Table of Content

Acknowledgement………………………………………………………………….2

Introduction………………………………………………………………………...4

Definition and Identifiable characteristics of unorganised sector………………5-6

Major concern faced by workers in unorganized sector…………………………6-8

Legislative and Policy Framework……………………………………………….9-12

Social security to unorganised workers………………………………………….12-14

Conclusion ……………………………………………………………………….14-16

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 1. Introduction

Our Constitution of India provided to all citizens of the country justice- social, economic and
political, liberty of thought, expression, belief, faith and worship; as well as equality of status
and opportunity irrespective of their caste, creed, status, religion, race, sex and nature of their
work. Yet the gap which existed between organized and unorganized sector in our country is
very wide which made our system unequal in the eyes of law.

As an unorganised worker play a pivotal role in society, so they need special attention. Most
socially and economically deprived sections of the society are engaged in informal economic
activities. The government realised the pivotal role performed by unorganised sector in the
economy. Therefore, many legislations and schemes are initiated by the government for the
benefit of unorganised workers.

An Unorganised Sector can be defined as the sector where the elements of the Organised Sector
are absent. In the absence of a more analytical definition, the landscape of the unorganised sector
becomes synonymous with the kaleidoscope of unregulated, poorly skilled and low-paid
workers. While defining an unorganised sector we can say that it is a part of the workforce which
has not been able to organise in pursuit of a common objective because of constraints such as
casual nature of employment, ignorance and illiteracy, small size of establishments with low
capital investment, per person employed, scattered nature of establishments, superior strength of

2
the employer etc. “ The unorganized Sector consists of all private enterprises having less than ten
total workers, operating on a proprietary or partnership basis.”

Further various social security measures provided by industrial units to their employees in the
form of pension, provident fund and gratuity. Non-statutory benefits also provided to workers
such as medical facilities, food, canteens etc. These benefits help in motivating the workers for
their active contribution in the prosperity of the industry and when the workers are fully satisfied
with the conditions of service, then they give their best efforts for the growth of the society.There
are number of legislations for the security of the labour force but those laws are routinely
executed in organized sectors yet in actuality, it is not used methodically in unorganized sectors1.

2. Definition and Identifiable characteristics of unorganised sector

The unorganized sector is too vast to remain within the confines of a conceptual definition.
Hence, descriptive means are often used to identify the unorganised or informal sector. In India,
the terms ‘unorganised sector ‘and ‘informal sector’ are used interchangeably in research
literature. The term ‘unorganised sector’ is used commonly in all official records and analyses. It
is defined as the residual of the organised sector.

There are various definitions given by different Commission and others. According to
the Unorganized Workers Social Security  Act,2008 “Unorganized sector means an enterprise
which is engaged in the production or sale of the food or in providing services of any kind
owned by individuals or self-employed workers and where the number of worker working is less
than 10 in number.”2 Problems of underestimation and insufficient coverage in
the unorganised sector lead to further problems in deriving the residual estimate of the
unorganised sector. Therefore, definitions based on the residual approach, that consider the
organized sector as employing 10 or more workers and the unorganized sector as the residual, no
longer seem to be dependable. Many new types of enterprises and employments that
have emerged in recent years, have to be taken into account.

1
(Dr.) Subhasish Chatterjee, ‘Labourers of Unorganised sectors and their Problems’ (2016) ‘International Journal of
Emerging Trends in Science and Technology’ 4397.

2
Unorganized Workers Social Security Act 2008,S 2.

3
There are characteristics which are considered to be very useful in indentifying unorganized
sector. low scale of organization; operation of labour relations on a casual basis, or on the basis
of kinship or personal relations; small own account (household) or family-owned enterprises or
micro enterprises; ownership of fixed and other assets by self; risking of finance capital by self;
involvement of family laborers; production expenditure indistinguishable from household
Expenditures and use of capital goods; easy entry and exit; free mobility within the sector etc3.
The mention list is not exhaustive.
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.
In terms occupation like leather workers, waiver, fisheries, bidi maker, construction workers,
workers of different industry like oil mill, paper mill, saw mill etc. bricks maker, landless
agricultural labour. 2. Nature of employment, Contract, Casual and bonded labour 3.Special
distressed categories- Head and shoulder loaders, Scavengers, variety of labour works. 4. Service
categories – Hotel boy, Midwives, Air hostesses, barber, masseur etc. Apart from aforesaid
category handicraft artisans, Cobblers, Handloom weavers, physically handicapped self
employed persons, Lady tailors Rickshaw pullers, Carpenters, Tannery labour,
Power loom workers and urban poor, Truck and Auto drivers also come under the unorganized
labour class.4

