CHALLENGES AND SOLUTIONS FOR IMPLEMENTING SOCIAL SECURITY FOR UNORGANIZED WORKERS IN INDIA: A CRITICAL ANALYSIS OF THE CODE ON SOCIAL SECURITY, 2020  AUTHORED

ADV. ARPITA RANJAN; ADV. AMAN YADAVA

Published Paper

Article Details

CHALLENGES AND SOLUTIONS FOR IMPLEMENTING SOCIAL SECURITY FOR UNORGANIZED WORKERS IN INDIA: A CRITICAL ANALYSIS OF THE CODE ON SOCIAL SECURITY, 2020

AUTHORED BY - ADV. ARPITA RANJAN,

Ph.D. Researcher, University of Lucknow,

CO-AUTHOR - ADV. AMAN YADAVA,

M.A., Babasaheb Bhimrao Ambedkar University, Lucknow

Abstract

Social security, recognized as a universal human right, is crucial for maintaining the dignity and standard of living of workers, providing them with essential benefits such as medical care, unemployment support, old-age pensions, maternity leave, and more. This article highlights the provisions of international conventions, such as the International Labour Organisation’s Social Security (Minimum Standards) Convention, 1952 (No. 102)[1], which delineates nine principal branches of social security. In India, the Code on Social Security, 2020 amalgamates nine previous laws to provide comprehensive coverage for organized, unorganized, gig, and platform workers.[2]

The unorganized sector, which comprises approximately 38 crore workers, faces significant challenges in accessing social security benefits.[3] The lack of legal protection and awareness contributes to their exploitation and marginalization, further exacerbated during crises like the COVID-19 pandemic. The article emphasizes the need for effective legal frameworks to safeguard these workers’ rights, including access to medical care, maternity benefits, and old-age pensions. Key provisions of the Code, such as the Employee Provident Fund Scheme, maternity benefits, and gratuity,[4] are discussed to underscore the enhanced protection it offers. However, the effective implementation of these provisions remains critical to ensuring workers receive their rightful benefits.

The research paper concludes with a call for greater government action to raise awareness among unorganized workers about their rights under the Code and to ensure proper implementation of the law. By improving the social security net, India can enhance the quality of life for millions of workers and contribute to economic stability and industrial harmony.

Keywords: Social Security, Code on Social Security 2020, Unorganised Workers, Gig Workers, Platform Workers, Labour Rights, Maternity Benefits, Employee Provident Fund, Gratuity, International Labour Organisation (ILO)

1. INTRODUCTION

Labour law encompasses the body of laws, administrative rulings, and precedents that address the legal rights and restrictions of working people and their organizations. It mediates various aspects of the relationship between trade unions, employers, and employees, defining their rights and obligations within the workplace. In essence, labour law covers[5] :

· Industrial relations: Including the certification of unions, labour management relations, collective bargaining, and unfair labour practices.

· Workplace health and safety.

· Employment standards: Such as general holidays, annual leave, working hours, unfair dismissals, minimum wage, layoff procedures, and severance pay.[6]

Labour law is divided into two broad categories collective labour law and individual labour law, Collective labour law relates to the tripartite relationship between employee, employer, and union; Individual labour law concerns with employees’ rights at work and through the contract for work.

The term “unorganized worker” is defined under the Unorganized Workers’ Social Security Act, 2008, as a home-based worker, self-employed worker, or wage worker in the unorganized sector. This definition also includes workers in the organized sector who are not covered by any of the acts listed in Schedule II of the Act, which encompasses:

The Employee’s Compensation Act, 1923
The Industrial Disputes Act, 1947
The Employees’ State Insurance Act, 1948
The Employees Provident Funds and Miscellaneous Provisions Act, 1952
The Maternity Benefit Act, 1961
The Payment of Gratuity Act, 1972

The Indian economy is characterised by the existence of a vast majority of informal or unorganised labour employment. As per a survey carried out by the National Sample Survey Organisation (NSSO) in 2009–10, the total employment in the country was of 46.5 crore comprising around 2.8 crore in the organised and the remaining 43.7 crore workers in the unorganised sector.[7] Out of these workers in the unorganised sector, there are 24.6 crore workers employed in agricultural sector, about 4.4 crore in construction work and remaining in manufacturing and service.[8]

The Indian Economy is characterized by the existence of a vast majority of informal or unorganized labour employment. As per the Economic Survey 2007-08, 93% of India’s workforce include the self-employed and employed in unorganized sector. The Ministry of Labour, Government of India, has categorized the unorganized labour force under four groups in terms of Occupation, nature of employment, specially distressed categories and service categories.[9]

· Under Terms of Occupation - Small and marginal farmers, landless agricultural labourers, share croppers, fishermen, those engaged in animal husbandry, beedi rolling, labelling and packing, building and construction workers, leather workers, weavers, artisans, salt workers, workers in brick kilns and stone quarries, workers in saw mills, oil mills, etc. come under this category.

· Under Terms of Nature of Employment- Attached agricultural labourers, bonded labourers, migrant workers, contract and casual labourers come under this category.

· Under Terms of Specially Distressed Category- Toddy tappers, scavengers, carriers of head loads, drivers of animal driven vehicles, loaders and unloaders come under this category.

· Under Terms of Service Category- Midwives, Domestic workers, Fishermen and women, Barbers, Vegetable and fruit vendors, Newspaper vendors etc. belong to this category.

In addition to these four categories, there exists a large section of unorganized labour force such as cobblers, Hamal’s, Handicraft artisans, Handloom weavers, Lady tailors, physically handicapped self-employed persons, rickshaw pullers, auto drivers, sericulture workers, carpenters, tannery workers, Power loom workers and Urban poor.

Though the availability of statistical information on intensity and accuracy varies significantly, the extent of unorganized workers is significantly high among agricultural workers, building and other construction workers and among home based workers. According to the Economic Survey 2007-08 agricultural workers constitute the largest segment of workers in the unorganized sector (i.e. 52% of the total workers).[10]

As per the National Sample Survey Organization (NSSO), 30 million workers in India are constantly on the move (migrant labour) and 25.94 million women workforces has been added in the labour market from the year 2000 onwards.[11] All the more every day 13000 Indians turn 60 years and they are expected to live another average of 17 years. Unfortunately, only 10% of the Indians save for old age. The tragedy is that the existing social security legislations cover only 8% of the total work force of 459 million in India.[12]

The latest report of the NSSO uploaded by the close of May 2011 about the casual workers in India between 2004-05 and 2009-10 compared to that of the period between 1999 – 2000 and 2004-05 very clearly shows that there is significant increase in the number of casual workers and decline in the number of regular workers. This report shows a substantial shift between 1999-00 and 2009-10 in the structure of the labour force which can be broadly divided in to self-employed, regular, and casual workers.[13] (Casual workers are employees who do not enjoy the same benefits and security as tenured employees. All daily wage employees and some categories of contract employees are casual labourers.)

All these NSSO reports are clear evidences to prove that the labour market of India has been undergoing tremendous transformations, including growth of informal sector activities, deterioration in the quality of employment (in terms of job security, terms and conditions at work), Weakening of worker organizations and collective bargaining institutions, marked decline in social security etc. To a greater extent, this transformation could be related to the ongoing globalization process and the resultant efforts on the part of employers to minimize the cost of production to the lowest levels. It is also evident that most of these outcomes are highly correlated and mutually reinforcing. A closer analysis suggests that the growing informalisation of labour market has been central to most of these transformations, which inter alia highlights the utility of understanding the growth of unorganized sector in India and its implications.

Many thought that India’s growth could do no wrong, and took the administrative versions and interpretations for granted. Now it comes to a point that none of these can be taken for granted. Growth is slow, inflation is structural and structure of employment is not enough to cater to the growing labour force.

