LABOUR LAW II

Purpose of Industrial employment standing orders act - to have uniform standing orders(terms
and conditions of employment) so that employees feel that they are treated equally - it helps in
maintaining industrial relations. If employers violate it then they will face penal consequences.
Main purpose of labour law - regulate IR
Other objectives of labour law - payment of wages in timely manner, protecting interest of
workers, no unauthorized deduction of wages., there should not be discrimination in payment of
wages in similar work in terms of gender - Equal remuneration act, provide social security to the
any human being not only workers.
In this sem, we will cover laws related to wages.
Article 22 of Universal Declaration of Human Rights, 1948 - Everyone, as a member of
society, has the right to social security and is entitled to realization, through national effort and
international co-operation and in accordance with the organization and resources of each State,
of the economic, social and cultural rights indispensable for his dignity and the free development
of his personality.
C102 - Social Security (Minimum Standards) Convention, 1952 (No. 102) - ILO members are
obligated to imbibe these principles. It has identified 9 branches of social security.
Provisions under Indian constitution specifically chapter 4-DPSP related to social security -
article 41,42,47, 46, 43.
Schedule 7 has certain entries which talks about social security.
So that working class can face certain contingencies of life like his income gets reduced or zero
like maternity, old age, employment injury leading to temp/permanent disability, sickness,
invaidiity etc.
States must take responsibility of social security because now families are nuclear. It’s not like
karta will take responsibility now. States must secure the futue of workers because he/she has
worked day and night for progress of establishment.
Workers should get social assistance and social Insurance for the future. These 2 are imp
components of social security.
Social assistance is kind of payment paid to employees irrespective of any contribution by
employees whereas social insurance if given to those who contribute equally towards it and it
depends upon situation. PF(provident fund) is social insurance because employer and employee
contribute equally to it. If a person is covered under EPF act and he/she is employee then he/she
will get PF when he leaves the work. ESI is also an example of social insurance. Maternity
benefit is example of social assistance. Social assistance is for everyone for example in cases of
employment injury even if he hasn't contributed anything towards it. Even if he is not earning, he
can claim it.
Mahatma Gandhi National Rural Employment Guarantee Act 2005 or MGNREGA is social
assistance because it provides 100 days guaranteed work/ Authorities are state govt in that.
Labour laws ensure that workers work in healthy environment and there is welfare of the
workers. Where workers are engaged in maufacturing sector where there is high risk to their
lives, there must be safety for workers.
1st labour law enacted to provide for social security to the working class in India - The
Employees Compensation Act of 1923.
Social Secuity Code 2020 which has subsumed all the labor laws relating to social security.
There are 9 social security legislations subsumed by 2020 social security code.
Govt also through certain schemes and not just legislations to provide social security to every
individual.
The working class may face some contigenices which they have to face in life like old age,
sickness, etc. To face these contingencies of life, there must be some social security available to
them. The earning of wokrmen has either got reduced or ended due to these contingencies, they
will become helpless.
Regulating IR, ensuring workers get wages and work in healthy evnirinment on one hand and on
other hand provide social security to workers.

