UNORGANISED SECTOR AND LABOUR LAWS

 When the entire state is working to ensure justice for the masses, it cannot allow injustice
to be perpetrated against the weaker sections of society - whether they be industrial
workers, agricultural workers or any other group.
- Sri. Khandubhai Desai













INTRODUCTION:
The unorganized sector in India plays an important role in the development of the
economy. Around 92% of India's population consists of unorganized workers. The
unorganized workers do not have enough means to provide security for themselves.
Social security for workers is important for the workers families and for the community.
Most unorganized workers face many problems like low wages, work hazards, etc. The
Unorganized Workers Social Security Act, 2008 is the legislation enacted by the
government that provides social security benefits to the unorganized workers. The Indian
judiciary plays an important role in protecting the rights of the unorganized sector.
There are many schemes and policies for the unorganized workers that provides social
security and many more benefits for the welfare of the workers.
HISTORIAL BACKGROUND:
The concept of social security protection for industrial workers is not new to India. In
India, the laws relating to social security owes its origin to the concept of social security
as envisaged by the International Labour Organization. The legal regime pertaining to
social security protection to industrial workers in India commenced during the British rule
with the enactment of the Workmen’s Compensation Act, 1923.The basic idea behind
the formulation of this legislation is to provide a measure of financial protection to an
industrial worker in the event of unemployment situation caused by specific eventualities.
The ILO in its founding convention has strongly propounded the concept of social
security for industrial workers on the premise that the state cannot remain as a mere
spectator for various kinds of risks exposed at the work place by industrial workers after
the advent of large-scale industries. This legislation is a well drafted legislation providing
a measure of social security protection for the industrial workers in the event of any
personal injuries suffered by them out of and in the course of their employment or for any
occupational diseases contacted by the workers which are peculiar to their employment.
The law provides reasonable measure of compensation in the event of any disability or
death suffered by the workmen out of and in the course of their employment. This law is
based on the common law principles of employer’s liability.
The law defines the terms ‘workman’ and the ‘employer’ for the purposes of the
applicability of the legislation and it applies to the workers employed both in organized and unorganized sectors. Later, the country witnessed the enactment of other social
security legislations broadly basing on contributory system. With this initiation, the
concept of social security assumed a new dimension and now it is viewed as a saving as
long as an industrial worker is in employment and as an income when he is unemployed
for any reason. The situation of unemployment may arise due to many factors, namely,
disability or invalidity in the event of industrial injuries, sickness, death, old age,
temporary loss of earning capacity due to confinement period in case of women workers
or loss of earning capacity due to loss of employment.
UNORGANISED WORKERS:
The workers and employers are two pillars of our national economy. The relationship
between workers and employers is one of partnership in the maintenance of production and say, the building up of the national economy. Proper regulation of employer- employee relationship is a condition precedent for planned, progressive and purposeful development of society. In this connection, the social and economic upliftment of the labour is important for securing industrial piece, which is essential to increase the national productivity
. The total labour force can broadly be divided into two categories:
• organised
• unorganised labour.
A plethora of laws have been enacted in order to protect and safeguard the interests of
organised labour. But the condition of unorganised labour is very miserable in the
absence of sufficient labour legislations.
The First National Commission on Labour, undshops and commercial establishments; sweepers and scavengers; workers in tanneries;
tribal labour and other unprotected labour.
Therefore, it is equite evident that the unorganised sector is too vast to remain within the
confines of a conceptual definition. Sometimes, it is also defined as the residual of the
organised sector. In view of the above, descriptive means are often used to identify the
unorganised or informal sector. The below mentioned are some characteristics of
employments or undertakings in which unorganised labour is employed. These
characteristics are low scale of organization; operation of labour relations on a casual
basis or on the basis of kinship or personal relations; small own account (household) or
family-owned enterprises or micro enterprises; involvement of family labourers; easy
entry and exit; free mobility within the sector; use of indigenous resources and
technology; unregulated or unprotected nature; absence of fixed working hours; lack of
security of employment and other social security benefits and lack of support from
government.
Under section 2(m)3 of the Unorganized Workers Social Security Act, 2008, the term
unorganized worker' means a home-based worker or a self- employed worker or a wage
worker in the unorganized sector. It includes a worker in the organized sector who is not
covered by any of the acts pertaining to welfare schemes as mentioned in Schedule II of
Unorganized Workers Social Security Act, 2008. Unorganized workers take over the
Indian labour market and represent 90% of the total Indian workforce. Unorganized
sector in India is one of the largest in the post- industrial world
Unorganized Workers are people who do not have the benefit of pension, maternity leave,
provident fund, gratuity etc. These workers work on daily and hourly wages. The
unorganized labour in India is enormous when it comes to its number range and hence,
they are omnipresent in India. The unorganized sector has to put up with cycles of
excessive seasonality of employment because most of the unorganized workers do not
have secure durable avenues of employment. Unorganized workers have no formal
employer employee relationship and their workplace is scattered and disintegrated.
Unorganized workers are subjected to indebtedness as their income does not meet with
their living needs. These workers face exploitation, harassment, discrimination by the rest
of the society.