1.1 GROWING PROMINENCE OF UNORGANIZED

SECTOR IN INDIA

Predominance of informal employment has been one of the central features of the labour market scenario in India. While the sector contributes around half of the GDP of the county, its dominance in the employment front is such that more than 90% of the total workforce has been engaged in the informal economy. As per the latest estimation of a Sub-committee of the National Commission for Enterprises in the Unorganized Sector (NCEUS), the contribution of unorganized sector to GDP is about 50% (NCEUS 2008).[14]

This national level pattern of informal workers occupying around 90% of the workforce is more or less similar in the case of most of the prominent states in the country.[15] Among the unorganized sector workers, a considerable proportion (about 65%) is engaged in agricultural sector, which in turn indicates the prominence of rural segment in the informal economy.[16]

The growth of formal employment in the country has always been less than that of total employment, indicating a faster growth of employment in the informal sector. Available data suggests that within the formal sector also the proportion of informal / unorganized workers are on the increase. For instance, by providing a comparison of the NSSO Employment Data for 55th and 61st Rounds (for 1999-2000 and 2004-05 respectively) the NCEUS (2007) explains that the country is currently in a state of “informalisation of the formal sector”, where the entire increase in the employment in the organized sector over this period has been informal in nature.[17]

It is widely acknowledged that the informal sector in India suffers from a low productivity syndrome, compared to the formal sector. The prominent features of the sector are lower real wages and poor working / living conditions.

Further, the sector is characterized by excessive seasonality of employment (especially in the farm sector), preponderance of casual and contractual employment, atypical production organizations and work relations, absence of social security measures and welfare legislations, negation of social standards and worker rights, denial of minimum wages and so on. Poor human capital base (in terms of education, skill and training) as well as lower mobilization status of the work force further add to the vulnerability and weaken the bargaining strength of workers in the informal sector. Thus, the sector has become a competitive and low-cost device to absorb labour, which cannot be absorbed elsewhere, whereas any attempt to regulate and bring it into more effective legal and institutional framework is perceived to be impairing the labour absorbing capacity of the sector.

With the advent of globalization and resultant reorganization of production chains led to a situation where production systems are becoming increasingly atypical and non-standard, involving flexible workforce, engaged in temporary and part-time employment, which is seen largely as a measure adopted by the employers to reduce labour cost in the face of stiff competition. No doubt, it obviously indicates that these flexible workers in the new informal economy are highly vulnerable in terms of job security and social protection, as they are not deriving any of the social protection measures stipulated in the existing labour legislations. The insecurities and vulnerabilities of these modern informal sector labour are on the rise, as there is a visible absence of worker mobilization and organized collective bargaining in these segments owing to a multitude of reasons.

The alarming expansion of informal sector, in recent times, has adversely affected employment and income security for the larger majority of the workforce, along with a marked reduction in the scale of social welfare / security programme.

In our “global” cities such as Bangalore, which are being show-cased as the new faces of an affluent and vibrant India, there are lakhs of people who rely on manual labour for their own livelihood. The housemaids, security guards, construction workers, garment workers, cobblers, beedi workers, agarbati workers, drivers and many others have a very different story to tell. Their incomes have not grown at the staggering rate of their employers; indeed, adjusted for inflation their incomes have often fallen over the last two and half decades, driving them into deeper poverty.

1.2 THE MAJOR CHARACTERISTICS OF THE UNORGANIZED WORKERS

The unorganized labour is overwhelming in terms of its number range and therefore they are omnipresent throughout India. As the unorganized sector suffers from cycles of excessive seasonality of employment, majority of the unorganized workers does not have stable durable avenues of employment. Even those who appear to be visibly employed are not gainfully and substantially employed, indicating the existence of disguised unemployment. The workplace is scattered and fragmented. There is no formal employer – employee relationship

In rural areas, the unorganized labour force is highly stratified on caste and community considerations. In urban areas while such considerations are much less, it cannot be said that it is altogether absent as the bulk of the unorganized workers in urban areas are basically migrant workers from rural areas. Workers in the unorganized sector are usually subject to indebtedness and bondage as their meagre income cannot meet with their livelihood needs.

The unorganized workers are subject to exploitation significantly by the rest of the society. They receive poor working conditions especially wages much below that in the formal sector, even for closely comparable jobs, i.e., where labour productivity is no different. The work status is of inferior quality of work and inferior terms of employment, both remuneration and employment.

Primitive production technologies and feudal production relations are rampant in the unorganized sector, and they do not permit or encourage the workmen to imbibe and assimilate higher technologies and better production relations. Large scale ignorance and illiteracy and limited exposure to the outside world are also responsible for such poor absorption. The unorganized workers do not receive sufficient attention from the trade unions. Inadequate and ineffective labour laws and standards relating to the unorganized sector.

A. UNORGANIZED WORKERS, GIG WORKERS, AND PLATFORM WORKERS

Unorganized, gig, and platform workers face similar challenges. Over 90% of Indian workers are in the informal sector, lacking social security benefits and facing job insecurity. The gig economy often bypasses labour laws, minimizing corporate liability concerning workers’ rights. Definitions of these workers in new codes overlap, potentially complicating code implementation. The Code on Social Security does not clearly define benefits and entitlements for such workers and lacks a unified registration process and compliance platform.

B. INVISIBLE LABOUR AND GENDER INEQUALITY

Invisible labour, often unpaid, includes childcare, household work, and elder care, predominantly performed by women. The new codes do not address invisible labour, which is unrecognized, unregulated, and burdensome. The National Statistical Office’s 2019 survey showed that 53.2% of respondents engaged in unpaid domestic services, with higher participation by women, particularly in rural areas. The pandemic increased the burden on invisible labour, with no recognition or relief.

C. MIGRANT WORKERS AND THE CONSEQUENCE OF THE COVID-19 PANDEMIC

Migrant workers, defined by the International Labour Organization (ILO) as those migrating for employment, faced severe hardship during the COVID-19 pandemic. The lockdown forced many to return home, often on foot, with inadequate food and shelter. The Code on Occupational Safety, Health, and Working Conditions defines interstate migrant workers but specifies only those earning a maximum of Rs 18,000 per month. The Niti Aayog’s draft on Migrant Labour Policy aims to recognize migrants’ contributions and support them, proposing a new National Migration Policy and a special unit within the Labour Ministry.

The Periodic Labour Force Survey Report (2018-19) indicates that 70% of regular wage or salaried employees in the non-agricultural sector lacked a written contract, and 52% had no social security benefits. The existing labour laws do not encourage the growth of labour-intensive sectors. The new labour codes address past demands and discrepancies but require timely and proper implementation. They should also address future challenges related to automation, artificial intelligence, and bioengineering to protect workers’ right.

2. DEFINING SOCIAL SECURITY

The concept of social security has evolved significantly over the years. Its earliest notable mention can be traced back to the Beveridge Committee Report in 1942, where it was defined as “freedom from want.”[18] At that time, the focus of social security provisions was limited to maintaining employment, children’s allowances, and comprehensive health services (Majumdar & Borbora, 2013). This initial understanding of social security laid the groundwork for future discussions and developments in the field.

In 1952, the International Labour Organisation (ILO) expanded the concept, proposing a more nuanced understanding of social security as protective measures against social and economic distress.[19] The ILO identified key protective measures, such as safeguards against abrupt income reductions or stoppages due to sickness, maternity, employment injury, unemployment, disability, old age, and death, alongside provisions for medical care (ILO, 1952). However, this approach faced criticism for its limited applicability, particularly in developing countries. Critics argued that it primarily reflected the experiences of developed nations.[20]

In contrast, developing countries often contend with a larger informal sector, heightened poverty levels, and lower industrialization, necessitating a broader conception of social security. Jean Drèze and Amartya Sen posited that in the context of developing nations, social security should be understood more as pro-poor measures implemented through public means.[21] Consequently, in countries like India, social security can be categorized into three primary approaches:

1. Promotional Measures: These initiatives aim to augment income, exemplified by the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

2. Preventive Measures: These are designed to forestall economic distress, such as Provident Funds (PF).

3. Protective Measures: These ensure relief from external shocks, such as compensation through insurance schemes in cases of injury or death of a primary breadwinner.

Despite the substantial size of India’s informal sector, many social security provisions are largely restricted to formal employment. Before delving into the state of social security in the informal sector and its associated challenges, it is essential to clarify what is meant by “informality” and examine key statistics that highlight the scope and significance of the informal labour market in India.

2.1 INFORMALITY IN THE CONTEXT OF THE LABOUR MARKET

2.1.1 A Global Perspective

The relationship between social protection and informality is intricate and complex. Early attempts to conceptualize informality were primarily focused on the characteristics of production units or enterprises, categorizing them as either informal or formal. In 1993, the 15th International Conference of Labour Statisticians (ICLS), convened by the ILO, defined informal enterprises as those operated by proprietors or partnerships without a complete set of accounts, producing goods or services for barter or sale (ILO, 1993).[22]

However, this definition later faced criticism for neglecting informal jobs available even within formal enterprises. In response, the 17th ICLS in 2003 introduced the term “informal employment” to encompass the condition of individuals and their work.[23] It delineated key characteristics of informal labourers, which included:

1. Own-account labourers working in informal enterprises (as defined by the 15th ICLS).

2. Employees with informal jobs in both informal and formal sectors.

Jobs were classified as informal if their employment relationship was, in law or practice, exempt from labour legislation, income taxation, social protection, or entitlement to specific employment benefits (ILO, 2003). Since then, these definitions have served as global standards for defining informality, even though countries are encouraged to refine these definitions based on their labour market characteristics and data availability.

