Relief For Ola: Karnataka HC Stays Order Declaring Drivers As Startup’s Employees

In a relief for Ola, a vacation bench of the Karnataka High Court has reportedly stayed a ruling that classified the ride-hailing startup’s relation with that of its drivers as that of employer-employees. 

Earlier, a single-judge bench of Justice M G S Kamal had directed Ola parent ANI Technologies to pay a compensation of INR 5 Lakh to a woman who was allegedly sexually harassed by one of its cab drivers in 2018. The order also said that drivers would be considered as employees under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act).

However, the bench of Justices S R Krishna Kumar and M G Uma, in its interim order dated September 30, stayed the previous order while hearing Ola’s appeal against it, news agency PTI reported.

Ola’s counsel argued before the bench that drivers are independent users of the platform and cannot be classified as employees. 

The case dates back to 2018, when a woman passenger alleged sexual harassment by an Ola driver, which led to a police complaint and further legal action under the POSH Act.

Besides the compensation, the single-judge bench of the Karnataka HC had also ordered ANI Technologies to pay INR 50,000 for covering the legal costs of the complainant.

Impact On Gig Economy

The earlier order, classifying the relation of Ola with its drivers as that of employer and employees, could have impacted not only the ride-hailing startup but also the entire gig economy of the country. 

From ride hailing and food delivery to ecommerce and quick commerce, most of the companies and startups don’t classify their drivers/ delivery executives as their employees. As such, the previous ruling was seen as potentially a path-breaking judgement.

Shaik Salauddin, national general secretary of the Indian Federation of App-Based Transport Workers (IFAT), earlier hailed the initial judgement. He said it set an important precedent to recognise drivers as employees and pushes for greater protections for gig workers.

It is pertinent to note that gig workers across the country have many times in the past complained about bad working conditions, long work hours, and low salaries. Besides, there have been multiple instances of gig workers going on strike or protesting against platforms to demand higher wages and improvement in working conditions.

In August, auto and taxi drivers across Delhi NCR protested against cab aggregators like Ola and Uber. Prior to that, women gig workers associated with Urban Company went on a strike at the startup’s Bengaluru office to protest against its new terms of reference. 

Notably, Fairwork India rated Ola, Uber, Dunzo, and Porter as the worst-performing startups on its index on working conditions of gig workers.

Amid all these, the Centre has been making efforts to provide social security to gig workers, while states are also taking steps to safeguard gig workers.