2019 – Posted in: RSTV

DRAFT SOCIAL SECURITY CODE

In News:

Recently, the union government has circulated the draft social security code.

Introduction

After years of deliberation, the trade union government has finally released the Draft Social Security Code, a key labor law proposal to merge an existing set of laws and proposing several new initiatives, including universal social security for all, workers in the non-organized sector, as well as insurance and health benefits for concert workers, including Ola and Uber drivers. In addition, it also proposes the corporatization of existing organizations such as EPFO and ESIC, led by people other than the Minister of Labor.

Objective

Its objective is to adhere to existing laws and proposes several new initiatives, including universal social security for unorganized workers and health and insurance benefits for GIG workers.

What is the issue?

The third draft of the Social Security Code of 2019 aimed at merging, simplifying and rationalizing the relevant provisions of the existing central labor legislation. The code did not achieve this stated purpose.

Key highlights of the draft are:

The Employee Provident Fund (EPF) and Employee State Insurance Corporation (ESIC) be comprehend under a central body with a corporate-like structure:
- Although it is proposed extending the coverage of pension funds and ESI to temporary workers, however, did not propose a comprehensive system providing social security coverage for all.
- The project simply proposed to amalgamate pension fund, pension, health insurance, maternity benefits, tips and pay laws.

Insurance, PF, life cover for unorganized sector employees:
- The draft code stipulates that “the central government shall from time to time draw up and notify adequate social assistance schemes for unorganized workers on matters relating to life and disability coverage, maternity and health benefits, of old age and any other advantage that the central government may determine.”
- States may also formulate and notify appropriate initiatives for non-unionized workers, including pension fund schemes, work injury benefits, housing, educational programs for their children, old age and funeral assistance.
- Most of India’s labor force is in the informal sector and a move forward is expected, but most of the key initiatives suggested could be the states’ decision with a small contribution from the center.
- There may be social security councils from the unorganized sector at the central and state levels.

Benefits for Gig workers:

Millions of Indian workers often described as solitary in the workplace may soon get a life, disability, health and maternity insurance, among others, while the union’s government is currently drafting a labor code proposing.

Maternity Benefit:
- According to the draft, subject to the other provisions of this code, every woman will be entitled to it and her employer will be responsible for paying the maternity benefit at the average daily wage rate for the period of her actual absence, ie say period immediately before the day of your birth and any period immediately after that day.
- For the purposes of this paragraph, “the average daily wage is the average woman’s salary payable to her for the days she worked in the three-month period immediately preceding the date of her absence from work”. maternity. , subject to the fixed or revised minimum wage rate in accordance with the Wage Code, 2019.

Existing labour laws that the code will merge:

The 2019 Social Security Code, once in force will amalgamate eight existing labor laws, including the Employee Compensation Act of 1923; Employees’ Insurance Act, 1948, Pension Funds and Miscellaneous Provisions Act, 1952; Maternity Benefits Act, 1961; The Tip Payment Act, 1972; Act of the Social Fund for Cinema Workers, 1981; Act on the Ceasing of Construction and Other Construction Workers, 1996 and the Social Security of Unorganized Workers Act, 2008.

Flaws in the draft

It rarely brings together the existing schemes in the organised sector.
The ambiguities have been avoided over the basic criteria for availing social security benefits.
No uniform definition of “social security” is there.
No clear definition for the crucial categories such as workers, wages, principal-agent in a contractual situation; and “organized-unorganized sectors is provided.
The government has given no contribution to the listed social security measures, even as the Code is clear about employee and employer contributions.

The code is to merge the following 8 laws:

Employees Compensation Act, 1923
Employees State Insurance Act, 1948
Employees Provident Fund and miscellaneous provisions act, 1952
Maternity Benefit Act, 1961
Payment of Gratuity Act, 1972
Cine workers welfare fund act, 1981
Building and other Construction workers Cess act, 1996
Unorganized Workers Social Security act, 2018

Failed examples:

Existing benefits for unorganized workers have failed to materialize. For example, the 22 years-old Building and Construction Workers’ Cess Fund’s failed to register the construction workers.
The fund has less than 3 crores workers registered including official estimates (over 5 crores construction workers) and union estimate (over 10 crores construction workers).
The arising problem is that the draft code merely clubs the relevant sections of the existing statute without specifying the manner in which these issues can be addressed.
The possible solution seen can be that the government should address the long-pending structural issues and should actually simplify the existing labour laws.

As part of its labor reform program, the government proposed combining 44 labor laws into four codes. After presenting two codes, on wages, job security, health and working conditions, the third was not written.

The code also states that no employer may knowingly employ a woman six weeks after childbirth, miscarriage or medical termination of pregnancy. The Maternity Benefits Act, 1961, which was included in the code, had established the six-week restriction for women after childbirth or miscarriage, not to mention medical interruption.

Conclusion

Moving on to the conclusion, Social security must include retraining of workers, not just unemployment benefits. This should help/force workers to buy insurance and save for old age, possibly deducting a fraction of payments received from their bank accounts to insurance/retirement accounts, for example in the national pension system. Social security should help older people deploy their skills to meet demand around the world.

Comprehensive health care and a quality education system would be linked to social security, which would improve income from working life and improve the income capacity of the next generation. It would be useful to rethink social security in holistic, if not conventional terms.

Source: RSTV

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