RIGTHS OF UNORGANISED LABOURS IN INDIA

Submitted by-

Divyaraj Jain

SM0121021

Faculty in charge –

Dr. Shailendra Kumar

NATIONAL LAW UNIVERSITY AND JUDICIAL

ACADEMY

GUWAHATI, ASSAM
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TABLE OF CONTENTS

❖ INTRODUCTION.................................................................................................................... 3

o LITERATURE REVIEW ........................................................................................... 3

o SCOPE AND OBJECTIVE........................................................................................ 4

o RESEARCH QUESTIONS ........................................................................................ 4

o RESEARCH METHODOLOGY .............................................................................. 4

❖ I. WHO ARE UNORGANISED LABOUR? .......................................................................... 5

o I.I. FOR INSTANCE ACCORDING TO THE REPORT OF THE NATIONAL

COMMISSION ON LABOUR IN 1969 .................................................................... 5

o I.II. FURTHER ACCORDING TO THE UNORGANIZED WORKERS

SOCIAL SECURITY ACT,2008: ............................................................................... 6

o I.III. PROBLEMS FACED BY THE UNORGANISED LABOURS ..................... 7

❖ II. UNORGANISED WORKER’S SOCIAL SECURITY ACT,2008 .................................. 9

o II.I. MERITS ............................................................................................................... 9

o II.II. DEMERITS ...................................................................................................... 10

❖ III. SUGGESTIONS FOR THE UNORGANAISED WORKER’S SOCIAL SECURITY

ACT, 2008. .............................................................................................................................. 13

❖ IV. CONCLUSION ................................................................................................................ 14

❖ REFERENCES ....................................................................................................................... 14

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INTRODUCTION
India's unorganized labor force, consisting of workers in the informal sector, is estimated to be
around 90% of the country's total workforce. Despite their significant contribution to the
economy, these workers often suffer from a lack of legal protection and recognition. This has
resulted in rampant exploitation and abuse of their rights, including low wages, hazardous
working conditions, and a lack of access to social security benefits. Unorganised workers
deserve special consideration since they play a crucial role in society. The majority of the
society's socially and economically disadvantaged groups are involved in informal economic
activity. The unorganised sector's crucial contribution to the economy was recognised by the
government. In light of this, the Indian government has taken several initiatives to safeguard
the rights of unorganized laborers. One such measure is the Unorganized Workers' Social
Security Act, 2008, which seeks to provide social security coverage to these workers.
Additionally, various labor laws and regulations have been introduced to protect the interests
of unorganized laborers. However, despite these efforts, the issue of unorganized labor rights
remains a pressing concern in India. There is a need for further research and analysis to assess
the effectiveness of existing legal frameworks and identify areas for improvement. This legal
project aims to examine the rights of unorganized laborers in India and evaluate the adequacy
of the current legal protections available to them. Additionally in this article, the author
attempts to critically assess both the circumstances of unorganised employees in India and the
Unorganised employees' Social Security Act of 2008. Additionally, the author offers
recommendations for strengthening the Social Security Act for Unorganised Workers of 2008's
provisions for worker protection in the unorganised sector and filling in any gaps. The project
will also explore potential solutions and policy recommendations to address the challenges
faced by this vulnerable section of the workforce.

LITERATURE REVIEW
• "Unorganized Workers and Social Security in India: Issues and Challenges" by
Dr. Santosh Mehrotra and Dr. Ankita Gandhi:

This article provides a comprehensive review of the challenges faced by unorganized

workers in India in accessing social security benefits. It analyses the existing legal and
policy framework for the protection of these workers and identifies the gaps in the system.
The authors propose a set of recommendations for improving the social security system for
unorganized workers in India.

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 • "Unorganized Workers and the Law: Issues and Challenges" by Dr. N.R.
Madhava Menon:

This article provides a critical analysis of the legal framework for the protection of
unorganized workers in India. The author highlights the challenges faced in the
implementation of labor laws and policies and proposes solutions for improving the
situation. The article also covers the role of trade unions and civil society organizations in
protecting the rights of unorganized workers.

• "The Informal Sector and the Rights of Workers in India" by Dr. Uma S. Bhende:

This article provides an overview of the informal sector in India and the challenges faced
by workers in this sector. The author analyzes the existing legal and policy frameworks for
the protection of these workers and proposes policy recommendations for improving their
situation. The article also covers the role of trade unions and civil society organizations in
protecting the rights of informal sector workers.

SCOPE AND OBJECTIVE

The scope of this paper is limited to the status of rights available to the unorganised labours in
India. The main objective is to critically analyze the conditions of unorganised workers in India,
and also to critically analyse the Unorganised Workers' Social Security Act, 2008.