MODULE 1
- Challenges for implementation of labour law:-
● Most of the workers belong to the informal/unorganised sector (scattered workers,
unstructured, heterogeneous). That's why most of the labour laws are applicable to them
because they are not organized and systematic. We have gig workers, self employed
workers, platforms worker, entrepreneurs, home based workers (clafification of workers).
So it is difficult to provide social security to these workers. Social Assistance can be
provided but social insurance is difficult to provide to them (because they need to
continuously contribute in order to avail the benefit). More than 91% of the total
workforce belongs to informal sector. Although on paper we say that it is basic need for
everyone but we are not able to provide social security to informal workers.
● There is problem of low literacy rate because informal workers no need education to do
work on these sectors. There is a low level of awareness. For example housemaids,
blacksmiths, carpenters, tailors who are unskilled, semi skilled and skilled work. In order
to avail benefits, workers need to get themselves registered (they don’t know how to
register or are even aware the need for registration). This problem can be seen in
lockdown wherein there were a lot of problems for inter state migrant workers. Although
govt is ready to provide benefits, but workers have low awareness to claim. There is
ignorance on part of govt as well so someone should do this on behalf of govt. On the
other hand workers engaged in formal sector, they have good level of awareness and they
are also informed about all these benefits/facilities by the org. For example banking
institution wherein most of labour laws are available because there is traditional
employer-employee relationship (one working under control and supervision of
employer). Banks are industry (organized set up) because there is systematic activity
 done with the cooperation of employee and employers to provide services to public. So
banks will comply with labour laws like women employees will be able to claim
maternity benefit, employees can avail gratuity, PF, ESI, etc. Bank will make all the
employers aware of employee’s rights about these benefits. These benefits are to be
displayed in notice board. These are losted in appointment letters as well. Obligation is
on employer to make women employees aware of maternity benefit as per section 11A(2)
of maternity benefits act, 1961 (inserted in 2016 amendment enforced in 2017)
● There is no budget constraint but there is no proper utilization of budget. State govt has
to ask for budget from central govt. Since state givt are not asking for it, scheme amount
remains unutilized. Lack of political will, interest are the reasons behind it. There is no
penalty imposed if benefits are not provided to workers. For example abolition of bonded
labour act in which state govt has obligation to rehabilitate those workers. Central govt
are ready to fund this but state govt are not asking for it.
● Gender Disparity: 47.8 % of entire salaried workforce are men only. Women generally
are not available to avail social sceuiryt measures because they don’t fall under salaried
workforce. Most of them fall under domestic servant which is not paid regularly. (look
deeper)
● Classification of workers: It is easier to cover organized sector. Coverage of workers -
only 6-7% of total workforce are covered under social security schemes.
● Coverage of gig workers and platform workers - Gig economy is booming. But
coverage of gig workers under social security schemes of the govt are very low.
Approximately 70% of the entire workforce is either engaged in
gig/platform/contractual/self-employed work who don’t have access to these social
security benefits. Because they don’t have traditional employer-employee relationship.
There must be employer under whom employee work and certain obligations can be laid
down to access social security benefits.
➢ Self employed - simply taking initiative to employing himself. May work from his
home also. May have his own shop
➢ Gig worker - nature of work and employer-employee relationship basis is same.
Gig worker need certain kind of assitance/place to work upon. For example
mason, carpenter, plumber, etc. (very minute difference between gig worker and
sef employed). It is more about skill he is utlizing in mostly service sector to earn
his livelihood whereas in self employed it can be rendering of services or trading
of goods.
- Source of income for gig worker is fixed after completing his services. Self
employed will decide his own criteria.
➢ Platform worker - who need digital platform like Ola Uber drivers, delivery men
of Swiggy and Zomato. There is intermediary in between through which they are
working. Contract worker - Social security measures like pension, PF, maternity
are available to these workers as per Contract Labour (Regulation and Abolition)
Act, 1970.
 - But they have to fulfill certain conditions. They have employer-employee
relationship with contractor and not principal employer. Contract worker is
wokrer employed through contractor and not principal employer. Only if there is
failure on part of contractor, principal employer will provide benefits to contract
worker. But there is widespread exploitation of contract workers because they
don’t have employer-employee relationship with principal employer.
➢ Fixed term employment/employee - There is no intermediary in fixed term
employment (direct employment). So there will be employer-employee
relationship so employer has to fulfill obligations. The employment is for fixed
period like 1 year, 2 year, etc.
- Because of these reasons, social security schemes are failing in India.

❖ CONCEPT
- The idea behind the concept of social security is that the state shall be responsible for
protecting its citizens against contingencies of life.
- It implies collective action by the community to help a member against misfortunes and
wants he cannot meet with his own resources.
- Based on ethical principle that individuals should be protected. It has certain legal
considerations and certain ethical considerations also
- Social secutiy is the security that society furnishes through appropriate ogrs against
certain risks to which its members are exposed.
- If you look at constitutional provisions and preamble (words like ‘socio economic
justice’, ‘democratic state’, ‘welfare state’, dignity of individuals), state is also made
liable to provide social security to all individuals including workers.

