The Social Security Organisations

Section 4: the Central Board

The Central Government may, by notification, constitute a Board of Trustees of the Employees' Provident Fund, called the Central Board, for the purposes of Chapter III, to administer the funds vested in it.

Composition, section 4(1). It is a tripartite body:

Its legal character, section 4(2). The Central Board is a body corporate with perpetual succession and a common seal, and it may sue and be sued in its own name.

Its committees, sections 4(3) and 4(4). The Central Government may constitute an Executive Committee from among the Board's members to assist it. The Board itself may constitute one or more further committees by order.

Delegation, section 4(5). The Central Board may by order delegate its powers and functions to its Chairperson, to its Executive Committee, or to any of its officers. A State Board constituted under section 12 may delegate to its Chairperson or to any of its officers. Either delegation may be made subject to conditions and limitations.

Tenure, section 4(6). Terms and conditions including tenure are prescribed by the Central Government, with a proviso that a member continues in office after his tenure expires until his successor is appointed. The point of that proviso is that the Board never lapses for want of members.

Section 5: the Employees' State Insurance Corporation

The Central Government may, by notification, constitute the Employees' State Insurance Corporation, called the Corporation, for the purposes of Chapter IV.

Composition, section 5(1). Larger than the Central Board, and it is the only one of the five with medical representation:

Its legal character, section 5(2). Also a body corporate with perpetual succession and a common seal.

The Standing Committee, sections 5(3) and 5(4). The Central Government may constitute a Standing Committee from among the Corporation's members. Subject to the Corporation's general superintendence and control, the Standing Committee administers the affairs of the Corporation and may exercise any of its powers and perform any of its functions; it must submit specified cases and matters to the Corporation for decision, and may in its discretion submit any other matter.

That is worth pausing on. The Corporation is a large body which meets occasionally; the Standing Committee is the body that actually runs the insurance scheme day to day. The relationship between the two is a favourite short question, and the answer is the phrase "subject to the general superintendence and control of the Corporation".

Section 6: the National Social Security Board and the State Board

Section 6(1) is drafted differently from sections 4 and 5, and the difference matters. The Central Government shall, by notification, constitute a National Social Security Board for unorganised workers. Sections 4 and 5 say "may". Section 6 says shall, so the Board is mandatory.

Composition, section 6(2). Chaired by the Union Minister for Labour and Employment, with the Secretary of the Ministry as Vice-Chairperson, the Director General Labour Welfare as Member-Secretary ex officio, and forty nominated members made up as follows: seven representing unorganised sector workers; seven representing employers of the unorganised sector; seven eminent persons from civil society; two from the Lok Sabha and one from the Rajya Sabha; ten representing concerned Central Government Ministries and Departments; five representing State Governments; and one representing the Union territories.

Qualification and representation. Section 6(3) requires all members except the Chairperson to be persons of eminence in labour welfare, management, finance, law or administration. The proviso to section 6(4) requires adequate representation to Scheduled Castes, Scheduled Tribes, minorities and women.

Term and meetings. Section 6(5) fixes the Board's term at three years. Section 6(6) requires it to meet at least thrice a year.

Functions, section 6(7). Six of them, and they are advisory and supervisory rather than executive:

1. recommend to the Central Government the framing of suitable schemes for different sections of unorganised workers, gig workers and platform workers;
2. advise the Central Government on matters arising out of the administration of the Code referred to it;
3. monitor social welfare schemes for unorganised, gig and platform workers administered by the Central Government;
4. review the record keeping functions performed at the State level;
5. review the expenditure from the fund and account;
6. undertake such other functions as the Central Government assigns.

Read that list carefully. The National Social Security Board recommends, advises, monitors and reviews. It does not frame schemes, and it does not pay anybody. Sections 109 and 114 give the scheme framing power to the Government. A student who writes that the Board frames schemes for unorganised workers has stated the one thing the Code deliberately withheld from it.

The State Unorganised Workers' Board is constituted by the State Government under the same section and performs the corresponding functions at State level.

A second role. Section 114(6) provides that the National Social Security Board constituted under section 6(1) shall be the Board for the purposes of the welfare of gig workers and platform workers. When it sits for that purpose the members in section 6(2)(c) and (d) are replaced by five representatives of aggregators, five of gig and platform workers, the Director General of the Corporation, the Central Provident Fund Commissioner, expert members, five State Government representatives and a Joint Secretary as Member Secretary. One Board, two memberships.

Section 7: the Building Workers' Welfare Board

Every State Government shall constitute a Board known as the (name of State) Building and Other Construction Workers' Welfare Board, to exercise the powers and perform the functions assigned to it under section 7 and Chapter VIII. It is a body corporate.

Composition, section 7(3). A chairperson nominated by the State Government, one member nominated by the Central Government, and not more than fifteen other members appointed by the State Government. The proviso requires an equal number of members representing the State Government, the employers and the building workers, and requires that at least one member be a woman.

That woman member requirement appears in section 7 and nowhere else among the five constitutions. It is the kind of specific that makes a good answer.

Officers, section 7(5). The Board appoints a Secretary, who is its chief executive officer, and such other officers and employees as it considers necessary.

