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In the mid 1950s, W.Arthur Lewis developed a theoretical model of

economic development based on the assumption that there was an
unlimited supply of labour in most developing countries and that this vast
pool of surplus labour would be absorbed as the modern industrial sector
in these countries grew. It was therefore assumed that the traditional
sector comprised of petty traders, small producers and a range of casual
jobs would eventually be absorbed into the formal economy and
disappear. This argument became less convincing since the 1970s when
case studies on informal sector in various parts of the world began to
reveal the highly active existence of men, women and children crowding
at the bottom of the urban economy in Third World countries. So many
studies have revealed the vast number of workers, in the Third World,
striving hard to survive on the fruits of their labours outside the formal
sector of the economy. The formal informal dichotomy can be regarded
as a new variation on the dualism theories of the past. In the colonial era
a contrast was constructed between an invasive western capitalist sector
and an opposing eastern non-capitalist peoples economy. In post-colonial
development theory the concept of dualism was applied to the dichotomy
of traditional and modern. According to this view, the rural agricultural
order was still predominantly pre-capitalist while the urban-based
industrial economy was described as capitalist. In the most recent phase
of the dualism doctrine capitalism is the label of only the advanced
segment of the urban milieu: the formal sector. The modes of production
in the lower economic terrain, rather questionably labeled as noncapitalist, are characterized as the informal sector.
In operationalizing these variations on dualism, the contrasts are more
significant than the specific characteristics of each segment. For instance,
its entirely normal to describe the informal sector by summing up the
absence of elements found in the formal sector. In the absence of a more
analytical definition, the landscape of the informal sector becomes
synonymous with the kaleidoscope of unregulated, poorly skilled and lowpaid workers. Highlighting this chaotic assortment Keith Hart coined the
term informal economy in 1971.
There are different terminologies used so interchangeably to signify the
unorganized sector like informal sector, informal economy, and even
informal labour which often highlights the most affected part of the sector,
namely, the labour. Informal labour is a labour whose use is not
governed either by state regulations or by collective agreements between
workers and employers.

Informal labour has, in different instances, been viewed as labour engaged

in urban small scale enterprises, as self employment, as labour engaged
in traditional activities, as wholly unskilled labour, and as labour whose
use is not subject to any rules or norms. But none of this has any sound
conceptual or empirical foundation. Informality does not imply a particular
mode or location of labour use; informal labour can be in self-employment,
in casual wage employment, and in regular wage employment, just as it
can be in urban as well as in rural areas. There is little reason to think that
informal labour must be confined to traditional and modern activities.
We do not need to assume that informal labour is unskilled; only need to
recognize that its skills are acquired outside the formal education system.
And all the more in the context of the neo-liberal economic policies of hire
and fire where the organized sector itself is getting informalised through
contractualisation, casualisation, and outsourcing of labour, there are
workers who are equally or even more educated and skilled, work better
and even longer in so many of the organized sectors; but for no labour
rights, wage, job or social security protection and for very dismal wages.
The casual and contract labourers are under the working and living
conditions that prevailed in the nineteenth century Europe.
Since the introduction of the informal sector concept, opinion has been
divided as to its socio-economic impact. There are authors who positively
point out the accelerated shift in livelihood patterns away from agriculture
and villages to cities and towns in the Third World since the mid-twentieth
century. But even if the masses of migrants flooding into urban areas were
fortunate enough to establish a foothold, the vast majority of them could
gain no access to the formal sector. It was still too small to cope with the
continuous influx of newcomers.
The more critical analysis of researchers, who have observed that the
formal sector remained inaccessible for reasons other than the inferior
quality of the new urbanites labour, and their other defects, rejects such
an optimistic view. The failure of the newcomers efforts to find stable,
decently paid and dignified work is in this alternative perception due
mainly to a development strategy that, in the face of excess supply, seeks
to keep the price of labour as low as possible, allows no room for
collective action to reduce these peoples vulnerability and refuses to
provide this footloose workforce with public representation. In short, the
lack of registration, organization and protection does not have its origin in
the free play of social forces, but its the deliberate product of economic
interests that benefit from the state of informality in which a wide range of
activities in all branches of the economy are kept, systematically and on a
large scale, through evasion of labour laws and taxation.