RESEARCH QUESTIONS
• Who are unorganised labours and what are the problems faced by them?
• What are the merits and demerits of The Unorganised Workers' Social Security Act,
2008?
• What changes can be made to the Unorganised Worker’s Social Security Act, 2008

RESEARCH METHODOLOGY
This paper is based on doctrinal research methodology. Under primary sources Unorganised
Workers Social Security Act 2008 is referred. Under secondary sources various statistical
journals and articles by trusted publishing houses and news portals were referred to attain the
required information to the analysis made

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I. WHO ARE UNORGANISED LABOUR?

Understanding who is considered as unorganised labour and who is not is very important for
many reasons. A policy or regulations cannot be effective if the targeted individuals cannot be
specifically identified. Therefore, various legislations and commissions have made an attempt
to define unorganised labour. Most of these definitions are negative definition i.e., they define
unorganised labour as those who are not covered under the definition of organised labour.

I.I. FOR INSTANCE ACCORDING TO THE REPORT OF THE NATIONAL

COMMISSION ON LABOUR IN 1969

‘‘Unorganized workers’ are groups of workers who are not covered under the definition or
organised labour and can organise in pursuit of a common goal due to force such as:-

1. Casual nature of employment.

2. Ignorance and illiteracy.
3. Establishment of small size with the low capital invested per person employed.
4. Scattered nature of establishments.
5. Muscular strength of the employer operating either singly or in combination.

National Commission also gives some categories of workers, which can be categorised as
unorganised workers, which are the following:

• Contract-based worker and it also includes workers engaged in the construction work.
• Informal(casual) labour.
• Labour engaged in small industry.
• Handloom/ power worm workers.
• Beedi and cigar workers.
• Employed in shops and commercial establishments.
• Sweepers and scavengers.
• Workers in teaberries.
• Tribal labour.
• Other unprotected labour.

These categories are only ‘illustrative’ and are not exhaustive.

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I.II. FURTHER 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.”

Unorganised Workers: “unorganised workers” means as follows.

• A home-based worker.
• Self-employed worker.
• Nature of employment, contract, casual and bonded labour wage worker in the
unorganised sector.

It also includes a worker in the organised sector who is not covered by any acts mentioned in
schedule II of the Act”.

Based on the distinctiveness, the government has classified the unorganised workforce
exclusively in four categories.

• In terms of employment like construction workers, waiver, fisheries, workers of the

paper mill, sawmill etc.
• The labourers which are most in exploited-Head and shoulder loaders, scavengers,
variety of labour works.
• Labourers who are providing service-Hotel boy, Midwives, Air Hostesses, barber,
masseur etc.

Apart from category described above handicrafts, artisans, cobblers, handloom weavers,
physically handicapped self-employed persons, lady tailors, a rickshaw puller, carpenters,
tannery labour, power loom workers and urban poor, Truck and Auto drivers also come under
the ambit of unorganised labour.

From the definition given above certain common characteristics can be identified for the
unorganised labours which are - ease of entry, smaller scale of operation, local ownership,
uncertain legal status, labour intensive and operating using lower technology based methods,
flexible pricing, less sophisticated packing, absence of a brand name, unavailability of good

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storage facilities and an effective distribution network, inadequate access to government
schemes, finance and government aid, lower entry barriers for employees, a higher proportion
of migrants with a lower rate of compensation.' Employees of enterprises belonging to the
Unorganized Sector have lower job security and poorer chances of growth and no leaves and
paid holidays, they have lower protection against employers indulging in unfair or illegal
practices.'1

I.III. PROBLEMS FACED BY THE UNORGANISED LABOURS

As being the weaker section of the society, they face many challenges. They are as follows.

• Low wages– Wages is only the factor for which any person/employer works. As the
labourer is getting meagre wages. As there is the Minimum Wages Act defines the
minimum wage, which needs to be paid to the worker, but the worker fails to get
minimum wages. 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 even though economic
compulsion might drive one to volunteer to work below the statutory minimum wage.
• No Knowledge about Work Hazardous and Occupational Safety-The working
conditions in the unorganised sector is the leading cause to have an adverse effect on
the health conditions of workers. Concerning home workers, most of the studies
reported that labourers suffer from health problems.
• The health problems are mostly related to respiratory due to inhalation of the tobacco
dust and body ache, or due to the peculiar posture that has to be maintained at all
times of work. Unguarded machinery, various toxic chemical coal, dust lime, dust
blaze, the raw material for synthetic generation leads to the death of many unorganised
workers because the working conditions are more severe and knowledge of
occupational health and safety is negligible.
• Maximum workers are living in deplorable conditions:-They live in unsanitary
conditions and likewise battle with sewer seepage framework overflowing drainage
system, flooding and storms. They live in a slum area. The facilities such as washing,

1
Reetika Dandheech, ‘Women workers in unorganized manufacturing sector of Punjab’, Gian Jyoti E-Journal
(September 22nd, 2016).

