ADR in the Gig Economy: India’s Forgotten Workers

Ms Ananya Sharma, student, Dr Ram Manohar National Law University, Lucknow.

KEYWORDS-Alternate Dispute Resolution, Labour Laws, Gig Economy

Abstract

In the article, we explore Alternative Dispute Resolution (ADR) and its application to the distinctive problems that workers who toil in the gig economy face in India when there is no formal contract, union representation, or access to other conventional mechanisms to resolve labour disputes. The evolution of dispute resolution is traced from the Industrial Disputes Act, 1947, to the recently promulgated Mediation Act, 2023, and gig economy workers continually remain marginalised from the legal mechanism. ADR can open the doors to flexibility, low-cost, and quicker resolutions to disputes, but is disempowered by inherent power imbalances in bargaining, unenforceable terms, low awareness, and engagement failures. This article suggests that the ADR process needs to be reformed to properly support platform workers through enhanced accessibility, fairness and legal recognition, which is documented with reference to Indian case law and various international models.

KEYWORDS-Alternate Dispute Resolution, Labour Laws, Gig Economy

1. Resolving Disputes in a Digital Labour Market: The Promise of ADR

In the fast-paced gig economy, workers - food delivery riders, ride-share drivers, and other users of platforms - work in a flexible but precarious environment, which sometimes leads to disputes over algorithmic decisions, ratings as a condition of service, and sudden deactivations. Because gig workers are not employees, but independent contractors, they work without safety nets like contracts or unions, making formal litigation a difficult option, especially when they struggle to survive daily. This is where Alternative Dispute Resolution (ADR) shows significant promise. As the International Labour Organisation remarks, “effective labour dispute settlement is essential to achieving and maintaining sound labour relations, decent work and sustainable development”.

Building on this, Ugochukwu has noted that the use of ADR in labour relations provides the chance for a more flexible, autonomous and confidential procedure, which serves as the very bedrock for the resolution of sensitive disputes in a workplace. ADR can provide cost-efficient, tailored resolutions in gig platforms, where conflicts extend to algorithmic opacity and termination without avenues for either party to make their concerns known. Research has indicated that ADR is more capable of addressing employment issues than courts and tribunals, as it provides flexibility in adapting to the nuances of each employment issue.

2. From Factories to Platforms: The Evolution of Labour Dispute Resolution

The genesis of institutionalised dispute resolution in India dates back to the Industrial Disputes Act, 1947 (IDA), a landmark legislation that provided a system for adjudication and resolution of industrial disputes. The Act provided for statutory conciliation, arbitration, labour courts and industrial tribunals, which functioned as quasi-judicial forums to ensure the correct balance between efficiency and justice. Even before the commencement of statutory mechanisms, collective bargaining and trade union negotiations were integral in the dispute resolution landscape. Trade unions frequently mediated between management and workers. 

The International Labour Organisation has stated that “negotiated dispute settlement continues to be the bedrock of sound industrial relations”. 

The shift in India’s approach from adjudication to informal conciliation under the IDA has significantly reduced the number of strikes and lockouts. This evolution takes a sharp turn in the gig economy, where gig workers, such as Ola drivers, face deactivation for unsafe work conditions without union representation or an employer-employee status. 

Integrating several labour laws into the Labour Codes, most expressly the Industrial Relations Code, 2020, has also transformed the environment for dispute resolution. While Codes have been instituted to simplify processes for resolving conflicts, they often overlook the gig workers, as noted in the Fairwork India Report (2022), which indicates that many workers remain “precarious, fragmented, and invisible in institutional dispute resolution”. Therefore, the transition from collective bargaining and conciliation under the IDA to the realities faced by gig workers today is both continuity and rupture. 

3. Navigating the Legal and Socio-Economic Terrain of Labour Disputes

The progression of ADR mechanisms for labour disputes has progressed through various reforms in legislation, such as The Industrial Disputes Act, 1947, which initially introduced conciliation officers, labour courts, and arbitration as institutional mechanisms to resolve employer-employee disputes; and The Industrial Relations Code, 2020, which later developed and modernised the law on the institutional treatment of labour disputes. The Mediation Act, 2023, builds on these developments by codifying mediation, recognising online dispute resolution, mandating enforceability of mediated settlements, and establishing a registry of accredited mediators. On the international level, the International Labour Organisation (ILO) has established binding standards that push for more reforms for the gig workers, particularly in algorithmic transparency and equality, emphasising access to effective dispute resolution mechanisms.

