Anshul Prakash
Khaitan & Co, Mumbai, Maharashtra
anshul.prakash@khaitanco.com

Kruthi Murthy
Khaitan & Co, Mumbai, Maharashtra
kruthi.murthy@khaitanco.com

Shreya Sukhtankar
Khaitan & Co, Mumbai, Maharashtra
shreya.sukhtankar@khaitanco.com

Introduction

Technology has advanced monumentally in recent years, making way for new possibilities that were previously unimaginable. The metaverse is one such evolving concept which is likely to revolutionise various sectors worldwide. The metaverse is an augmented virtual reality platform created using blockchain technologies which use virtual reality to form immersive virtual worlds wherein users can interact with each other in a similar way to real life interactions. Such enabling technologies are already being used across industries including the car industry, healthcare, fashion, tourism, architecture and gaming. Virtual reality has also gained popularity in organisations’ learning and development initiatives.^[1]

The metaverse has now made its way into the workplace, offering an immersive and realistic experience for employees to interact with each other just as though they are meeting in an office, without having to be physically present. The emergence of workspaces in the metaverse has been somewhat well-timed, given the world has recently become familiarised with remote and hybrid working arrangements against the backdrop of the global Covid-19 pandemic.

The advent of workspace in the metaverse

During the Covid-19 pandemic, companies resorted to remote working setups to adapt to the prevailing circumstances. Today, even though we are in the process of gaining back a sense of normality, it should be noted that remote or hybrid working arrangements are here to stay. However, discussions have emerged that remote working, which prevents in-person interactions, could hamper effective communication therefore leading to disconnect and lack of cooperation between employees. While remote working significantly helped many businesses to remain operational at a much-needed time, research shows that many employees developed feelings of isolation, with limited in-person interaction.

An office in the metaverse seeks to mitigate some of the challenges faced in remote working setups. It intends to replicate the physical workplace, allowing employees to interact with each other as they would in a physical office, all from their own homes. A workplace in the metaverse portrays employees as digital ‘avatars’ accessed through a device such as 3D virtual reality headsets. It aims at providing employees an immersive experience without the confines of a physical office, ultimately boosting engagement and productivity. Where a company’s presence is spread across different regions of the world, entering an office which is beyond the realms of the physical world increases the accessibility of the workforce. It enables employees to collaborate and have spontaneous conversations with their colleagues working anywhere in the world, as though they are meeting in real life. Various organisations have already begun using the metaverse for conferences and events.

Two of the most renowned technology giants, Meta (formerly known as Facebook) and Microsoft are developing products to facilitate work in the metaverse.^[2] A few companies have already developed workspaces in the metaverse.^[3] In fact, at the multinational corporation level, companies such as Accenture^[4] and Hyundai^[5] are using the metaverse for recruitment and employee inductions as well.

In India, the All India Council for Technical Education became the first accreditation agency to build its own office in the metaverse.^[6] Atoms, an events firm has also recently set up its office in the metaverse, aiming to connect with global clients.^[7]

Understanding the associated considerations

Transitioning to a metaverse workplace entails certain legal and human resource considerations and issues. This may not be addressed by India’s current employment laws.

Recruitment/upskilling of workforce

There are no geographical attributes in the metaverse, which will broaden the horizon in terms of hiring new employees. Recruitment will not be limited by physical location, and a diverse pool of talent may be hired by employers.

To mitigate the risk of redundancy, employers will also need to factor in the time and resources to train their workforce on how to use the metaverse, given the regular developments in the field.

Considering the lack of geographical boundaries in the metaverse, avatars of employees may be logging in from India, while the employee may be a foreign national or residing outside India. In such instances, employers may also face challenges in terms of determining applicable immigration and work authorisation requirements which continue to focus on actual physical presence of individuals.

Remuneration payable to employees

Transactions and purchases in the metaverse are largely driven by cryptocurrencies. Nevertheless, existing labour laws only provide for payment of remuneration in the form of cash, cheques or direct deposit into employee bank accounts, and do not factor in cryptocurrencies as a mode of payment. Accordingly, the feasibility of payment of remuneration in the form of cryptocurrency or non-fungible tokens (NFTs), which are not currently adequately regulated, would have to be assessed from a taxation and regulatory perspective. Employers will also have to be mindful of the fluctuating value of cryptocurrencies and the cryptocurrency-to-cash exchange rates.

That being said, to address the concerns of payroll deductions (including in respect to social security contributions) and withholdings, it is likely that the traditional form of payments will continue, with cryptocurrencies and NFTs being additional benefits.

Privacy concerns

In the metaverse, building a customised setting similar to real life and creating a digital avatar representing the individual would entail collection of a wide range of personal data. Against this backdrop, data privacy concerns are expected to increase exponentially in the metaverse. At the outset, the device which collects the personal data of the users and enables them to operate in the metaverse may be susceptible to a data breach. Furthermore, since our physical being will be substituted by avatars in the metaverse, the simulated environment may also be prone to imposters and intruders, which could lead to other legal and social concerns.

