Introduction – The Bill
Currently there are over 40 Labour Law Legislations that are in force in our country. The Government of India has embarked on a herculean task to amalgamate all of these labour law legislations into four Labour Codes. These Codes aims to simplify the labour law compliances which will in turn help these businesses to target their resources toward the development of the industry instead of complicated labour law compliances. This is being done in order to simplify the labour law regulations as a facilitator to encourage the growth of industry in the country, in purview of the ‘Make in India’ initiative of the Government of India and also to improvise the ease of doing business in India. The latest code to be placed in the Lok Sabha as a bill is the Code on Social Security 2019 (‘the Social Security Bill’).
The Social Security Bill proposes to simplify, amalgamate, rationalize and replace the following central labour legislations:
1.The Employees’ Compensation Act, 1923;
2.The Unorganised Workers’ Social Security Act, 2008.
3.The Payment of Gratuity Act, 1972;
4.The Employees’ State Insurance Act, 1948;
5.The Cine Workers Welfare Fund Act, 1981;
6.The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952;
7.The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959;
8.The Maternity Benefit Act, 1961;
9.The Building and Other Construction Workers Cess Act, 1996;
It was introduced in the Lower House of the Indian Parliament by Mr. Santosh Kumar Gangwar, the Labour Minister for India on 11.12.2019 as Bill No. 375 of 2019 and is currently pending approval of both the Houses of the Parliament. A copy of the Social Security Bill as introduced in the Lok Sabha can be accessed on https://labour.gov.in/sites/default/files/375_2019_LS_Eng.pdf.
Key Aspects of The Social Security Code,2019
The Social Security Bill aims
The Social Security Bill has introduced several new aspects for the welfare of those working in the unorganized as well as the organized sectors of the Economy. It aims to introduce several new aspects that are currently missing in the labour legislations in force in India. The Social Security Bill has taken the concept of ‘labour legislations to be welfare legislations’ to another level and once implemented, it shall definitely improvise the social and economic standing of those impacted by this Bill. This section highlights the key aspects of the Social Security Bill, in brief.
Social Security Welfare Schemes
Under the Code, the Central Government may notify various Social Security Schemes for the benefit of workers. These include an Employees’ Provident Fund Scheme, an Employees’ Pension Scheme and an Employees’ Deposit Linked Insurance Scheme which may provide for a provident fund, a pension fund, and an insurance scheme, respectively.
The government may also notify:
- An Employees’ State Insurance (ESI) Scheme to provide sickness, maternity, and other benefits,
- Gratuity to workers on completing five years of employment (or lesser than five years in certain cases such as death),
- Maternity benefits to women employees,
- Cess for welfare of building and construction workers, and
- Compensation to employees and their dependants in the case of occupational injury or disease.
- Widened the scope of the definition of “Wages”
The Social Security Bill has elaborately and specifically defined the term “wages” to widen the scope of the term to a vast extent. The definition of wages has three parts to it –
Inclusive in the definition: All remuneration expressed in monetary terms are wages and includes basic pay, dearness allowance and retaining allowance.
Specific exclusions: Provided Fund, pension and gratuity, house rent and conveyance allowances etc. are not included in the term wages as long as it does not exceed the 50 per cent of the total remuneration being paid.
Benefits in kind: These will be included to the extent of 15 per cent of total wages. Overall this will ensure that wages for social security benefits will be at least 50 per cent of overall compensation.
Establishment of Social Security Organisations
The Code provides for the establishment of several bodies to administer the social security schemes. These include:
- A Central Board of Trustees, headed by the Central Provident Fund Commissioner, to administer the EPF, EPS and EDLI Schemes.
- An Employees State Insurance Corporation, headed by a Chairperson appointed by the central government, to administer the ESI Scheme.
- National and state-level Social Security Boards, headed by the central and state Ministers for Labour and Employment, respectively, to administer schemes for unorganised workers.
- State-level Building Workers’ Welfare Boards, headed by a Chairperson nominated by the state government, to administer schemes for building workers.
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