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Author: Srishti Ekka, IV year of B.A.,LL.B(Hons.) From Symbiosis Law School, Pune


The Indian labour market has been, and continues to be, predominantly informal. Due to lack of governmental oversight, a large proportion of these workers work in exploitative and precarious conditions. The Government of India has introduced several policy initiatives on labour and welfare to extend social security benefits to informal workers in the country. Despite that, their reach is limited.

Meaning of Social Security

The concept of social security has evolved over time. It was described as “freedom of want,” and its provisions were limited to maintenance of employment, children’s allowances, and comprehensive health services. Subsequently, in 1952, the International Labour Organisation (ILO) proposed an understanding of social security- as protective measures against social and economic distress, this included abrupt reduction in income resulting from of sickness, maternity, employment injury, disability etc.

ILO’s approach to social security was criticised for being limited to the experience of developed countries. Developing countries have a much larger informal sector, higher levels of poverty, low levels of industrialisation, among other constraints. They require a wider conception of social security. Thus, in developing countries like India, social security is best understood as pro-poor measures that can be:

  • Promotional, aiming to augment income, such as through the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA);

  • Preventive, aiming to forestall economic distress, such as through Provident Funds (PF); and

  • Protective, aiming to ensure relief from certain external shocks, such as remuneration provided through insurance schemes in the case of injury or death of a primary breadwinner.

Meaning of Unorganised Workers

The term ‘unorganised worker’ has been defined under as ‘a home based-worker, self-employed worker or a wage worker in the unorganised sector and includes a worker in the organised sector who is not covered by any of the Acts mentioned in scheduled II of its Act.

Thus, unorganized workers are essentially those who do not have the benefit of pension, provident fund, gratuity etc. They are also not represented by active trade unions.

Ministry of Labour has categorized the unorganized labour force under four groups in terms of:

  • Occupation

  • Nature of Employment

  • Specially distressed categories

  • Service Charges

critical analysis

Inaccessibility of Social Security for Unorganized Workers Challenges under The Code on Social Security, 2020

The Code on Social Security was a sensible endeavour to bring about the necessary improvements, given that informal employees continue to lack access to the necessary social security and the Unorganized Workers Act has failed to successfully expand its reach.

Lack of reform with the erstwhile Unorganized Workers Social Security Act continues in the Social Security Code, 2020

Even after UWSSA came into force in 2008, there had been very little progress in creating accessible and effective social security schemes for informal workers in the unorganised sector. By and large, the Code on Social Security mostly directly picks from the UWSSA. It does not elaborate on the scope, nature, funding mechanism or minimum goals of the possible social security schemes. More importantly, it fails to address some fundamental issues that made UWSSA ineffective. For example, the national and state level advisory boards, under both the Code and erstwhile UWSSA, have an advisory role only, and no institutional power. The registration of unorganised workers is the responsibility of the district administration, but there is no provision to hold them accountable. This has led to limited registration of unorganised workers.

Lacking of Facilitation of Registration

The Code authorises the Workers Facilitation Centres (WFC) to aid workers with registration, information, and for identifying beneficiaries for various schemes. The Code, diverging from the erstwhile UWSSA, no longer requires the district administration to ensure and facilitate registration of workers. Thus, no authority or institution can be held accountable for delayed registration. This implies that the Code does not legislate any other mechanism to supervise the registration of workers. This might further weaken the monitoring of the registration process.

Giving up legislative ground to the executive

The Code stipulates “as may be prescribed” or “as may be framed” at the discretion of the executive. This means that vital provisions can be defined and re-worked through the executive without the participation of stakeholders or democratically elected Parliament. Despite the Standing Committee’s recommendation that the MoL&E review such provisions and specify them in a clear manner, the Code was passed with several such provisions.

Lack of a minimal benefit policy at the national level

There are a variety of thresholds for Social Security provisions. This also includes that the benefits to which a person is entitled depend on factors such as the worker's pay and the total number of employees in the business. Therefore, a citizen is not entitled to a minimal social security benefit.