According to India’s applicable data privacy laws, any transfer of sensitive personal data or information such as password, financial information, sexual orientation, and biometric information, to any overseas entity would require consent of the information provider and the same level of data protection being adhered to by such overseas entity as is being followed by the Indian entity. The information collected for the purposes of operating in the metaverse would fall within the field of personal information and/or sensitive personal data or information. Since the digital avatar may be considered as an extension of the employees’ physical self and given that the companies would be collecting the employees’ data ultimately, the application of the extant data protection regime would retain its status in the context of the metaverse. Companies with a presence in several countries would need to monitor collection, processing, transfer and protection of data according to the laws of the various jurisdictions.

Sexual harassment concerns

Establishments have already begun to witness sexual harassment claims from employees in the metaverse. Although such harassment does not entail physical touch, haptic technology used in the metaverse has the potential to give a realistic experience to its users, and such instances may be deeply traumatic for individuals.

Safety features

In a traditional office setup, an organisation would typically have CCTV surveillance, and in remote working setups, official devices are monitored by the entity from time to time. Similarly, the metaverse office may be subjected to strict surveillance at all times. Furthermore, while designing the workplace, safety features may be incorporated such that violent actions are not possible by design. Meta has developed safety features including an additional ‘personal boundary’ feature which bans digital avatars from proceeding beyond a set distance of another avatar, although this may prevent only limited forms of sexual harassment.^[8]

Identification of the perpetrators

Since the employees are represented by digital avatars, it may be difficult to identify the perpetrator in real life. To address such concerns, employers may need to keep track of each avatar and their corresponding identity. Robust security practices would also have to be developed to avoid the possibility of imposters.

Application of existing law

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (PoSH Act) provides protection to female employees against sexual harassment in the workplace. The range of ‘sexual harassment’ under the law includes verbal and non-verbal conduct in addition to physical conduct. Further, the term ‘workplace’ is broadly defined to include any place visited by the employee arising out of or in the course of employment. In this context, it may be contended that the metaverse qualifies as a ‘workplace’ for extending the protection under the PoSH Act to female employees working in the metaverse. Going forward, employers will have to organise training programmes for their employees to apprise them of acceptable conduct in the context of the metaverse.

Diversity and inclusion

The Rights of Persons with Disabilities Act, 2016 and the Transgender Persons (Protection of Rights) Act, 2019 aim to provide protection to persons with disabilities and transgender persons respectively, primarily in the context of a physical workplace. However, given that the physical being will be substituted by avatars in the metaverse, the question that arises is whether employees would be required to replicate their physical characteristics in their avatars. For instance, it may have to be assessed as to whether a disabled person’s avatar would be created to reflect such characteristics. Employers may also have to consider whether and how any infrastructural amendments are made to the workspace in the metaverse to accommodate persons with disabilities (such as those with visual, hearing or motor skill impairments). Operating in the metaverse by wearing virtual reality headsets for extended periods may lead to eye strain, headaches or neck pain, and increase the number of work-related injuries.

Jurisdiction

Assessment of jurisdiction is one of the conundrums that assume greater significance in the metaverse. Employees working in the metaverse may belong to various geographical regions worldwide. Since there are no geographical attributes in the metaverse, a pertinent question arises as to which nation’s laws will apply for any non-compliance or offence that might occur on the platform.

In the context of sexual harassment, while the realm of ‘workplace’ is wide under the PoSH Act and covers any place which the employee visits ‘during the course of employment’, the question of jurisdiction in the metaverse remains ambiguous. For instance, if a woman residing in India faces sexual harassment in her workspace in the metaverse, and the offender resides in another country, it remains unclear as to how the claim will be addressed and enforced from a legal standpoint.

The (Indian) Information Technology Act, 2000 (IT Act) applies to contraventions committed outside India by any individual if the conduct involves a computer located in India, irrespective of their nationality. Consequently, at this stage, it may be considered that the IT Act would be applicable to employees in the metaverse, irrespective of their location or nationality if the device can be traced back to India.

Jurisdiction in the metaverse may be determined based on various factors such as the place of residence of the victim or offender, the location of the server or other relevant factors. However, there has been no definite line of thought on this to date. Some have also suggested the formation of a universal jurisdiction known as a ‘meta-jurisdiction’, although the possibility of having universal jurisdiction for the metaverse is unlikely. At this juncture, jurisdiction will have to be determined on a case-to-case basis and we shall have to await further clarity in this regard.

Concluding remarks

The metaverse is no longer only a futuristic concept. It is well on its way to being a revolution of the internet and is likely to have an impact on almost every industry/sector we know today, from digital payments to entertainment to employment. While the evolution of the workplace in the metaverse is at an emerging stage in India, major developments can be expected in the time to come. As this concept develops, the legal regime in India would also need to be subjected to necessary amendments and inclusions to cater to the concerns that may arise. Until then, employers who aim to develop their workspace in the metaverse would need to adapt to the dynamic circumstances and take appropriate steps to ensure the seamless functioning of the workplace in the metaverse.