Author: Ayesha Gupta, IV year of B.A.,LL.B from Gitarattan International Business School, GGSIPU.
The Code on Social Security, 2019 was repealed and the new bill was introduced which is known as Social Security Code 2020. The main purpose behind this legislation was to bring social security provisions for workers employed in all the sectors, and hence, one of the main provisions of this legislation is that it deals with workers in organized sectors as well as unorganized sectors.
Introduction to Social Security Code 2020
Social Security Code 2020 has replaced the following enactments namely, The Employee’s Compensation Act, 1923; The Employees’ State Insurance Act,1948; The Employment Exchanges (Compulsory Notification of Vacancies) Act,1959; The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952; The Maternity Benefit Act, 1961; The Payment of Gratuity Act, 1972; The Cine Workers Welfare Fund Act, 1981; The Building and Other Construction Workers Welfare Cess Act, 1996; and The Unorganized Worker’s Social Security Act, 2008.
The definition of the term ‘employee’ has been widened to keep pace with the changing times and emergence of divergence in job roles. Such widening of the definition has resulted in including the maximum number of employees and workers.Various new terms have also been added in the code such as aggregator, gig worker, platform worker etc.
This code aims to improve access to health care and other social security benefits such as income security in the cases of sickness, maternity leave etc.
Key provisions of Social Security Code 2020
Dividing the workers of different sectors
Some new terms have been added under the definition of worker and the horizon of already existing definitions has been expanded.
Organised workers
These workers will now also include people employed as IT professionals, advisors and consultants.
Gig workers
With the advancement in technology, a new type of work is emerging like never before, which is known as ‘freelancing’. People employed in such freelance jobs are considered under the term ‘gig workers’ of the Social Security Code, 2020. This is the first time that this concept of ‘gig workers’ has been taken into account into the new labour codes. There is no strict definition of ‘gig worker’ in the code, but the code states that ‘a person who performs or participates and earns from such activities outside of traditional employer employee relationship’ is a gig worker[1].
Platform workers
Another new type of worker which is added is ‘platform worker’. These are the workers engaged in or undertaking platform work. These are the individuals who are employed on different platforms for a fixed sum of money. For example, a content writer works on different platforms on different assignments and earns a certain amount of money for each assignment[2].
Other sectors of unorganized workers
It includes a home-based worker, wage worker or a self-employed worker in the unorganized sector[3].
Changes in definitions
Certain definitions have also been changed, which include:
expanding the definition of ‘employees’ to include workers employed through contractors.
expanding the definition of “inter-state migrant workers” to include self-employed workers from another state.
expanding the definition of “platform worker” to additional categories of services or activities as may be notified by the government[4].
Benefits
Earlier workers such as gig workers, platform workers etc. were not included in labour codes, but now the inclusion of such terms will help them in claiming several social security benefits.
The new code states that the Central and state governments have the right to frame and notify the social security schemes for such workers on the matters related to life and disability cover, insurance etc. Such schemes may get their funding through Central government, State government, aggregators, corporate social responsibility etc[5].
The new code also provides a right to the government to set up a helpline and facilitation centers for such workers[6].
Various boards and authorities
National Social Security Board
The new code states that The national Social Security Board can frame, recommend and monitor schemes for the welfare of the gig workers, platform workers etc[7].
Central Board of trustees
Central Commissioner of Provident Fund manages this organization and administers funds such as EPF, EPS etc.
Employee State Insurance Corporation
This corporation is managed by the Chairman who is appointed to administer and regulate various insurance schemes.
Appointment of inspectors
They are appointed to provide training to the employers and employees regarding the operation of this code.
Registration[8]
The new code states that every unorganised worker, Gig Worker or Platform Worker is required to be registered to avail the benefit of any scheme made under this code, subject to the fulfilment of the following conditions:
(a) he has completed sixteen years of age or any other prescribed age; and
(b) he has submitted a self-declaration which contains information prescribed by the Central Government.
Every eligible worker has to make an application for registration along with prescribed documents such as the Aadhaar number after which a distinguishable number will be assigned to his application.
Employees’ Provident Fund
This scheme under this code will now be applicable to every establishment in which 20 or more employees are employed. Both the employer and employee have to contribute equally to the provident fund, and the present rate of contribution is 10%[9].
Employees’ State Insurance
This scheme will apply to an establishment employing 10 or more employees and also to the establishments which carry on hazardous or life-threatening occupation as notified by the Central Government. Gig workers and persons employed in unorganized sectors are also covered under this scheme.
Gratuity[10]
Gratuity shall be paid to employees of every establishment in which 10 or more employees are employed, or were employed, on any day of the preceding 12 months. There is a condition for payment of gratuity, i.e., it is payable to an employee on the termination of his employment only when he has rendered continuous service for not less than 5 years.
A continuous service of five (5) years shall not be necessary where the termination of the employment of any employee is due to death or disablement or expiration of fixed-term employment. Gratuity shall be payable on the termination of employment after continuous service of three years in cases of working journalists.
Maternity Benefits[11]
These provisions are applicable to every shop or establishment in which ten 10 or more employees are employed, or were employed, on any day of the preceding 12 months. No woman shall be forced to work in any establishment during the 6 weeks immediately following the day of her delivery, miscarriage or medical termination of pregnancy.
There is a condition to claim maternity benefits, and that is she is entitled to such benefits only if she has actually worked in an establishment of the employer from which she claims maternity benefit for a period of not less than 80 days in the 12 months which immediately precedes the date of her expected delivery.
The maximum period for which any woman can claim maternity benefit is 26 weeks, of which not more than 8 weeks shall precede the expected date of her delivery. However, this period is different in the case of a woman having two or more surviving children.
Penalties for non-compliance
The code specifies various penalties for non-compliance of the provisions. For example, an employer contravening the provisions of maternity benefits shall be punishable with imprisonment for a term which may extend to 6 months or with a fine which may extend to Rs. 50,000 or with both. Such penalties are prescribed for non-compliance of other provisions as well such as failure to pay gratuity etc.
Conclusion
Social Security Code, 2020 has undoubtedly widened the scope of pre-existing labour laws in India. With the inclusion of terms like gig workers and fixed-term employment, the concept of short-term employment will increase. Such concepts are very important to be included under the ambit of labor laws because it will help in generating more opportunities of employment, especially for the youth, along with providing them with social security.
[1] Section 2(35) of The Social Security Code, 2020
[2] Section 2(61) of The Social Security Code, 2020
[3] Section 2(86) of The Social Security Code, 2020
[4] https://prsindia.org/billtrack/the-code-on-social-security-2020, visited on 28 April 2021
[5] Section 109 of The Social Security Code, 2020
[6] Section 112 of The Social Security Code, 2020
[7] Section 6 of The Social Security Code, 2020
[8] Section 113 of The Social Security Code ,2020
[9] Section 16 of The Social Security Code, 2020, Chapter III of The Social Security Code ,2020
[10] Chapter V of The Social Security Code, 2020
[11] Chapter VI of the Social Security Code, 2020