Independent Research and Policy Advocacy

Our Response to the Ministry of Labour on the Draft Code on Social Security, 2019

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This post sets out our comments to the Draft Code on Social Security, 2019 [“Code”], in response to the Ministry of Labour’s call for comments by stakeholders, dated 17 September 2019.

This Code is one of the four Labour Codes proposed by the government to consolidate and simplify India’s piecemeal labour legislation. The present Code proposes to replace eight legislations pertaining to social security, including the Employees Provident Fund Act, 1952, the Employees’ State Insurance Act, 1948; the Maternity Benefits Act, 1961 and the Unorganised Workers Social Security Act, 2008. (S. 157)

Our response to the Code may be summarized under the following heads:

1. Need for clarity in the institutions set up under the Code: The present Code does not define the functions of bodies such as the Central Board of Trustees (S. 3) and the National Social Security Board for Unorganised Sector Workers. (S.5) We suggest that the Code provide greater clarity as to the role these bodies can play in administering schemes under the Code and collecting data on how they can be improved.

2. Need for clarity in definitions of “employee” and “worker” under the Code: The 2017 and 2018 Drafts of the Social Security Code treated employees and workers in the unorganized sector at par with those in the organized sector. The present Code, however, appears to confine the scope of “employee” and “worker” to those in formal employment arrangements. We suggest that this ambiguity be removed, and workers to be treated uniformly.

3. Need for better protection for workers in the unorganized sector: Under the present Draft, the Centre and State governments are empowered to frame schemes for the benefit of workers in the unorganized sector. We suggest that these provisions be strengthened by introducing floor level social security rights for all workers and mandating the governments to enforce them.

4. Need for better protections for interstate migrant workers: We suggest that the present Code expressly provides for portability of benefits across states, in order to provide social security coverage to all interstate migrant workers.

5. Need to account for the capacity to pay and linkage with the Wages Code: As noted here, many workers may find themselves unable to pay contributions to schemes framed under the Code. We suggest that adequate support be provided to workers in order to guarantee certain floor level social security rights.

6. Need for a simple and accessible grievance redressal system: We suggest that the Code provides an informal dispute resolution process before the reference to adjudication.

Our full response submitted to the Ministry of Labour is available here.

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