❖ ILO
- Established in 1919 - India was its member since its beginning. So India has certain
responsibilities in being a founding member. So we have taken initiatives on workers like
employees compensation act of 1923 (earliers labour legislation in India).
- There are certain ILO conventions which we haven’t ratified. But we have considered
those ILO principles laid down in conventions to provide social security to working class.
- According to ILO, “Social security is the protection which society provides for its
members through a series of public measures against the economic and social distress
resulting from sickness, maternity, employment injury, unemployment, invalidity, old age
and death.”
- ILO convention 102 of 1952 : It has laid down minumum standards of social security and
has identified 9 branches which every member needs to be imbibe through their domestic
measures.
- These measures are also of a great importance to a country which is on the way of large
scale industrialization as they improve employee’s morale by providing sense of security
to them against various industrial hazards.
- India hasn’t ratified convention 102. But then also we through our certain labour laws, we
have made an effort to recognise these principles. Like we have seperate law on
maternity benefit. Sickness and medical benefit is covered in ESI Act. Employment
injury is covered in employee compensation act of 1923 (amt is determined in the act). Fo
unemployment, govt has came up with certain schemes and policies to provide certain
tempropary assiatnce like MGNERAGA and layoff compensation (although we don’t
have strong law on unemployment insurance)
- Chapter 5B of the ID act lays down obligations on employers having 100 or more
employees to take prior permission from govt to declare layoff.
- Invalidity - worker becomes incapable of performing any task because of any
temp/permanent disability in which income becomes reduced or gets ended. Employee
compensation act of 1923 has covered this.
- What is the problem in ratifying minimum standards of social security? ILO wants to
provide social security (because it is in need of every person) to all working class
universally irrespective of sectors. In India, more than 91% workers are engaged in
informal sector and our labour laws are either applicable on basis of no. of workmen
employed in any establishment or salary of employee. So it becomes difficult for us to
make it universally applicable.
- Denmark (provide education facility to children), Brazil (has best social security
mechanism). Every member has come up with a way to provide social security as per
their abilities and resources. There are other developin countries also who are not able to
provide universal social security coverage to all working class because of certain
difficulties.
- There are 10 fundamental ILO conventions.

❖ INTERNATIONAL PERSPECTIVE
- Article 22 of UDHR: Everyone, as a member of society, has the right to social security
and is entitled to realization, through national effort and international co-operation and in
accordance with the organization and resources of each State, of the economic, social and
cultural rights indispensable for [their] dignity and the free development of [their]
personality.
- Article 25 of UDHR: emphasizes right to standard of living adequate for health and well
being including access to social security.
1) Everyone has the right to a standard of living adequate for the health and well-
being of himself and of his family, including food, clothing, housing and medical
care and necessary social services, and the right to security in the event of
 unemployment, sickness, disability, widowhood, old age or other lack of
livelihood in circumstances beyond his control.
2) Motherhood and childhood are entitled to special care and assistance. All
children, whether born in or out of wedlock, shall enjoy the same social
protection.

❖ WHAT IS SOCIAL SECURITY?

- Any of the measures established by legislation to maintain individual or family income or
to provide income when some or all sources of income are disrupted or terminated or
when exceptionally heavy expenditures have to be incurred (e.g., in bringing up children
or paying for health care)
- Social security may provide cash benefits to persons faced with sickness and disability,
unemployment, crop failure, loss of the marital partner, maternity, responsibility for the
care of young children, or retirement from work
- Social security benefits may be provided in cash or kind for medical need, rehabilitation,
domestic help during illness at home, legal aid, or funeral expenses
- It acts as a facilitator – it helps people to plan their own future through insurance and
assistance.
- ILO defines Social Security as : “The security that the society furnishes through
appropriate org against certain risks to which its members are exposed. These risks are
essentially contigencies against which the individual of small means cannot effectively
provide by his own ability or foresight alone or even in private combination with
fellows”

❖ HISTORY OF SOCIAL SECURITY

- Germany was the first country to introduce Social security scheme (1883)
● Each member of a particular trade (blacksmiths, painters, weavers etc.) was
required to contribute at regular intervals;
● Money from this fund was used for food, lodging, hospital and funeral expenses
of aged and disabled members.
- In USA, Social Security Act came into existence in 1935.

