In a relief to major platform-based aggregators, the Karnataka High Court on Friday directed the state government not to take any coercive action against companies such as Swiggy, Zomato, Zepto, and Urban Company for failing to implement the provisions of the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025.
However, the court directed the companies to deposit the welfare fee demanded by the state government with the court registry within three weeks.
Justice M Nagaprasanna passed the interim order while hearing petitions filed by the Internet and Mobile Association of India (IAMAI) and several aggregators challenging the Act. The matter has been posted for further hearing on August 14, with the state government directed to file its response within four weeks.
The petitioners argued that Karnataka's Gig Workers Act is unconstitutional as it overlaps with the Centre's Code on Social Security (CoSS), 2020, which already provides a framework for gig workers' welfare across the country.
Senior advocates appearing for the aggregators submitted that while the companies support welfare measures for gig workers, the state law creates duplicate compliance requirements by introducing provisions already covered under the central legislation.
Defending the Act, Advocate General K Shashi Kiran Shetty argued that the state law and the central Code can coexist, as Karnataka's legislation is aimed specifically at gig workers operating within the state. He also pointed out that states such as Rajasthan, Bihar, and Telangana have enacted similar laws.
The Union, represented by Additional Solicitor General Arvind Kamath, supported the aggregators' challenge, arguing that the Karnataka law amounts to "parallel legislation" in a field already occupied by the central Code on Social Security.
During the hearing, the High Court also questioned the state government on how it intended to utilise the welfare fee collected from aggregators, drawing comparisons with labour cess funds that courts have previously found to be underutilised or misused.
The Advocate General assured the court that the welfare fee would not be utilised until the petitions are decided. While the aggregators initially proposed maintaining the funds in a separate account, the court directed that the money instead be deposited with the court registry.
Under the Karnataka law, aggregators are required to contribute welfare fees of 50 paise per two-wheeler ride or delivery, 75 paise for three-wheelers, and Rs 1 for four-wheelers. The High Court observed that the amounts involved were "very meagre", particularly when compared to the service charges levied by the platforms.