3. Major concern faced by workers in unorganized sector

The certain factor effect the workers in unorganized sector in such way that are forbidden from
being exclusive sector. It depends on organized sectors for its raw materials, capital,
employment and marketing. The formal sector uses the model of sub contracting for engaging
labor in the unorganized sector.5 The formal sector uses the model of sub contracting for
engaging labour in the unorganized sector. Problems of unorganized labours are multifarious in
nature, hence confining this sector within a comprehensive framework is difficult.6

3
ibed
4
(Dr.) Subhasish Chatterjee, ‘Labourers of Unorganised sectors and their Problems’ (2016) ‘International Journal of
Emerging Trends in Science and Technology’ 4397.
5
Kishore C Samal, Growth of Informal Sector ( SSDN Pub,2013).

4
3.1.Insecurity in Job

Social security means which provide amenities and assurance to the workers. For instance, the
employment of the agricultural sector is irregular and unassured. Agricultural workers are
engaged for only three months in a year and for the rest, they search an alternative job to sustain
from starvation. For this reason informal workers depends on multiple employments due to
insecurity of work7. The condition is even more worse for women in developing countries like
India acc. To National Commission for women reporting impact of WTO on Women in
Agriculture (2005) they are engaged only few day’s work in a year. The factors like
variations in the climate and location also affects the workers job security.

3.2. Inability to Secure Minimum Wages

Wags are core reason why a labor work and for the protection of the factor. The Supreme Court
of India ruled that employing workers at wage rates below the statutory minimum wage levels is
considered as the forced labour and is the infringement of Article 23 of the Constitution of
India.8 The harsh reality somewhat different Studies on conditions of employment in the
unorganized sector reported that daily wages are paid much below than the minimum fixed by
the government. The casual workers are least protected due to low earnings. Wage is not
influenced by the market forces9 mostly the works are ready to work for lower wages due to
economic compulsion.

3.3. Occupational Hazards

Unorganised workers are exposed to hazardous working conditions which adversely affect their
health. Health problem increase due to low nutrition and heavy physical labour. Low income
and inability to pay for the health care leads the poor worker to be indebted. Studies reported

6
K. R. Gupta, Urban Development Debates In The New Millennium: Studies In Revisited Theories And Redefined
Praxes (Atlantic Publishers and Distributors Pvt Ltd,2004)
7
S.C. Srivastava, Treatise on Social Security and Labour Laws (Eastern Book Co,2005)

8
Peoples Union for Democratic Rights v. Union of India (AIR 1982 SC 1473)
9
Pradeep Devadashan, ‘Prospects and Problems of unorganised Labours in Indian’ [2007] ‘JOUR’ 94.

5
that home based beedi workers are effected with respiratory and body ache due to inhalation of
the tobacco dust and peculiar posture at work respectively. In fish processing units women are
working in highly contaminated environment. In tobacco processing units, who involve
plucking, winnowing, grading and packing etc, the mist containing tiny particles of
tobacco spread in the workplace enters the respiratory track and cause dangerous diseases
like asthma, Tuberculosis etc. Salt Pan Workers suffer from severe eye problems due to the
reflection of light from the heap of salt and skin diseases. Extensive usage of fertilizers,
insecticides and pesticides also affect the health in the agriculture sector. Persons engage in
applying, mixing and loading pesticides are exposed to toxic chemicals. Collecting statistics
about accidents and injuries in farming need to be developed 10. The workers working in the
fireworks, match works, leather tanning and construction are prone to accidents leading to
amputations, due to unguarded operations or unsafe machines.

