Social Security Framework for Labour Force in India

Meaning of Social Security

Social security may be defined as any programme of social protection established by legislation, or any other mandatory arrangement, that provides individuals with a degree of income security when faced with the contingencies of old age, survivorship, incapacity, disability, unemployment or rearing children. It may also offer access to curative or preventive medical care.

As defined by the International Social Security Association (an international institution to promote dynamic social security), social security can include social insurance programmes, social assistance programmes, universal programmes, mutual benefit schemes, national provident funds, and other arrangements including market-oriented approaches that, in accordance with national law or practice, form part of a country's social security system.

History of Social Security

The first social security programmes based on compulsory insurance were established in Europe in the late-19th century. It was during the 20th century, however, that national social security programmes developed more widely around the globe.

The development of social security has also been supported by various international conventions and instruments, and the recognition of social security as a basic human right was enshrined in the 1948 Universal Declaration of Human Rights. In a few countries, for example Germany and Brazil, social security is a right guaranteed by the Constitution.

Today, most countries have some type of social security system. Worldwide, the most common type of programme is for old-age, disability, and survivors’ pensions, followed by programmes for benefits for work injuries and occupational diseases, sickness and maternity, family allowances and unemployment.

Social Security in India

Social Security is a government program that provides economic assistance to persons faced with unemployment, disability, or agedness, financed by assessment of employers and employees.

In the Indian context, Social Security is a comprehensive approach designed to prevent deprivation, assure the individual of a basic minimum income for himself and his dependents and to protect the individual from any uncertainties. The State bears the primary responsibility for developing appropriate system for providing protection and assistance to its workforce.

Matters relating to Social Security are listed in the Directive Principles of State Policy and the subjects in the Concurrent List of the Constitution of India.

The following social security issues are mentioned in the Concurrent List (List III in the Seventh Schedule of the Constitution of India) –

• Item No. 23: Social Security and insurance, employment and unemployment.

• Item No. 24: Welfare of Labour including conditions of work, provident funds, employers’ liability, workmen’s compensation, invalidity and old age pension and maternity benefits.

Part IV Directive Principles of State Policy in the Constitution of India lays down the following:

Article 41 Right to work, to education and to public assistance in certain cases The State shall, within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want.

Article 42 Provision for just and humane conditions of work and maternity relief The State shall make provision for securing just and humane conditions of work and for maternity relief.

Organised and Unorganised Sector

The labour force in India can be divided into the organized and unorganized sectors.

The organized sector includes primarily those establishments which are covered by the Factories Act, 1948, the Shops and Commercial Establishments Acts of State Governments, the Industrial Employment Standing Orders Act, 1946 etc. This sector already has a structure through which social security benefits are extended to workers covered under these legislations.

The unorganized sector on the other hand, is characterized by the lack of labour law coverage, seasonal and temporary nature of occupations, high labour mobility, dispersed functioning of operations, casualization of labour, lack of organizational support, low bargaining power, etc. all of which make it vulnerable to socio-economic hardships. The nature of work in the unorganized sector varies between regions and also between the rural areas and the urban areas, which may include the remote rural areas as well as sometimes the most inhospitable urban concentrations. In the rural areas it comprises of landless agricultural labourers, small and marginal farmers, share croppers, persons engaged in animal husbandry, fishing, horticulture, bee-keeping, toddy tapping, forest workers, rural artisans, etc. where as in the urban areas, it comprises mainly of manual labourers in construction, carpentry, trade, transport, communication etc. and also includes street vendors, hawkers, head load workers, cobblers, tin smiths, garment makers, etc.

Social Security framework for Unorganised Workers

With a view to providing social security to unorganized workers, the Government enacted the Unorganised Workers’ Social Security Act, 2008. The Act came into force w.e.f. 16.05.2009. The Act provides for registration of unorganized workers to help in formulating social security schemes for particular occupations. The Central Rules under the Act viz. Unorganised Workers’ Social Security Rules, 2009 have been framed.

The ‘Unorganised Workers’ Social Security Act, 2008 also provides for constitution of National Social Security Board which shall recommend social security schemes viz life and disability cover, health and maternity benefits, old age protection and any other benefit as may be determined by the Government for unorganized workers. The National Social Security Board was constituted vide Notification no. S.O 2132 (E) dated 18.8.2009.