Functions, section 7(6). Unlike the National Social Security Board, this one pays. Ten functions:

1. provide death and disability benefits to a beneficiary or his dependants;
2. pay pension to beneficiaries who have completed sixty years of age;
3. pay premium for a Group Insurance Scheme for beneficiaries, as prescribed;
4. frame educational schemes for beneficiaries' children;
5. meet medical expenses for treatment of major ailments of a beneficiary or dependant;
6. pay maternity benefit to beneficiaries;
7. frame skill development and awareness schemes;
8. provide transit accommodation or hostel facility;
9. formulate any other welfare scheme for building worker beneficiaries, by the State Government in concurrence with the Central Government;
10. provide and improve such other welfare measures and facilities as the Central Government prescribes.

Advisory committees, section 7(7). The State Government may constitute one or more advisory committees on matters relating to building workers.

A worked example

Anil is a mason on a construction site in Thane. His employer also runs a small engineering workshop with twenty-five employees. Anil wants to know who is responsible for what.

For the workshop's provident fund, the workshop has twenty-five employees so Chapter III applies, and the body administering it is the Central Board under section 4, through the Central Provident Fund Commissioner.

For the workshop's insurance, Chapter IV applies at ten or more persons, and the body is the Corporation under section 5, running day to day through its Standing Committee.

For Anil as a building worker, the money side of building work is Chapter VIII, and the body is the Maharashtra Building and Other Construction Workers' Welfare Board under section 7. It is that Board which would pay him a disability benefit, a pension at sixty, or maternity benefit to a woman beneficiary.

Who speaks for Anil nationally? If he is also an unorganised worker, the National Social Security Board under section 6 recommends schemes for him and monitors them, and the State Unorganised Workers' Board does so in Maharashtra. Neither pays him.

If Anil drives for an app at weekends, the same National Social Security Board is the body for gig and platform workers under section 114(6), but with the different membership that provision substitutes.

What this does NOT mean

These are not courts. None of the five adjudicates a claim. Disputes under Chapter IV go to the Employees' Insurance Court under section 48, and compensation claims go to the competent authority under section 91.

They are not all funded the same way, and they do not all pay benefits. The Central Board and the Corporation hold and disburse contributory funds. The Building Workers' Welfare Board pays welfare benefits out of cess. The National Social Security Board and the State Unorganised Workers' Board pay nothing at all.

"Social Security Organisation" is a defined term, not a description. Section 2(79) lists exactly these bodies. The Inspector-cum-Facilitator, the competent authority and the Recovery Officer are officers under the Code but they are not Social Security Organisations, and sections 8 to 13 do not apply to them.

Limits and criticism

Two constitutions are permissive. Sections 4 and 5 say the Central Government "may" constitute the Central Board and the Corporation, while sections 6 and 7 say "shall". Nothing in the Code compels the two contributory bodies into existence, although both plainly exist as continuations of the bodies under the repealed Acts, preserved by section 164(2)(a).

The unorganised sector bodies have no executive power. They advise, monitor and review. The workers they exist for are the workers whose benefits depend entirely on a scheme being framed and funded by Government.

Worker representation is thin where the numbers are largest. Seven members represent unorganised sector workers on a forty member Board, for by far the largest group of workers the Code covers.

Quick revision

• Five Social Security Organisations, defined in section 2(79).
• Section 4, Central Board: provident fund, Chapter III; Chairperson and Vice-Chairperson, up to 5 officials, up to 15 State representatives, 10 employers, 10 employees, and the Central Provident Fund Commissioner ex officio; body corporate; Executive Committee under 4(3).
• Section 5, Corporation: insurance, Chapter IV; adds 2 medical members and 3 members of Parliament, and 1 per State; Standing Committee administers its affairs subject to the Corporation's general superintendence and control.
• Section 6, National Social Security Board: shall be constituted; Union Labour Minister chairs; 40 nominated members; term three years; meets thrice a year; functions are to recommend, advise, monitor and review, never to frame or to pay. Also the Board for gig and platform workers under section 114(6), with a different membership.
• Section 7, Building Workers' Welfare Board: every State shall constitute one; chairperson by the State, one member by the Centre, up to fifteen others, equal representation of State, employers and building workers, at least one woman; the Secretary is chief executive; ten functions, and this Board does pay, including pension at sixty.

Test yourself

1. Name the five Social Security Organisations and the section constituting each. Central Board of Trustees of the Employees' Provident Fund, section 4; Employees' State Insurance Corporation, section 5; National Social Security Board and State Unorganised Workers' Board, section 6; State Building and Other Construction Workers' Welfare Board, section 7.

2. Who actually administers the affairs of the Corporation from day to day? The Standing Committee, constituted under section 5(3), subject to the general superintendence and control of the Corporation: section 5(4)(a).

3. Does the National Social Security Board frame schemes for unorganised workers? No. Under section 6(7)(a) it recommends to the Central Government that schemes be framed. The power to frame is in sections 109 and 114 and belongs to the Government.

4. What does the proviso to section 7(3) require about the membership of a Building Workers' Welfare Board? An equal number of members representing the State Government, the employers and the building workers, and at least one woman member.

5. A Board's term has expired and successors have not been appointed. Does the Central Board cease to exist? No. The proviso to section 4(6) keeps a member in office, notwithstanding the expiry of his tenure, until his successor is appointed.

6. Which of the five Organisations pays a pension, and at what age? The Building Workers' Welfare Board, to beneficiaries who have completed sixty years of age: section 7(6)(b).