3.4. Poor Employer-Employee Relationship

scattered work culture without designated workplace, is preventing to build master-servant

relationships to execute labour laws.11 The preference over multiple employers due to non
availability of work and employment of home based workers through contractors has
deprived the unorganised workers from getting minimum wages and social security.

3.5. No Fix Hours of Work

Long hours of work in the unorganised sector beyond the labour and regulatory norms are
standard in India. In the agricultural sector, there are no fixed hours of work as there are no laws
to act as guidelines for the working conditions of agricultural laborers. Long working hours
beyond the regulatory norms will affect the social and family life, especially of women
employees restraining them from participating in any cultural or social affairs of the
family.12Absence of laws to govern the working conditions of agricultural labour resulted for
lengthy working hours.

10
Ibed
11
Debi Saini, ‘Labour in new the Industrial-Relation Era: Global and Indian perspectives’[2008] ‘JOUR’1.
12
Arjun Patel and kiran Desai, Contemporary Society: Social Concern (1992).

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3.5. Vulnerable Labour Groups and Low Bargaining Power

The study group on the construction of the First National Commission on Labour as well Second
National Commission (2002) observed that on quarries, brick-kilns as well as in big construction
sites a system of bondage exists and get extended from one generation to the next through
labour.The migrants workers have no right to bargain and works for less wage. Illiteracy, lack of
awareness, lack of regulations and social isolation are the hurdles from unionizing. Inspite of
employment opportunities it generates and contributions to the Gross Domestic Product of the
country, it lacks in the legal status affecting workers right prospects drastically. They cannot
voice their demands or object the adverse attitude of the employers to protect their self interest.13

4. Legislative and Policy Framework

4.1. Constitution of India

‘Labour’ is a subject belong to Concurrent list of Indian Constitution, with both Central and
State Governments competent to enact legislations on the subject. The constitution grants
some Fundamental Rights connecting to labour under Part III. Protection of life and personal
liberty14, Right against exploitation 15
prohibiting Traffic in human beings, beggar and other
forms of forced labour compelling anyone for involuntary and free service without wage or any
forced labour which are punishable under law. Traffic in human beings is to deal in men and
women like goods‟ either by selling or disposing or slavery which are punishable under
Section 370 of Indian Penal Code, 186016. Right to Constitutional Remedies (Article 32) and
Directive Principles of State Policy (Article 38- 51) in the Part IV, with a set of guiding
principles for the governance of the country. Article 46 directs the State to promote educational
and economic interest of the weaker sections to protect from social injustice and all forms of
exploitation. Article 47 guides the State to raise the level of nutrition and the standard of living

13
Gender and Economic Policy Discussion Forum (2012).
14
The Constitution of India, 1950, Art. 21
15
The Constitution of India, 1950, Art. 23
16
Raj Bahadur vs Legal Remembrancer to the Government of West Benga(AIR 1953 Cal 522).

7
the people. Article 51(A)(e)ensures promotion of harmony and the spirit of common
brotherhood among all the people of India and to renounce practices derogatory to the
dignity of women.

4.2. Equal Remuneration Act, 1976

The Act is applicable to the women workers and provides for the payment of equal remuneration
to men and women workers and for the prevention of discrimination, on the ground of sex,
against women in matters of employment. Under the Act, the employer has to pay equal
remuneration to men and women workers for same work or Estelar 129 work of a similar nature.
By same work or work of a similar nature is meant work in respect of which the skill, effort and
responsibility required are the same, when performed under similar working conditions. The Act
also provides against discrimination made while recruiting men and women workers.17

4.3. The Bonded Labour System (Abolition) Act, (1976)

Forced labour violates the fundamental rights guaranteed to all citizens by the Indian
Constitution. Article 23(1) in Part III relating to Fundamental Rights, states "Traffic in human
beings and begar and other forms of forced labour are prohibited and any contravention of the
provision shall be an offence, punishable by law". The Bonded Labour System (Abolition) Act,
(1976) dealing with bonded and forced labour was legislated by Indian Parliament in 1976 in
view of the above provision. The Act is applicable to bonded labour and provides for the
abolition of bonded labour system with a view to preventing the economic and physical
exploitation of the weaker sections of the people. The Act defines 'bonded labour' as a service
rendered under the 'bonded labour system'. This is a system of forced, or partly forced, labour