Other Gaps and Challengers

Fragmented administration systems and impact on the delivery of social security

The administrative and delivery systems for social security are disjointed in a number of different ways. First off, there is no comprehensive database of unorganised employees. Various ministries within the Union government are in charge of social security programmes. Under each of these schemes, distinct beneficiary databases are kept up to date by the relevant department. Additionally, there are state-level schemes that have different implementation apparatuses. Thus, the system for identifying beneficiaries is fragmented, which means that a worker has to apply for each scheme separately, filling in forms and furnishing different documents. This makes the process complicated.

When a worker moves between states for employment, they might have to forego certain social security benefits. However, due to the fragmented financial and administrative structures of social security, there are several implementation obstacles. For example, it is unclear which state will be required to pay for migrant workers’ social security benefits.

Judicial interpretations

While addressing the purpose of the Contract Labour (Regulation and Abolition) Act, 1970, the Supreme Court in Gammon India Ltd. vs. Union of India observed that the Act was designed to prohibit the exploitation of contract labour as well as to provide improved working conditions. The Act’s policy is that contract worker’s working conditions should be controlled to guarantee that salaries are paid and that basic necessities are provided.

The Supreme Court ruled in Royal Talkies, Hyderabad vs. Employees State Insurance Corporation, that the definition of an employee under the Employee's State Insurance Act, 1948 should apply to the workers of a bike stand and cafeteria maintained in a movie theatre by contractors. The court observed that the definition of employee appears to be of wider meaning. It doesn’t seem to disqualify a temporary employee even who are working in the unorganized sector. The term “employee” includes everyone whose services are borrowed by the major employers.


Despite the Unorganized Worker’s Social Security Act being passed in 2008, there has been a lack of development in the unorganized sector due to many reasons including the lack of a better enforceable minimum social security level, the Act itself has drawn criticism. The National Social Security Board for Unorganized Workers was established in August 2009, but its role is limited to that of an advisory body and it lacks significant authority to implement, monitor, or enforce social security regulations.

Under the Social Security Act, the first section for informal workers should also include migrant workers, women workers, and disadvantageous groups specifically. Focusing on the difficulties that these workers had to face should be the goal of the sections dealing with registration and delivery.

The National Social Security Fund’s nature and legal standing should be specifically addressed in the Act, together with the necessary state-level mechanism to ensure that there is explicit funding support and an enforced deadline. Welfare boards at the state level should aim toward financial independence through institutional frameworks such cess from employers, levies on export duties, and government budgetary allocation. A portion of these donations ought to go to the unorganised employees as well.

An effective method for grievance redressal and the ability to make people accountable are two adjustments that should be made to the Act. An all-party conflict resolution mechanism that includes employees, employers, and official representatives from the relevant governments might be another improvement specially for the unorganized sector. This addition will prevent the resources of all parties involved in the unorganized sector from undergoing litigation proceedings. Setting up worker assistance centres with contemporary facilities would be a further but more idealistic step that would allow for the provision of updated information regarding labour laws and the rights of undocumented employees as well as the ability to meet their requirements whenever needed.


The list of unorganised workers in India appears to go on indefinitely. If some ambiguities in primary legislation, such as the Unorganized Worker’s Social Security Act of 2008, are resolved, the immediate actions might be seen as a first step. The demands are rather great. Lack of adequate legislation, poor execution of current laws and programmes, and low investment are the main areas of concern for enhancing distribution policy.

We must recognise social security as a system that offers comprehensive security for a person in the family and at work, rather than viewing illness or starvation as an unpredictable part of life. It must contain provisions intended to guarantee that each person can achieve their fundamental requirements, such as access to clean water, enough nourishment, housing, and health care, as well as protections for childbirth, child care, disease, disability, death, unemployment, widowhood, and old age benefits. The goal must be to bring up a situation where everyone can maintain a living level that is appropriate and in line with societal standards.


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