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 urinal, toilets facilities at work are found to be below standard. It could be said that no
such facilities were provided to workers in the industries.
• Extended 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 labourers.
• High Level of insecurity is common-Social security means which provide amenities
and assurance to the workers. For instance, the employment of the agricultural sector is
irregular and unassured. This is due to the availability of work to them only for about
three months and remaining nine months, they are mostly unemployed and suffer from
starvation.
• Seasonal Employment-The workers are employed as a seasonal employer. They are
employed only for a particular season and remain unemployed during the remaining
year. Employment is only for 3-4 months.
• Women and children are unprotected and get meagre wages: Article 39(d) of
Constitution of India talks about Equal pay for equal work means that all the person
should get equal wages irrespective of their age, sex if they work for the same hours.
The children are forced to work at hotels, dhaba for low wages.
• Children and women are paid low wages as compared to male despite working for the
same hours. Children and female workers work as household labour at the house of the
people living in the urban area. Such child labourers are subject to long working
hours and involved in the hazardous sectors such as carpet weaving, cloth printing,
explosives and fireworks, cigarette making, printing and soldering process in electronic
industries.
• Harassment issues at the workplace for women- Sexual Harassment is a big issue
that occurs at the workplace. A safe workplace is women’s legal right, but it has been
neglected. They still experience a wide range of physical and psychological ailments
due to eve-teasing and sexual harassment. In spite of the Act that was enacted in the
year 2013 still, the woman is being assaulted at their workplace.
• Vulnerable Labour Groups: -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.
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 • The bonded labour involves a debtor-creditor relationship in this system, the creditor
advances loan to the labourer and put him in bondage until the loan is returned. The
repayment of debt is so arranged that the servant cannot repay it during his lifetime
before ensuring lifelong service for the master. It is this feature which differentiates
bonded labour from unpaid forced labour.
• Insecurity due to natural disasters: -There are many natural disasters like floods,
droughts, earthquakes, famine etc. which also have a devastating impact on the informal
sectors. Natural disasters do not wipe out the productive base of the informal sector,
but can also affect the limited household assets of the owner.
• In the handloom sector, the work is organised in such a way that wages were based
on 12-15 hours of work per day. A large number of workers and the labourers are
illiterate and as a result, the employers exploit the labourer by forcing them to work for
extra hours. Due to long working, social isolation of migrant workers, high level of
unemployment, illiteracy and lack of awareness are the major hurdles in organising
themselves.2

II. UNORGANISED WORKER’S SOCIAL SECURITY ACT,2008

The Unorganized Workers' Social Security Act, 2008 is a landmark legislation in India that
seeks to provide social security and welfare to workers in the unorganized sector. The
unorganized sector comprises workers who are employed in informal and unregulated
employment, without any job security or social security benefits. This act aims to address the
issues faced by unorganized workers by providing them with access to social security benefits
and welfare measures.

II.I. MERITS

The act has several merits that make it an essential piece of legislation for the welfare of
unorganized workers.

i. Access to Social Security Benefits: The Unorganized Workers' Social Security Act,
2008 provides access to social security benefits such as health and maternity benefits,
life and disability cover, old age protection, and education. This ensures that

2
Rajiv Srivastav, ‘An Analysis on the Problems faced by Unorganized Sector’, Juris Centre review (June 27th,
2003).

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 unorganized workers have access to the same benefits that workers in the organized
sector enjoy.
ii. National Social Security Board: The act provides for the establishment of a National
Social Security Board that is responsible for formulating and implementing policies for
the welfare of unorganized workers. This board comprises representatives from the
central and state governments, employers' organizations, and workers' organizations,
ensuring that the interests of all stakeholders are taken into account.
iii. National Fund for Unorganized Workers: The act provides for the establishment of a
National Fund for Unorganized Workers that is used to finance social security and
welfare schemes for unorganized workers. The fund is financed by contributions from
the central and state governments, employers, and workers, ensuring that all
stakeholders contribute to the welfare of unorganized workers.
iv. Registration of Unorganized Workers: The act provides for the registration of
unorganized workers, ensuring that they are identified and included in the schemes and
programs that are designed for their welfare. This registration process ensures that
unorganized workers are not left out and are entitled to social security benefits and
welfare measures.
v. Dignified Life: The Unorganized Workers' Social Security Act, 2008 recognizes the
contribution of unorganized workers to the economy and seeks to provide them with
social security and welfare measures that will help them lead a dignified life. This
ensures that unorganized workers are not left behind and can enjoy the same benefits
and protections as workers in the organized sector. Boost to the Economy:
vi. The Unorganized Workers' Social Security Act, 2008 is a significant step towards
ensuring that workers in the unorganized sector receive the benefits and protections that
they deserve. This will boost the economy by ensuring that unorganized workers have
access to the same benefits and protections as workers in the organized sector, leading
to increased productivity and growth.3