17
Equal Remuneration Act,1976

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under which the debtor enters into an agreement, oral or written, with the creditor. According to
this agreement, in consideration of an 'advance' obtained by the debtor or by any of his lineal
ascendants and in consideration of interest on such an advance or in pursuance of any customary
obligation or by reason of his birth in any particular caste or community, the debtor agrees to
render, by himself or through any member of his family, labour for the creditor for a specified or
unspecified period of time either without wages or for nominal wages, or forfeits the freedom of
employment or other means of livelihood, or forfeits the right to move freely throughout India,
or forfeits the right to appropriate or sell at market value any of his property or the product of his
own or any of his family members'. It may be noted that the Supreme Court in the case of
'Bandhua Mukti Morcha, 1983 has held that the burden of proof that a worker is not a bonded
labour is on the employer and that the court would presume the existence of bonded labour
unless it is rebutted by satisfactory evidence.18

4.4. The Child Labour (Prohibition and Regulation) Act, 1986

No child below the age of 14 years shall be employed or permitted to workin any specified
employments under the act. Whoever employs in contravention to section 3 of the act shall
be punishable with imprisonment for not be less than six months, extendable to two years, or
with fine of not less than Rs. 20,000, extendable to Rs. 50,000 or with both. Many
children are working in agriculture, handlooms, power looms, food industry, Beedi
Industry,Small rubber and plastic factories, Jari (Golden Embroidery), domestic services,
garages etc. Some are engaged as shoe shine boys, vendors, car cleaners, carriers in the trade of
illicit liquor and other narcotic drugs. Children working in the Textile industry, engage in
weaving. Work place being a small room,serves as home and workshop with less pay and could
not attend school.

4.5. The Minimum Wages Act, 1948

The Act is applicable to the workers engaged in the scheduled employments and provides for
fixing minimum rates of wages in certain employments. It is applicable both to agricultural, non-

18
The Bonded Labour System Act,1976

9
agricultural and to rural as well as urban workers. The Government may, however, increase the
scope of this Act by adding schedules. Units employing even one worker are covered by the Act.
Under the Act, the appropriate government shall fix the minimum rates of wages payable to
employees in a specified employment and review the rates at such intervals as it may think fit,
such intervals not exceeding five years. The Government also fixes a minimum rate of wages for
time rated work, a minimum rate of wages for piece work, a minimum rate of remuneration to
apply in the case of employees on piece work for the purpose of securing to such employees a
minimum rate of wages on a time work basis, a minimum rate (whether a time rate or a piece
rate) to apply in substitution for the minimum rate which would otherwise be applicable, in
respect of overtime work done by employee.
Maternity Benefits Act, 1961 The Act is applicable to the women workers and seeks to regulate
employment of women in certain establishments for certain periods before and after childbirth
and provides for maternity and certain other benefits. It applies to every establishment, being a
factory, mine or plantation including any such establishment belonging to Government. This Act
is not applicable to the establishments engaging less than 10 persons. The Government may
however extend its applicability to any other establishment or class of establishments. This Act
does not apply to any factory or other establishments to which the provisions of the Employees'
State Insurance Act, 1948, (34 of 1948) apply. The Act prohibits employment of, or work by,
women during the six weeks immediately following the day of her delivery or miscarriage.
Women worker are entitled to maternity benefit at specified rates for specified periods. It also
provides for payment of maternity benefit to the nominee in case of death, payment of medical
bonus, and leave for miscarriage for a period of six weeks immediately following the day of her
miscarriage, leave for illness arising out of pregnancy, delivery, premature childbirth, or
miscarriage, nursing breaks etc.19

4.6. Social security to unorganised workers(Unorganised Workers Social Security Act 2008 )

Social security is essential for the welfare and provides certainty to the workers. Social security
measures have manifolds benefits in promoting the workers, increasing the production level of
industry and develop the feeling of surety among the workers. It was also helpful for eradicating
19
The Minimum Wages Act, 1948

10
poverty to some extent. Social security is a fundamental human right (Though not one of
the Constitutional Fundamental Right).
In this regard, the issue of social security to the growing sector of unorganised workers draws
more attention in emerging India. The government enacted much social security legislation for
the welfare of unorganised workers also formulated many schemes. Unorganised Workers Social
Security Act 2008 is one of the significant activities which is exclusively for the protection of
unorganised workers.
The mechanism under the Act provides a three-tier system for the implementation of the law.