Indeed, the informal sector is not a separate and closed circuit of work
and labour. There is the interaction, between the formal and informal
sectors, and dependence of the latter on the former and even its
subordination to it. Now with the neo-liberal economic policies there is the
widespread informalization of the formal sector through down sizing,
casualisation and contractualisation. In short the capitalist leaches
become richer and richer by squeezing the life blood of the working force.

The Indian Scenario

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 Indias 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.
1. In terms of Occupation:
Small and marginal farmers, landless agricultural labourers, share
croppers, fishermen, those engaged in animal husbandry, beedi
rolling, labeling 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.
2. In terms of Nature of Employment:
Attached agricultural labourers, bonded labourers, migrant workers,
contract and casual labourers come under this.
3. In terms of Specially distressed categories:
Toddy tappers, Scavengers, Carriers of head loads, Drivers of animal
driven vehicles, Loaders and unloaders come under this category.
4. In terms of Service categories:
Midwives, Domestic workers, Fishermen and women, Barbers,
Vegetable and fruit vendors, News paper vendors etc. belong to this
In addition to these four categories, there exists a large section of
unorganized labour force such as cobblers, Hamals, Handicraft artisans,
Handloom weavers, Lady tailors, Physically handicapped self employed
persons, Rikshaw pullers, Auto drivers, Sericulture workers, Carpenters,
Tannery workers, Power loom workers and Urban poor.

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
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 meager 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, ie, where labour productivity are 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.

Social security measures

It is rightly true that when independent Indias constitution was drafted,
social security was specially included in List III to Schedule VII of the
constitution and it was made as the concurrent responsibility of the
central and state governments. A number of directive principles of state
policy relating to aspects of social security were incorporated in the Indian
constitution. The initiatives in the form of Acts such as the Workmens
Compensation Act (1923), the Industrial Disputes Act (1947), the
Employees State Insurance Act (1948), the Minimum Wages Act (1948),
the Coal Mines Provident Funds and Miscellaneous Provisions Act (1948),
The Employees Provident Fund and Miscellaneous Provisions Act (1952),
the Maternity Benefit Act (1961), the Seamens Provident Fund Act (1966),
the Contract Labour Act (1970),the Payment of Gratuity Act (1972), the
Building and Construction Workers Act (1996) etc. reveal the attention
given to the organized workers to attain different kinds of social security
and welfare benefits. Though it has been argued that the above Acts are
directly and indirectly applicable to the workers in the unorganized sector
also, their contribution is very negligible to the unorganized workers.
Inspite of the fact that not much has been done in providing social
security cover to the rural poor and the unorganized labour force, the
country has made some beginning in that direction. Both the central and
state governments have formulated certain specific schemes to support
unorganized workers which fails in meeting with the real needs and
requirements of the unorganized sector labour force.
This becomes clear even when the highly proclaimed National Rural
Employment Guarantee Act -2005 (NREGA), though it is a breakthrough,
doesnt have common wage in different states and limits itself only to
hundred days work for those registered worker under the Act. What about
the rest of the days in an year? As per this Act, the work guarantee
applies in rural areas only, what about the urban poor?
And looking at the recent Unorganized Sectors Social Security Act (2008) ,
one really wonders if there is any provision for an unorganized worker in
this Act other than some guidelines about the available social security

schemes in the country. How can it be called an Act unless it has the legal
binding and provisions of rights to work and entitlements under it? Here
as per the Act nothing is mentioned about what constitutes appropriate
and adequate social security for the vast mass of unorganized workers
and their dependents, what eligibility criteria, if any, ought to be
prescribed, what will be the scale of benefits that the workers and their
families are entitled to receive and under what conditions, what will be the
funding arrangements that must be put in positions to meet the cost of
social security and so on. Arent the unorganized workers of this country
entitled to receive, in this 60th year of our Republic, minimum standards of
social security and labour rights, on the scale and spread adumbrated in
the relevant ILO convention drawn up more than 50 years ago? Therefore,
this law which does not deal with the issue of unemployment, its
regulation, wages, and conditions of work and so on is not merely
incomplete but dysfunctional if it proceeds to deal with social security on
a stand alone basis. The Act, actually, suffers from a serious lack of
legislative policy and intent. Ultimately this Act is an eye wash which has
neither the capacity to address nor the inbuilt provision to provide
solutions to the needs of the unorganized sector. Even the provisions and
procedure of the Minimum Wages Act (1948) is so vague and futile that
different states of India have fixed abysmally meager wages and that too
with so much of variations from state to state.
In fact a comprehensive Act, catering to the security needs of the
unorganized sector such as Food, Nutrition, Health, Housing, Employment,
Income, Life and accident, and old age remains a dream in India. Still the
cries of the unorganized sector goes unattended with the governments
laying red carpets for the corporate and so called investors at the
expense and sacrifice of the working class.

