Unorganised Labour

The two decisions

People's Union for Democratic Rights v. Union of India, AIR 1982 SC 1473.

Facts. A petition concerned the conditions of workmen engaged in the construction for the Asian Games in Delhi, employed through contractors, and alleged non payment of the minimum wage and breaches of the labour laws.

Held on article 23. Where a person provides labour or service to another for remuneration which is less than the minimum wage, the labour or service provided by him clearly falls within the scope and ambit of the words forced labour under article 23; and such a person is entitled to come to the court for the enforcement of his fundamental right under article 23 by asking the court to direct payment of the minimum wage, so that the labour ceases to be forced labour and the breach is remedied.

Held on why. Ordinarily no one would willingly supply labour for less than the minimum wage when he knows he is entitled to it by law; therefore when a person does so he is acting under the force of some compulsion which drives him to work though he is paid less than his legal entitlement. What article 23 prohibits is labour or service which a person is forced to provide, and the force may be physical, or exerted through a legal provision, or, as here, economic.

Held on the reach of the article. Article 23 provides that no one shall be forced to provide labour or service against his will even though it be under a contract of service, so that a contract is no answer; otherwise the law would lend its authority to the exploitation of the poor and helpless employee by the economically powerful employer.

Why it matters. It converts a wage entitlement under an ordinary statute into a fundamental right enforceable under article 32, which is what makes it available to a worker who has no union, no written contract and no employer he can name.

Bandhua Mukti Morcha v. Union of India, AIR 1984 SC 802.

Facts. An organisation dedicated to the release of bonded labourers addressed a letter to a judge of the Court alleging that workmen in stone quarries and crushers in Haryana were living in bondage and in inhuman conditions. The letter was treated as a writ petition. The questions included whether stone quarries are mines within the Mines Act 1952, whether the workers were entitled to the benefits of that Act and of the Inter-State Migrant Workmen Act 1979, the Contract Labour Act 1970, the Minimum Wages Act, the Workmen's Compensation Act, the Payment of Wages Act, the Employees' State Insurance Act, the Employees' Provident Funds Act and the Maternity Benefit Act; and whether the existence of forced labour amounts to bonded labour under the Bonded Labour System (Abolition) Act 1976.

Held on the burden of proof. Where forced labour is shown, the burden lies on the employer to prove that the labourer is not a bonded labourer, and the court will be justified in presuming that the labourer is a bonded labourer unless that presumption is rebutted by satisfactory material.

Held on the labour statutes. The Court examined the responsibility of the mine lessees and owners and of the Central and State Governments for ensuring the benefits accruing under the Mines Act and the other statutes, and held that thekedars or jamadars recruiting workers from outside the State are contractors within the Inter-State Migrant Workmen Act.

Why it matters. The presumption is the practical rule. A bonded labourer cannot prove the terms of his bondage; placing the burden on the employer is what makes the Act of 1976 usable, and it is the same technique of reversing an evidentiary burden that Module II examines critically in the security statutes, used here in favour of the person the law protects.

The Unorganised Workers' Social Security Act 2008

The definitions, in section 2.

Unorganised worker, in clause (m): a home based worker, a self employed worker or a wage worker in the unorganised sector, and includes a worker in the organised sector who is not covered by any of the Acts mentioned in Schedule II.

Schedule II lists the six Acts whose coverage marks the boundary: the Workmen's Compensation Act 1923, the Industrial Disputes Act 1947, the Employees' State Insurance Act 1948, the Employees' Provident Funds and Miscellaneous Provisions Act 1952, the Maternity Benefit Act 1961 and the Payment of Gratuity Act 1972.

Unorganised sector, in clause (l): an enterprise owned by individuals or self employed workers engaged in the production or sale of goods or the provision of any service, where, if it employs workers, the number is less than ten.

Wage worker, in clause (n): a person employed for remuneration in the unorganised sector, directly or through a contractor, irrespective of the place of work, whether for one or more employers, in cash or in kind, whether home based, temporary, casual or migrant.