The interconnectedness of informality and social security became more pronounced with the ILO’s Recommendation Number 204 (R204), which emerged over a decade later in 2015.[24] This recommendation called for policy initiatives employing a consultative approach involving all stakeholders to assist economies in transitioning from informality to formality. It emphasized the necessity of establishing national social protection floors that focus on the informal labour market and advocated for progressively extending social protection measures—such as maternity benefits and the right to a sustainable minimum wage—to all informal workers. As a member country of the ILO and a key contributor to global statistical definitions of informal sector indicators, India has adhered to the definitions established by the 15th and 17th ICLS. Since 1993, all-India representative household surveys, conducted by the National Sample Survey Office (NSSO) under the Ministry of Statistics and Programme Implementation (MoSPI), have served as the primary data source for estimating the extent of informality in India’s labour market.[25] The Periodic Labour Force Surveys (PLFS) have replaced these surveys starting in 2017-18, with modifications made to the design.

2.1.2 Informality in The Indian Labour Market

India’s total workforce can be analysed through two dimensions: (a) the sector of work, based on the type of enterprise or production unit where the person is employed, and (b) the type of employment, defined by employment status and other job-related characteristics. The sector of work can be further divided into three categories: the formal (or organized) sector, the informal (or unorganized) sector, and the household sector. Meanwhile, employment types can be categorized as formal and informal.

According to the PLFS data from June 2018 to July 2019, a striking 80 percent of India’s workforce was engaged in the informal sector, while only 20 percent was employed in the formal sector, with a small proportion (1 percent) engaged in the household sector.[26] Notably, when considering all three sectors, approximately 90.3 percent of the total workforce was involved in informal employment in 2018-19.[27] Alarmingly, 9.5 percent of workers held informal jobs even while employed in the formal sector.

Figure 1.1 Share of total workers in India across type of employment and sector(2018-19)

Authors’ estimates based on ‘Periodic Labour Force Survey’ (PLFS), 2018-19, NSO, MoSPI[28]

To examine the provision of social security by employers, we focus on a subset of workers, namely regular salaried earners and casual labourers in the non-agriculture sector and Agricultural Sector Excluding Growing of Crops (AGECE).[29] This focus is warranted because the PLFS collects information on access to social security exclusively for this group, excluding self-employed individuals who cannot be attached to any specific employer.

Figure 1.2 Regular salaried earners and casual labourers with access to social security, and other benefits.

Source: Authors’ estimates based on ‘Periodic Labour Force Survey’ (PLFS), 2018-19, NSO, MoSPI and ‘Employment and Unemployment Survey’, 2011-12, 68th round, NSSO, MoSPI.[30]

In 2018-19, a majority of these workers did not have any social protection from their employers. Specifically, only 19 percent had a written job contract, and about 29 percent were eligible for paid leave. In terms of social security benefits, only 26 percent were eligible for one or more types of benefits, including Provident Fund (PF), pension, gratuity, healthcare benefits, and maternity benefits. Notably, 35 percent of urban workers were eligible for these benefits, compared to only 17 percent in rural areas. Between 2011-12 and 2018-19, access to social security benefits saw a slight increase from 23 percent to 26 percent, while the share of workers eligible for paid leave or holding written job contracts showed negligible change. In urban areas, there was even a decline of 4 percentage points in the proportion of workers with written job contracts during this period, indicating that labour market policies have not effectively focused on transitioning toward formal employer-employee relationships[31].

Figure 1.3 Distribution of informal workers in India across type of employment and place of residence (2018-19)

Estimates based on Periodic Labour Force Survey (PLFS), July 2018 to June 2019, NSO, MoSPI[32]

Among regular salaried workers, approximately 53 percent did not receive any social security benefits from their employers in 2018-19, highlighting the prevalence of informal jobs even within this category.[33] The situation for casual labourers and self-employed individuals is particularly precarious concerning social security access.

Nationally, a substantial share of informal workers in 2018-19 was self-employed (58 percent), followed by casual labourers (26 percent) and regular salaried earners (16 percent). The self-employed can be further categorized into own-account workers, employers, and unpaid family workers, with the majority being own-account workers in household enterprises (41 percent of the total).[34] Additionally, 15 percent of informal workers contributed to family-based enterprises without receiving formal payment.

In urban areas, nearly half of informal workers were self-employed, with 35 percent being regular salaried workers.[35] This distribution reflects the challenges posed by the informal labour market in India and underscores the urgent need for comprehensive social security reforms that address the unique circumstances of informal workers.

The evolution of social security, particularly in the context of developing countries like India, underscores the need for a more inclusive and expansive approach to protect workers in the informal sector. The current landscape reveals significant gaps in social security provisions, particularly for those engaged in informal employment. As the world continues to grapple with changing labour dynamics.

3. EVOLUTION OF LABOUR LAWS: INTERNATIONAL PERSPECTIVE

Labour law emerged from the demands of workers for better conditions and the right to organize, alongside employers’ efforts to restrict these powers and control labour costs. Employers’ costs can increase due to workers organizing for higher wages or laws imposing requirements for health, safety, and equal opportunities. Workers’ organizations, such as trade unions, can also extend beyond industrial disputes to gain political power, which some employers may oppose. The state of labour law is thus both a product and a component of societal struggles between different interests.

The International Labour Organisation (ILO) was one of the first organizations to address labour issues, established as an agency of the League of Nations following the Treaty of Versailles, which ended World War I.[36] The ILO’s founding was influenced by various international efforts to protect labour unions and improve labour conditions during and after the war.

In Great Britain, the Whitley Commission recommended the establishment of “industrial councils,” and the British Labour Party proposed a reconstruction program advocating for labour rights.[37] Similarly, the American Federation of Labor (AFL) and other international organizations called for an international labour rights body. Despite differing visions, the ILO was created to enact and enforce legislation to protect workers and trade unions, marking the beginning of a concerted international effort to standardize and improve labour conditions.

The ILO’s first annual conference in 1919 adopted key International Labour Conventions on hours of work, unemployment, maternity protection, night work for women, minimum age, and night work for young persons in industry.[38] Since then, the ILO has continued to play a pivotal role in shaping labour laws worldwide, including in India, where labour law has evolved to address the specific needs and challenges of its workforce.

3.1 INTERNATIONAL LABOUR STANDARDS AND THEIR IMPACT ON WORKERS’ RIGHTS

International labour standards are crucial legal instruments developed by the International Labour Organization (ILO) through the collaboration of its tripartite constituents, which include governments, employers, and workers. These standards manifest as conventions and recommendations, adopted annually at the International Labour Conference in Geneva, where a tripartite committee meticulously discusses the text line by line over a two-year period. Once consensus is achieved, the text is presented for adoption at the conference. While international labour conventions are created under international law and become binding once ratified by member states, recommendations serve as non-binding guidelines to orient national policy and practices.

A convention comes into force after a minimum number of member states ratify it, typically requiring two ratifications, with the convention becoming part of binding international law 12 months post-ratification. However, ratification is a voluntary process; a country is not compelled to ratify merely because it voted in Favor of the convention. Once ratified, a country commits to applying the convention’s provisions, adapting national laws, and accepting international supervision. The system allows for representations about alleged non-compliance, enabling investigation and action regarding complaints raised by other ratifying states or worker and employer organizations. By the end of 2013, the ILO had adopted 189 conventions and 202 recommendations, with a significant proportion of ratifications coming from emerging and developing countries.[39]

Among the conventions, a subset is recognized as “fundamental” or “core labour standards,” representing basic human rights. The 1998 Declaration on Fundamental Principles and Rights at Work asserts that all member states, regardless of whether they have ratified specific conventions, are obligated to uphold these fundamental rights,[40] which include freedom of association and collective bargaining, the elimination of forced labour, the abolition of child labour, and the eradication of discrimination in employment and occupation. These principles have been widely accepted and are integrated into the United Nations Global Compact.[41]

A vital component of the ILO’s standard-setting mechanism is its supervisory framework[42]. Countries that ratify ILO conventions are required to report regularly on their implementation efforts. These reports are also solicited for unratified conventions, providing insight into national law and practices. Governments must submit their reports to both employers’ and workers’ organizations, which are then invited to comment and provide feedback.