❖ FEATURES OF SOCIAL SECURITY

- Provides financial help
- Covers wide variety of health and financial schemes
- Dynamic concept (it is a comprehensive term)
- Social insurance and social assistance
- Covers all social risks
❖ VARIOUS APPROACH
- With this we will come to know how labour laws evolved in India
- Compensation, restoration and prevention - all labour laws revolve around these 3
approaches.
- Compensation - in case it is either reduced or ended. To bring him to same position if
injury wouldn’t have happened.
- Restoration - to make good/restore of the loss
- Prevention - obligations are laid down on employer to prevent any injury/loss to workers

❖ SOCIAL SECURITY IN INDIA

- India has always had a Joint Family system that took care of the social security needs.
- However with rise of migration, urbanization, nuclear families and demographic changes,
Joint family system has declined. Hence we need a formal system of social security.
- Legislation
- Policies

❖ CONSITUTIONAL PROVISIONS
- Under the Directive Principles of State Policy
- And placed under the 7th Schedule - Concurrent List
- Article 21 - Right to life

❖ CONCURRENT LIST
- It means both union and state Government can make laws -
- (List III in the Seventh Schedule of the Constitution of India)
- Item No. 23
- Social Security and insurance,
- employment and unemployment.
- Item No. 24
● Welfare of Labour including conditions of work,
● provident funds,
● employers’ liability,
● workmen’s compensation,
● invalidity and old age pension and maternity benefits.

❖ PART IV: DPSP

- Article 41 - Right to work, to education and to public assistance in certain cases
State shall, within the limits of its economic capacity and development, make effective
provision for securing the right to work, to education and to public assistance in cases of
unemployment, old age, sickness and disablement, and in other cases of undeserved want.
- Article 42 - Provision for just and humane conditions of work and maternity relief
 State shall make provision for securing just and humane conditions of work and for
maternity relief.

❖ DIFFERENCE BETWEEN ORGANIZED AND UNORGANIZED

SECTORS
● Organized sector
- includes primarily those establishments which are covered by the Factories Act, 1948, the
Shops and Commercial Establishments Acts of State Governments, the Industrial
Employment Standing Orders Act, 1946 etc.
- This sector already has social security benefits under above laws.
- Examples: employees of union and state Government, army, navy, air force,
Multinational companies, Infosys, TCS and so on.

● Unorganized Sector
- Unorganized sector doesn’t have adequate labour law coverage. These are seasonal and
temporary nature of occupations.
- Casual nature of work, labour mobility is high hence bargaining power is low.

❖ CODE ON SOCIAL SECURITY 2020

- Govt has come up with Social Secuity Code of 2020 to have universal coverage of social
security schemes. So that unorganised sector workers can also be covered under this.
- It has defined organized sector and unorganized sector. It also defines workmen and
employee
- Laws which are Subsumed in 2020 Code are:-
● The Employees’ Compensation Act, 1923,
● The Employees’ State Insurance Act, 1948,
● The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952,
● The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959,
● 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,
● Unorganized Workers' Social Security Act 2008

❖ SOCIAL SECURITY LAWS IN INDIA

● Employees State Insurance Act, 1948
- covers factories and establishments with 10 or more employees
- Provides medical care to employees and their families.
- Provides Cash benefits during sickness and maternity
- Monthly pension after death or permanent disability.
● Employees Porvident Funds Act, 1952
- Applies to specific scheduled factories and establishments employing 20 or more
employees and ensures terminal benefits to provident fund, superannuation pension, and
family pension in case of death during service.
● Employees Compensation Act, 1923
- Requires payment of compensation to the workman or his family in cases of employment
related injuries resulting in death or disability.
● Maternity Benfits Act 1961
- Provides for 26 weeks wages during maternity as well as paid leave in certain other
related contingencies.
- Not applicable to unorganised sector women workers because it only applies to
establishments having 10 or more workers.
● Payment of Gratuity Act 1972
- Provides 15 days wages for each year of service to employees who have worked for five
years or more in establishments having a minimum of 10 workers.

