Swiggy Shares Surge 5% After Company Expresses Support for New Labour Codes

The new codes stipulate that aggregators employing gig workers must contribute 1-2% of annual turnover to social security, with the total contribution not exceeding 5% of the amount payable by the aggregator. Shares of on-demand convenience firm Swiggy Ltd ended nearly 5 per cent higher on Monday following a fag-end rally after the firm termed the newly-notified labour codes as a "transformative step" that will unlock far-reaching benefits for millions of workers.

The stock climbed 4.90 per cent to settle at Rs 404.55 apiece on the BSE. During the day, shares of the firm hit a high of Rs 410.30 and a low of Rs 378.05. On the NSE, the stock jumped 4.96 per cent to Rs 404.60.

While supporting the government's vision of a modern and inclusive social security net, Swiggy, in a regulatory filing on Saturday, said it does not anticipate any material impact from the CoSS (the Code on Social Security, 2020) on its business sustainability, cost structure, or long-term financial performance. The government on Friday notified the four labour codes, which have rationalised 29 existing labour laws. These will formalise employment, strengthen worker protection, and make the labour ecosystem simpler, safer and globally aligned.

Under the new codes, 'gig work', 'platform work', and 'aggregators' have been defined for the first time. The codes stipulate that aggregators employing gig workers must contribute 1-2 per cent of annual turnover to social security, with the total contribution not exceeding 5 per cent of the amount payable by the aggregator.

"This reform represents a landmark restructuring of India's welfare and regulatory architecture, a transformative step toward building an inclusive, coherent, and future-ready social-security framework that extends across formal employment, the unorganised sector, and the rapidly expanding platform economy," Swiggy said.

The company further said, "We recognise the significance of this moment and the far-reaching benefits these reforms can unlock for millions of workers." The four labour codes are: the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020.

Referring to the Code on Social Security, 2020 (CoSS), Swiggy said it is a welcome development that brings much-needed uniformity, clarity, and predictability to all stakeholders.

"The framework is expected to simplify and strengthen benefit access for workers on digital platforms, while also easing compliance for enterprises operating across diverse geographies," it added.

Eternal Ltd on Saturday welcomed the implementation of the four labour codes, which it said will help strengthen the social security access for gig workers, including for its Zomato and Blinkit businesses. In a regulatory filing, Eternal, the parent entity of Zomato and Blinkit, said it does not think the financial impact on account of these rules will be detrimental to the long-term health and sustainability of its business.

Shares of Eternal Ltd ended marginally lower by 0.36 per cent at Rs 300.95 apiece on the BSE. On the NSE, the stock dipped 0.31 per cent to Rs 301.