Utkarsh Rawat

What: The Shift to Flexible Employment and the Gig Economy

Industrial relations, traditionally built around stable, long-term employment relationships, are
undergoing a seismic shift due to the rise of flexible employment and the gig economy.
Flexible employment encompasses a range of work arrangements, including part-time,
temporary, remote, and freelance work, often facilitated by digital platforms. The gig
economy, a subset of this trend, is characterized by short-term contracts and project-based
tasks, as opposed to permanent jobs. This transformation is driven by technological
advancements, globalization, and changing workforce preferences, fundamentally altering
the employer-employee dynamic. As outlined in Utkarsh Rawat’s research paper, these new
paradigms challenge traditional frameworks of labour relations, unionization, and legislative
protections, presenting both opportunities and risks for workers and employers alike.
The gig economy, in particular, has gained traction globally, with India serving as a
prominent example. Companies like Zomato, Ola, and Urban Company have leveraged
technology to create platforms that employ millions of gig workers, projected to reach 23.5
million by 2030 according to the NITI Aayog Report. This shift promises flexibility and
autonomy but also raises concerns about job security, benefits, and collective
representation, necessitating a re-evaluation of industrial relations systems.

When: The Evolution and Triggers of Change

The transition to flexible employment has been gradual but accelerated significantly in recent
decades. Rawat’s paper traces this evolution to the convergence of technology, economic
pressures, and workforce demands. The advent of the internet and platforms like Upwork
and Fiverr marked the first wave, enabling gig workers to connect with global opportunities.
The COVID-19 pandemic further catalysed this trend, with a NASSCOM Report noting a
post-pandemic increase in gig projects lasting over a year, as organizations sought agility in
uncertain times. In India, 25% of surveyed tech firms expressed a preference for hiring gig
workers for longer-term roles, with 53% absorbing them full-time, reflecting a blurring line
between gig and traditional employment.
Historically, industrial relations relied on predictable employment patterns, with unions
negotiating wages and conditions in centralized workplaces. However, as Rawat notes, the
rise of flexible work—spanning the unorganized sector and gig platforms—has disrupted this
model. The unorganized sector, employing over 90% of India’s workforce (NCEUS, 2007),
and the gig economy both exemplify employment outside formal contracts, challenging the
applicability of traditional labour laws and union structures.

Why: Drivers and Implications of Flexible Work
The shift to flexible employment is driven by two key factors: flexibility and technology.
Flexibility appeals to workers seeking autonomy and work-life balance, with a McKinsey

report cited by Rawat indicating that 70% of independent workers chose gig work for its
freedom, not just financial gain. Technology, meanwhile, acts as an enabler, with platforms
streamlining access to gig opportunities and app-based models formalizing sectors like
delivery and home services. However, this comes at a cost. The gig economy exacerbates
power imbalances, as employers—or platforms—can hire and fire at will, leaving workers
without traditional protections (Donovan, 2016).

For industrial relations, the implications are profound. Unions struggle to organize a
decentralized, transient workforce, with membership declining as workers no longer fit the
traditional employee mold (Yazdanifard, 2014). Collective bargaining, a cornerstone of
labour relations, weakens in fragmented contexts where workers lack a unified employer or
long-term affiliation. Additionally, the unorganized sector—characterized by precarious
conditions and lack of legal oversight—further complicates industrial relations, as workers
are excluded from formal frameworks (ILO, 2021).

