Social Security for Unorganised Workers

In one line

The Code brings the roughly nine in ten Indian workers who are outside the organised sector inside the statute, by giving the Central and State Governments the power to frame welfare schemes for them.

In exam wording: section 109 of the Code on Social Security 2020 requires the Central Government to frame and notify welfare schemes for unorganised workers on life and disability cover, health and maternity benefits, old age protection and education, and requires the State Government to frame schemes on provident fund, employment injury benefit, housing, education of children, skill upgradation, funeral assistance and old age homes.

Why the law has this at all

Because the rest of this Code does not reach most Indian workers.

Chapters III to VII are built around an establishment with an employer and a payroll. They apply above thresholds of ten or twenty employees. The street vendor, the domestic worker, the head loader, the home based garment finisher, the small farmer's labourer and the rickshaw driver have none of that. There is no establishment to register, no employer to contribute, and no wage record to compute a benefit from.

Section 2(85) draws the line: an unorganised sector enterprise is one owned by individuals or self-employed workers which, if it employs anyone, employs fewer than ten. Section 2(86) makes an unorganised worker a home based worker, a self-employed worker or a wage worker in that sector, and it also sweeps in a worker in the organised sector who is not covered by the Industrial Disputes Act 1947 or by Chapters III to VII of this Code.

That second limb of section 2(86) is worth noticing. "Unorganised worker" is not simply "worker in a small firm". It is a residual category: anyone the rest of the system does not catch.

The Industrial Disputes Act 1947 referred to there has itself been repealed by the Industrial Relations Code 2020. The reference is read through section 8 of the General Clauses Act 1897 as a reference to the corresponding provision of the re-enacting law.

Some words this chapter uses

Scheme means delegated legislation framed and notified by a Government, carrying the detail the Code leaves out. Enabling provision is one which confers a power to act rather than creating a right directly. Corporate social responsibility fund is the fund a company must spend on social causes under the Companies Act 2013. Home-based worker, self-employed worker and wage worker are defined in sections 2(36), 2(75) and 2(90). Duplication and overlapping in section 111 mean the same worker being recorded twice.

Section 109: the two lists of schemes

Section 109(1), the Central Government's list. The Central Government shall frame and notify, from time to time, suitable welfare schemes for unorganised workers on matters relating to: