Govt of India seeks to "water down" social security for unorganized sector workers

By Vipul Pandya* 
Even as the Government of India is planning to come up with Labour Code on Social Security and Welfare Bill, 2018, several Gujarat-based trade unions and NGOs working in different unorganized sectors held a meeting at Gujarat Vidyapeeth, Ahmedabad, on January 3, 2019, to analyze it’s provisions, pointing towards how it is a step in the wrong direction in the name of labour reforms. Organized by Bandhkam Mazdoor Sangathan (BMS), the on-day consultation suggested that the Government of India is seeking to water down the present welfare schemes for the unorganized sector.
It is the third revised draft Social Security Code. It has been revised in the name of reform, but the basic concept of having one welfare board at the state level and one national board has been further watered down by turning them into advisory boards. Many of ills of the previous drafts continue. Even though the proposal to repeal Employees’ State Insurance (ESI) and Employees’ Provident Fund (EPF) Acts has been dropped, 11 labour welfare laws, including two Building and other Constriction Workers Welfare (BOCW) Acts, 1996, are being repealed.
The Acts proposed to be repealed are:  

• The Employees Compensation Act, 1923 
• The Maternity Benefit Act, 1961 
• The Payment of Gratuity Act, 1972 
• The Unorganized Workers Social Security Act, 2008 
• The Iron Ore Mines, Manganese Ore Mines and Chrome Ore MinesLabour Welfare Fund Act, 1976 
• The Beedi Workers Welfare Fund Act, 1976 
• The Cine Workers Welfare Fund Act, 1981 
• The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare (Cess) Act, 1976 
• The Beedi Workers Welfare (Cess) Act, 1976 
• The Building and Other Constriction Workers Welfare (Cess) Act, 1996 
• Building and Other constriction workers (Regulation of Employment and Condition of Service) Act, 1996 

There are several outstanding issues in the revised draft. Thus, the definition of the unorganised worker does not include domestic worker in Section 2.1. This is over and above the fact that, while the structure of the national social security board and state welfare board has been changed to include some level of representation to the unorganized workers, the representation is not even one third.
Further, the functions of the national social security board in the draft are purely advisory in nature and its decisions are not binding, even though the draft says that the Central government “shall formulate and notify”, from time to time, suitable welfare schemes for unorganized workers on matter relating to life and disability cover, health and maternity benefits, and old age protection and any other benefit (Section 65.1).
Similarly, the draft says that the State government may formulate and notify, from time to time, suitable welfare schemes for unorganized workers, including schemes relating to provident fund, employment injury benefit, housing, educational schemes for children, skill upgradation of workers, funeral assistance, and old age homes (Section 65.2).
However, like the national board, functions of the state welfare board, too, are proposed to be purely advisory, and there is no provision for compulsory registration of employers. Worse, even the registration of workers is not compulsory. In fact, there is no regulation for employment and wages, and the welfare provisions for unorganised workers exclude domestic workers.
The draft says that registration of workers, which is not compulsory, would be done for the unorganised workers on completion of 14 years of age (Section 68-1), which would mean legalising child labour. Further, for obtaining registration, the worker is supposed to satisfy a prescribed socio-economic criterion, which means that the Above Poverty Line (APL) and Below Poverty Line (BPL) classification of unorganised workers would continue.
The draft says that building and other construction workers would be registered as a separate category, which means an appropriate government authority would be required for them. Thus, at the district level they would be registered through workers’ facilitation centres under the district administrations, which are already over-burdened. It also suggests that that the registration would not be administered by the welfare board or the labour department.
The draft requires that authentication of registration has to be provided by the employer in the building sector, and NGOs and advocates would assist the registration process, which indicates there no role for trade unions. As for those who are already registered in the existing BOCW welfare board or other welfare boards, since the two BOCW Acts and the Unorganized Workers Social Security (USWSS) Act, 2008 are proposed to be repealed, their cards would not be valid, and fresh registration would be required.
The draft provides for the creation of a new fund – a construction workers’ welfare fund – by collecting cess. However, the Central government has been empowered to exempt certain establishments from the payment of cess. Further, there is a mention of some income from grants and loans from Central and state Governments. But the quantum is not specified, even though the Parliamentary standing committee has stated that 3% of the budgetary allocation is necessary. Then, there is a mention about funds which could be collected for various categories of workers by the state government, but these would be constituted as separate funds.
The unorganised sector is in the dire need for regulation of employment and wages and suitable social security measures to be implemented through sectoral welfare boards for large sectors employing over 1 lakh workers in a state. However, the draft is quiet about this. Further, the BOCW welfare boards and other sectoral welfare schemes, as well as sectoral welfare boards existing in states such as Kerala and Tamil Nadu, would be adversely affected by with the enactment of the proposed code.
There is a provision for the privatisation of certain activities in the draft (it was not there in the previous drafts), which is highly objectionable. Thus, the revised Draft’s Section 65.5 wants “Central and State Governments to provide for such matters necessary for efficient implementation of the scheme” including “agency or agencies that will implement the scheme.”
Seeking to do away with the enforcement of labour laws, especially maternity benefit, gratuity, cess etc., the draft talks of appointing only a facilitator who would facilitate the implementation of the legal provisions. On the other hand, there is a mention of having a controlling authority for implementing different schemes; perhaps this authority would function as a commissionerate. Indeed, there is no effort to make to make it participatory, as it excludes trade unions.
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*With Bandhkam Mazdoor Sangathan. This is the modified version of the note prepared by the author for the Ahmedabad consultation