Sexual harassment in unorganised

Seventeen per cent of working women in India claim that they have
experienced sexual harassment at workplace. This high incidence of
sexual harassment, both in the organised and the unorganised sectors,
was revealed in an opinion poll titled Sexual Harassment at Workplaces in
India 2013-2014 released by Oxfam India.
The survey for which women were interviewed in Delhi, Mumbai,
Bangalore, Chennai, Kolkata, Ahmadabad, Lucknow and Durgapur was
jointly conducted by Oxfam India and Social and Rural Research Institute.

Most women claimed to have faced incidents that were non-physical,

according to the survey. Sixty-six of the 400 respondents reported to
have faced a cumulative of 121 incidents of sexual harassment, 102 of
121 incidents reported to be non-physical, whereas the remaining 19
incidents were physical in nature, indicated the survey.
The report also noted that while 87 per cent of the general population and
93 per cent of working women respondents reported awareness of sexual
harassment of women at work place, majority of the victims did not resort
to any formal action against the perpetrator. The top three categories that
have emerged unsafe for women are labourers (29 per cent), domestic
help (23 per cent) and small scale manufacturing (16 per cent).
According to Oxfam India CEO: Violence against women is a human rights
violation, whether it is domestic violence within homes or sexual
harassment at the workplace. If the domestic sphere is not safe, the
workplace is not safe, public spaces are not safe, then, where should
women go? It is shocking that 17 per cent of working women face sexual
harassment in workplaces as per our study. We believe in the right of
every woman to a violence-free workplace. Each one of us has to take a
stand and say No to Violence against Women.
Majority of respondents (both general population and working women)
perceived women working in the unorganised sector to be more
susceptible to sexual harassment due to lack of awareness of legislation.
Interestingly, 26 per cent reported to be the sole earning member of their
families, indicating that economic vulnerability further makes women
more vulnerable to harassment at the workplace.
The study said that the reasons stated for not taking any action by the
women despite the harassment were fear of losing the job, absence of any
complaints mechanism at the workplace, fear of getting stigmatized and
not aware of redress mechanism.
Further the survey pointed out that the Supreme Court Guidelines on
Sexual Harassment were known to as many as 17 per cent of the
respondents among the general population. It was found that awareness
of the Guidelines was higher in metro cities -- 24 per cent as compared to
other areas. Also overall more than 80 per cent of the respondents
reported the need for a separate law for dealing with sexual harassment
at work place.

legal approach against the sexual

harassment in unorganised sector
India finally enacted its law on prevention of sexual harassment against
female employees at the workplace. The Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("Sexual

Harassment Act") has been made effective on April 23, 2013 by way of
publication in the Gazette of India.
The statute has been enacted almost 16 years after the Supreme Court of
India, in its landmark judgment in Vishaka and others v. State of Rajasthan
("Vishaka Judgement")1 , laid down guidelines making it mandatory for
every employer to provide a mechanism to redress grievances pertaining
to workplace sexual harassment and enforce the right to gender equality
of working women ("Guidelines"). Codification of the requirements is a
much-awaited development and is a significant step towards creating
awareness on the issue of workplace sexual harassment and ensuring
women a safe and healthy work environment.


The Supreme Court of India, in 1997, in the Vishaka Judgment, for the first
time, acknowledged sexual harassment at the workplace as a human
rights violation. The Supreme Court relied on the Convention on the
Elimination of All Forms Discrimination Against Women, adopted by the
General Assembly of the United Nations, in 1979, which India has both
signed and ratified. In its judgment, the Supreme Court outlined the
Guidelines making it mandatory for employers to provide for sympathetic
and non-retributive mechanisms to enforce the right to gender equality of
working women. As per the Vishaka Judgment, the Guidelines, until such
time a legislative frame work on the subject is drawn-up and enacted,
have the effect of law and the Guidelines are to be mandatorily followed
by organizations, both in the private and government sector. While there
were several attempts made to enact a law on this subject previously, the
Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Bill, 2012 was eventually passed by the Lower House of the
Parliament (Lok Sabha) on September 3, 2012, then passed by the Upper
House of the Parliament (Rajya Sabha) on February 26, 2013 and received
the President's assent on April 22, 2013.