II.II. DEMERITS

• Defects in Section (2): The long title of the Act is that it is an Act "to provide for social
security and welfare of the unorganised workers and for other matters connected
therewith or incidental thereto." The term "social security" has not been defined in the

3
Upasana Mahanta, ‘Recognition of the Rights of Domestic Workers in India’, Springer (2019).

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 law and what is even more strange, the term does not occur in the body of the law in
any substantive sense. Though, the expressions "social security" and "welfare" are used
interchangeably, the emphasis seems to be only on schemes of welfare.2 No doubt, the
phrase "social security" occurs in a few places, as for example in the heading of Chapter
II, designating the National and State level Boards as "social security" Boards, in
section 9(a), ,in section 10(4) and finally in the heading of Schedule I The Act is
premised on a clear distinction between 'organised' and 'unorganised' sectors, despite
the contrary argument that such firm distinctions cannot be drawn and both the terms
are inter-linked. Contrary to the usual practice of defining unorganised as a residue of
the organised, the Act defines organised as a residue of the unorganised. This has been
done by defining 'unorganised sector'3 as establishments that employ less than 10
workers. The definitions exclude majority of workers like forest workers and
fisherman's, who could not be brought within the ambit of 'home-based worker', 'self-
employed worker', and 'wage worker'. Since these people are not working in an
establishment, they are also excluded from the per view of definition of Unorganised
sector. For instance, most of the traditional fish workers in India follows a sharing
system, in which the catch is shared among the boat owner and the crew. In this Act,
the unpaid women workers are not covered as they do not fall within the definitions of
'home-based worker', 'self-employed worker', or 'wage worker'. In all these definitions,
wage or monthly earnings are a precondition for being considered as 'unorganised
worker'. Many workers in rural India, especially in agricultural sector, work on
consideration other than money. Therefore, the definition of 'self-employed worker'
should include unpaid women workers, unpaid family members engaged in the work
done by the family for livelihood, and workers paid in kind. The expression "District
Administration" occurring in section 2(c) has not been defined. With the spread of
administrative hierarchies of various developmental and regulatory departments of
government, there is considerable presence of almost all departments at the District
Level, Labour Department also being one such. Therefore, there is need to define the
term "District Administration" in order to avoid confusion at the time of
implementation of the schemes.
• Application of schemes limited to BPL workers: Most of the schemes are available
only for BPL (Billow Poverty Line) workers.6 The definition of the term "self-
employed worker" in section 2(k), and of the term "wage worker," in section 2(m) of
the Act provide for limits to be prescribed by the government for monthly earnings or
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 of extent of land holdings or of monthly wage, paves way for the suspicion that, the act
is essentially designed to cover BPL workers. A person earning more than Rs.12 per
day in a village is not considered BPL as per the current BPL norms, which leave a
large proportion of the deserving poor outside the safety net. The Central Vigilance
Commissioner (CVC) has, therefore, recommended enhancing the number of BPL
families. By this restrictive clause in the schemes, more than 90 per cent of the
unorganised workers, the contingencies of whose lives have pushed them into poverty
and increased vulnerabilities, are, in effect, denied the benefits of the schemes
mentioned in the schedule of the Act. This generalised exclusion is constitutionally
invalid. It is in violation of Article 14 of the Constitution, which does not permit
generalised discrimination.4
• The term "Unorganised Worker" has been, inter-alia, defined in section 2(m) as "a
home-based worker, self-employed worker, or a wage worker in the unorganised sector
....... The term "Unorganised Sector" restricts the coverage to those enterprises
employing workers who number less than 10 as defined in section 2(l). This numerical
limit may raise problems. For example, in the case of brick kilns not using power in the
manufacturing process, the number of persons employed, even if it be for only a portion
of the year, will be well above 9, this definition will make the workers ineligible for
coverage. If the argument is that such enterprises will get covered under, say the
Factories Act, 1948, what happens to those enterprises where the employment is
between 10 and 19. Also enterprises employing 9 or a smaller number of workers may
include cyber cafes, beauty parlours, real estate agencies and so on but their employees
may not even like to be referred to as unorganized workers. It is perhaps in this context,
section 2(n) defining "Wage Worker" prescribes a monthly wage limit. Be that as it
may, the employment limit of 9 in defining an enterprise as unorganised sector may
need a relook.5

