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A Critique of the Unorganised Workers' Social Security Act

As the first attempt to legislate security for 94% of the workforce, the Unorganised Workers' Social Security Act 2008 is welcome. However, it does not make it mandatory for the government to introduce new welfare schemes. It unfairly divides unorganised workers into those below the poverty line and those above, and is silent on a national minimum wage, improving working conditions and the problems of women workers like unequal pay and sexual harassment at the workplace.


A Critique of the Unorganised Gandhi National Old Age Pension Scheme, National Family Benefit Scheme, Janani
Workers’ Social Security Act Suraksha Yojana, Handloom Weavers’ Comprehensive Welfare Scheme, Handicraft Ar
tisans’ Comprehensive Welfare Scheme, Na
tional Scheme for Welfare of Fishermen and
Paromita Goswami Training and Extension, Janashree Bima Yo-

As the first attempt to legislate security for 94% of the workforce, the Unorganised Workers’ Social Security Act 2008 is welcome. However, it does not make it mandatory for the government to introduce new welfare schemes. It unfairly divides unorganised workers into those below the poverty line and those above, and is silent on a national minimum wage, improving working conditions and the problems of women workers like unequal pay and sexual harassment at the workplace.

Paromita Goswami (goswami.paromita@ is with Shramik Elgar, based in Chandrapur, Maharashtra.

Economic & Political Weekly

march 14, 2009

ndia’s unorganised workers who work long hours (when they get any employment at all), are forced to migrate to find work, toil in dangerous and often inhuman conditions, and have no fixed employer or any assurance of minimum earning comprise 94% of the country’s workforce. They start working as children and continue till they are too old or till illness or disability overtakes them. They are the “unfree” – bound by grinding p overty, e xploitation, discrimination and constant flux. These “unfree” people include 95% of all female workers and 89% of all male workers in India and together they contribute more than 60% of the country’s gross domestic product (GDP).

On 18 December 2008 Parliament a pproved the Unorganised Workers’ Social Security Bill, 2008 thus converting it into an act. Several commissions that examined the condition of these workers as well as grass roots organisations of rural labourers and unorganised workers and even politicians across parties have raised several concerns about their status in post- independent India. Expectations were therefore high that such an act would have the power to bring freedom to the “unfree”.

Several Shortcomings

The act should be welcomed as the first attempt to legislate social security for unorganised workers, but the only recommendation that it has accepted in toto from the commissions is that of registration of workers and issuance of identity cards in the form of a smart card bearing a unique social security number. In its present form however it falls short of ensuring the workers their rights.

(1) Compilation of Existing BPL Schemes: The act enables the central and state g overnments to formulate certain schemes for the welfare of the unorganised worker. Schedule 1 contains a list of schemes that e xists today for those workers who fall in the below poverty line (BPL) category (I ndira

vol xliv no 11

jana, Aam Admi Bima Yojana, and Rashtriya Bima Yojana). The question that follows is – why was a new act needed at all when these schemes had already been formulated? The act does not make it mandatory for the present or future governments to i ntroduce a single new scheme and to that extent it does not ensure anything new by way of real benefits to the workers.

Also, these existing schemes are for the BPL category and by dividing the unorganised workers into BPL and non-BPL categories grave injustice is being committed against the latter. The National Commission for Enterprises in the Un organised Sector (2007) had visualised a minimum level of social security for all workers and this should have been legislated into the act in order to ensure that every worker in the country gets certain basic entitlements.

(2) Wage Issues: As of today the minimum wage is fixed by state governments, according to regions within a state, and according to occupation and skill of the l abour. The minimum wages are neither revised on time by the state governments nor enforced with any modicum of seriousness. On the crucial issue of national minimum wage the act has maintained a deafening silence.

There are no penal sections to curb malpractices like non-payment of wages, paying less than minimum wages, delays in payment, unequal remuneration, etc. Wagerelated problems are a regular feature of the unorganised sector. The very structure of the sector is such that the worker, especially migrant and women workers are totally powerless. The fact that they are not organised and there are severe structural problems in organising them indicates that they require special protection of the government with regard to their wages. All other social security measures become meaningful only when the wage earned by the worker (we are not even talking about the minimum wage or fair wage, but just the wage earned by dint of hard labour as part of the contract) is ensured to them. Non-payment of wages and


inordinate delays are far more rampant than is acknowledged by the policymakers. No scheme can give as much s ecurity to the worker as the knowledge that his or her rightful wages shall be paid on time.