S E X U A L H A R A SS M E N T - O B J E C T I V E O F T H E L AW, M E A N I N G A N D

The Sexual Harassment Act has been enacted with the objective of
providing women protection against sexual harassment at the workplace
and for the prevention and redressal of complaints of sexual harassment.
Sexual harassment is considered as a violation of the fundamental right of
a woman to equality as guaranteed under Articles 14 and 15 of the
Constitution of India ("Constitution") and her right to life and to live with
dignity as per Article 21 of the Constitution. It has also been considered as
a violation of a right to practice or to carry out any occupation, trade or
business under Article 19(1)(g) of the Constitution, which includes a right
to a safe environment free from harassment.

The definition of sexual harassment in the Sexual Harassment Act is in line

with the Supreme Court's definition in the Vishaka Judgment and includes
any unwelcome sexually determined behaviour (whether directly or by
implication) such as physical contact and advances, demand or request
for sexual favours, sexually coloured remarks, showing pornography, or
any other unwelcome physical verbal or non-verbal conduct of sexual
The Sexual Harassment Act stipulates that a woman shall not be
subjected to sexual harassment at any workplace. As per the statute,
presence or occurrence of circumstances of implied or explicit promise of
preferential treatment in employment; threat of detrimental treatment in
employment; threat about present or future employment; interference
with work or creating an intimidating or offensive or hostile work
environment; or humiliating treatment likely to affect the lady employee's
health or safety may amount to sexual harassment.


Scope : The ambit of the Sexual Harassment Act is very wide and is
applicable to the organized sector as well as the unorganized sector. In
view of the wide definition of 'workplace', the statute, inter alia, applies to
government bodies, private and public sector organisations, nongovernmental organisations, organisations carrying on commercial,
vocational, educational, entertainmental, industrial, financial activities,
hospitals and nursing homes, educational institutes, sports institutions
and stadiums used for training individuals. As per the Sexual Harassment
Act, a workplace also covers within its scope places visited by employees
during the course of employment or for reasons arising out of employment
- including transportation provided by the employer for the purpose of
commuting to and from the place of employment2 .
The definition of 'employee' under the Sexual Harassment Act is fairly
wide and covers regular, temporary, ad hoc employees, individuals
engaged on daily wage basis, either directly or through an agent, contract
labour, co-workers, probationers, trainees, and apprentices, with or
without the knowledge of the principal employer, whether for
remuneration or not, working on a voluntary basis or otherwise, whether
the terms of employment are express or implied.

Committee : The Sexual Harassment Act requires an employer to set up
an 'Internal Complaints Committee' ("ICC") at each office or branch, of an
organization employing at least 10 employees. The government is in turn
required to set up a 'Local Complaints Committees' ("LCC") at the district
level to investigate complaints regarding sexual harassment from
establishments where the ICC has not been constituted on account of the
establishment having less than 10 employees or if the complaint is
against the employer. The Sexual Harassment Act also sets out the
constitution of the committees, process to be followed for making a
complaint and inquiring into the complaint in a time bound manner.

Interim Reliefs : The Sexual Harassment Act empowers the ICC and
the LCC to recommend to the employer, at the request of the aggrieved
employee, interim measures such as (i) transfer of the aggrieved woman
or the respondent to any other workplace; or (ii) granting leave to the
aggrieved woman up to a period of 3 months in addition to her regular
statutory/ contractual leave entitlement.

Process for Complaint and Inquiry : Please refer to the following

flowchart which provides, in brief, the process to be followed by the
aggrieved employee to make the complaint and by the employer to
inquire into the complaint. The law allows female employees to request for
conciliation in order to settle the matter although a monetary settlement
should not be made as a basis of conciliation.

Action against Frivolous Complaints : So as to ensure that the

protections contemplated under the Sexual Harassment Act do not get
misused, provisions for action against "false or malicious" complainants
have been made.


