Final report on Social Security Code
The Parliamentary Standing Committee on Labour on 31 July 2020 submitted to the Lok Sabha speaker its final report on the Code on Social Security, which seeks to subsume nine laws related to social security of workers. The panel has made a case for "unemployment insurance and reducing continuous service period to one year from five years for getting gratuity". It also asked to specify the source of funding for running social security schemes enshrined in the Code.
- As per the report, the panel has urged the labour ministry to revisit the proposed amalgamation of Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959, with the Code and rather contemplate examining the compliance aspect to the provisions contained in the Act.
- It said that "the Act provides for reporting of vacancies to the Employment Exchanges" does not in any way connect with the theme and thrust of social security.
- Moreover, just to reduce the number of Acts/legislations, any Act not connected with the subject matter of the Code should not be illogically subsumed in it, the panel opined.
- The ministry to have a relook at those labour welfare laws which have been left out of the amalgamation process irrespective of the abolition, so as to ensure that the merited and principled provisions as contained in such laws are duly incorporated in the Code.
- It also stressed on the need to clearly spell out, either in the Preamble or at any other appropriate place, the principles to be followed for provision of social security benefits to all workers in accordance with the provisions stipulated in the Constitution of India, ILO Conventions and other international instruments which espouse and guarantee various labour rights.
- The panel suggested that a clear and specific enforcement date needed in the Code to ensure effective provision of social security to all the workers within a definite timeline.
- There is a need for more clarity in the definitions indicating unambiguously whether a particular worker belongs to the unorganised sector or organised sector or both.
- It suggested that a proviso may be added in Clause 2(19) stating that "the contractor includes the agencies engaged by any establishment in the name of concessionaire/licensee".
- It opined that some terms used in the definition viz, 'regularly employed', 'employment governed by mutually accepted standards of conditions of employment, engagement on permanent basis', 'periodical increment', and 'other welfare benefits' seem to be ambiguously worded which are liable to be interpreted differently and may be a major source of litigation.
- The panel also suggested the labour ministry to expand the definition of employee so as to encompass all sorts of workers such as 'Anganwadi' and 'Asha' workers.
- It also suggested that the efforts should be made to determine wage thresholds through an automatic process of wages indexation with Consumer Price Index (CPI) periodically which would obviate dependence on notifications/subordinate legislation.
- The panel suggested the definition of 'employment injury' needs to be standardised and made more inclusive so that the unorganised sector is also given due coverage.
- It suggested that for extending social security benefits to all the workers without discrimination or differentiation, the definition of establishment should also include 'exchange of services' with a provision of less than ten workers along with trade, business, manufacturer or occupation, etc.
- The panel said that the definition of social security be appropriately 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 (minimum standards) 1952 viz, medical care, sickness benefits, unemployment benefits; old age benefit; employment injury benefit, family benefit, maternity benefit; invalidity benefit.
- It also favoured adding housing facilities to the workers in the components of social security. Code provides for the constitution of the Central Board of Trustees for Social Security Organisations.
- The panel suggested that the tripartite character of the composition of CBT (central board of trustees of the EPFO) and ESIC should not be diluted or undermined.
- The Committee desired that possibilities be explored to make the EPF & MP Act applicable to all the workers including self-employed ones to become the part of EPF, notwithstanding the additional liability for deposit in social security schemes run by the Employees' Provident Fund Organisations.
- It also pitched for reducing minimum service of five to become eligible for gratuity, to a year. It asked for clearly spelling out funding pattern for schemes meant for unorganized sector workers in Code to ensure adequate accrual of funds for potent implementation of various Schemes.
- It suggested incorporating 'Unemployment Insurance, in the Code, as recommended by the Second National Commission on Labour (SNCL), for the unorganised sector workers.