From an economic perspective, ADR's advantage is a timely and inexpensive resolution, which reduces downtime and risk of backlog with court systems, and is built on legal requirements for the parties to create statutory timelines and enforceable settlements.  The benefits are especially acute for gig workers with sudden income loss associated with being deactivated from a platform. About sociological perspectives, the imbalance of power between gig workers and the platform, through algorithmic management, exacerbates the economic benefits of ADR when the gig worker is bound by a contract created by the platform's policies and is not a union member. 

In the comparative space, there is the EU Directive on algorithmic accountability as a mechanism for worker protection in platforms and a U.S. arbitration model based on rights advocates' claims for gig platforms. However, their application in fragmented gig marketplaces is still up for debate. The ILO's work of creating binding standards for gig work highlights the need for India to create ADR policies that meld comparable legal frameworks, economic instruments, and social policy approaches to create a framework that will create equitable and inclusive ADR economic policy frameworks to ensure gig workers aren't overlooked in the pursuit of industrial justice.

4. Bridging the Gap: Challenges and Lessons in Labour Dispute Resolution

Although Alternative Dispute Resolution (ADR) offers great potential for enhancing industrial relations, some challenges remain in the gig economy. A key issue is the power imbalance between employers and workers. The platforms maintain algorithm management and authority over the contracts, providing little to no leverage to gig workers.  In the case of Shripal v. Nagar Nigam, Ghaziabad (2025), the Supreme Court held that the daily wagers who had put in work for an extended period must be regularised and protected against hasty termination. The Court reiterated that an employer cannot force persons into permanent work under fictitious and precarious contracts, which applies to gig platforms. In Indian Federation of App-Based Transport Workers (IFAT) v. Union of India, 2021, the court recognised gig workers as forming a part of the unorganised sector, bringing them under the domain of social security laws.

One of the obstacles to implementing the ADR in the form it was intended, as compared to when used previously in AR with collective agreements, is that there is often no formal contract containing a dispute resolution clause. ADR is a standard provision of collective agreements or contracts that establishes an ADR process through mediation or arbitration provided by traditional employment relationships. Conversely, in the gig economy, gig workers work under a contract of terms of service by a gig platform, which typically does not have a clause requiring ADR to be utilised in a gig worker situation. This creates a power differential, where the worker lacks legal status to compel or require a dispute to go to resolution, ultimately putting gig workers in a position of unilateral algorithmic decision-making through algorithmic disengagement of algorithms of deactivation through worker and work information.

 One solution may be to amend the Industrial Relations Code, 2020, to stipulate that platforms provide a new clause for ADR, as part of the amended agreements, that would standardise ADR in user agreements. This would create some equivalent of a "quasi-employment contract" status, like many of the collective agreements in the EU, which could give gig workers recourse to claim equitable treatment.

 The EU Platform Work Directive specifies explicit duties to worker transparency in dispute resolution, showing that the authors were thinking along similar lines with respect to developing and supporting a national registry of gig disputes, for subsequent review/parsing by independent and trained mediators, and specifically called out the desire to work with statutory agencies. There is also an opportunity for partners to the government, like NGOs, to demonstrate partnerships and provide legal/feedback support and public information through community-supported ADR. 

 Enforceability problems with ADR outcomes create inconsistent results, particularly for gig workers seeking reinstatement or compensation.  Additionally, representation gaps leave gig workers without union support. Issues of access and awareness exist, particularly salient for informal workers, who often do not know they have the right to resort to ADR.

There is evidence from case studies to demonstrate the potential of ADR, but also the limits. India’s mandatory conciliation of strikes and lockouts can prevent disruptive industrial action from standing in the way of engagement. The protests among Zomato delivery partners in 2020-21 demonstrate how mediation can resolve disputes quickly, without escalation or confrontation. Similarly, a model in the UK, ACAS, demonstrates that mediation via statute works pretty well. Singapore’s tripartite model shows how strategic and coordinated engagement among the government, unions, and employer bodies can protect the gig workers.

5. ADR and the Quest for Fair Industrial Harmony

As precarious work and gig work become prominent in labour relations, Alternative Dispute Resolution (ADR) emerges as an essential mechanism for protecting workers. However, if not carefully designed, ADR may only reinforce existing inequalities. By making ADR equitable, accessible, and worker-centred, India may achieve industrial peace without jeopardising social justice. This demonstrates that equity and efficiency may coexist, even in the most fragmented labour market, as the focus is on worker protections. To genuinely protect gig and precarious workers, India needs to create ADR systems that are effective and inclusive, integrating workers from digital platforms into the reach of industrial justice.

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