Ans.

1
Introduction
The unorganized sector of labour comprises the labourers who are engaged in mostly seasonal
work. The work ranges from construction jobs to domestic work and the work on farms. The
struggle for the labourers is gender specific and women are required to work outside for
economic reasons and at home as well. In numerous cases women are forced by their situation
to engage in labour work due to divorce, separation, death of spouse or due to the requirement
of double income, not to mention the need to work due to the husband being a drunkard. The
problems which these labourers face are only amplified due to their lack of awareness of
possible remedies. Therefore, in so far as these unorganised labourers are concerned, their
employers are at an advantaged position where they can and do exploit them without
consequence.
While the nature of work does not require technical knowledge or skill and allows for unskilled
labour to find work, due to the fact that the workers are unskilled and lack special knowledge,
they have no bargaining power in their competitive market and thus, the unorganised sector
has workers working and living in poor conditions. Their conditions are so dire that their work
means their life which is why the seasonal nature of their work is a huge problem for the
workers.

The Gaps in the Legal Regime

The Government had decided to amalgamate 44 odd labour laws into 4 codes. Social Security
Bill, 2019 is one of these Codes. Currently, the workers of this sector do not have protection of
the legislations like the Equal Remuneration Act, Minimum Wages Act and Workmen
Compensation Act. As such, the problems faced by them include the very core problem of
below minimum wages. This is a major gap in the current legal regime. Moreover, the workers
have to work long hours for multiple employers be it different houses or different construction
sites at once to provide for their families. However, even this option of working at multiple
places is not open to all of them since nowadays, unorganised workers also include employees
at small shops, security guards etc, where the employer demands long hours without decent
pay. As such, these problems are not addressed in the legal regime for this sector. The
education of their children suffer amidst all these issues, since the core issue of insufficient pay
and long hours do not allow the workers to provide more than food for their family. These
issues accumulate to keep the workers and their next generations in the same economic class
they are in now. Casteism is prevalent. The job givers are usually upper castes who do not give
certain jobs like cooking to people of certain lower castes.
THE UNORGANISED WORKERS’ SOCIAL SECURITY ACT, 2008 (Hereinafter, the previous act) did
provide for the Central Government to formulate and notify social welfare schemes for the
unorganized sector workers with regard to even matters such as skill upgradation and
education of children, however, so far, schemes have not been formulated for all these pressing
issues and the ones been formulated are not implemented adequately, hence the problems
discussed above are still prevalent.

Social Security Bill, 2019 - A way forward?

The bill seeks to establish a social security fund and tap the corporate social responsibility fund
to offer unorganized sector workers medical, pension, death and disability benefits via the
employee’s state insurance corporation.1
● The Code on Social Security Bill 2019 seeks to replace the following legislations:
● Employees’ Compensation Act, 1923;
● Employees‘ State Insurance Act, 1948;
● Employees‘ Provident Funds and Miscellaneous Provisions Act, 1952;
● Maternity Benefit Act, 1961;
● Payment of Gratuity Act, 1972;
● Cine Workers Welfare Fund Act, 1981;
● Building and Other Construction Workers Cess Act, 1996 and
● Unorganized Workers‘ Social Security Act, 2008
While the Bill seeks to consolidate the previous labour laws which make compliance complex
and difficult, it does little to progress towards solving the problems faced by the unorganised

1Livemint, Prashant K. Nanda, 11 Dec 2019, https://www.livemint.com/news/india/labour-code-on-social-security-

introduced-in-lok-sabha-11576058650232.html.
sector. For unorganised workers, the bill carries forward essentially the same provisions as
before which were provided in the previous act. This is true for the provision which deals with
welfare schemes for these workers. The problem of long hours without a decent wage has not
been addressed. There is a provision for setting up worker facilitation centres in the Chapter IX
of the Bill, which would disseminate information about social security schemes for unorganised
workers. However, the provision uses the keyword ‘may’ and thus does not make it mandatory
for the central government to set up such centres. The most this Code does for unorganized
workers therefore, is makes possible for the central government to formulate and notify
schemes for them which the previous Social Security Act, 2008 did as well.

Ans. 2
The position of women in the labour market is far worse than that of men. More than 90 % of
the women workforce is part of the unorganized sector. This is a result of societal gender roles
and other norms for women that make it a lot more difficult for women to get trained and learn
skills to be part of organised labour or skilled labour able to command bargaining power.
Instead, while the economic need for a second wage compels women to labour, the societal
norms and gender roles limit their work to household help and since they lack literacy or skill
for the same reasons, their work gets limited to the unorganised sector.
Moreover, even within this sector there are more problems for women than there are for men.
The employers are known to exploit unorganised workers and what’s more is that the women
bear the brunt of it. The women are already a marginalised community in society, that added
with the caste and class status of these workers, they will be found as further marginalised. Due
to the reason of being women itself, they face discrimination. Moreover, they were not legally
protected with maternity benefits nor with the Minimum wages Act.
With the coming of the Code on Wages, the following legislations have been repealed and
replaced [Section 69(1)]:
● The Payment of Wages Act, 1936,
● The Minimum Wages Act, 1948,
● The Payment of Bonus Act, 1965 and
 ● The Equal Remuneration Act, 1976.

Inclusive Code: The first noticeable change is in Section 2(k) and (l) where the words ‘employee’
and ‘employer’ have been given broad definitions. Therefore, the application of the provisions
using these words will be on a larger group and more workers will now get the protection of
minimum wages and equal remuneration. The definition of ‘employer’ shows the intent of law
makers to increase the ease of doing business as well, since the manager, where managers are
hired and given control, are being roped in as employers, not the ultimate owners.
Another noticeable difference is in Section 3 which provides for prohibition of discrimination
based on ‘gender’ instead of using the words, “men and women”. This makes for a statement
inclusive of other genders. With the second proviso in Section 2, this Code has also cleared the
air on what components must be considered while computing ‘remuneration’ for this purpose.
The next noticeable change is seen in the definition of wages in Section 2(y) which provides
inclusions and exclusions. The exclusions are quite a long list of other modes of compensations
which will not any longer form part of wages. This has been done in order to make sure that
these compensations are not misused to effectively pay less wages.
Cost of living allowance: Section 7 provides for an allowance over a basic rate of pay, which is
also mentioned as the cost of living allowance. This is a component of minimum wage. Thus,
the code considers the cost of living which by itself means that the code accounts for the
geographical differences in the same and the authorities are to fix minimum wages accordingly.
Floor wage: Section 9 also provides for the fixing of ‘floor wage’, a new concept. Clause (1) of
this section provides that the minimum living standard must be considered for determination of
the floor wage. The proviso allows for fixing of different floor wages for different geographical
areas. Clause (2) also provides that the minimum wage never be lower than floor wage and if
minimum wage gets set higher than floor wage then it must not be reduced.
Wage period: It is provided in the code that the wage period will not be more than a month.