The Code on Social Security, 2020
On September 22, 2020, Parliament passed the Code on Social Security, the Industrial Relations Code, and the Occupational Safety, Health and Working Conditions Code. The three were made Acts on September 28. These, along with the Code on Wages, 2019, aim to combine India’s 29 labour laws into four codes.
The first Code mentioned
here – the Code on Social Security, 2020 – seeks to amend and consolidate the
laws related to social security, aiming to extend such security to employees
and workers in all sectors (organised and unorganised).
The 116-page Code contains
14 chapters: Preliminary (Chapter I); Social Security Organisations (Chapter
II); Employees’ Provident Fund (Chapter III); Employees State Insurance Corporation
(Chapter IV); Gratuity (Chapter V); Maternity Benefit (Chapter VI); Employee's
Compensation (Chapter VII); Social security and cess in respect of building and
other construction workers (Chapter VIII); Social security for unorganised
workers, gig workers and platform workers (Chapter IX); Finance and accounts
(Chapter X); Authorities, assessment, compliance and recovery (Chapter XI);
Offences and penalties (Chapter XII); Employment information and monitoring
(Chapter XIII); and Miscellaneous (Chapter XIV).
Which Acts does the Code replace?
The Code replaces nine central laws: Employee's Compensation Act, 1923; Employees' State Insurance Act, 1948; Employees' Provident Funds and Miscellaneous Provisions Act, 1952; Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959; Maternity Benefit Act, 1961; Payment of Gratuity Act, 1972; Cine-Workers Welfare Fund Act, 1981; Building and Other Construction Workers' Welfare Cess Act, 1996; and Unorganised Workers' Social Security Act, 2008.
What are some of the social security measures included in the Code? Whom do the measures apply to?
The central government – the Code states – may frame an Employees' Provident Fund Scheme to provide retirement, nominee, widower, disablement, and other kinds of pensions, to employees. The scheme shall apply to every establishment with 20 or more employees, except those registered under the Co-operative Societies Act, 1912; establishments under central and state governments; and employees who were receiving the benefits of a provident fund under any central or state law, immediately before the Code's commencement.
The Code states that the benefits provided by the Employees’ State Insurance Corporation – which was established by Parliament in 1948 for the social security of workers – shall apply in every establishment where 10 or more persons are employed, other than seasonal factories. Employers shall provide insurance services through the Corporation in all establishments with less than 10 employees, where hazardous or life-threatening activities – as specified by the central government – are conducted. Additionally, employers at plantations may opt to avail of the Corporation’s services. (Plantations refer to land of five acres or more, used to cultivate tea, coffee, rubber, cinchona or cardamom, or to cultivate any other plant for which 10 or more persons are or were employed in the last 12 months.)
Gratuity – the Code stipulates – shall be payable to every employee on the termination of their employment, if they have worked continuously for at least five years; three years in the case of working journalists, as defined in the Working Journalists Act, 1955. Gratuity is payable on superannuation (when the employee has reached an age specified in the contract, after which they shall no longer be employed); retirement or resignation; death or disablement due to accident or disease; termination of the contract period; and any other event notified by the central government. Such payments shall be made in every factory, mine, oilfield, plantation, port and railway company; and every shop or establishment in which 10 or more persons are or were employed on any day in the last 12 months.
If an employee, during the course of employment, suffers a personal injury due to an accident or occupational disease, the employer shall be liable to pay compensation, as prescribed in the Code. This shall apply to all employers and employees who are not covered under Chapter IV (Employees’ State Insurance Corporation) of the Act.
What are ‘unorganised’, ‘gig’ and ‘platform’ workers? What does the Code say about them?
‘Unorganised worker’ refers to ‘home-based’, ‘self-employed’ and ‘wage workers’ in the unorganised sector. ‘Wage workers’ are those employed for remuneration in cash or kind in the unorganised sector, directly or through a contractor. ‘Home-based worker’ means those who produce goods or services for an employer in their home, or premises other than the employer’s workplace. ‘Self-employed worker’ refers to a person with no employer, who engages in an occupation in the unorganised sector, earning a monthly amount which may be notified by the central or state government; such persons may also hold cultivable land.
‘Gig worker’ means a person who works or participates in a work arrangement outside the ‘traditional’ employer-employee relationship and earns from such activities. ‘Platform work’ refers to a work arrangement outside a traditional employer-employee relationship, in which online platforms are used to access organisations or individuals that provide certain services – as specified by the central government – in exchange for payment.
The Code mandates that the central government frame ‘suitable’ welfare schemes for unorganised workers on matters relating to life and disability cover; health and maternity benefits; old age protection; education; and any other benefit as may be determined by the government. State governments shall frame schemes relating to provident funds; employment injury benefit; housing; education schemes for children; upgrading the skills of workers; funeral assistance; and old age homes.
The central government may frame social security schemes for gig and platform workers, on matters relating to life and disability cover; accident insurance; health and maternity benefits; old age protection; crèches; and any other benefit as may be determined by the government.
Every such scheme framed by the central government shall cover its scope; manner of administration; the agencies implementing the scheme; its sources of funding; the role of ‘aggregators’; and any other matter that the government may consider necessary for the efficient administration of the scheme. (‘Aggregator’ means a digital intermediary or a market place for buyers and sellers of services, including ride sharing, food delivery, and content and media services.)
The ‘appropriate Government’ (centre or state) may set up a toll free call centre or helpline to disseminate information on social security schemes available for unorganised, gig and platform workers; to facilitate the registration of unorganised, gig and platform workers under this Code; and to facilitate the enrolment of registered unorganised, gig and platform workers in social security schemes.
What does the Code say about Aadhaar-based identification?
According to the Code, employees, unorganised workers and other persons, shall use their Aadhaar numbers to establish their identity, or the identities of their dependents or family members. This shall be required to register as a beneficiary under the Code; seek benefit in kind or cash, medical sickness benefit, pension, gratuity, maternity benefit, and others; avail the services of a career centre; or receive any payment or medical attendance as an ‘Insured Person’.
Focus and Factoids by Abhaya Ganashree.
Ministry of Law and Justice
Government of India, New Delhi
28 Sep, 2020