New Delhi: Some of India’s biggest app-based platforms like Rapido, Swiggy, Zepto, Zomato and Urban Company have challenged Karnataka’s new welfare law for gig workers, saying it’s unconstitutional as it conflicts with Parliament’s labour code.
The companies, along with the Internet and Mobile Association of India, have moved the Karnataka High Court against the Karnataka Platform Based Gig Workers (Social Security and Welfare) Act, 2025. Their plea is yet to be listed before the high court.
The petition described the 2025 Act as “unconstitutional”, “arbitrary”, and violative of the platform aggregators’ fundamental rights under Articles 14 and 19(1)(g) of the Constitution, which guarantee the right to equality and the right to practice any profession or to carry on any occupation, trade or business.
The plea also challenges the government notification constituting the Karnataka Platform-Based Gig Workers Welfare Board and a 12 February government order directing the aggregators to pay a welfare fee directly to platform-based gig workers.
The plea also said that the act and the rules, along with government notifications, violate Article 265, which says tax cannot be levied without the explicit authority of a law.
They added that the act violated Article 254 of the Constitution, which says that if there is an inconsistency between laws made by the Centre and the states regarding any matter in the Concurrent list, the Centre’s law will prevail.
Gig workers fall under the Concurrent list (Seventh Schedule of the Constitution), which means that both states and the Centre can make legislation on the subject. If there is a conflict between the two, the Centre’s stand will prevail.
Why the law is being challenged
One of the main issues is the welfare fee.
Under Section 20 of the Karnataka Act, aggregators or platforms will be charged a welfare fee, known as the Platform Based Gig Workers Welfare Fee, which shall be at least 1 percent but not more than 5 percent of the payout given to gig workers for each transaction, as may be notified by the State government.
The plea also says that the act mandates the collection of the welfare fee from aggregators, ostensibly for the welfare of gig workers, without the prior formulation, notification, or operationalisation of any concrete welfare scheme or benefit structure.
Moreover, the plea argues that the Karnataka Platform Based Gig Workers (Social Security and Welfare) Act, 2025, which was passed with the intention of protecting the rights of platform-based gig workers, violates the Code on Social Security, 2020, one of the four comprehensive Labour Codes enacted by Parliament.
The 2020 code is the only labour code that expressly defines “gig workers” and “platform workers” and provides a complete and exhaustive statutory framework for their social security, the plea said
Under Section 155 of the Code, rule-making powers with respect to gig and platform workers are vested exclusively in the Central government, the plea says.
The plea also adds that the 2025 Act, and its accompanying rules, traverse the very same legislative field, creating a parallel state regime for registration, welfare contribution, welfare funds and the welfare board, in direct replication of the framework already mandated by the Code.
The plea filed by Rapido, which ThePrint has accessed, also points to the lack of Presidential assent. The act only has the Governor’s assent, which was received on 11 September last year, but not the President’s assent, the plea said.
“In the absence of such assent, the KPBGW Act is void to the extent of its repugnancy with the CoSS and cannot prevail over or modify the Parliamentary enactment in any manner,” the plea said while adding that the Code was formulated by the Centre, and will override the state-enacted law.
Finally, the plea says that Sections 12, 13, 14, and 16 of the act, which require aggregators to provide clear, written contracts, ensure transparency in decision-making processes, give workers a minimum of 14 days’ written notice, and mandate basic occupational health and safety standards, impose vague obligations and allow unbridled discretion to enforcement authorities.
(Edited by Sugita Katyal)
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