In addition to ensuring compliance with the other provisions stipulated,

the Sexual Harassment Act casts certain obligations upon the employer
to, inter alia,

provide a safe working environment


display conspicuously at the workplace, the penal consequences of

indulging in acts that may constitute sexual harassment and the
composition of the Internal Complaints Committee


organise workshops and awareness programmes at regular intervals

for sensitizing employees on the issues and implications of workplace
sexual harassment and organizing orientation programmes for members
of the Internal Complaints Committee


treat sexual harassment as a misconduct under the service rules

and initiate action for misconduct.
The employer is also required to monitor the timely submission of reports
by the ICC.
If an employer fails to constitute an Internal Complaints Committee or
does not comply with any provisions contained therein, the Sexual
Harassment Act prescribes a monetary penalty of up to INR 50,000
(approx. US$750). A repetition of the same offence could result in the
punishment being doubled and / or de-registration of the entity or
revocation of any statutory business licenses.


As a result of the growing importance of the issues relating to sexual

harassment and protection of female employees in India, a new
section3 was added to the Indian Penal Code, 1860 through the Criminal
Law (Amendment) Act, 20134 , which enlists the acts which constitute the
offence of sexual harassment and further envisages penalty / punishment
for such acts. A man committing an offence under this section is
punishable with imprisonment, the term of which may range between 1 3 years or with fine or both. Since the amendment criminalizes all acts of
sexual harassment, employers shall be required to report any offences of
sexual harassment to the appropriate authorities.


The Sexual Harassment Act is a much awaited development and a

significant step towards ensuring women a safe and healthy work
environment. We however list below some issues in relation to this new

The Sexual Harassment Act only addresses the issue of protection of

women employees and is not gender neutral. Male employees, if
subjected to sexual harassment, cannot claim protection or relief under
the law.


The definition of 'aggrieved woman' does not make a reference to

victimization (on the part of the employer) of the employee who has made

the complaint of harassment, which would be fairly common in such

situations. This was in fact an important recommendation of the Standing
Committee. The definition of the 'sexual harassment', the words 'verbal,
textual, physical, graphic or electronic actions' should have been added in
order for the purposes of clarity, as it would cover some of the
technological developments.

It may become a challenge for employers to constitute an ICC at "all

administrative units or offices". It may also become necessary for the
employer to spend more time and efforts in training members of the ICC
who are to be replaced every 3 years. There is also a lack of clarity as to
who shall be a chairperson of the ICC in absence of a senior level female
employee. Also, in such cases, the composition of the committee
members should ideally have been an odd number in order for the
committee to arrive at a decision based on majority.


The ICC also needs to involve a member from "amongst nongovernmental organisations or associations committed to the cause of
women or who have had experience in social work or have legal
knowledge." Employers may not be comfortable with such an external
representation, considering the sensitivities surrounding this issue and the
need to maintain strict confidentiality.


The law casts an obligation upon the employer to address the

grievances in respect of sexual harassment at workplace in a time bound
manner, which in several cases may not be practically possible as the
employees or witnesses involved may not easily or readily co-operate.


The law allows the employer to initiate action against the

complainant in case of a false or malicious complaint. This provision,
although meant to protect the employer's interests, is likely to deter
victims from reporting such incidents and filing complaints, which may in
turn defeat the purpose for which the law was enacted.


In case the allegation has been proved, the Sexual Harassment Act
allows the ICC to recommend to the employer to deduct from the
respondent's salary such sums it may consider appropriate to be paid to
the aggrieved woman. However, there may need to be made certain
corresponding changes to the Payment of Wages Act, 1936 of India, which
restricts the nature of deductions that may be made from an employee's


The Sexual Harassment Act does not stipulate any monetary liability
on the employer in case of harassment on the part of an employee
against another female employee. Infact, in developed countries like the
US, although there is no codified law on sexual harassment or workplace
harassment, based on case law that prohibit workplace discrimination,
there is vicarious liability cast upon the employer in certain cases.


Considering that India has a diverse set of religions, cultures, castes,

languages, etc. the government also needs to start focusing on providing
protection for some of the other forms of harassment, which is fairly
common in several of the developed countries.

I hope that unlike some of the other laws, the Sexual Harassment Act is
implemented well, which in itself would go a long way in protecting the
employees' interests and well-being in India.

AIR 1997 SC 3011

Section 2(o), Sexual Harassment Act, 2013
Section 354A, Indian Penal Code, 1860
Published in the Official Gazette on April 2, 2013