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LABOUR AND
INDRUSTIAL LAWS

Topic: Working conditions of Unorganized sector with

reference to Constitution of India and the
Unorganized Worker’s Social Security act, 2008

SUBMITTED TO: - SUBMITTED BY:-

Dr. Virender Negi Tania

UILS, PU B.COM.LL.B.(Hons.)

CHD 145/12, 9TH Sem.

Section: C
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ACKNOWLEDGMENT

This project has been made for the purpose of covering a part of the syllabus of Labour
and indusial laws as prescribed by Panjab University.

I hereby, acknowledge my mentor, Dr. Virender Negi, for his expert guidance and views
in each and every aspect. Without his help, making of this project would never have been
possible.

Tania

145/12
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INDEX

Particular pages

1. Categories of unorganised labour force 4

2. Labour Rights under the Indian constitution 5-6
3. Adoption of welfare measures for the unorganized sector 7
4. Aim of Social Security Act 8
5. Issue and analyses 9
6. Unorganised Worker’s Social Security Act 2008 10-12
7. Major Limitations Of The Act 13-14
8. Conclusion – Review Of Social Security Of The Unorganised 15
9. Bibliography 16

.
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Introduction
Categories of unorganised labour force

The Ministry of Labour, Government of India, has categorised the unorganised labour force
under four groups depending on occupation, nature of employment, specially distressed
categories and service categories.

1. Under Terms of Occupation:

Small and marginal farmers, landless agricultural labourers, share croppers, fishermen, those
engaged in animal husbandry, beedi rolling, labelling and packing, building and construction
workers, leather workers, weavers, artisans, salt workers, workers in brick kilns and stone
quarries, workers in saw mills, oil mills, etc. come under this category.

2. Under Terms of Nature of Employment:

Attached agricultural labourers, bonded labourers, migrant workers, contract and casual
labourers come under this category.

3. Under Terms of Specially Distressed Category:

Toddy tappers, scavengers, carriers of head loads, drivers of animal driven vehicles, loaders and
unloaders come under this category.

4. Under Terms of Service Category:

Midwives, domestic workers, fishermen and women, barbers, vegetable and fruit vendors,
newspaper vendors, etc., belong to this category.
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Labour Rights under the Indian constitution

The Constitution of India has conferred innumerable rights on the protection of labour. In
this chapter let’s see in brief what are all the rights conferred and what are the mechanism used,
with the support of case laws. Articles 14, 19, 21, 23 and 24 form part of the Fundamental Rights
guaranteed under Part III of the Constitution. Articles 38, 39, 39-A, 41, 42, 43, 43-A and 47 form
part of the Directive Principles of State Policy under Part IV of the Constitution.

Article 14: Art 14 of the Indian Constitution explains the concept of Equality before law. The
concept of equality does not mean absolute equality among human beings which is physically
not possible to achieve. It is a concept implying absence of any special privilege by reason of
birth, creed or the like in favour of any individual, and also the equal subject of all individuals
and classes to the ordinary law of the land.

Thus, the rule is that the like should be treated alike and not that unlike should be treated
alike. In Randhir Singh v. Union of India1, the Supreme Court has held that although the
principle of 'equal pay for equal work' is not expressly declared by our Constitution to be a
fundamental right, but it is certainly a constitutional goal under Articles 14, 16 and 39 (c) of the
Constitution. This right can, therefore, be enforced in cases of unequal scales of pay based on
irrational classification.

Article19(1)(c) This Article speaks about the Fundamental right of citizen to form an
associations and unions.. Under clause (4) of Article 19, however, the State may by law impose
reasonable restrictions on this right in the interest of public order or morality or the sovereignty
and integrity of India.

Article 21:The sweep of the right to life, conferred by Article 21 is wide and far reaching. 'Life'
means something more than mere animal existence. It does not mean merely that life cannot
be extinguished or taken away as, for example, by the imposition and execution of the
death sentence, except according to procedure established by law. That is but one aspect of the
right to life. An equally important facet of that right is the right to livelihood because, no person
can live without the means of living, that is, the means of livelihood.

