Social security for the unorganised: A case of creative story-telling

In his recent ‘Mann ki Baat,’ Prime Minister Narendra Modi said that India has a cultural tradition of story-telling which needs to be revived and continued. The Social Security Code 2020 (SS Code), passed by Parliament without discussion recently, appears to be a serious effort in that direction -- of telling creative stories, promising universal social security to everyone, especially the 93% workers in the unorganised sector, whose total lack of social security was made obvious during the sudden Covid-19 lockdown

Importantly, the late T S Sankaran, a former Additional Secretary, Ministry of Labour, had said, when the Unorganised Workers’ Social Security (UWSS) Bill 2006 was being framed, that the components of what constitutes adequate social security, the scale of benefits, the funding arrangements to meet the cost of social security, etc., for unorganised workers, should be built into the law itself and the law should not enable governments to do merely what is expedient. But ‘expediency’ was what was done in the UWSS Act and has been done now in the SS Code.

The SS Code allegedly draws inspiration from the 2002 Report of the 2nd National Commission on Labour (NCL), which had recommended that the existing multiple labour laws relating to social security should be merged and rationalised into a single Social Security Code. Even the ‘National Labour Law Association’, of which doyens such as the recently-demised R K A Subrahmanya were members, had drafted an “Indian Labour Code” in 1994 itself and spelt out the need for a single unified institutional mechanism of a Social Security Authority of India to provide universal social security. But in the SS Code of 2019, multiple institutions were envisaged.

The Parliamentary Standing Committee on Labour (henceforth, the committee), to whom the 2019 version of the SS Code was sent for review, gave thorough and painstaking comments in its report to the ministry in July 2020. The committee had noted that having multiple organisations would be “a mere continuation of the extant fragmented structure of social security”. The committee wanted the ministry to put in place a more compact system, with mandatory registration of establishments and workers with “one body, instead of with multiple organisations”. But this recommendation has not been heeded.

Stakeholders who gave their opinions to the committee pointed out that the 2019 Code was full of stipulations like “as may be specified”, “as may be prescribed”, or “as may be framed” by the central government, bypassing Parliament, and not through ‘relevant provisions’ built into the Code. They pointed out that the government also reserved the right to grant exemptions and raise thresholds for compliance. In response thereto, the ministry stated that “flexibility” to the government was necessary to make modifications. Dissatisfied, the committee exhorted the ministry “to review all such equivocal and cryptic provisions” and bring in an inclusive legislation “with due regard to the powers and privileges of Parliament.” But this recommendation, too, has been thrown to the winds by the ministry in the final SS Code 2020.

On the question of what constitutes social security, the committee opined that the definition of social security should be modified “to make it all-encompassing with specific mention of all the nine components contained in the International Labour Organisation (ILO) Convention on Social Security 1952”. But the SS Code 2020 mentions only seven of the nine ILO benefits on which schemes for the unorganised shall be prepared “from time to time”. It excludes family/childcare benefit and unemployment allowance, which were seen to be sorely required during the lockdown. Moreover, there is no time-line prescribed for framing the schemes. Nothing is said about the quantum of benefits, which is a requirement under the
ILO Convention.

The Mahila Kisan Adhikaar Manch (Makaam), too, in its response to the SS Code of 2019 stated that the Code’s approach to social security benefits was problematic as it was “scheme-based, and not rights-based”. It lamented that “there is no unified and/or comprehensive scheme for unorganised workers”.

On the raising of resources to fund social security benefits for the unorganised sector, the committee felt that there was a lack of firm commitment on the part of the government and recommended that it be “clearly spelt out in the law”, stipulating the contributions from the employees, employers, central and state governments and other sources. The SS Code was hence modified to say that “aggregators” of gig and platform workers will contribute 1-2% of their annual turnover for creating a fund for the workers, but no similar mechanism, or any mechanism, for raising money from employers of other unorganised workers has been specified. In fact, the Code in Section 141(5)(i) says, the State Social Security Fund is to be created out of the amount received from a ‘composition of offences’ under the Code (whatever that means). The other glaring lacuna is that no mechanism for raising the resources for making the government’s contribution to the funds for unorganised workers has been spelt out while merely saying that the government ‘may’ contribute.

On the manner of implementing social security benefits, the 2nd NCL suggested correctly that area-based schemes are suitable for workers in the unorganised sector, “who are too numerous to be covered under occupation-based schemes”. The 2018 version of the Code had made the gram panchayats and municipal wards, which are proximate to the workers, responsible for registering workers and delivering benefits. The 2020 Code says that workers’ facilitation centres may be set up for registering workers, but it does not say where these will be set up and who will maintain the records.

So, all in all, the 93% unorganised workers in the country will have to continue to wait for the promised social security, as they have always done, and make do instead with the government’s creative story-telling.

(The writer is Executive Trustee of CIVIC Bangalore)