Proposed Labour Code Aims to Provide Social Security to All, But at the Cost of Workers' Voices

Besides disentitling women from availing maternity benefits, the draft labour code also seeks to eliminate the role of trade unions, a threat to the democratic rights of workers.

Labourers work at the construction site of a metro rail station in Kolkata. Credit: Reuters/Rupak De Chowdhuri

The Ministry of Labour and Employment has proposed four legislations as part of its steps for simplification, amalgamation and rationalisation of 44 labour laws – codes in the areas of wages, industrial relations, social security and occupational safety, health and working conditions.

On March 16, the draft labour code on social security and welfare was published on the ministry’s website, giving the public till April 15 – barely a month’s time – to provide comments. The date was later extended to May 15.

The 177-page long welfare code consists of 166 sections distributed in 22 parts and six schedules. Among others, it deals with the registration of workers, employers and employing entities; collection of contributions; policy and administrative mechanisms, and a plethora of control and penal provisions. The proposed welfare code, affecting about 700 million workers in the country, of which 92% are in the unorganised and informal sector, needs a critical consideration.

Undifferentiated definition of workers

Although the code acknowledges nine different definitions of workers, it refers to workers in an undifferentiated way in the main sections. The working class is a complex mix of a vast spectrum of cohorts in India such as domestic worker, contract workers, workers from the unorganised and organised sectors or from those in the formal and informal economy. The impetus on simplification of the code has eclipsed the vast diversity and the socio-cultural constructs of workers in India.

A reform without workers’ participation

The haste for amalgamation is almost dismissive of the participation of workers. The ritual of soliciting public comments is technically adhered to by the ministry, through the English version of the code which is made available solely on its website. Hence, both the medium and the method of soliciting comments will exclude majority of the workers from expressing their views.

The national council proposed under the code consists of 21 members and provides for only three employee representatives, that too on the basis of nomination by the government. There is a weak emphasis on gender balance as it proposes “at least one of the three nominees to be a woman” in the national council. However, the code is silent even on a symbolic gender representation of employees  both in the central as well as in the state boards. Nominating employee representatives directly by the government instead of taking into account organised constituencies of workers through trade unions divests the process of democratic participation in decision making, besides vesting too much power in the central government. Moreover, the vast diversity of concerns of the unorganised workers and workers in the informal sector can hardly be sufficiently represented by a couple of nominated members.

Elimination of tripartite negotiations and the role of trade unions

The most regressive dimension in the code is undoing the role of trade unions that has been a part of the constitutional scheme of things in the post-independence era in the form of tripartite negotiations for workers rights. In part B, the code introduces the idea of social security organisations consisting of the National Social Security Council of India (national council), central board and state board as the policy and regulatory bodies for the welfare of workers, none of which envisages any role for the trade unions. The code is characterised by over-centralisation of decision making. The national council, vested with vast administrative, regulatory and financial powers (such as regulating funds, regulating provident fund, laying down norms for the management of corpus and the like), is chaired by the prime minister. Undoubtedly, this does not augur well for the democratic rights of workers.

Disentitling women from maternity benefits

Discriminating against and disentitling the poor, which was expressed so far by way of targeting for population control, is proposed to be made a legal clause, subtly through the code. The two-child norm, under section 55.1, is made a legal eligibility criterion for availing benefits under the Maternity Benefits Act, 1961, which has hitherto been universal. The clause appears to be pro-women in prohibiting employing women just before and after the delivery. However, section 55, which states that a woman who has “actually worked in an establishment for a period of not less than 80 days in the 12 months immediately preceding the date of her expected delivery” is eligible for maternity benefits, is a potent exclusionary clause for many women who may not have regular employment as is commonly the case. Hence, although superficially the language of the code states that “all women” will be entitled to maternity benefits, in practice such a criterion renders a large number of women, especially the most vulnerable sections, ineligible to avail maternity benefits.

Greater role for non-state intermediary agencies – suspicion of privatisation

The code requires every employer, employee and each employer-employee relationship to be registered. The process of such registration is fraught with confusions and vagueness. In the case of those workers in the unorganised sector or informal economy with multiple employers (as in the case of agricultural labourers or domestic workers), there is no provision for self-declaration by workers. Further, there is no clarity on eligibility and identity of the registering authority. The code, on the one hand, seems to underplay the huge machinery that is required for such a massive task, and notes the role of undefined intermediary agencies. Part K lays out the provisions for licensing of intermediate agencies such as fund manager agency, service delivery agency, benefit disbursement agency, facilitation agency, record keeping agency and so on. The humongous task of recasting the welfare services coupled with the silence on the mechanics that is required along with provisions for intermediary agencies can only raise the suspicion of this code being a ploy for the larger agenda of the government, i.e. promotion of private business.

Flawed presumptions

The code does precious little to take into account the perspectives of workers, particularly workers from the informal and unorganised sectors who are the most vulnerable of all. The code rests on some underlying presumptions which may be seriously contested, especially in the context of there being a large spectrum of workers in the unorganised sector. The following are a few of such presumptions.

  • That all capable citizens (workers) have regular remunerative work, at least paying them minimum monthly income;
  • That all workers are individually able to negotiate for their entitlements without any  assistance;
  • That all workers are homogenous and there is no recognisable differentiation among and between workers in different sectors such as formal-informal sectors or organised-unorganised workers.

Amalgamation needs thoughtful reconsideration 

Contrary to the propaganda of the union government that the code will entitle every citizen to social security, a finer reading of the draft suggests otherwise. The vagueness and complexity of the registration process indicates that it will potentially leave out a large majority of workers from the informal and unorganised sectors. Notably, minimum wage is determined sectorally, and sometimes even within sectors it has geographic variations as seen in beedi sector, and is not a legal entitlement for majority of the workers in the informal sector. Given such context, the requirement of contribution from every worker to the social security fund (which is mandatory to be eligible for social security benefits) will exclude the unemployed, people with disability, daily wage workers whose daily wages are abysmally low, large number of women who are housewives and others, who cannot provide contributions to such a fund. Women constitute a considerable workforce both in the organised and unorganised sectors. However, the code does not envisage expressly the participation of women in the proposed social security organisations.

Thus, the populist perception that this code is attempting to provide security to all workers, needs to be challenged. In essence, it erodes the spirit of democratic participation of workers in the decision making process. It is worth noting that the code does not use the terminology of workers’ rights, but rather employs the phrase of ‘benefits,’ thus sucking out the core element of citizenship itself, making it sound like a largess of the benevolent government. The code could also be sounding the death knell for the role of the unions by eliminating the constitutional space for the tripartite negotiations. Silently but steadily, it is attempting to completely bulldoze the role of trade unions into oblivion. Ironically, even if the code succeeds in providing social security benefits, the trade off would be the collective voice of the workers, which has been at the core of democracy and citizenship in India.    

E. Premdas Pinto is a human rights lawyer associated with public health research at Centre for Health and Social Justice and is a Ph.D Scholar in public health and law at the Centre for Social Medicine and Community Health (JNU).

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