❖ INDIAN SOCIAL SECURITY CODE, 2020

- Why is it imp?
Special recognition was given to gig worker, freelancers, self employed.
- Features - Consolidation of laws, expanded coverage, universal digital registration,
voluntary provident fund contributions, social security boards, maternity benefits,
provisions for fixed term employees.
- Pro - rata Gratutity - based on length of their contract even if it is less than usual
qualifying period.
❖ Compared with the other developed Nations
- We do not have an existing universal social security system. 93% of the workforce is in
the informal sector which is largely unrecorded.
- Today 1/8th of the world’s older people live in India. The overwhelming majority of
these depend on transfers from their children.
- Addressing social security concerns with particular reference to retirement income for
worker.
- In India the coverage gap i.e. workers who do not have access to any formal scheme for
old-age income provisioning constitute about 93% of the estimated workforce of 400
million people.
- As per the world Social Protection Report 2017-2019 despite significant progress in the
extension of social protection in many parts of the world, the human right to social
security is not yet a reality for a majority of the world's population. Only 45 per cent of
the global while the remaining 55 per cent/ 4 billion people - are left unprotected. 16
- ILO estimates also show that only 29 per cent of the global population are covered by
comprehensive social security systems that include the full range of benefits, from child
and family benefits to old-age pensions. Yet the large majority 5.2 billion people are not,
or are only partially, protected.
- Social security refers to systems designed to provide income security and access to
healthcare during various life contingencies like old age, unemployment, illness
disability, and maternity.

❖ Global Frameworks for Social Security

1. ILO Conventions: Social Security (Minimum Standards) Convention, 1952 (No. 102)
- The ILO plays a central role in defining and promoting minimum standards for social
security globally.
- Recognized as the foundation for comprehensive and universal social security.
- Covers nine key branches of social security:
● Medical care
● Sickness benefits
● Unemployment benefits
● Old-age benefits
● Employment injury benefits
● Family benefits
● Maternity benefits
● Invalidity benefits
● Survivors benefits
 2. Universal Declaration of Human Rights (1948):
- Article 22: Declares social security as a fundamental right necessary for human dignity
and the free development of personality.
- Article 25: Emphasizes the right to a standard of living adequate for health and well-
being, including access to medical care and social services.

3. Universal Social Protection Initiative (USP2030)

- A global initiative led by the ILO and the World Bank to achieve universal social
protection by 2030, in line with the UN Sustainable Development Goals (SDGs).
- USP2030 aims to achieve SDG 1.3 by ensuring universal access to social protection
systems by 2030.
- SDG 1.3: Implement nationally appropriate social protection systems and measures for
all, including floors, and by 2030 achieve substantial coverage of the poor and the
vulnerable.
- Implementing nationally appropriate social protection measures, including basic
guarantees (“floors”).
● Basic Guarantees: Essential protections to meet fundamental needs, such as: Access to
healthcare. Income security for children, the elderly, unemployed, and disabled
individuals.
● Universal Coverage: Ensures everyone, especially vulnerable groups, has access to these
minimum protections.
● Foundation for Social Protection: Acts as the baseline or starting point, with the goal of
expanding to more comprehensive systems over time.
● Extending coverage to all, especially the poor and vulnerable.
- Global Progress: Countries like Brazil (Bolsa Família) and Thailand (Universal
Healthcare Scheme) have been cited as models under USP2030 for their innovative
approaches to universal social security.
These frameworks guide countries in:
● Building equitable and inclusive systems.
● Ensuring economic stability and resilience for all citizens.
● Bridging the gap between developed and developing nations through progressive and
sustainable reforms.