This was the basic security that the act should have ensured. The present system of expecting the worker who is not paid by the employer to go to the labour court against powerful employers when she does not even have the money to buy the next meal is a mockery of justice. In fact, the issue of dispute resolution through tripartite boards as suggested by the Shramshakti report of 1988 should have been considered. Also, no government has the right to ask for workers’ contribution for welfare schemes when it fails to ensure the timely payment of rightful wages.

  • (3) Grievance Redressal: The act has come up with an impractical provision that every scheme formulated by the govern ment shall include its own mechanism of grievance redressal. The author’s experience in Maharashtra shows that women beneficiaries of the niradhar y ojanas (social assistance schemes for destitute persons with a large percentage of women amongst the beneficiaries) face a number of problems including corruption, delays, and harassment in the govern ment offices as well as banks and post offices. No official forum exists to ensure that grievances like these are heard and addressed. In the future these will not be dealt with seriously unless the approach is that the government is ensuring the rights of the citizen-workers and not doing a f avour by coming up with schemes. It was expected that the act would come up with a cheap, quick and accessible forum for workers’ grievance but there is only a h alf-hearted and self-defeating a ttempt in this direction.
  • (4) Work Conditions: It is difficult to understand why our parliamentarians did not show even a modicum of consideration for the inhuman working conditions and long working hours that these workers face. While it might be argued that an eight-hour working day, even if legislated, would have remained on paper (which is true of most social justice legislation in the country), such provisions would have said something for the principles that should be upheld. Legislation gives strength to
  • the workers and their organisations who are struggling at the grass roots.

    (5) Workers’ Facilitation Centres and Panchayati Raj Institutions: The act fails to exploit the full potential of two structures that together could have given teeth to the enactment. These are: (a) the workers’ facilitation centres (WFC), and (b) panchayati raj institutions. Instead of restricting its activities to awareness generation and acting as a clearing house for applications, the WFC could have been entrusted with the task of registration of workers and maintaining records at the local level. The WFC should have been set up at the block level and connected with the gram panchayats or municipal bodies for taking the benefits closer to the workers. Most importantly, it should have been given the task of maintaining the record of licensed labour contractors in the area as this would have gone a long way in curbing human trafficking and exploitation of l abour by unlicensed contractors. Similarly, the gram panchayat should be empowered to keep records of contractors who come to the village to procure labourers and the details of the labourers who are taken for work outside the area

    – either in the same district or state or as interstate migrant workers. In a situation where a migrant labourer or woman labourer is harassed, tortured or not paid wages and in normal circumstances has nowhere to go, the WFC could have played a crucial role in helping them.

    (6) Women Workers: There are no s pecific provisions in the act regarding w omen workers especially about equal r emuneration, decent work conditions, and protection from sexual harassment at the workplace. The present schemes look at women’s needs in the context of their roles as mothers or widows and while this is important their needs as workers should also have been addressed. The recommendations of the Shramshakti report (1988) which concentrated on issues of women workers in the unorganised sector should have reflected in the act. Similarly, the S upreme Court guidelines in Vishaka vs State (1997) which addressed the issue of sexual harassment at the workplace should have found a place in this enactment.

    Charity, Not Rights

    Overall, the language of the act is not one of giving rights to the unorganised sector workers at par with the workers in the

    o rganised sector, but rather to confine their status as beneficiaries of government schemes. There remain spaces within the act through which some of these concerns can be addressed. For example, there are the national social security boards at the central level and the state social security boards at the state levels which have been given the powers “to recommend to the Central (or State as the case may be) G overnment suitable schemes for different sections of unorganised sector workers” and also “monitor such social welfare schemes for unorganised works as are a dministered by the Central (or State) Government”. One hopes that these boards will be constituted wisely and shall be given the mandate to look into the i ssues of unorganised workers in more specific details. However, what should have been legislated into the act as workers’ entitlements will now at best be i ncluded incrementally.

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    march 14, 2009 vol xliv no 11

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