The Committee of Experts on the Application of Conventions and Recommendations (CEACR), established in 1926,[43] plays a pivotal role in examining these reports. Comprised of 20 eminent lawyers from diverse legal backgrounds, the CEACR evaluates compliance with international labour standards and provides impartial technical assessments. The Committee issues two types of comments: observations, which address specific application issues and are published in annual reports, and direct requests, which are more technical inquiries communicated privately to governments.[44]

A special procedure exists for addressing violations of the right to organize through the Committee on Freedom of Association (CFA).[45] This tripartite committee investigates complaints about infringements of trade union rights, even if the pertinent conventions have not been ratified. The CFA’s findings and recommendations aim to rectify violations and promote adherence to freedom of association standards.

In addition to the ILO’s framework, the UN Guiding Principles on Business and Human Rights have emerged to address the negative impacts of business activities on human rights.[46] Adopted unanimously by the UN Human Rights Council in 2011, these principles outline a “Protect, Respect, and Remedy” framework consisting of three pillars.[47] The first pillar asserts the state’s duty to protect against human rights abuses by third parties, including businesses, through appropriate regulations and adjudication. The second emphasizes that businesses are responsible for respecting human rights, necessitating measures to avoid infringing on the rights of others and addressing adverse impacts. The third pillar calls for effective access to remedies for victims of human rights violations.

International labour standards and the UN Guiding Principles provide essential frameworks for promoting and protecting workers’ rights globally. They establish legal obligations for states and businesses to foster safe and equitable working conditions while holding them accountable for violations, thereby contributing to the ongoing discourse on labour rights and human dignity.

3.2 EVOLUTION OF LABOUR LAW IN INDIA

3.2.1The Historical Roots of Slavery and Labor

The origins of labour, worker conditions, and slavery are deeply intertwined with historical contexts that vary significantly across different regions, including India. Understanding this complex background necessitates an examination of the evolution of labour practices, the emergence of organized work, and the socio-economic structures that shaped the workforce throughout history.

In ancient civilizations like Mesopotamia, Egypt, and China, organized labour was primarily linked to agricultural practices.[48] Peasants worked the land under the authority of rulers or landowners, often enduring harsh conditions. Various forms of slavery were prevalent, with enslaved individuals performing a range of tasks, from agricultural labour to construction and domestic work. In ancient Greece and Rome, slavery was integral to the social and economic frameworks, where enslaved people were employed in agriculture, mining, and as domestic servants. Free labour also existed, with craftsmen and artisans engaging in diverse occupations.[49]

The medieval period saw the rise of feudalism in Europe, where serfs laboured on land owned by landlords in exchange for protection, effectively tying the workforce to the land. The Age of Exploration and the subsequent colonization marked a brutal expansion of the modern slave trade, resulting in millions of Africans being forcibly transported to the Americas to work on plantations. In the Indian context, the varna and caste system played a critical role in defining occupations and labour roles, with specific responsibilities assigned to each caste. During the British colonial era, these systems were further complicated by the introduction of new economic policies that shifted agricultural practices toward cash crops, leading to widespread exploitation of both skilled and unskilled Indian labour.

After gaining independence, India underwent significant economic and industrial changes, with the government actively shaping labour laws to protect workers’ rights. This period marked the formalization of labour unions and the establishment of regulatory frameworks aimed at improving working conditions.

3.2.2 Post-independence Labour Law Acts in India

Dr. B.R. Ambedkar’s vision for labour liberation reflects a profound commitment to social justice and economic empowerment. Recognized as a principal architect of the Indian Constitution, Ambedkar tirelessly advocated for the marginalized, understanding the essential link between labour liberation and the broader goal of emancipation from discrimination and inequality.[50] His vision encompassed both legal and economic aspects of labour, aiming to dismantle entrenched social hierarchies.

Ambedkar emphasized the necessity for comprehensive labour reforms that would uplift the downtrodden, particularly the Dalits and other marginalized communities. His advocacy went beyond mere economic participation; it aimed for the overall empowerment of individuals through equal opportunities, fair wages, and dignified working conditions. Dr. Ambedkar’s conception of labour liberation underscores the importance of social dignity, challenging the historical oppression faced by marginalized groups.

Labour law in India, also known as industrial law, has evolved significantly over time, deeply intertwined with British colonialism. Early industrial and labour legislations enacted by the British were primarily aimed at protecting the interests of British employers, with the political economy of Britain shaping these laws.[51] For instance, the Factories Act was introduced in 1883 due to pressure from textile magnates in Manchester and Lancashire, aiming to make Indian labour more expensive to curb competition from Indian textiles in the export market. This act introduced significant welfare measures such as the stipulation of eight-hour workdays, the abolition of child labour, restrictions on women’s night employment, and overtime wages for work beyond eight hours. While these measures had welfare implications, their primary motivation was protectionist.

The earliest Indian statute to regulate the relationship between employers and workers was the Trade Dispute Act, 1929 (Act 7 of 1929)[52]. This act included provisions to restrain the rights to strike and lockout but did not provide machinery to address disputes.

Post-independence, the original colonial legislation underwent substantial modifications to reflect the needs of independent India, which called for a clear partnership between labour and capital. In a tripartite conference in December 1947, it was agreed that labour would receive fair wages and working conditions, while capital would get the fullest cooperation of labour for uninterrupted production and higher productivity.[53] This partnership was part of the national economic development strategy, and all parties agreed to a three-year truce free from strikes and lockouts. Consequently, the Industrial Disputes Act, enacted on April 1, 1947, replaced the Trade Disputes Act, 1929, and remains a cornerstone of Indian labour law.

3.3 CONSTITUTIONAL PROVISIONS REGARDING LABOUR LAWS

The Indian Constitution underscores the dignity of human labour and the need to protect the interests of labour as human beings, which align with the Fundamental Rights and Directive Principles of State Policy, reflected in Chapter III (Articles 16, 19, 23, and 24) and Chapter IV (Articles 39, 41, 42, 43, 43A, and 54).[54]

Labour is a concurrent subject in the Indian Constitution, meaning both the Union and State governments can legislate and administer labour matters.

The Constitution provides detailed provisions for citizens’ rights and outlines the Directive Principles of State Policy, which guide the activities of the state. These principles aim to:

a) Secure the health and strength of employees, both men and women.

b) Prevent the abuse of children’s tender age.

c) Ensure that citizens are not forced by economic necessity into unsuitable vocations.

d) Provide just and humane working conditions and maternity relief.

e) Encourage the participation of employees in the management of industrial undertakings through suitable legislation or other means.

3.3.1 Constitutional Provisions Guaranteeing Protection to Labor Laws

The key articles of the Indian Constitution that provide protections, support, and guidelines for various labour laws, ensuring their effective implementation and functioning. These articles include Articles 14, 16, 19(1)(c), 21, 23, 24, 35, 38, 39, 39A, 41, 42, 43, 43A, 46, 47, 32, 226, and 227.

Right to Equality: Article 14 establishes the principle of equality before the law, meaning no special privilege should be granted based on birth, creed, or other factors. This provision implies that all individuals and classes are subject to the same laws, ensuring equal treatment under similar circumstances.[55] The Supreme Court has affirmed this principle in cases like Randhir Singh v. Union of India, recognizing that while the principle of “equal pay for equal work” is not explicitly a fundamental right, it is a constitutional goal derived from Articles 14, 16, and 39(c). This right can be enforced against irrational classifications in pay scales.

In Dhirendra Chamoli v. State of U.P.[56], the court ruled that casual workers performing the same tasks as regular employees were entitled to equal pay and benefits, reinforcing the notion that unequal treatment based on employment status violates Article 14. The case Daily Rated Casual Labour v. Union of India further elaborated that classification between regular and casual employees for the purpose of pay is unconstitutional if it does not reflect actual differences in responsibilities and roles. The court also pointed out that the state, as a model employer, should not exploit its dominant position.

Article 19(1)(c): Right to Form Associations: Article 19(1)(c) guarantees citizens the fundamental right to form associations and unions. While this right allows for the formation of trade unions and political parties, it can be restricted by the state under clause (4) for reasons related to public order or morality[57]. The Supreme Court in Damayanti v. Union of India[58] emphasized that the right to form an association includes the right to continue that association with voluntarily admitted members. In Balakotiah v. Union of India,[59] the termination of a trade unionist for membership in a political party was upheld, illustrating that while individuals can form associations, they do not have an absolute right to employment in government services.

