9th October – Labour pains – Draft social security code has little to offer

The third draft on the Code on Social Security, 2019 falls short of its stated aim to “amalgamate, simplify and rationalise” the relevant provisions of eight existing central labour laws.

Details –

It merely clubs together existing schemes in the organised sector, while skirting ambiguities over the basic criteria for availing social security benefits — such as the minimum number of employees in an organisation and length of service.

Shortfalls –

Besides, there are some basic structural and conceptual flaws.

  • First, there is no uniform definition of “social security”, nor is there a central fund. The corpus is proposed to be split into numerous small funds creating a multiplicity of authorities and confusion.
  • Second, it is not clear how the proposed dismantling of the existing and functional structures, such as the Employees’ Provident Fund Organisation (EPFO) with its corpus of ₹10 lakh crore — which will be handed over to a government-appointed central board — is a better alternative.
  • Third, crucial categories such as “workers”; “wages”; “principal-agent” in a contractual situation; and “organised-unorganised” sectors have not been clearly defined. This will continue to impede the extension of key social security benefits such as PF, gratuity, maternity benefits, and healthcare to all sections of workers.
  • Finally, there is no commitment on the government’s part to contribute to the listed social security measures, even as the Code is clear about employee and employer contributions.

Good beginning –

It is heartening to welcome aboard large sections of the workforce — “gig workers” such as those working in taxi aggregate companies like Uber and Ola. But how exactly the government proposes to facilitate their access to PF or medical care is not clear. If employers in the unorganised sectors are expected to foot the bill for EPFO contributions, that will substantially hike the cost of doing business.

Way forward –

The draft Code merely cuts and pastes the relevant sections of the existing statute without specifying how these issues are to be addressed. The government should address long-pending structural issues and deliver on its promise to actually simplify the existing labour laws.

SourceThe Hindu Business Line

QUESTIONIt is said that the ‘Draft Social Security Code’ is merely an exercise of rejigging of existing statutes that offer little respite to the workers. Discuss.

Social Security for Workers in Informal Sector | PIB Summary

In order to provide social security benefits to the workers in the unorganised sector, the Government has enacted the Unorganised Workers’ Social Security Act, 2008.

About the Unorganised Workers’ Social Security Act

The 2008 Act stipulates formulation of suitable welfare schemes for unorganised workers on matters relating to –

  1. life and disability cover,
  2. health and maternity benefits,
  3. old age protection.

Other important schemes

  1. Indira Gandhi National Old Age Pension Scheme (Ministry of Rural Development);
  2. National Family Benefit Scheme (Ministry of Rural Development);
  3. Janani Suraksha Yojana (Ministry of Health and Family Welfare);
  4. Handloom Weavers’ Comprehensive Welfare Scheme (Ministry of Textiles);
  5. Handicraft Artisans’ Comprehensive Welfare Scheme (Ministry of Textiles);
  6. Pension to Master Craft Persons (Ministry of Textiles);
  7. National Scheme for Welfare of Fishermen and Training and Extension (Department of Animal Husbandry, Dairying & Fisheries);
  8. Aam Aadmi Bima Yojana (Department of Financial Services); and
  9. Rashtriya Swasthya Bima Yojana (Ministry of Health and Family Welfare).

Further, Central Government has also launched the Atal Pension Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana for all citizens especially targeting unorganised workers to provide them comprehensive social security.