India’s Social Security Code 2019

by Rohini, Simran, and the IMN Team

India currently has 40 Central Acts of Parliament around labour. Streamlining this has been a key part of the government’s reform agenda. In the Budget Speech of 2019, Finance Minister Sitharaman announced that these legislations are to be collapsed into 4 Labour Codes, covering wage, social security, industrial relations, and industrial safety and welfare.

The first of these, the Wage Code, has already been passed in August 2019, despite apprehensions that it adversely affects migrant households. The Social Security Code, which is expected to be tabled in Parliament in the Winter Session will likely also be passed very soon, given the government’s track record.

However, since it was first put forward, the reform agenda has courted controversy, with labour groups across the political spectrum including civil society and academics, registering protest. In this Redux edition of Gotta Keep On Movin’, we explore the importance of the SSC 2019 for migrants.

READ: India’s largest trade union, Bharatiya Mazdoor Sangh (BMS) rejects the Social Security Code.

SSC DRAFTS: A TIMELINE

  • In September 2019, the Draft Social Security Code was put out by the Ministry of Labour and Employment for public comments. This was the third draft to be put out.
  • The first draft, in 2017, had ambitiously aimed to provide universal coverage to all workers in the country, covering the 450-million strong Indian labour force in its entirety. It proposed a decentralised social security system subsuming existing bodies such as the Employees’ Provident Fund Organisation and the Employees’ State Insurance Corporation.
  • Its top-down approach was also a major point of criticism, leading to a second draft in 2018 which put forward a Public-Private partnership model for managing provident and insurance funds. This, too, was rejected, for the limited role it had granted to trade unions in the new proposed institutional bodies and a third draft was rolled out in 2019, withdrawing most of these reforms.
  • The third draft aims to cover all building/construction, plantation, contract, self-employed, home-based, gig, oilfield, seasonal, sea, railway, platform, and fixed-term employed workers and employees. The code covers provident fund, insurance, pension, gratuity, compensation, and welfare cess.
  • The draft has received widespread criticism and been rejected by BMS, India’s largest trade union. From the 450 million+ labour force of the first draft, it now covers barely 10% of the labour force (which exists in the organised sector). Nevertheless, it is likely to be passed by Parliament in the upcoming Winter Session.

What does the SSC 2019 offer?

What does it mean for migrants?

The SSC 2019 adversely impacts migrants in two ways. Firstly, there is no social security scheme in it that is explicitly targeted to migrants. Migrants are included in the definition of “wage worker” — which covers other workers in the unorganised sector — and “contract worker”. The SSC formulates no concrete schemes for wage workers, only stating in Chapter IX that the Central and State Governments will legislate on various issues relating to unorganised workers. It also provides for different advisory committees to be set up at Central and State levels for this purpose.

Secondly, the SSC is unclear about whether its schemes at all extend to the unorganised sector, although the presence of Chapter IX seems to indicate that it does not. This is important because a large number of labour migrants work in the unorganised sector which the SSC neglects.

The SSC is generally ambigious about its definitions of employee and worker, a point raised by Dvara Trust, in its comments to the Ministry. Whether or not unorganised sector workers are to be treated as employees and therefore made eligible for the SSC schemes is unclear.

Migrants, therefore, lose out by virtue of being migrants as well as because many work in the unorganised sector. Emigrant workers migrating to work for foreign employers are also not factored in at all although the Global Compact for Safe, Orderly, and Regular Migration (ratified by India in 2018) talks about ensuring portability of social security for migrants going abroad in Objective 22.

Interstate migrants are vulnerable in ways that locals are not. Our 2019 IMPEX analysis highlights how migrants miss out on vital social security schemes such as PDS at source and are also not able to avail such schemes at destination. Access is particularly difficult for seasonal migrants who spend a few months at destination and are usually on the move. Poorer households, for whom migration is an income-generating strategy therefore miss out on vital social security benefits. There is a need for migrant focused legislation for social security. While some states such as Kerala and Tamil Nadu have taken the lead in extending social security benefits such as health insurance to interstate migrants, other prominent destination states such as Maharashtra and Gujarat have not.

WATCH: “Falling sick takes 500 rupees out of our salary.”

How interstate migrants fare at destination and what states such as Kerala are doing right.

Dvara Trust’s comments on the Code also point out issues in the definitions of worker and employee and call for better protection for urorganised sector and interstate migrant workers. Read the comments in detail here.

Aajeevika Bureau, which works extensively with migrant labourers in Rajasthan, Gujarat, and Maharashtra critiqued the Code in a series of tweets, highlighting the clause requiring workers above the minimum wage category to contribute 12.5–20% of their monthly incomes. Read more here.

The implementation of the SSC is another area of concern. Awareness campaigns and facilitation centres for unorganised workers are mentioned in Chapter IX, but do not hold much value since the Code is generally ambigious about actual schemes for such workers. The Code also lacks a grievance redressal method for its other schemes, a point also raised in the comments of Dvara Trust.

An effective social security legislation ought to have its intended beneficiaries — the workers — at the heart of it. By providing for workers in general, and migrant workers in particular, India can more effectively harness the benefits of migration.

NOVEMBER UPDATES!

Team members Varun Aggarwal and Rohini Mitra attended the National Consultation on the Implementation of the Global Compact for Migration (GCM) at Viswa Yuvak Kendra (International Youth Centre) in New Delhi on 8 and 9 November.

Team members Rohini Mitra and Aarohi Damle published an article on the twin phenomena of migration and domestic work in The Wire.

Image Credits: Maternity Benefits, Gratuity, Provident Fund, Compensation, Insurance Scheme, Welfare Cess, Social Security for Unorganised Sector

India Migration Now

Written by

Migration is an opportunity, we want to ensure India grabs it. IMN is a South East Migration Foundation venture, based out of Bombay, since Feb 2018.

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