How: Adapting Industrial Relations to New Realities

The transformation of industrial relations requires innovative responses across policy,
organizational practices, and worker advocacy. Rawat’s paper highlights several strategies:
Legislative Adaptation: Governments are redefining labour laws to accommodate gig and
flexible workers. In India, the Social Security Code 2020 aims to extend benefits to gig
workers, while California’s AB5 law reclassifies some freelancers as employees, granting
them minimum wage and benefits. Similarly, a UK tribunal in 2016 recognized Uber drivers
as “workers,” not contractors, entitling them to basic rights (Stewart & Stanford, 2017).
These cases illustrate the tension between platform models and traditional laws, pushing for
clearer worker classifications.
Union Innovation: Traditional unionization falters in the gig economy, but new approaches
are emerging. Digital platforms and social media enable decentralized organizing, while
initiatives like the Fair Work model rate platforms on worker rights, fostering accountability
(Woodcock & Graham, 2020). Sectoral bargaining, negotiating across entire industries rather
than individual firms, offers another avenue to protect dispersed workers (Shulze & Tobias,
2021).
Policy for the Unorganized Sector: In the unorganized sector, Rawat suggests strengthening
trade union rights, enhancing social security coverage, and improving regulatory
frameworks. Promoting informal associations could bridge the gap to formal unions, while
technology—such as apps informing workers of rights or delivering benefits—could address
enforcement gaps (ILO, 2021).
Redefining Employment: The gig economy blurs traditional employer-employee
relationships, with platforms acting as facilitators rather than employers. This necessitates
new models of representation and portable benefits, untethered from specific employers, to
ensure worker protections (Harris & Krueger, 2015).
Case Examples: Real-World Applications

Rawat’s research provides concrete examples of these dynamics. In the tech industry,
companies like GitLab operate fully remotely, eliminating traditional supervision and conflict
resolution structures, yet thriving through flexibility. In contrast, gig platforms like Uber and
Lyft face legal battles over worker classification, as drivers attempt to unionize under laws ill-
suited to flexible work. In India, the unorganized sector’s street vendors and domestic
workers exemplify the challenges of exclusion from industrial relations, surviving without
contracts or benefits despite their economic significance.

What Next: The Future of Work and Labour Relations

Looking ahead, the future of work will likely blend gig, flexible, and traditional employment,
driven by AI, automation, and global connectivity. Rawat predicts a hybrid workforce where
gig platforms manage talent and drive development, but only if industrial relations evolve.
This requires rethinking education, labour laws, and social protections to match rapid
change. For instance, tech firms hiring gig workers for longer projects signal a convergence
of flexibility and stability, reducing hiring times and diversifying talent pools (RazorPay
Report). Yet, challenges like quality assurance, security checks, and regulatory clarity
persist.
The future demands a balance between economic agility and social equity. Without
adaptation, flexible employment risks widening inequality, eroding labour rights, and
diminishing union power. However, with proactive policies—emphasizing representation,
sustainability, and participation—it could usher in a new era of industrial relations that
respects worker dignity while embracing modern dynamism.

Conclusion

The rise of flexible employment and the gig economy marks a pivotal moment for industrial
relations. As traditional systems falter under decentralized, technology-driven work,
stakeholders must innovate to protect workers while harnessing flexibility’s benefits. From
legislative reforms to union reinvention, the path forward requires collaboration among
policymakers, businesses, and labour advocates. Rawat’s analysis underscores that this
evolution is not just an economic shift but a social and cultural one, redefining work’s
meaning in the 21st century.

References

Donovan, S. A., Bradley, D. H., & Shimabukuro, J. O. (2016). What Does the Gig Economy
Mean for Workers. Congressional Research Service.
Harris, S. D., & Krueger, A. B. (2015). A Proposal for Modernizing Labor Laws for Twenty-
First-Century Work. The Hamilton Project.
ILO (2021). The Informal Economy and Decent Work: A Policy Review. International Labour
Organization.

NCEUS (2007). Report on the Conditions of Work and Promotion of Livelihoods in the
Unorganised Sector. National Commission for Enterprises in the Unorganised Sector.
Shulze, T., & Vachon, T. (2021). The Future of Work and Workers: Insights from US Labour
Studies. ResearchGate.
Stewart, A., & Stanford, J. (2017). Regulating Work in the Gig Economy: What Are the
Options?. The Economic and Labour Relations Review.
Woodcock, J., & Graham, M. (2020). The Gig Economy: A Critical Introduction. Polity Press.
Yazdanifard, R. (2014). Impact of Flexible Working Hours on Work-Life Balance.
ResearchGate.