❖ International Practices
- Developed nations like Denmark, Sweden Germany, UK, South Korea, and New Zealand
have established comprehensive welfare states, prioritizing universal health care and
income protection.
- Developing nations like Brazil tailor their systems to address informal sector challenges
and rural populations.
-
● DENMARK
- Education-Centric Approach: Social assistance for individuals under 30 is
linked to mandatory educational programs. This policy aims to up-skill the youth
and integrate them into the labour market.
- Employment Incentives: The 225-hour work rule requires recipients to work a
minimum number of hours annually to retain benefits, fostering employment but
posing administrative challenges.
● GERMANY
- Separation of Benefits: Social assistance operates independently from other
benefits like housing or family support, simplifying access but complicating
transitions across income thresholds.
- Employment Focus: Germany’s system incentivizes reentry into the labour
market through wage subsidies and skill development programs.
● NEW ZEALAND
- Integrated Tax Credits: Refundable tax credits consolidate family benefits into
the taxation system, ensuring accessibility and administrative efficiency.
● SWEDEN
- Housing Assistance: Sweden’s model integrates social assistance with housing
subsidies, ensuring comprehensive support for low-income households.
● UK
- Universal credit: A single payment system merging six means-tested benefits,
simplifying administration and reducing overlap.
- Benchmark for single payment system
- India can incorporate these but because of scattered people and low awareness, no
statistics on what to give/why to give, so we are delaying this.
● SOUTH KOREA
- Rapid Health Insurance Expansion: Achieved universal health insurance within 12
years (1977-1989). It combined government subsidies with mandatory contributions from
employers and workers.
- LIC provisions and health insurance provisions taken from South Korea.
● BRAZIL
➢ Historical Evolution
- Early Developments: The foundations of Brazil’s social security began
with the Eloy Chaves Act (1923), which established Retirement and
Pension Funds for railway employees.
By the 1960s, the Organic Social Security Law unified scattered schemes,
culminating in the creation of the National Institute for Social Security
(INPS) in 1966.
- Constitution, 1988: Marked a paradigm shift by formally integrating
health, social assistance, and contributory pensions under a unified
framework.
 Key principles include universal coverage, equity in access, and
distribution of benefits based on need.
Because of 1988 consitution, social security got formal recognition. -
major reason for its good reputation on social security over the world.

➢ Social Assistance and Targeted Programs

➔ Bolsa Familia Program:
- A flagship conditional cash transfer program targeting low-income families.
- Key objectives include improving educational attendance and health outcomes by linking
benefits to school attendance and health checkups.
- Benefits reach over 13.3 million families (2011), playing a vital role in reducing poverty
and inequality.
- Significant contributor to Brazil’s 30% reduction in extreme poverty (2001–2009).

➔ Continued Benefits Payment (BPC): Provides non-contributory pensions to elderly

individuals and disabled persons living in poverty. Around 3.6 million beneficiaries
(2011), ensuring protection for marginalized groups.
➔ Universal Healthcare (SUS)
- Sistema Unico de Saude provides universal, tax-funded healthcare services to every
Brazilian citizens.
- Transformed from a contributory system to a public universal system post 1988. (now it
is available to each and every brazilian citizen irrespective of contribution). It was earlier
contributory because it focused on targeted group.
- Key achievement: Because of universal system, poor people gained immensely. It
improved access to preventive and advanced medical care and reduced healthcare
disparities between urban and rural populations.
➔ Rural social security:
- Special provisions for rural workers introduced in the 1988 Constitution to address
economic vulnerabilities in rural areas.
- Benefits include pensions equivalent to the minimum wage and early retirement (age 55
for women, 60 for men).
- Contributed to:
Reducing rural-urban migration.
Promoting family farming and food security.
➢ Achievements of the Brazilian Social Security System
- Poverty Reduction: Social security and assistance programs have lifted 23.13 million
individuals out of poverty. Extreme poverty reduced from 25% (2001) to 17.4% (2009).
- Gender Equality: Programs like rural pensions empower women in agricultural
communities.
- Income Redistribution: Cash transfers, pensions, and rural social security enhance
equity by targeting low-income groups.
 ➢ Funding Mechanisms
- Social security is financed through contributions from:
● Employers: Payroll-based contributions.
● Employees: Contributions based on labour income.
● Government: Supplementary funding through general taxes.
- Redistributive funding allows for benefits to marginalized groups with limited
contributory capacity (e.g., rural workers) (like poor abhi 20 diye toh next time 10 denge)
➢ Comparisons with India
- Similarities:
● Both countries emphasize social protection for informal and rural workers.
● Conditional cash transfer programs like Bolsa Família are mirrored by India’s PM- Kisan
and Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
- Differences:
● Brazil has achieved universal healthcare, whereas India’s healthcare system, despite
efforts like Ayushman Bharat, faces challenges in achieving universal access.
● Brazil’s rural pension system is more comprehensive and equitable.
● India has not achieved universal health care despite Ayushman Bharat (health insurnace
scheme for poor people - good medicines, good hospitals, good equipments - however
there is problem of black market wherein non beneficiaries are getting benefits so it is
getting updated).