Section 3: the schemes. The Central Government shall formulate and notify suitable welfare schemes for unorganised workers on matters relating to life and disability cover, health and maternity benefits, old age protection, and any other benefit it determines; the schemes in Schedule I are deemed to be such schemes; and the State Government may formulate schemes relating to provident fund, employment injury benefit, housing, educational schemes for children, skill upgradation, funeral assistance and old age homes.

Section 4: funding. A Central scheme may be wholly funded by the Centre, partly by the Centre and the State, or partly by the Centre, the State and contributions from the beneficiaries or the employers; and every scheme must provide for its scope, its beneficiaries, its resources, its implementing agency, the redressal of grievances, and any other relevant matter.

Sections 5 and 6: the Boards. A National Social Security Board chaired by the Union Minister for Labour and Employment with thirty four nominated members, seven representing unorganised sector workers, seven representing their employers, seven eminent persons from civil society, three Members of Parliament, five representing Central Ministries and five representing State Governments; and a State Social Security Board in every State chaired by the State Minister with twenty eight nominated members on a corresponding pattern, with a proviso requiring adequate representation to persons belonging to the Scheduled Castes, the Scheduled Tribes, the Minorities and Women. The State Board recommends schemes, advises the Government, monitors the schemes, reviews record keeping at district level and reviews the progress of registration and the issue of cards.

Section 10: registration. Every unorganised worker is eligible for registration if he has completed fourteen years and makes a self declaration that he is an unorganised worker; he applies to the District Administration; and he shall be registered and issued an identity card which shall be a smart card carrying a unique identification number and shall be portable. Where a scheme requires a contribution from him, he is eligible for the benefits only on paying it; and where the scheme requires a government contribution, the government shall make it regularly.

The Act completed

Section 1 gives the short title, extent and commencement. Section 4 provides for the funding of Central schemes, already described. Section 5 constitutes the National Social Security Board and sets out its functions, which are to recommend suitable schemes to the Central Government, to advise it on the administration of the Act, to monitor the schemes, to review the record keeping functions and the progress of registration, and to review the expenditure from the funds.

Section 7 provides for the funding of State schemes, on the same three patterns as section 4. Section 8 places the record keeping functions on the District Administration, which may be performed by a district level authority or a Workers' facilitation centre. Section 9 permits the State Government to set up Workers' facilitation centres to disseminate information on the schemes, to facilitate the filing and processing of applications for registration, and to assist an unorganised worker to obtain registration.

Sections 11 to 17. The Central Government's power to give directions to the National Board or to a State Government or State Board; that a vacancy or defect does not invalidate proceedings; the rule making powers of the Central and State Governments; the laying of rules; a saving for the operation of any corresponding law; and the power to remove difficulties.

Sections 8 and 9 are the practical provisions. Registration under section 10 is done by the District Administration, and the facilitation centre in section 9 is the only body in the Act whose function is to help a worker actually get registered; where a State has not set one up, the scheme reaches the worker who can navigate it himself, which is not the worker the Act is for.

What the Act does and does not do

What it does. It defines the class, creates a registration and identity system that is portable across employers and States, constitutes tripartite Boards, and requires the framing of schemes on four heads.

What it does not do. It confers no enforceable right to any benefit. The benefits are in schemes, framed and funded at the discretion of the Governments, and the Act's own machinery for grievance redressal is left to be provided in each scheme under section 4(2)(v). A worker whose scheme benefit is refused has no remedy in the Act itself.

That is the honest assessment, and an LL.M. answer should make it. The Act is a framework and a register; the enforceable protection of an unorganised worker still comes from article 23 as read in the two decisions above, from the minimum wage law, and from whatever labour statute happens to cover him.

A worked example

A man is recruited by a jamadar in one State to work in a stone quarry in another. He is paid below the minimum wage, is not registered anywhere, and is told he cannot leave until an advance is repaid.

Is he an unorganised worker? Yes: a wage worker in the unorganised sector if the enterprise employs fewer than ten, and in any event a worker not covered by the Schedule II Acts.