Article 21: Right to Life: Article 21 expands the definition of ‘life’ to include the right to livelihood[60]. The Supreme Court in Maneka Gandhi’s case interpreted the right to ‘live’ as more than mere existence, encompassing the right to live with dignity and the means necessary for a fulfilling life[61]. This view was reiterated in Francis Coralie v. Union Territory of Delhi,[62] where the court stated that the right to live must include basic necessities such as adequate nutrition, clothing, and shelter.

The court ruling in Olga Tellis v. Bombay Municipal Corporation reinforced that the right to life encompasses the right to livelihood.[63] The court stated that deprivation of livelihood equates to deprivation of life itself, thus linking Article 21 directly with Articles 39(a) and 41, which require the state to secure adequate means of livelihood.

In D.K. Yadav v. J.M.A. Industries, the Supreme Court clarified that Article 21’s right to life includes the right to livelihood, and the termination of employment without due process violates this right.[64] The decision emphasized that any procedure depriving a person of their livelihood must be just, fair, and not arbitrary, aligning with the principles of natural justice.

The principles enshrined in Articles 39(a) and 41 of the Indian Constitution are fundamental in understanding and interpreting the scope of fundamental rights.[65] Article 39(a) mandates the State to ensure that citizens have adequate means of livelihood, while Article 41 emphasizes the right to work. Thus, it would be simplistic to exclude the right to livelihood from the broader interpretation of the right to life under Article 21. Although the State is not strictly obliged to provide every citizen with a means of livelihood or employment through affirmative action, any individual deprived of their livelihood—except through a just and fair legal process—may challenge such deprivation as a violation of their right to life.

In the landmark case of State of Maharashtra v. Manubhai Pragaji Vashi,[66] the Supreme Court significantly broadened the scope of the right to free legal aid, asserting that it and the right to a speedy trial are fundamental rights under Article 21. Article 39A underscores the need for “equal justice” and “free legal aid,” which are vital to upholding the rule of law in a democratic society. The article emphasizes that the State must ensure that justice is accessible to all citizens, irrespective of their economic or social conditions, and requires legislation or schemes to facilitate free legal aid. This necessity for legal education to meet society’s demands calls for a robust network of law colleges, including private institutions, with financial support from the State to maintain educational standards. The Court mandated the State to provide grants-in-aid to private law colleges, emphasizing that quality legal education is essential for ensuring access to justice for all citizens.[67]

The interplay between Articles 21, 23, 24, and the Directive Principles of State Policy (Articles 38, 39, 39A, 41, 42, 43, 43A, and 47) illustrates the responsibility of the State—both at the Central and State levels—to provide for labour rights and to secure living wages, ensuring the dignity of workers in alignment with the nation’s economic conditions.

Article 23 explicitly prohibits “traffic in human beings” and forms of forced labour, with any contravention punishable under the law.[68] While it does allow for compulsory services for public purposes, such provisions must not discriminate based on religion, race, caste, or class. The term “traffic in human beings” encompasses a range of abuses, including slavery and the immoral trafficking of women and children. Although not explicitly mentioned, slavery falls under this definition. Parliament has enacted laws, such as the Suppression of Immoral Traffic in Women and Girls Act, 1956,[69] to address these violations. Article 23 protects individuals from both State and private actions and imposes a positive obligation on the State to eliminate practices of forced labour and trafficking.

In Peoples Union for Democratic Rights v. Union of India, the Supreme Court clarified that Article 23 has a broad scope, prohibiting not only “begging” but all forms of forced labour. This includes work done under compulsion, regardless of whether it is compensated. The Court underscored that forced labour violates human dignity and fundamental human rights, a stance supported by various international human rights instruments.

In Sanjit Roy v. State of Rajasthan, the Court ruled that paying less than the minimum wage for labour during famine relief efforts violated Article 23. Similarly, in Deena v. Union of India, the Court recognized that labour extracted from prisoners without proper remuneration constituted “forced labour,” affirming the right of prisoners to fair wages for their work.

3.3.1 (1) Protection of Children in Employment: A Constitutional Perspective

Article 24 of the Indian Constitution explicitly prohibits the employment of children below 14 years of age in factories and hazardous occupations.[70] This provision is designed to safeguard the health and safety of children, recognizing them as invaluable assets of the nation. To reinforce this protection, Article 39 mandates the State to ensure that the health and strength of workers—especially children—are not exploited and that no citizen is compelled by economic necessity to engage in work unsuitable for their age or physical capacity.[71]

In the landmark case of People’s Union for Democratic Rights v. Union of India,[72] the Supreme Court addressed the applicability of the Employment of Children Act, 1938, concerning the employment of children in construction projects, such as those for the Asiad in Delhi. The Court rejected the argument that construction work was not a specified process under the Children Act, emphasizing that such employment is inherently hazardous. Justice Bhagwati highlighted this ‘sad and deplorable omission’ and urged the State Government to amend the Act to include construction work, thereby ensuring compliance with the constitutional mandate of Article 24.[73]

Similarly, in M. C. Mehta v. State of Tamil Nadu, the Supreme Court reaffirmed that children under 14 years cannot be employed in any hazardous industry.[74] The Court laid down comprehensive guidelines for State Authorities to protect the economic, social, and humanitarian rights of millions of children who are illegally working in various sectors. The directives included:[75]

1. Conducting a survey of child labour within six months.

2. Identifying nine specific industries, including match and diamond polishing industries, for prioritization.

3. Ensuring that any employment offered is in close proximity to the child’s residence and is manual in nature.

4. Providing financial support of Rs. 25,000 to the family of the child in cases where no alternative employment is available for an adult family member, contingent upon the child’s education.

5. Guaranteeing free education until the child reaches 14 years, as mandated by Article 45 of the Constitution.

6. Requiring the Secretary of the Ministry of Labour to report back to the Court within a year regarding compliance with these directives.

The essence of fundamental rights is rendered meaningless without an effective mechanism for their enforcement. Thus, the Constitution’s architects recognized the necessity of remedies, as articulated in Article 32, which guarantees the right to seek enforcement of these rights. Article 226 further empowers High Courts to issue writs for this purpose.[76] Article 32(1) allows any individual to approach the Supreme Court through “appropriate proceedings” for redressal, with the Court having the discretion to issue necessary directions or writs under Article 32(2).

The traditional principle of locus standi, which limited petitions under Article 32 to individuals directly affected, has evolved. The Supreme Court now permits public interest litigations (PILs) initiated by public-spirited citizens to advocate for the constitutional and legal rights of those unable to seek relief due to poverty or social disadvantage.

Articles 38, 39, 39-A, 41, 42, 43, 43-A, and 47 of the Constitution embody the Directive Principles of State Policy.[77] Although not enforceable in a court of law, these principles are fundamental in governance, obligating the State to apply them in legislative processes. They emphasize the promotion of social welfare, justice, and humane working conditions for all citizens.

In light of evolving societal norms, the interpretation of community interests has broadened, reflecting a shift from individual to collective rights. The Directive Principles, while not justiciable, guide courts in ensuring the enforcement of fundamental rights. They form the conscience of the Constitution, aiming to create a synthesis between Fundamental Rights and Directive Principles.

The interpretation of Articles 39(a) and 41 as fundamental to understanding the essence of fundamental rights is supported by Justice Chinnappa Reddy’s observations in Randhir Singh v. Union of India,[78] where he stated that “equal pay for equal work,” as proclaimed in Article 39(d), should be considered a principle derived from the fundamental rights enshrined in Articles 14 and 16.

Pursuant to Article 39(d), the Parliament enacted the Equal Remuneration Act, 1976. Although the principle of equal pay for equal work is not a fundamental right, the Supreme Court in Randhir Singh v. Union of India recognized it as a constitutional objective enforceable under Article 32. The doctrine applies equally to daily wage workers. However, it allows for reasonable classifications based on legitimate criteria related to the nature of work.