❖ Indian Social Security Code, 2020

- The Social Security Code, 2020, is a landmark reform in India's social security
framework. It consolidates and rationalizes nine central labour laws into a unified code,
simplifying compliance and extending coverage to a broader segment of workers,
including those in the gig and unorganized sectors.
1. Employees’ Compensation Act, 1923.
2. Employees’ State Insurance Act, 1948.
3. Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.
4. The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
5. Maternity Benefit Act, 1961.
6. Payment of Gratuity Act, 1972.
7. Cine Workers Welfare Fund Act, 1981.
8. Building and Other Construction Workers Cess Act, 1996.
9. Unorganized Workers’ Social Security Act, 2008.
➔ Key Features
● Consolidation of Laws: Unified nine existing labour laws and simplifies the legal
framework and reduces redundancy.
● Expanded Coverage: Includes gig workers, platform workers, and unorganized sector
employees. Provides social security benefits like healthcare, pensions, disability
insurance, and maternity benefits.
● Universal Digital Registration: Requires all workers to register on a digital platform to
ensure efficient delivery of social security benefits.
● Voluntary Provident Fund Contributions: Self-employed workers can opt for
provident fund contributions, enabling financial planning for the informal workforce.
● Social Security Boards: Establishes state and national boards to oversee and monitor
implementation, especially for the unorganized sector.
● Maternity Benefits: Includes provisions for paid maternity leave, childcare, and creches
at workplaces.
● Provisions for Fixed-Term Employees: Introduces pro-rata gratuity for fixed-term
employees, enhancing their job security and benefits.
➔ What is Pro-Rata Gratuity?
- Gratuity is a statutory benefit paid to employees for their service to an organization.
- Pro-rata gratuity means fixed-term employees are entitled to gratuity based on the length
of their contract, even if it is less than the usual qualifying period (e.g., 5 years of
continuous service in India).
➢ Why is it Important?
- Ensures fair treatment for fixed-term employees compared to permanent staff.
- Recognizes their contributions and enhances financial security upon contract completion.
- Promotes inclusivity and equality in workplaces.
➢ Impact on Fixed-Term Employees:
- Encourages employers to offer better terms of employment.
- Makes fixed-term jobs more attractive by providing similar benefits as regular roles.
- Aligns with global labor standards promoting equitable treatment.
Comparisons with Global Practices
- Similarities with International Practices
1. Inclusion of Gig and Platform Workers: India’s focus on extending social security to
gig and platform workers aligns with global trends.
Examples:
● Brazil: Includes informal workers in its Bolsa Família program through
conditional cash transfers.
● Denmark: Provides comprehensive coverage for freelance and part-time workers
under its flexicurity model.
2. Digital Registration Initiatives: The National Database for Unorganized Workers
(NDUW) in India uses digital tools for registration, similar to international practices.
Examples:
● South Korea: Uses the Employment Insurance System to track workers and
provide tailored benefits.
 ● European Union: Implements digital platforms for cross-border workers to ensure
seamless benefits under its European Labour Authority.
3. Simplified Frameworks: India’s consolidation of labor laws into a single code reflects a
global move toward simplified regulations.
Examples:
● Australia: Uses the Fair Work Act to streamline labor laws.
● New Zealand: Consolidates employment rights and benefits under the
Employment Relations Act.
4. Health and Maternity Benefits: India’s focus on extending healthcare and maternity
benefits resonates with global priorities.
Examples:
● Germany: Maternity leave benefits are supported under its comprehensive health
insurance system.
● Canada: Offers paid maternity and parental leave through Employment Insurance
(EI).