The important ingredients of the Act are as under:

• It provides for formulation of schemes by the Central Government for different sections of unorganised workers on matters relating to (a) life and disability cover; (b) health and maternity benefits; (c) old age protection (d) any other benefit as may be determined by the Central Government.

• It provides formulation of schemes relating to provident fund, employment injury benefits, housing, educational schemes for children, skill upgradation, funeral assistance and old age homes by the State Governments.

• Constitution of National Social Security Board under the chairmanship of Union Minister for Labour & Employment with Member Secretary and 34 nominated members representing Members of Parliament, unorganized workers, employers of unorganised workers, civil society, Central Ministries and State Governments.

• The functions of National Board, inter-alia, include: to recommend to the Central Government suitable schemes for different sections of unorganised workers; monitor the implementation of schemes and advise the Central Government on matters arising out of the administration of the Act.

• The Act also provides for constitution of similar Boards at the State level.

• Setting up of constitution of Workers’ Facilitation Centre to (a)disseminate information on social security schemes available to them (ii) facilitate the workers to obtain registration from district administration and enrollment of unorganised workers.

• Eligibility criteria for registration as also the procedure for registration under the Act.

Social Security framework for Organised Workers

Social Security to the workers in the Organized Sector is provided through five Central Acts, namely,

• The Employees’ Compensation Act, 1923 (earlier called “the Workmens’ Compensation Act”)

• The Employees’ State Insurance Act, 1948 (ESI Act)

• The Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 (EPF & MP Act)

• The Maternity Benefit Act, 1961

• The Payment of Gratuity Act, 1972

In addition, there are a large number of welfare funds for certain specified segments of workers such as beedi workers, cine workers, construction workers etc.

Social Security Schemes of Employees’ Provident Fund Organization (EPFO) and Employees’ State Insurance Corporation (ESIC) are also available for the workers.

THE EMPLOYEES’ COMPENSATION ACT, 1923

The Employees’ Compensation Act, 1923 (earlier called the Workmen’s Compensation Act, 1923) requires payment of compensation to the workman or his family in cases of employment related injuries resulting in death or disability.

Important Provisions under the Act:

1. The Employees’ Compensation Act (erstwhile Workmen’s Compensation Act), aims to provide workmen and/or their dependents some relief in case of accidents arising out of and in the course of employment and causing either death or disablement of workmen.

2. The Workmen’s Compensation Amendment Act, 2009 made the Act gender-neutral with the substitution of "workman" with "employee". Henceforth the Act came to be known as Employee’s Compensation Act, 1923.

3. The Act does not apply where the employee is covered under the ESI Act - Since a workman is entitled to get compensation from Employees State Insurance Corporation, an employee covered under ESI Act is not entitled to get compensation under Employee’s Compensation Act, as per section 53 of ESI Act, 1948.

4. Every employee (including those employed through a contractor but excluding casual employees), who is engaged for the purposes of employers business and who suffers an injury in any accident arising out of and in the course of his employment, shall be entitled for compensation under the Act.

5. The employer of any establishment covered under this Act, is required to compensate an employee:

a. Who has suffered an accident arising out of and in the course of his employment, resulting into

(i) death,

(ii) permanent total disablement,

(iii) permanent partial disablement, or

(iv) temporary disablement whether total or partial, or

b. Who has contracted an occupational disease.

6. Employer Shall Not Be Liable:

a. In respect of any injury which does not result in the total or partial disablement of the workmen for a period exceeding three days;

b. In respect of any injury not resulting in death, caused by an accident which is directly attributable to:

i. the workmen having been at the time thereof under the influence or drugs, or

ii. the willful disobedience of the workman to an order expressly given, or to a rule expressly framed, for the purpose of securing the safety of workmen, or

iii. the willful removal or disregard by the workmen of any safeguard or other device which he knew to have been provided for the purpose of securing the safety of workmen. The burden of proving intentional disobedience on the part of the employee shall lie upon the employer.

iv. when the employee has contacted a disease which is not directly attributable to a specific injury caused by the accident or to the occupation; or

v. when the employee has filed a suit for damages against the employer or any other person, in a Civil Court.

To read the full article: Click Here