Article 43 emphasizes the State’s role in enabling worker participation in management and ensuring a living wage, as opposed to merely a minimum wage, which encompasses basic necessities and provisions for education and insurance.[79]

Article 45 mandates the State to ensure free and compulsory education for children until the age of 14, aiming to eliminate illiteracy. The Supreme Court, in Unni Krishnan v. State of A.P., ruled that the right to education up to this age is a fundamental right under Article 21.[80]

Article 47 compels the State to enhance nutrition, living standards, and public health, advocating for the prohibition of intoxicants. Article 46 focuses on the educational and economic advancement of the marginalized, particularly Scheduled Castes and Tribes, protecting them from exploitation.[81]

Article 39-A aims to ensure that the legal system promotes justice and provides free legal aid to economically disadvantaged individuals. This article was introduced to further legal support for underprivileged communities.[82]

Articles 226 and 227 empower the High Court to supervise inferior courts. The High Court’s jurisdiction is not unlimited; it acts with restraint, only intervening in cases of grave injustice or legal violation. Key principles governing this supervisory power include:[83]

1. Limited Intervention: The High Court will not intervene simply due to an erroneous decision unless there’s a significant miscarriage of justice.

2. No Appellate Function: The Court does not reweigh evidence or make findings of fact but reviews for jurisdictional errors or violations of natural justice.

3. Grounds for Interference: Interference may occur in cases of jurisdictional excess, failure to exercise jurisdiction, or procedural violations.

4. Certiorari Issuance: Certiorari may correct jurisdictional errors or illegal actions but requires manifest errors in law on the record.

5. Supervisory Role: The court’s role is supervisory, not appellate, meaning it will not re-evaluate factual determinations by lower tribunals.

4. CODE ON SOCIAL SECURITY, 2020: OVERVIEW

The Code on Social Security, 2020[84] (hereinafter referred to as the COSS Code subsumes the following key enactments:[85]

1. Employees’ Compensation Act, 1923

2. Employees’ State Insurance Act, 1948

3. Employees’ Provident Funds and Miscellaneous Provisions Act, 1952

4. Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959

5. Maternity Benefit Act, 1961

6. Payment of Gratuity Act, 1972

7. Cine-Workers Welfare Fund Act, 1981

8. Building and Other Construction Workers Welfare Cess Act, 1996

9. Unorganised Workers’ Social Security Act, 2008

4.1 SALIENT FEATURES

· The COSS Code applies to every establishment, subject to a minimum threshold of employees.

· Establishments must register within a prescribed time frame as mandated by the Central Government.

· Employers are required to maintain records that include details such as hours worked, wages paid, and leave entitlements.

· Employers must issue wage slips to employees and file returns, either electronically or otherwise, before the authorized officer.

a. Employees’ Provident Fund (EPF)

Applicability: The EPF provisions apply to establishments with 20 or more employees.

· Contributions: Employer: Required to contribute 10% of wages to the provident fund.

· Employee: Similarly required to contribute 10% of wages.

· The employee may opt to contribute more than 10%, but the employer is not obligated to match this excess.

· The Central Government may increase the contribution rate to 12% for specific establishments.

· Self-employed Workers: The Central Government may establish schemes to provide social security benefits to self-employed individuals.

b. Employees’ State Insurance Corporation (ESIC)

Applicability: ESIC provisions apply to establishments with 10 or more employees and to those in hazardous occupations.

· Insured Persons: All employees in applicable establishments must be insured.

· Contributions: Employers are responsible for contributing to the ESIC, which they may recover from employees’ wages.

· In case of employer default in payment, the Corporation may still provide benefits to employees, later recovering costs from the employer.

c. Gratuity

Applicability: Gratuity provisions apply to factories, mines, and establishments with 10 or more employees.

· Eligibility: Employees are entitled to gratuity after 5 years of continuous service. For journalists, the requirement is 3 years.

· Gratuity is payable at a rate of 15 days’ wages for each completed year of service.

d. Maternity Benefit

Applicability: Maternity benefits apply to factories, mines, and establishments with 10 or more employees.

· Benefits: Women are entitled to maternity leave for 26 weeks, with a maximum of 8 weeks preceding delivery.

· A medical bonus of ?3,500 is provided if no prenatal or postnatal care is offered by the employer.

· Establishments with 50 or more employees must have crèche facilities.

e. Employee’s Compensation: The provisions regarding employee compensation apply to employers and employees not covered by the ESIC.

f. Social Security and Cess for Building and Other Construction Workers

· Applicability: Covers establishments involved in building and construction work.

· Cess: Employers are required to pay a cess, not exceeding 2% but not less than 1% of construction costs, to fund social security for construction workers.

g. Unorganised Workers, Gig Workers, and Platform Workers: The COSS Code defines unorganised, gig, and platform workers.

· Schemes: The Central and State Governments will create welfare schemes for these workers.

· Funding: Schemes may be funded by government contributions, employers, or corporate social responsibility funds.

h. Employment Information and Monitoring

Career Centres: The COSS Code introduces the concept of Career Centres for providing career services and reporting vacancies before filling them. Employers are not mandated to recruit through these centres.

The Code on Social Security, 2020 represents a significant step toward consolidating and enhancing social security frameworks for workers in India, reflecting a commitment to improving labour conditions across various sectors.

4.1 COMPARISON OF THE CODE ON SOCIAL SECURITY 2020

The Code on Social Security, 2020 represents a significant overhaul of India’s labour law framework, aimed at modernizing social security provisions for both organized and unorganized sectors. Here’s a comparative analysis of key changes introduced by the Code, highlighting how it contrasts with the previous framework and its potential impact on the employment ecosystem:

Table 4.1 Key Changes and Comparative Analysis[86]

KEY CHANGES	PREVIOUS FRAMEWORK	NEW CODE
1. Registration of Establishment	Mandatory registration across various labour laws	Establishments must register on the Shram Suvidha Portal. Existing registered establishments will not need to reregister but must update their details.
2. Appeal to the Industrial Tribunal under the Employees’ Provident Fund	Appeals must be decided within 6 months with a filing fee of INR 2000 and a 75% deposition requirement by employers.	Appeals must be decided within 1 year, with a fee increase to INR 5000, and the deposition requirement reduced to 25%.
3. Limitation Period	No time limit for initiating proceedings regarding dues.	A limitation period of 5 years is introduced for such proceedings.
4. Prior Opportunity Before Prosecution	No prior opportunity for employers to rectify noncompliance.	Employers now receive a chance to correct noncompliance before prosecution, unless they repeat violations within 3 years.
5. Fixed Term Employment	No definition or provisions for fixed term employment.	Introduces a definition and mandates that fixed term employees receive wages and benefits equivalent to permanent employees.
6. Gratuity	No gratuity for fixed term employees; application timeframe was 90 days.	Fixed term employees are eligible for gratuity on a prorate basis after 1 year of service, with the application timeframe extended to 180 days.
7. Consolidated Definition of ‘Wages’	Varied definitions across laws.	A uniform definition is established, specifying inclusions and exclusions of components considered as wages.
8. Social Security for Unorganized Workers	Basic welfare schemes were available for unorganized workers.	Mandatory registration for unorganized, gig, and platform workers on the Shram Suvidha Portal, with enhanced welfare schemes introduced.
9. Voluntary Coverage of EPF and ESIC	No provision for opting in or out of EPF and ESIC.	Employers can voluntarily opt in or out, subject to agreements with employees.
10. Employee’s State Insurance Corporation	Applicable to factories with 10 or more employees.	Coverage extends to establishments with any number of employees engaged in hazardous occupations.
11. Maternity Benefit	No provision for common crèche facilities.	Introduction of common crèche facilities and removal of specific monetary limits for medical bonuses.
12. Concept of “Principal-Employer” and “Immediate Employer”	Definitions were interlinked under the ESIC Act.	Distinction made between “employer” and “contractor”.
13. Inspector-cum- Facilitator	Inspectors had limited roles in compliance enforcement.	Inspectors will now also act as facilitators, providing advice and ensuring compliance with an emphasis on natural justice.
14. Employment Compensation	Limited to certain employers with defined disablement categories.	Broader applicability and clearer definitions of disablement categories, including commuting accidents.
15. Employment Opportunities	Limited role of employment exchanges.	Introduction of career centres with expanded roles, including career counselling and job fairs.
16. Penalties	Penalties were less stringent.	Enhanced penalties for noncompliance across various areas, acting as a deterrent against violations.

The introduction of the Code on Social Security, 2020,[87] is expected to significantly enhance social security coverage, especially for unorganized and gig workers, aligning with modern employment practices. The streamlined processes for compliance, enhanced definitions, and new frameworks for fixed term employment and gratuity are likely to foster a more inclusive and equitable labour environment. The focus on digital registration and compliance through the Shram Suvidha Portal is anticipated to improve transparency and accessibility in the employment ecosystem.[88] These reforms are poised to contribute positively to labour rights and protections in India, aims to improve workplace conditions and greater job security for employees across various sectors.