4.6.1. National social security board

The Union Government constitutes the National Social Security Board with the union minister
for Labour and Employment as Chairperson, members nominated by The Union Government
consisting of seven each representing workers and employers from unorganized sector, an
eminent person from civil society, two members from the House Of the People, one member
from the Rajya Sabha and also five each members representing Ministries from the Central And
the State Governments.20 The main function of the board is recommend and advise new scheme
to central government and review and record running schemes at central and state level.
4.6.2. State social security board

The State Government at the state level is empowered to constitute the Social Security Board for
the objective of proper implementation of the Act. Function and Composition of State Social
Security are the same as the National Social Security Board.
The Social Security Boards, which are entrusted with the responsibility of implementation of the
act, are just advisory in nature and are not empowered to perform many functions except
monitoring and review.

4.6.3. Workers facilitation centers

20
Unorganised Workers Social Security Act, 2008, Art.5 

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The Act also provides for the constitution of “Workers Facilitation Centers” by the State
Governments21 to disseminate information social security schemes, assist unorganized workers
for the registration and facilitate the enrollment of the registered unorganized workers for social
security schemes, but the Act is silent about at which level these workers facilitation centres are
to be created.
The government attempts to change the scenario with the introduction of the Unorganised
Workers’ Social Security Act of 2008. India Exclusion Report 2013-14 explains the act as
“Enacted to benefit the working poor and targeting people with little or no means of their own,
like the land- less and land-poor, this piece of legislation was aimed at reaching out to these
citizens in need of public support, to secure their survival. It has, however, largely resulted in the
culmination of the sum of existing pieces of social welfare schemes. These welfare schemes do
not, conversely, share the act’s rights-based approach”. Enactment of this law was propelled by
the motive to institutionalize the efforts being done by the states and central governments and to
mon-itor the schemes and benefit at the individual level. The act has worked as pushing force to
some long time ignored labour issues, but it has yet to be applied with its full potential22.
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Conclusion

India do not have a specific scheme to register whole workers of unorganised sector. The wage
payment by the owner, sub contractor, agent and middlemen are violating wage regulations
causing miseries to the marginalized workers. Employment on sub-contract, have evaded
welfare standards specified by the law. Non compliance of labour regulation relating to
minimum wage, social security and welfare have increased miseries of informal sector. Lack of
skills and training, home based work, micro enterprises, has created unregulated work
environment. Non availability of jobs in the capital intensive organized sectors due
technological advancement encourage employments in the labour intensive unorganized
sectors. Many are attracted to the unorganised sector due to the easy employment and income.
Government should regulate informal economic activities with safety and health. The
causes for injuries, fatalities, diseases, disasters in this sector should be controlled. The
21
Unorganised Workers Social Security Act, 2008, Art.9
22
Satyam Mishra, ‘Social Security for Unorganised workers in India’ [2004] ‘JOUR’ 74

12
Government of India took a step by enacted a legislation ‘Unorganized Social Security Act,
2008’ for providing underlying social security to the unorganised workers who work in an
unorganised sector. In pursuance of this Act, the Government of India has implemented
numerous schemes such as Aam Admi Bima Yojanaold age pension scheme, Rashtriya Swasthya
Bima Yojana etc. The enterprises should focus to contribute to the national assets by creating
community awareness on sensitive issues connected to workers. Attention should be provided to
encourage green jobs, sustainable development, community participation, health and safety
consciousness and enriching the skills of unorganised workers in India.
As many problems are faced by unorganised workers such as low wages, exploitation of
workers, cruel conditions of workers etc. so the legislative system of India protects the rights of
the unorganised workers with the help of various articles covered under the constitution of India.
The Central Government, under the requisite section and the State Government under the
specified section, have been empowered to make the rules for the smooth functioning.

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14