➔ Unique Aspects of India’s Social Security Code, 2020

1. Integration of the Informal Workforce: India’s emphasis on including informal
workers (approximately 90% of its workforce) is a distinct feature.
- Why Unique? Developed nations primarily focus on formal workers, as informal work is
minimal.
- Comparison: South Africa provides grants for informal workers, but the scale of India’s
informal sector requires tailored reforms.

2. Pro-Rata Gratuity for Fixed-Term Workers: The Code includes provisions for
gratuity even for workers with fixed-term contracts, calculated on a pro-rata basis.
- Why Progressive? Addresses the growing demand for contractual and temporary
workers’ rights. Encourages employers to formalize short-term employment
relationships.

3. Voluntary Coverage for Unorganized Sector: Unique provision for unorganized

workers to voluntarily contribute to schemes like pensions and healthcare.
- Comparison: Unlike mandatory systems in developed countries, this flexibility caters to
India’s socio-economic diversity.

4. Portability of Benefits: Introduces portability of benefits for migrant workers through

digital platforms.
- Why Unique? Targets India’s large internal migration (over 140 million migrant
workers).
- Comparison: Few countries have equivalent portability measures for domestic migrants,
though cross-border portability exists in the EU.
 5. Self-Employment and Entrepreneurial Recognition: Gig and platform workers,
including delivery agents and freelancers, are formally recognized as part of the
workforce.
- Why Unique? First major step to formalize and regulate India’s booming gig economy
(estimated at 15 million workers).

6. Tiered Contribution Model: Workers in the unorganized sector can contribute at

different levels based on their income.
- Why Innovative? Enables participation from low-income workers, a challenge in
developing countries.

7. Localized Administration: State governments play a significant role in implementing

the code, tailoring it to regional needs.
- Why Effective? Accommodates India’s federal structure and vast socio- economic
disparities across states.

❖ ILO/INTERNATIONAL LABOUR ORGANIZATION

- Founded in 1919
- HQ: Geneva, Switzerland
- How many total ILO members are there currently? 187 members
- Last country to join ILO? Kingdom of Tonga
- There are total 191 conventions, 9 protocols and 202 recommendations
- 47 conventions ratified by India
- Difference between convection, recommendation, protocol: They are either:
Conventions and Protocols, which are legally binding international treaties that may be
ratified by member States, or
Recommendations, which serve as non-binding guidelines.
In many cases, a Convention lays down the basic principles to be implemented by ratifying
countries, while a related Recommendation supplements the Convention by providing
more detailed guidelines on how it could be applied. Recommendations can also be
autonomous, i.e., not linked to a Convention.
Protocol - procedure related.
A Protocol is a procedural device for adding extra flexibility to a Convention or for extending a
Convention’ s obligations.
Protocols are also international treaties, but which, in the ILO context, do not exist independently
since they are always linked to a Convention. Like Conventions, they are subject to ratification.
They allow adaptation to changing conditions and they enable practical difficulties to be dealt
with which have arisen since the Convention was adopted, thus making the Conventions more
relevant and up to date. Protocols are particularly appropriate where the aim is to keep intact a
Convention which has already been ratified and which may receive further ratifications, while
amending or adding to certain provisions on specific points.
Recommendations are also international instruments adopted by the ILC but are not legally
binding and serve as guidelines to help member States formulate their policy at a national level.
Often, they supplement an existing convention by providing detailed guidelines for its
implementation but they can also be adopted autonomously.

- Objectives of ILO
● Labour is not a commodity
● Freedom of speech and expression
● Property anywhere diminishes (ask someone)

- The principal organs of the ILO are the International Labour Conference, the Governing
Body [executive function], and the International Labour Office [in Geneva], headed by a
Director General.
- International Labour Conference: it sets the International labour standards and the broad
policies of the ILO. It meets annually in Geneva. It is often referred to as an International
Parliament of Labour. It is also a forum for discussion of key social and labour questions.
- ILO has adopted 31 conventions related to social security
- ILO has adopted 10 conventions and 2 recommendations related to occupational safety
and health.