1
AIR 1982 SC 879
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In D.K. Yadav v. J.M.A. Industries2, The Supreme Court has held that the right to life
enshrined under Article 21 includes the right to livelihood and therefore termination of the
service of a worker without giving him reasonable opportunity of hearing in unjust, arbitrary and
illegal.

Articles 39(a) and 41 The principles contained in Articles 39(a) and 41 must be regarded as
equally fundamental in the understanding and interpretation of the meaning and content of
fundamental rights. If there is an obligation upon the State to secure to the citizens an adequate
means of livelihood and the right to work, it would be sheer pedantry to exclude the right to
livelihood from the content of the right to life.3

2
1993 SCR (3) 930, 1993 SCC (3) 259
3
http://www.lawyersclubindia.com/articles/Labour-Rights-under-the-Indian-constitution-3300.asp
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Adoption of welfare measures for the unorganized sector

Approximately 85% of India’s 460 million strong labour force are categorised as ‘unorganised
sector’ workers. As the National Commission for Enterprises in the Unorganised Sector
(NCEUS) argues, the unorganised sector workforce does not enjoy three types of social
protection – employment security (no protection against arbitrary dismissal), work security (no
protection against accident and health risks at the workplace) and social security (health benefits,
pensions, and maternity benefits). In the spirit of extending social security to the unorganised
sector and keeping in mind long term demographic trends which indicate a rapidly ageing
population and a non-declining unorganised sector workforce, the Government of India passed
the Unorganised Workers’ Social Security Act (UWSSA) in 2008. The passage of the UWSSA
also tied in with the introduction of several publicly provided, social security schemes in the
insurance and pension sectors, the three predominant schemes being Rashtriya Swasthya Bima
Yojana (RSBY), a national health insurance scheme largely for the below poverty line
population; Aam Aadmi Bima Yojana (AABY), a life insurance scheme; and National Pension
Scheme – Swavalamban (NPS-S), a pension scheme specifically for the unorganised sector
workforce.

.The Ministry of Labour and Employment in order to ensure the welfare of workers in the
unorganised sector which, inter-alia, includes weavers, handloom workers, fishermen and
fisherwomen, toddy tappers, leather workers, plantation labourers, beedi workers, has enacted
the Unorganized Workers’ Social Security Act, 2008. The Act provides for a constitution of the
National Social Security Board which shall recommend the formulation of social security
schemes, viz. life and disability cover, health and maternity benefits, old age protection and any
other benefits as may be determined by the Government for the unorganised workers.
Accordingly, the Ministry has constituted a National Social Security Board.
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Aim of Social Security Act

• The Unorganised Sector Workers' Social Security Bill, 2007 provides for an enabling
framework for welfare schemes targeting unorganised sector workers.

• The central government may formulate welfare schemes for different sections of
unorganised sector workers regarding life and disability cover, health and maternity benefits, old
age protection, and any other benefit decided by the government.

• The state government may formulate welfare schemes related to the provident fund,
employment injury benefits, housing, educational schemes for children, skill upgradation of
workers, funeral assistance, and old age homes.

• This Bill establishes boards at the central and state levels to advise and help in
formulating, implementing and monitoring social welfare schemes for unorganised sector
workers.

• Every unorganised sector worker shall be registered by the district administration and
issued a portable smart card carrying a unique identification number.
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Issues and Analysis

• The National Commission for Enterprises in the Unorganised Sector (NCEUS)
recommended two separate Bills for agricultural workers and unorganised non-agricultural
workers. This Bill does not differentiate between agricultural and non-agricultural workers.

• The two NCEUS draft Bills included both conditions of work and social security benefits.
This Bill does not address conditions of work.

• In order to register as an unorganised worker, an individual must be 14 years of age and

declare himself an unorganised worker. There is no process to verify such declaration.

• The Bill does not specify any time limit within which the district administration must
issue an identity card.