4.2 CRITICAL ANALYSIS AND CRITICISM OF THE CODE

The introduction of the Code on Social Security (COSS) 2020 marks a pivotal reform in the workplace landscape of India. Receiving Presidential assent on September 28, 2020[89], the COSS consolidates nine preexisting regulations pertaining to social security, retirement, and employee benefits.[90] COSS came into force on May 3^rd, 2021.

The primary objective of the COSS is to enhance the implementation of labour laws, minimize definitional multiplicities, streamline various authorities, and uphold fundamental welfare and benefit concepts for workers. Additionally, the code seeks to leverage technology for improved compliance and enforcement, thereby broadening the scope of universal social security coverage. It aims to establish a ‘Social Security Fund’ to support 400 million unorganized workers, including Gig and platform workers, along with plantation workers who will also gain access to Employees’ State Insurance Corporation (ESIC) benefits.[91]

Analysis of the code: One of the notable shifts under the COSS is the duality in the administration of social security schemes. Historically, state governments were responsible for the formulation and implementation of social security initiatives for unorganized sector workers. However, the COSS transfers this responsibility to the Central Government. According to Section 109(1),[92] the Central Government is mandated to develop and notify welfare schemes for unorganized workers concerning various aspects, including life and disability coverage, health and maternity benefits, old age protection, education, and other benefits as deemed appropriate. Section 109(2) further delineates additional schemes such as provident funds, employment injury benefits, housing, educational programs for children, skill development, funeral assistance, and old age homes.[93] This delineation suggests a dual authority structure, with clearly defined responsibilities for both the Central and State Governments regarding the welfare of unorganized sector workers.

A. Provisions Concerning Gig and Platform Workers: The COSS introduces definitions for “Gig Workers” and “Platform Workers,” both of whom operate outside the traditional employer employee relationship. Gig Workers are generally characterized as those not tied to a conventional employment framework, while Platform Workers access clients or customers via web platforms to provide services in exchange for payment. The inclusion of definitions for Unorganized Workers—encompassing those not covered by the Industrial Disputes Act, 1947, or other relevant legislation, including self-employed individuals—raises concerns about definitional overlaps. For instance, an app-based taxi driver may fit into multiple categories: as a Gig Worker due to the absence of an employer-employee relationship, as a Platform Worker due to reliance on a web platform, and as an Unorganized Worker due to self-employment status. The ambiguity arising from these overlapping definitions poses challenges in implementing tailored schemes for each worker category.

B. Gratuity Provisions for Fixed-Term Workers: The COSS stipulates that gratuity is payable only if an employee has served a continuous period of five years. However, this stipulation does not apply to fixed term workers whose contracts expire. In such cases, employers are permitted to pay gratuity on a prorate basis relative to the contract term. Contrarily, the Industrial Relations Bill, 2020, asserts that fixed term workers are entitled to gratuity only after completing a one-year contract. The divergent provisions in these two legislative frameworks create ambiguity regarding gratuity entitlements for fixed term employees with contracts shorter than one year.

C. Aadhar Linking Concerns: The COSS mandates that workers, including those in the unorganized sector, must provide their Aadhar number to access social security benefits or services from career centres. This requirement raises significant legal concerns, particularly in light of the Supreme Court’s ruling in the Puttaswamy case. The Court held that Aadhar can only be made mandatory for accessing subsidies, benefits, or services funded by the Consolidated Fund of India. Since entitlements such as gratuity and provident funds are primarily financed by employers and employees, the requirement to link Aadhar may infringe upon the Court’s judgment.

The COSS represents a critical effort to reform social security frameworks In India; however, it fails to address fundamental issues affecting workers’ rights and entitlements. The government’s focus on economic growth without equitable wealth redistribution risks fostering jobless growth and perpetuating poverty among workers, rendering them vulnerable to economic fluctuations and labour market instability.

Neglecting the needs and rights of workers undermines social cohesion and threatens the country’s potential to enhance living and working conditions. Denying millions of workers their basic rights and entitlements jeopardizes the long-term sustainability of India’s growth model. It is essential for the current policy and procedural frameworks to be reassessed in light of the new code, ensuring that technology integration is effectively implemented to support the welfare of all workers.

4.3 CURRENT CHALLENGES AND LABOUR EXPLOITATION

Despite the advancements in labour law, significant challenges remain. Approximately 80 lakh workers, predominantly women, engaged in various government schemes are still denied formal recognition as workers. Recommendations from the Indian Labour Conferences (ILC) to acknowledge these workers and provide them with minimum wages and social security benefits have largely been ignored.

The Supreme Court’s order to grant gratuity to Anganwadi workers and helpers has yet to be implemented, highlighting the ongoing neglect of these crucial segments of the workforce. The drastic cuts in budgetary allocations for essential schemes—55% for the Integrated Child Development Services (ICDS), 30% for the midday meal programme, and 20% for the National Health Mission (NHM)—under the current government further exacerbate these issues.[94]

The government’s approach to privatizing welfare schemes, transferring them to large corporations and NGOs, raises concerns about the quality and accessibility of these essential services. India faces a critical gender disparity in workforce participation, with women’s participation rates among the lowest globally. Although there has been a recent uptick attributed to government policies, this increase is largely due to distress driven unpaid self-employment. Before the COVID19 pandemic, 50% of women were self-employed; this figure rose to 60% post pandemic, yet their earnings have declined in real terms.[95] Economists at the Conference on Finance and Economy in India noted that a significant portion of self-employed women are engaged in unpaid family work.

The government claims to have increased paid maternity leave from 12 to 26 weeks;[96] however, many women remain in unpaid roles. Over 82% of women workers are in the unorganised sector, mainly in agriculture, where they fall outside the purview of the Maternity Benefit Act.[97] Even among those in the organised sector, many work as contract or outsourced employees, making them ineligible for maternity benefits. The dismantling of inspection mechanisms will likely exacerbate these disparities.

As the country navigates the challenges of globalization and changing economic paradigms, the ongoing struggle for labour rights, social justice, and gender equality remains paramount. Ensuring fair treatment and dignified working conditions for all workers, particularly the marginalized, is essential for fostering inclusive economic growth and upholding the principles of justice and equality envisioned by leaders like Dr. B.R. Ambedkar.

5. RECOMMENDATIONS

To create a more resilient and inclusive labour market in India, several recommendations can be drawn from foreign examples:

6.1.1. Enhanced Social Security for Gig and Informal Workers:

Example: In countries like Denmark, the government provides comprehensive social security systems that include unemployment benefits, health insurance, and pension schemes for all workers, including those in gig and informal sectors.[98]

Recommendation: India should extend social security benefits to gig and informal workers, ensuring access to health, life, and disability insurance, and consider a universal basic income or unemployment benefits for these workers.

6.1.2. Stronger Enforcement of Labor Laws:

Example: In Germany, there are stringent mechanisms for the enforcement of labour laws, with dedicated labour courts and inspectors to ensure compliance.[99]

Recommendation: India should strengthen its enforcement mechanisms by increasing the number of labour inspectors, establishing dedicated labour courts, and ensuring that violations of labour laws are met with appropriate penalties.

6.1.3. Promotion of Worker Training and Skill Development:

Example: Singapore’s Skills Future initiative provides funding for citizens to take up training courses to upgrade their skills and stay relevant in a changing job market.[100]

Recommendation: India should expand its skill development programs, such as the National Skill Development Mission and the Skill India Mission, with increased funding and accessibility to ensure workers can continuously upgrade their skills.

6.1.4. Support for Small and Medium Enterprises (SMEs):

Example: In Japan, the government offers significant support to SMEs through subsidies, tax incentives, and access to low interest loans to help them navigate economic crises.[101]

Recommendation: India should implement similar support measures for SMEs to ensure their survival and ability to retain employees during economic downturns.

6.1.5. Comprehensive Worker Protection Legislation:

Example: In France, the labour laws provide strong protections for workers, including regulations on working hours, conditions, and rights to unionize and strike.[102]

Recommendation: India should ensure that its labour codes comprehensively protect workers’ rights, including fair wages, safe working conditions, and the right to unionize and engage in collective bargaining.

