A COLLAGE OF LAWS THAT LEAVES THE WORKER OUT IN THE COLD
WHY IN NEWS?
As COVID-19 destroys lives and livelihoods, an unprepared government has rendered low-paid, informal workers, who constitute 91% of the workforce.
Social security entails including free basic curative care in public clinics and hospitals, the elderly had old age pensions, the dying had death/disability insurance or life insurance.
GAPS IN THE CODE
India’s Parliament in September 2020 passed a Social Security Code.
The SS Code 2020 merges existing social security laws and attempts to include informal workers within the ambit of social security administration.
The SS Code 2020 amalgamates and rationalises the provisions of eight existing central labour laws. Of these acts, employees provident fund, employees state insurance (ESI), maternity benefit, gratuity are entirely for organised sector workers.
For employees’ state insurance, the existing employee threshold has been withdrawn and now the central government can extend ESI benefits to any organisation irrespective of the number of workers employed therein. However, there are areas of ambiguity and overlapping too.
HURDLES FOR INFORMAL WORKERS
However, is the Code going to provide universal social security to the 91% workers in the informal sector? It proposes that both the central and State governments will formulate schemes for unorganised workers.
The legal framework as proposed in the Code and Rules, implies that the basic onus lies on informal workers registering as beneficiaries.
Registration is a prerequisite for universal coverage. To avail social security, an informal worker must register herself on the specified online portal to be developed by the central government.
Similar provisions are already there in existing social security schemes run by State governments under the Unorganized Workers’ Social Security Act, 2008.
Still, a large number of informal workers are outside the ambit of any social security even after 13 years.
The absence of definite and unambiguous provisions in the present code would further complicate achievement of universal registration.
Also, experience shows that there is an awful lack of awareness among informal workers regarding social security schemes.
Online registration places a further challenge as most informal workers lack digital literacy and connectivity.
Informal workers also find it difficult to furnish all documentary papers required as part of the registration process.
Most informal workers are footloose casual workers (26% of all workers) and self-employed (46% of all). They move from one place to another in search of livelihoods.
Furnishing proof of livelihood and income details in the absence of tangible employer-employee relations is very difficult.
Such requirements deter informal workers from completing the registration and they continue to remain outside the social security ambit.
INTER-STATE COOPERATION MUST
Further, as unorganised workers are spread across the length and breadth of India, inter-State arrangement and cooperation becomes imperative. The code does not provide for such eventualities.
Providing holistic social security cover for the unorganised workforce in a simple and effective manner is something lost in the Centre-State labyrinth and jurisdictional or institutional overlap.
KEY BENEFITS
Maternity benefit: Under the SS Code, the provision of maternity benefit has not been made universal. Maternity benefit is presently applicable for establishments employing 10 workers or more. The definition of ‘Establishment’ in the proposed code did not include the unorganised sector.
Hence, women engaged in the unorganised sector would remain outside the purview of maternity benefit. This obsession with thresholds of the number of workers employed was the bane of earlier labour laws too.
Employees Provident Fund: The SS Code maintains that the Employees’ Provident Fund Scheme will remain applicable, as before, to every establishment in which 20 or more employees are employed. Thus, for informal sector workers, access to employees’ provident fund remains unfulfilled too in the new code.
Payment of gratuity: Gratuity shall be payable to eligible employees by every shop or establishment in which 10 or more employees are employed, or were employed, on any day of the preceding 12 months.
But although payment of gratuity was expanded in the new Code, it still remains inaccessible for a vast majority of informal workers.
LOST OPPORTUNITY
The provision of social security could be used to formalise the workforce to a certain extent. Employers could have been made to own up to the responsibility of providing social security to their workers.
The state has a responsibility but the primary responsibility still lies with employers since they are taking advantage of workers’ productivity; but all the code does is to state that it will design schemes for informal workers as and when it deems fit.
At a time when India chairs a BRICS meeting in Delhi (preparatory to a Summit) that is focused on issues of labour, especially informality, it fails to even recognise that India is ageing without social security, and the demographic dividend of the young workforce that could support the ageing ends in 15 years.