• Whereas the Bill sets a salary limit to define a self-employed worker and a wage worker,
there is no such salary limit in the definition of a home-based worker.
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Unorganised Worker’s Social Security Act 2008

Before discussing the contents of the Act it is pertinent to highlight the main features of the
recommendations of the NCEUS, since the idea of a „national minimum‟ was put forward by
that Commission for the first time and also because it provided the basis for the new legislation
in 2008. The NCEUS scheme was intended to cover all unorganized or informal workers,
including both wage and self-employed workers, earning less than Rs. 6500 per month in 2005.
The scheme had the following three types of social security cover: (a) health cover to take care
of illness of the workers and members of the family and maternity benefit to the spouse or self
(in the case of women workers), (b) accident or death of the registered worker, and (c) old age
pension for those belonging to poor households and provident fund to those outside this segment.
The Unorganized Workers Social Security Act 2008 (UWSSA), though not measuring up to the
expectations of the NCEUS, does take forward many of its recommendations, and thus marks a
departure from the past on the much neglected issue of social protection for the unorganized
workers. The main features of the UWSSA, 2008, are as follows:

 The Act covers unorganized workers, including both self-employed and wage
workers.
 It provides for formulation of schemes by the Central Government for different
sections of unorganized 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 for 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 government.
 It provides for a National Social Security Board under the chairmanship of the
Union Minister for Labour and Employment. The Board, among others, also
provides for representatives of unorganized workers and employers of
unorganized workers as well as persons belonging to the Scheduled Castes (SCs),
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Scheduled Tribes (STs), other minorities and women. There is provision for the
constitution of similar Boards at the state level.
 Realizing the critical deficiency in the database relating to unorganized workers
and the need for such informationfor proper monitoring, the Act prescribes
record-keeping functions by the district administration with the help of the
District Panchayats in rural areas and urban local bodies in urban areas.
 Provision is also made for setting up of Workers‟ Facilitation Centres to
disseminate information on social security schemes available to them and to
facilitate registration of workers by the district administration and enrolment of
unorganised workers.
 The Act, in Schedule I, lists ten social security schemes for unorganized workers
and provides for inclusion of more such schemes from time to time. The Central
rules under the Act have since been framed and the Act came into force with
effect from 16 May 2009. The National Social Security Board has been
constituted and some states have already constituted the Social Security Board.
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The ten schemes included in the Schedule 1 of the Act are:

(i) Indira Gandhi National Old Age Pension Scheme,

(ii) National Family Benefit Scheme,

(iii) Janani Suraksha Yojana,

(iv) Handloom Weavers‟ Comprehensive Welfare Scheme,

(v) Handicraft Artisans‟ Comprehensive Welfare Scheme,

(vi) Pension to Master Craftspersons,

(vii) National Scheme for Welfare of Fishermen and Training and Extension,

(viii) Janashree Bima Yojana,

(ix) Aam Aadmi Bima Yojana (Life Insurance Scheme for Common People), and

(x) Rashtriya Swasthya Bima Yojana (National Health Insurance Scheme).

The first eight of these ten schemes are among the existing ones while the last two are relatively
new schemes that were announced a few months before the Act was passed. It is important to
note that except the schemes for handloom weavers, handicraft artisans, fishermen and landless
labour households, the eligibility in all the other schemes is based not on the
unorganised/informal work status of the person but on whether those concerned belong to Below
Poverty Line (BPL) households.
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MAJOR LIMITATIONS OF THE ACT