4
T S Sankaran, ‘A Critique of India’s Unorganised Workers’ Social Security Act, 2008’, South Asia Citizens Web
(January 16th, 2009).
5
Sunita Adhav, ‘Protection of Unorganised Workers in India: A Critical Analysis’, Indian Journal of Law and
Justice (March 18th, 2014).

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III. SUGGESTIONS FOR THE UNORGANAISED WORKER’S SOCIAL SECURITY
ACT, 2008.

The Unorganized Workers Social Security Act, 2008, was enacted to provide social security
benefits to unorganized workers in India. However, despite the provisions of the act,
unorganized workers continue to face several challenges related to social security. Therefore,
it is important to suggest measures that can help strengthen the implementation of the act and
ensure that unorganized workers are provided with the necessary social security benefits. Here
are some changes that can be made to the act to make it more inclusive and comprehensive for
the betterment of the unorganised workers: -

• "Social Security" and "Family" must be defined so that the benefits that are covered by
the ILO Convention on minimum standards of social security accrue to the worker and
his family.
• Those social security benefits referred to in section 3(1) of Chapter II should include
unemployment and others indicated in the ILO Convention. The scale of these benefits
should also be spelt out in the law instead of leaving it to the Central Government to be
notified through schemes.
• The fairness and effectiveness of the implementation of the Act greatly depends on the
availability of a functional institution of grievance redressal mechanism, through which
workers have recourse to a method for voicing their complaints about violations. The
government should formulate a model Dispute Settlement Mechanism for unorganised
workers of each occupations involving local administration, employers, police and
other authorities for resolving disputes and grievances relating to employment,
livelihood, encroachment, displacement, land rights, discrimination, state actions etc
with powers to grievance redressal authority to enforce attendance, take evidence,
inspections and investigations, seize records and such other powers as necessary to
resolve dispute or differences amicably between parties and if necessary to refer the
dispute for arbitration.6

6
Yash Mittal, Sneha Kalani and Aditya Raj, ‘Suggested Amendments to UWSS Act 2008’, National Convention on
Social security (January 8th, 2010).

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IV. CONCLUSION

In conclusion, despite being a significant contributor to the economy, unorganized workers

lack the same benefits and protections as their counterparts in the organized sector. The project
has highlighted the various problems faced by unorganized workers, including lack of social
security, low wages, poor working conditions, and limited access to education and training.
The Unorganized Workers Social Security Act, 2008, is a landmark legislation that aimed to
address some of these issues. The act has several merits, including the provision of social
security benefits, setting up of a National Social Security Board, and the creation of a welfare
fund for unorganized workers. However, the implementation of the act has been challenging,
with inadequate funding and lack of awareness being the main hurdles. To improve the
implementation of the Unorganized Workers Social Security Act, several suggestions have
been made, including increasing the coverage of the act, providing more funding for social
security schemes, simplifying bureaucratic processes, and enhancing awareness among
unorganized workers. These suggestions, if implemented, can help ensure that unorganized
workers can enjoy their rights and lead a life of dignity. Overall, the project has highlighted the
importance of ensuring that unorganized workers have access to social security benefits and
protection. It is essential to continue to work towards creating a more equitable and just society
that takes into account the needs of all sections of society, including unorganized workers.

***

REFERENCES

• Rajiv Srivastav, ‘An Analysis on the Problems faced by Unorganized Sector’, Juris
Centre review (June 27th, 2003).
• Reetika Dandheech, ‘Women workers in unorganized manufacturing sector of Punjab’,
Gian Jyoti E-Journal (September 22nd, 2016).
• Sunita Adhav, ‘Protection of Unorganised Workers in India: A Critical Analysis’,
Indian Journal of Law and Justice (March 18th, 2014).

• T S Sankaran, ‘A Critique of India’s Unorganised Workers’ Social Security Act, 2008’,

South Asia Citizens Web (January 16th, 2009).
• Upasana Mahanta, ‘Recognition of the Rights of Domestic Workers in India’, Springer
(2019).

• Yash Mittal, Sneha Kalani and Aditya Raj, ‘Suggested Amendments to UWSS Act 2008’,
National Convention on Social security (January 8th, 2010).

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