Eternal sees no “detrimental” impact of new labour codes on business in long run

Food delivery platform Zomato's parent firm, Eternal, said that implementing the new labour codes will have no negative financial impact on its business in the long term.

“We don't think any financial impact on account of these rules will be detrimental to the long-term health and sustainability of our business,” the company said in a stock exchange filing, adding that the exact financial and operational outcomes of the new codes will be clear once the rules are notified.

Under the Code on Social Security (2020), online aggregators and marketplaces that avail services of gig workers for deliveries, warehouse management, and other purposes will now have to set aside 1-2% of their annual turnover towards a gig worker welfare fund, as per the new labour codes announced by the government on Friday.

According to the government's press release, aggregators need to contribute “1-2% of the annual turnover, capped at 5% of the amount paid/payable to gig and platform workers.”

This will impact companies such as food delivery platforms Zomato and Swiggy, quick commerce apps like Blinkit and Zepto, on-demand service companies like Urban Company and Snabbit, ride-hailing apps like Uber and Rapido, and ecommerce marketplaces such as Amazon India and Flipkart.

“A unified, nationwide framework brings much-needed uniformity for gig workers, and at the same time improves ease of doing business for platforms and is a step in the right direction,” Eternal said in the filing.

The government on Friday announced four labour codes, which replaced the existing 29 labour codes. The new labour codes include the Code on Wages (2019), the Industrial Relations Code (2020), the Code on Social Security (2020), and the Occupational Safety, Health, and Working Conditions (OSHWC) Code (2020).

Under the new labour code, the Code on Social Security (2020), gig work, platform work, and aggregators have been defined for the first time.

Source: EconomicTimes
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