A vacation bench of the Karnataka High Court reserved a ruling that classified Ola’s relationship with that of its drivers as that of employer-employee.

Earlier, a single judge had ordered Ola parent company ANI Technologies to pay compensation of INR 5 Lakh to a female customer who was allegedly sexually harassed by an Ola taxi driver in 2018.

The order, which classifies Ola’s relationship with its drivers as that of employer and employees, could have impacted not only the startup but also the country’s entire gig economy.

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 relationship with that of its drivers as that of employer-employee.

Rather a single judge court of Justice MGS Kamal had directed Ola parent company ANI Technologies to pay compensation of INR 5 Lakh to a woman who was allegedly sexually harassed by one of the taxi drivers in 2018. The order also stated that drivers would be considered employees under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 (POSH Act ) .

However, the bench of Justices SR Krishna Kumar and MG 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 court that drivers are independent users of the platform and cannot be classified as employees.

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

Besides the damages, the single judge of the Karnataka HC had also ordered ANI Technologies to pay INR 50,000 towards covering the complainant’s legal expenses.

Impact on the gig economy

The earlier decision, which classified Ola’s relationship with its drivers as that of employer and employees, could have impacted not only the startup but also the country’s entire gig economy.

From ride-hailing and food delivery to e-commerce and high-speed commerce, most companies and startups don’t consider their drivers/delivery managers as their employees. As such, the earlier ruling was seen as a potentially landmark verdict.

Shaik Salauddin, national secretary general of the Indian Federation of App-Based Transport Workers (IFAT), earlier praised the initial judgment. He said it set an important precedent to recognize drivers as employees and pushed for better protections for gig workers.

It is pertinent to note that gig workers across the country have complained many times in the past about poor working conditions, long working hours and low salaries. Additionally, there have been several examples of gig workers going on strike or protesting against platforms demanding higher wages and improvements in working conditions.

In August, auto and taxi drivers in Delhi NCR protested against taxi companies such as Ola and Uber. Before that, female gig workers of Urban Company went on strike at the startup’s office in Bengaluru to protest against the new job description.

Fairwork India in particular scores Ola, Uber, Dunzo and Porter are the worst performing startups on its index on the working conditions of gig workers.

Amid all this, the Center has been making efforts to provide this social security for gig workerswhile states are also taking steps to do so protect gig workers.