1. Neither agricultural labourers have been brought under the purview of the Act nor a
separate bill for agricultural labourers tabled. But, the minister claims that they are also
covered.
2. NCEUS had prepared two Bills, one on social security and the other on working
conditions. The latter has been dumped and the Bill passed confines itself only to social
security in its most diluted/truncated form.
3. The 2008 Act appears to have excluded vast sections of unorganized workers like
agricultural labourers, the unorganized labourers in the organised sector including
contract labourers and the informal labourers in the formal sector, the anganwadi
workers, para workers like ASHAs and parateachers, and those the cooperative sector.
This exclusion reveals the true colours of the “Politics of Inclusiveness” of the UPA.
4. The Act is applicable only to a small section of unorganized labourers whose income
limit is expected to be notified by the government. There is every possibility that the
subsequent notification will include parameters to exclude good number of unorganised
workers from the applicability of the law and the schemes.
5. The workers in the construction sector are exempted from making any payment because a
cess was collected from the sector for providing health insurance and other facilities. But
there is no provision to collect a mandatory cess from the employers in other sectors.
Only the BPL unorganized workers have been exempted from paying any premium only
in the case of one scheme – 'Rashtriya Swasthya Bima Yojana – providing for a paltry
health insurance cover of up to a maximum of Rs.30,000 for a family of five. As a result,
workers in other sectors would have to pay the premium amount.
6. The passage of the Act is not accompanied by any legally stipulated guarantee for the
establishment of a Central Welfare fund.
7. There is no provision for penalties in the Act to punish those employers who violate it.
8. “Social Security” to the unorganized workers has been narrowed down to ten paltry
social security schemes. Most of these schemes like old age pension or maternity benefit
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(or even the meagre Bima Yojana, for that matter) are already existing/ongoing schemes
and there is nothing new in them.
9. As a result of dropping the Bill on conditions of work prepared by the Arjun Sengupta
Commission, working conditions of unorganised workers including hours of work,
mandatory holidays, industrial safety, job security, industrial relations and trade union
rights, guaranteeing minimum wages, bonus etc., would remain unregulated and
unenforced.
10. The government has not acknowledged the principle of unemployment allowance in the
case of job losses for unorganised workers or any form of employment and wage/income
guarantee. It was recognized in the case of NREGA and the State governments in West
Bengal and Tamil Nadu introduced a meagre payment of Rs.500 per month for organised
industrial workers in case of loss of jobs but a comprehensive unemployment/job-loss
allowance is yet to take shape in India as in the West. What is social security in the
absence of unemployment allowance?
11. The national and state boards for unorganised workers provided for in the Act are
advisory bodies and like the National Labour Commission they are toothless bodies.
While implementation is left to the district bureaucracy, there is no independent
enforcement or watchdog/oversight body with representation from unions and there is no
appellate authority even.
12. Not only there is no penalty against the defaulting employers, there would be no action
against the bureaucrats who refuse to register any unorganised worker under any of the
twin scheduled schemes.
13. The special problems of migrant workers, especially inter-State migrants, among
unorganised workers, especially the problem of security, has been totally ignored by the
Act.
14. The special problem of women unorganised workers do not figure in the Act. The
problems of security, sexual harassment, proper accommodation for migrant women
workers, issues relating to nature of work and industrial safety, gender wage gap, non-
payment of wages, childcare facilities at work spot etc., have been totally neglected
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CONCLUSION – REVIEW OF SOCIAL SECURITY OF THE UNORGANISED

According to the commitments of the Government of India, right of workers to social security
has been recognised as inalienable and, therefore, must accrue to every worker under any system
of labour law or labour policy. Provision of social protection is enshrined in Articles 38 (securing
a social order for the promotion of welfare of the people), 39 (certain principles of policy), 41
(right to work, education and public assistance in certain cases), 42 (just and human conditions
of work and maternity relief) and 43 (living wage etc.) of the Constitution of India as a part of
the Directive Principles of State Policy. Important social security, poverty alleviation and social
welfare measures are being implemented by various Ministries/Departments of State
Governments and by civil society organisations.

However, the reality on the ground today is that workers don’t have access to essential social
security services. Though the Unorganized Workers Social Security Act was passed in 2008,
there has been dismal progress on the ground. The Act itself has been criticized for not defining a
minimum social security floor that is enforceable by law and for not providing institutional
powers to ensure effective implementation. The National Social Security Board for Unorganised
Workers, constituted in August 2009, is limited to an advisory role, and does not have sufficient
powers to implement, monitor or enforce social security. With the exception of a few states such
as West Bengal, Chhattisgarh and Karnataka, a majority of the states have not even set up their
state level welfare boards.
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Bibliography

 Paul, Meenu, Labour and Industrial Law,18th Edition 2010, Central Law Publications,
Allahabad
 Malik, P.L., Law of Industrial Dispute,11th edition 2005, Allahabad law publications
 http://www.cpiml.org/liberation/year_2009/feb_09/commentary_3.html
 http://www.lawyersclubindia.com/articles/Labour-Rights-under-the-Indian-constitution-
3300.asp
 http://www.thealternative.in/society/review-of-social-security-for-unorganized-workers-
in-india/
 http://www.ilo.int/legacy/english/protection/travail/pdf/rdwpaper22a.pdf