Is the underpayment a fundamental rights violation? Yes. On People's Union for Democratic Rights labour for less than the minimum wage is forced labour within article 23, and he may move a court to direct payment of the minimum wage.

Is he a bonded labourer? The advance and the restraint on leaving suggest so; and on Bandhua Mukti Morcha the burden lies on the employer to prove that he is not, the court being justified in presuming that he is until that is rebutted.

Is the jamadar a contractor? On Bandhua Mukti Morcha, thekedars or jamadars recruiting workers from outside the State are contractors within the Inter-State Migrant Workmen Act 1979.

What does the 2008 Act give him? Eligibility for registration at fourteen on a self declaration, a portable smart identity card from the District Administration, and eligibility for whatever schemes are notified.

What does it not give him? An enforceable right to any particular benefit, the benefits being in schemes framed at the Government's discretion.

What it does NOT mean

Article 23 does not require every employer to pay a living wage. It requires payment of the minimum wage, below which the labour becomes forced labour.

The 2008 Act does not repeal any labour statute. It defines its class partly by reference to those statutes not applying.

Registration is not a benefit. It is a condition of eligibility for schemes.

And the presumption of bondage is rebuttable. The employer may displace it by satisfactory material.

Quick revision

• Constitution: art 23 prohibits begar and other similar forms of forced labour and binds private persons; art 24 child labour; arts 38, 39, 41, 42 and 43 the directives on livelihood, equal pay, health and strength of workers, public assistance, humane conditions and a living wage.
• People's Union for Democratic Rights v. Union of India, AIR 1982 SC 1473: labour for remuneration less than the minimum wage is forced labour within art 23, enforceable by a direction to pay the minimum wage; nobody would willingly work below it, so he acts under compulsion; and art 23 applies even under a contract of service.
• Bandhua Mukti Morcha v. Union of India, AIR 1984 SC 802: a letter treated as a writ petition; where forced labour is shown the burden lies on the employer to prove the labourer is not bonded, the court presuming bondage until rebutted; and jamadars recruiting from outside the State are contractors under the Inter-State Migrant Workmen Act 1979.
• Unorganised Workers' Social Security Act 2008: s.2(m) unorganised worker; s.2(l) unorganised sector, fewer than ten workers; Schedule II's six Acts; s.3 Central schemes on life and disability cover, health and maternity, old age protection, and State schemes on provident fund, injury, housing, education, skills, funeral assistance and old age homes; s.4 funding and mandatory scheme contents including grievance redressal; ss.5 and 6 the National and State Social Security Boards; s.10 registration at fourteen on self declaration, with a portable smart identity card.
• The Act creates a framework and a register and confers no enforceable right to any benefit.

Test yourself

1. Define an unorganised worker and the unorganised sector. An unorganised worker is a home based worker, a self employed worker or a wage worker in the unorganised sector, and includes a worker in the organised sector not covered by any of the six Acts in Schedule II; the unorganised sector is an enterprise owned by individuals or self employed workers engaged in the production or sale of goods or the provision of services, where, if it employs workers, the number is less than ten.

2. How does article 23 reach the minimum wage? Because labour or service provided for remuneration less than the minimum wage falls within the words forced labour, no one willingly working below his legal entitlement, so that he acts under compulsion; and the worker may move the court to direct payment of the minimum wage so that the labour ceases to be forced labour.

3. Where does the burden lie in a bonded labour case? On the employer, to prove that the labourer is not a bonded labourer, the court being justified in presuming bondage where forced labour is shown, unless the presumption is rebutted by satisfactory material.

4. What are the four heads on which the Central Government must frame schemes? Life and disability cover; health and maternity benefits; old age protection; and any other benefit determined by the Central Government.

5. What is the principal weakness of the 2008 Act? That it confers no enforceable right to any benefit, the benefits being contained in schemes framed and funded at the discretion of the Governments, with grievance redressal left to be provided in each scheme.