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Home > Archives (2006 on) > 2007 > September 8, 2007 > Give Unorganised Sector Workers A Fair Deal

Mainstream, Vol XLV, No 38

Give Unorganised Sector Workers A Fair Deal

Sunday 9 September 2007, by Bharat Dogra



Recently there was widespread opposition by trade unions and campaigns for workers’ rights when the government announced a highly inadequate and weak draft law for social security of unorganised sector workers. These workers had been waiting for a social security legislation for decades, but after a long wait what the government announced was merely an intention of preparing and implementing some schemes rather than a definite plan of action with firm resource commitments to make social security a reality for 369 million unorganised sector workers.

Due to the widespread opposition to this weak and highly inadequate draft law, the government has agreed to reconsider it. If this reassessment is to result in a fair deal to workers without causing avoidable delay, then the government can gain a lot by consulting the Second Labour Commission Report which had been given the responsibility of suggesting suitable legislation about a decade back.

Enacting protective umbrella legislation which can apply to all sections of unorganised workers is not easy as a very wide range of works and occupations have to be covered. Some of these leading occupations are—agricultural workers, forest workers, rickshaw pullers, vendors, domestic workers, home based workers, construction workers, scavengers and rag pickers, wholesale/retail trade workers and numerous others. Nevertheless, it is important to have a comprehensive law that provides at least some protection for all unorganised workers as the alternative is to have separate laws for too many categories of workers—a task which is even more complicated and time-consuming.

As welfare and social security laws will lose all credibility and utility if the overwhelming majority of workers do not derive any benefits from them, various reports of the Labour Ministry have been emphasising the need for comprehensive protective legislation for urorganised sector workers, but still this work of crucial significance was delayed for too long. Finally, the Second National Commission on Labour (NCL) was asked, as perhaps its most significant task, to propose an umbrella type legislation for workers in the unorganised sector.

This legislation and the system that is to be built around it, the Commission was told, should assure at least a minimum protection and welfare to workers in the unorganised sector.

The NCL Report explained why it is important to have new legislation to cover various categories of unorganised workers, and the scope and aims of this legislation, “Most of the Labour Laws that we have today, are relevant only to the organised sector. Furthermore, the laws in the statute book that relate to some sectors of the unorganised sector are too inadequate to give protection or welfare for the vast majority of workers in the unorganised sector. The schemes of Welfare Funds and Welfare Boards are also confined to a few states and specific categories of workers in the unorganized sector. It is in this context that we have to look at the need for new legislation that will have general applicability and will provide essential protection.

“The way to extend legal protection to the employments and vocations in the unorganised sector is not by legislating separately for each employment or vocation. This will only multiply the number of laws when one of our goals is to simplify and reduce the number of existing laws. It is, therefore, logical and wise to enact an umbrella type of law for the unorganised sector which would guarantee a minimum of protection and welfare to all workers in the unorganised sector, and would leave it open to the Government to bring in special laws for different employments or sub-sectors if experience indicates the need for it, provided that the sub-sectoral laws do not take away any of the basic rights or the access to social security that the umbrella legislation provides. Such an arrangement will give full respect to the federal nature of our Constitution as well as the different needs of diverse groups of workers. It will also be open to Governments to repeal existing sub-sector laws or merge existing (welfare) Boards with the Boards or Funds that we are suggesting in the Umbrella Legislation.

“The unorganised sector accounts for over 90 per cent of our work force. Their percentage is likely to increase. They are as entitled to protection and welfare/security as workers in the organised sector, who are often described today as the privileged sector of the work force. The laws that exist today hardly touch the work force in the Unorganised Sector. It is therefore necessary to enact new legislation to cover workers in this sector. There is a wide variety of employments in this sector. Conditions vary, levels of organisation very. The nature of the relations with employers vary. There is an expanding sector of those who are self-employed, or are on contract, and work from homes. It is difficult to have separate laws for each employment. This will only result in endless multiplication of laws. Hence the need for one umbrella legislation that covers whatever is basic and common, and leaves room for supplementary legislation that covers whatever is basic and common, and leaves room for supplementary legislation or rules where specific areas demand special attention. But we cannot overlook the fact that all such legislation is enacted with the twin purposes of extending protection, and welfare/security. Protection includes security of employment, identification of minimum ages or fair wages, making the minimum known to workers, ensuring the full payment of these wages without unauthorised deductions, and a machinery at the threshold of his/her work place to enforce the law on minimum wages and working conditions. Welfare/security has to include medical services, compensation for injury, insurance, provident fund and pensionary benefit etc. We have also tried to keep in view the need to ensure that the machinery proposed for enforcement of benefits is not vitiated by distance, centralisation, top heavy structure, inaccessibility, multiplication of administrative set-ups etc.”

THE NLC Report says that in specific terms, the objectives of the legislation will have to be:
- a) To obtain recognition for all workers in the unorganised sector.
- b) To ensure a minimum level of economic security to these workers.
- c) To ensure a minimum level of social security to these workers.
- d) To facilitate the removal of the poverty of these workers.
- e) To ensure future opportunities for children by eliminating child labour.
- f) To encourage formation of membership based orgnisations of workers including Trade Unions.
- g) To ensure representation of workers through their organizations in local and national economic decision making.

