, the Karnataka bench of the bench also ordered ANI Technologies to pay INR 50,000 towards the legal costs of the complainant.

Impact on the gig economy

The earlier order, classifying Ola’s relationship with drivers as an employer-employee relationship, could have an impact not only on the passenger transportation startup, but also on the entire gig economy in the country.

From passenger transportation and food delivery to e-commerce and high-speed commerce, most companies and startups do not classify their drivers/delivery managers as employees. The previous ruling was therefore considered potentially groundbreaking.

Shaik Salauddin, national general secretary of the Indian Federation of App-Based Transport Workers (IFAT), had earlier praised the interim judgment. He said this sets an important precedent for recognizing drivers as employees and pushes for better protection for gig workers.

It is worth noting that in the past, contract workers across the country have repeatedly complained about poor working conditions, long hours and low wages. Additionally, there have been numerous occasions where gig workers have gone on strike or protested against the platforms, demanding higher wages and improved working conditions.

In August, auto and taxi drivers across Delhi NCR protested against cab aggregators like Ola and Uber. Earlier, women employees associated with Urban Company went on strike at the startup’s office in Bengaluru, protesting against the new regulations.

It is worth noting that Fairwork India has rated Ola, Uber, Dunzo and Porter as the worst performing startups in its index on the working conditions of contract workers.

Among them, the Center has made every effort to provide them social insurance for gig workerswhile countries are also taking steps in this direction protect gig workers.