6.1.6. Inclusive Policy Making and Social Dialogue:

Example: In Sweden, social dialogue between the government, employers, and trade unions plays a crucial role in shaping labour policies and ensuring fair labour practices.[103]

Recommendation: India should foster inclusive policymaking processes that involve social dialogue with all stakeholders, including workers’ representatives, to ensure that labour laws are balanced and address the needs of all parties.

By drawing on these examples and implementing these recommendations, India can build a more robust and inclusive labour market that better protects its workers and promotes sustainable economic growth.

6. CONCLUSION

The COVID-19 pandemic has exposed deep vulnerabilities in India’s labour market, particularly for workers in the unorganized sector, who often lack the protections and benefits afforded to their organized counterparts. Despite government initiatives aimed at providing immediate relief—such as cash transfers, food assistance, and employment guarantees—these measures have often been criticized for their inadequacy and limited reach.

The introduction of new labour codes, including the Code on Wages, the Industrial Relations Code, and the Occupational Safety, Health, and Working Conditions Code, represents a significant evolution in India’s labour legislation. These reforms aim to consolidate existing laws, enhance protections for workers, and modernize the regulatory framework to better reflect contemporary employment practices. However, the real challenge lies not only in the enactment of these laws but also in their effective implementation and enforcement.

To truly transform the labour landscape, India must prioritize the rights and needs of all workers, particularly those in the informal and gig economies. This entails addressing systemic issues such as gender disparities, inadequate social security, and lack of formal recognition for essential workers like Anganwadi and ASHA workers. Moreover, a comprehensive strategy that includes increased budgetary allocations for social welfare programs, strengthening enforcement mechanisms, and fostering inclusive policymaking is crucial for achieving sustainable improvements in working conditions and labour rights.

In conclusion, while the reforms initiated through the labour codes offer a foundation for progress, a concerted effort is necessary to ensure that the benefits of economic growth are equitably distributed among all segments of the workforce. Upholding the principles of justice and equality, as envisioned by leaders like Dr. B.R. Ambedkar, will be essential in fostering a resilient and inclusive labour market that can withstand future challenges and promote the dignity of work for every individual in India.

[1] The ILO Social Security (Minimum Standards) Convention, 1952 (No. 102), available at: https://www.ilo.org/sites/default/files/wcmsp5/groups/public/@ed_dialogue/@actrav/documents/publication/wcms_743401.pdf. (Last visited on 7 September 2024).

[2] The Code on Social Security - Ministry of Labour & Employment 22 Sept. 2020, available at: https://labour.gov.in/code-social-security. (Last visited on 3 September 2024).

[3] Social Security Schemes for Organised and Unorganised Sector, 24 Mar. 2021, available at: https://pib.gov.in/PressReleasePage.aspx?PRID=1707228. (Last visited on 7 September 2024).

[4] The Code on Social Security - Ministry of Labour & Employment 22 Sept. 2020, available at: https://labour.gov.in/code-social-security. (Last visited on 9 September 2024).

[5] Employment & Labour Laws and Regulations India 2024. 07 Mar. 2024, available at: https://iclg.com/practice-areas/employment-and-labour-laws-and-regulations/india. (Last visited on 9 September 2024).

[6] Labour Laws In India – Ncib, available at: http://www.ncib.in/pdf/ncib_pdf/Labour%20Act.pdf. (Last visited on 9 September 2024).

[7]Unorganised worker - Ministry of Labour & Employment. available at: https://labour.gov.in/sites/default/files/Chapter%20-%208.pdf. (Last visited on 9 September 2024).

[8] Ibid.

[9] Indian Informal Sector: An Analysis - ARC Journals. available at: https://www.arcjournals.org/pdfs/ijmsr/v4-(Last visited on 2 September 2024). i1/9. pdf.

[10] Indian Informal Sector: An Analysis - ARC Journals. available at: https://www.arcjournals.org/pdfs/ijmsr/v4-i1/9.pdf. (Last visited on 19 September 2024).

[11] National Sample Survey Office (NSSO) – MOSPI, 24 Sept. 2024, available at: https://mospi.gov.in/national-sample-survey-officensso. (Last visited on 1 September 2024).

[12] Ibid.

[13] Ibid.

[14] Problems And Prospects of Unorganized Workers In Tamil Nadu - Jetir. available at: https://www.jetir.org/papers/JETIRC006020.pdf. (Last visited on 9 September 2024).

[15] Ibid.

[16] Ibid.

[17] Employment and Unemployment in India 1999-2000 Key Results. available at: https://mospi.gov.in/sites/default/files/publication_reports/455_final.pdf. (Last visited on 12 September 2024).

[18] The Beveridge Report - api.pageplace.de. available at: https://api.pageplace.de/preview/DT0400.9781000781601_A43526782/preview-9781000781601_A43526782.pdf. (Last visited on 9 September 2024).

[19] The ILO Social Security (Minimum Standards) Convention, 1952 (No. 102). 12 Aug. 2012, available at: https://www.ilo.org/resource/ilo-social-security-minimum-standards-convention-1952-no-102. (Last visited on 9 September 2024).

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[29] Ibid.

[30] Ibid.

[31]Ibid.

[32] Ibid.

[33] Ibid.

[34] Ibid.

[35] Ibid.

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[52] Ibid.

[53] Labour And Employment Laws of India - Mondaq. available at: https://www.mondaq.com/india/employee-rights-labour-relations/50440/labour-and-employment-laws-of-india. (Last visited on 9 September 2024).

[54] Constitution of India,1950.

[55] Supra note 52.

[56] Dhirendra Chamoli And Anr. vs State of U.P. on 5 August, 1985. available at: https://indiankanoon.org/doc/145498/. (Last visited on 19 September 2024).

[57] Supra note 52.

[58] Damyanti Naranga vs The Union of India and Others on 23 February, 1971. available at: https://indiankanoon.org/doc/1214330/.(Last visited on 11 September 2024).

[59] P. Balakotaiah vs The Union of India and Others, available at: https://indiankanoon.org/doc/1659001/.(Last visited on 9 September 2024).

[60] Supra note 52.

[61] Maneka Gandhi vs Union of India on 25 January, 1978 - Indian Kanoon. available at: https://indiankanoon.org/doc/1766147/.(Last visited on 14 September 2024).

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[64] D.K. Yadav v. J.M.A. Industries Ltd. 1993 SCR (3) 930 1993 SCC (3) 259.

[65] Supra note 52.

[66] State Of Maharashtra vs Manubhai Pragaji Vashi & Ors on 16 August, 1995, available at: https://indiankanoon.org/doc/1307719/.(Last visited on 7 September 2024).

[67] Ibid.

[68] Supra note 52.

[69] Judis.Nic.In Supreme Court of India, available at: https://main.sci.gov.in/jonew/judis/1905.pdf. (Last visited on 9 September 2024).

[70] Supra note 52.

[71] Supra note 52.

[72] People’s Union for Democratic Rights vs Union of India & Others, available at: https://indiankanoon.org/doc/496663/.(Last visited on 6 September 2024).

[73] Ibid.

[74] M.C. Mehta vs State Of Tamil Nadu And Others on 10 December, 1996. available at: https://indiankanoon.org/doc/212829/.(Last visited on 4 September 2024).

[75] Ibid.

[76] Supra note 52.

[77] Supra note 52.

[78] Randhir Singh vs Union of India & Ors on 22 February, 1982, available at: https://indiankanoon.org/doc/1230349/.(Last visited on 9 September 2024).

[79] Ibid.

[80] Ibid.

[81] Ibid.

[82] Ibid.

[83] Ibid.

[84] Code on Social Security, 2020 (36 of 2020)

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[86] Ibid.

[87] Ibid.

[88] Shram Suvidha - Unified Portal for Labour and Employment. available at: https://shramsuvidha.gov.in/.

[89] Code on Social Security, 2020 (36 of 2020) (Last visited on 9 September 2024).

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[92] Supra note 85.

[93] Ibid.

[94] Supra note 90.

[95] Ibid.

[96] Ibid.

[97] Ibid.

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Article Information

CHALLENGES AND SOLUTIONS FOR IMPLEMENTING SOCIAL SECURITY FOR UNORGANIZED WORKERS IN INDIA: A CRITICAL ANALYSIS OF THE CODE ON SOCIAL SECURITY, 2020 AUTHORED

Authors: ADV. ARPITA RANJAN, ADV. AMAN YADAVA

Journal IJLRA
ISSN 2582-6433
Published 2024/10/10
Issue 7

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