According to the NLC, The Social Security measures for the Unorganised Workes should include:

a. Health Care

b. Maternity and early Child Care

c. Provident Fund Benefits

d. Family Benefits

e. Amenities/Benefits including Housing, Drinking Water, Sanitation, etc.

f. Compensation of employment Injury benefits (including invalidity benefits and survivor’s or dependent’s benefits)

g. Retirement and post-retirement benefits (Gratuity, Pension and Family Pension)

h. Some cover in cases of loss of earning or the capacity to earn.

i. Besides these, there should be schemes, either independent or in association with the Government, Welfare Bodies, NGOs and Social Organisations, for the upgradation of skills and the education of workers, and for the elimination of child labour, forced labour, and unfair labour relations and practices.

After holding discussions with a large number of concerned persons and considering the recommendations of a Study Group on this issue, the National Commission in Labour suggested a draft of this legislation in which apex boards for unorganised sector workers will be created in all states by the respective State governments. This apex board in consultation with the state government will create State Welfare Boards for various categories of workers. The State Board in consultation with district panchayats will also constitute district boards.

In this draft Worker Facilitation Centres (FCs) are local centres of activities of the Board co-ordinated by respective District Boards. The District Board in consultation with local panchayats will constitute them, WFCs will work in panchayats and areas of workers’ concentration. Workers will be enrolled by the WFC and welfare benefits to them will also be provided by WFCs.

The Central and State Boards will raise funds by way of contribution, cess, assistance, grant from Government through budget allocation or donations from employment providers, private sector, workers and other legally permitted sources.

The Board will encourage the growth and formation of organisations of workers. A legal minimum wage will be fixed without any gender discrimination. Non-payment of minimum wage shall be punishable. Women workers will be given due representation at all levels.

The Central and State governments shall order dearness allowance on minimum wage linked to All India Consumer Price Index Number at least once in every six months and where the dearness allowance is ordered on the above lines the minimum wages shall be revised once in five years and in other cases once in two years.

Workers will be covered by social protection measures as maybe prescribed by the Central or State government. The worker shall be eligible to social security protection, namely, old age, invalidity, group insurance, sickness, medical and employment injury benefits. The woman workers shall be eligible for maternity benefits and chidcare/daycare facility while on work. The local authorities will create and invest their resources to develop better living conditions for the workers by providing amenities like housing, safe drinking water, sanitation etc. The State board shall encourage alternate insurance for employment injury to cover employer’s liability under Workmen’s Compensation Act.

Work shall be permitted only in safe and healthy environment and working places, The State Government may frame appropriate rules in this regard. Workers shall have sufficient rest, leisure, holidays, leave and optimal working hours. Workers shall be given one holiday in each week.

FOLLOWING the submission of the report of the National Labour Commission, the Ministry of Labour organised a National Seminar on Unorganised Sector Labour in November 2002. This seminar set up a technical group on legislative aspective aspects. According to the recommendations of the Technical Group on Umbrella Legislation for Unorganised Sector.

“The approach of the legislation both for the Unorganised Sector and the Agricultural workers should not merely be welfare oriented but also provide for regulation of employment, provision of minimum employment earnings guarantee wherever practicable, as well as a role of the workers for proper enforcement of the law and the schemes. Attempt must be made to ensure workers participation in formulation and implementation of the scheme.

“The role of the Central Government should be generally to provide leadership and coordination. The scheme should be generally operated at the State and at the Union Territory levels. The Central Government has to play an important role in the collection of funds and the disbursement, auditing of the funds through various state boards.

“Provision must be made in the law for payment of minimum wages. There should be a National Minimum Wage below which no state level Minimum Wage can go.

“The proposed law shall be in addition to other laws which are in the statute books such as Trade Unions Act, Workmen’s Compensation Act, Equal Remuneration Act and so on. Therefore, there is no need for this law to reproduce those provisions.

“Without prejudice to the conclusions of the other group dealing with social security, it was fell that minimum levels of social security particularly in the areas of health, maternity benefits, disability and old age benefits must be provided, if necessary through public assistance also. The existing schemes of ESI and Provident Fund may also be extended to this sector. Different provisions maybe necessary for the self-employed and appropriate scale of contribution of benefits will have to be worked out.

“Considering that this sector represents 92 per cent of the work force, it will require that an adequate percentage of the revenue of the Central and State governments be set apart for providing social security to this category of workers and their families. A system of levy of cess coupled with contributions both from the employers and the workers would also be an additional sources of funding.

“The burden of proof of making payment to the workers wherever there are dues must be on the employers. This will also ensure proper maintenance of record. At the same time care must be taken to see that employers are not over-burdened with multiplicity of forms and registers. A single register and single annual return will suffice for the purposes of law enforcement and of statistics.

“Representation of both the employers and the trade unions must be equal in number on all bodies. Representation of NGOs, experts, academics and other interest groups should also be given in adequate numbers.”

All these suggestions will be extremely useful to the government in preparing a fair deal for unorganised workers.

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