MAJOR PROBLEMS FACED BY UNORGANISED WORKERS:
In India, 90% of the workforces are engaged in unorganized sector. As being the weaker
section in the society, they deal with many problems. Even though the unorganized sector
contributes to the economy, they are faced with many challenges. They are:er the chairmanship of Justice
GAJENDRAGADKAR, defined the unorganised sector as that part of the workforce who
have not been able to organize in pursuit of a common objective because of constraints
such as
(a) casual nature of employment,
(b) ignorance and illiteracy,
(c) Small size of establishments with low capital investment per person employed,
(d) scattered nature of establishments and
(e) superior strength of the employer operating singly or in combination.
The commission further listed the various categories of unorganised labour. These are
contract labour including construction workers; casual labour; labour employed in small
scale industry; handloom/power-loom workers; beedi and cigar workers; employees in High level of insecurities in jobs: Unorganized workers depend on various jobs
due to insecurity of work. Factors like climate change, locations etc. affect the
employment opportunities for unorganized workers. For example, agricultural
sector in India is highly irregular and unassured. This is because of the availability
of work to them. They are engaged only for 3 months in a year and the remaining
9 months they are either unemployed or they search for alternative jobs to sustain
from starvation.

2. Minimum wages: Sec 2(h) of Minimum Wages Act, 1948 defines the term
Wages'. It means remuneration capable of being expressed in terms of money
which would if the terms of the contract of employment express or implied were
fulfilled be payable to a person employed in respect of his employment or of work
done in such employment and includes house rent allowance4

. Even though the act
defines the term, the workers are not paid minimum wages in most cases. In
Peoples' Union for Democratic Rights v. Union of India5

, the Supreme Court
held that even if poverty forces anyone to work for minimum wage, Article 23
prohibits employing workers for wages below the statutory minimum level as it
results in forced labour.

3. Long working hours: In the Unorganized sector, long working hours are beyond
the labour and regulatory norms which is standard in India. The agricultural sector
has no fixed working hours as there are no laws that regulate the working hours
for the agricultural sector. In the other unorganized sectors, the working hours are
fixed from 12- 15 hours and their wages depend on the hours their work for their
employer. As most of the workers are illiterate and are dependent on the wages
given by the employer they are exploited by the employer as they force the
workers to work for more hours.
4. Work hazards, occupational safety and living conditions: Unorganized workers
are exposed to dangerous working conditions which affects their health conditions.
They face many health problems because they have low nutrition and their
excessive physical activities. Due to their low income, they are unable to pay for
their medical expenses. Workers who work in firework factories, tobacco
factories, and matchstick factories are prone to respiratory diseases because of
inhaling the tobacco dust, fire powder etc. Workers in agricultural sector are
affected by excessive use of pesticide, insecticide and fertilizers. Unorganized
workers live in slum areas and unsanitary conditions. Basic facilities like washing
areas, toilet facilities etc. are below standard.

5. Women and children are unprotected: Art 39(d) of the Constitution of India
talks about equal pay for equal work. This means that all workers should be given
equal wages irrespective of their sex. Wages given to men are more than the
wages given to women and children for their equal hours of work. Many children
are forced to work in households, dhabas, and tea shops for low wages. Children
work for long working hours and they are exposed to many hazardous working
conditions which affect their health. Women are sexually harassed and assaulted in
many workplaces. Women experience many physical and mental problems and
they are not aware of their rights.

SOCIAL SECURITY AND UNORGANISED WORKERS
The social security schemes in India cover only a small segment of the organised

workforce, which may be defined as workers who are having a direct regular employer-
employee relationship within an organization. The social security legislation in India

derives their strength and spirit from the Directive Principles of the State Policy as
contained in the Constitution of India. Social security is a dynamic concept. It varies from
time to time and country to country. The International Labour organization has defined
social security as:
The security that the society furnishes through appropriate organization against certain
risks to which its members are exposed. These risks are essentially contingencies against
which the individual of small means cannot effectively provide by his own ability or
foresight alone or even in private combination with fellows.
The term social security has also been endorsed by the first National Commission on
Labour in the following manner:
Social security envisages that the members of a community shall be protected by
collective action against social risks causing undue hardship and privation to individuals
whose prime resources can seldom be adequate to meet them.
In India, the organised sector, which accounts for about 7% of the total workforce,
benefit from a fair minimum standard of social security. However, in contrast to this, the
unorganised or informal sector which comprises roughly of 93 percent of the labour force
have only a minimal social security arrangement. So far there is no specific or
comprehensive schemes or legislation at the national level, which exclusively address the
issues of unorganised sector6
.

It was realized by the Government that the unorganised sector is growing at an alarming
rate, where majority of the workers are left with no social security to fall back upon
during contingencies and old age. It was also realised by the policy makers that the
existing legal and protective frames have become grossly inadequate to address the issues
of unorganised sector workers. Therefore, in view of the above, the Parliament ultimately passed the Unorganised Workers’ Social Security Act, 2008 (hereinafter referred to as
the Act) for providing social security to the unorganised workers.

UNORGANISED WORKERS SOCIAL SECURITY
ACT, 2008:
The Unorganized Workers Social Security Act, 2008 was passed by the Parliament of
India on December 30, 2008. This act aims to provide social security and welfare to the
unorganized sector. The Central Government and State Government has made various
schemes connected to life, disability, old age, housing, education, employment etc. These
schemes are funded by the Central and State Government. This act is applicable to whole
of India, specifically for the unorganized sector. For the implementation of the law, the
government has constituted the National Social Security Board and the State Social
Security Board.

SALIENT FEATURES OF THE ACT:
• Formulation of schemes by the Central Government for different sections of
unorganised workers on matters relating to
1. life and disability cover
2. health and maternity benefits
3. old age protection
4. any other benefit as may be determined by the Central Government.
• Formulation of schemes relating to provident fund, employment injury benefits,
housing, educational schemes for children, skill upgradation, funeral assistance
and old age homes by the State Governments.
• Funding of the schemes to be specified in the scheme itself.
• Constitution of National Social Security Board under the chairmanship of Union
Minister for Labour & Employment, Member Secretary and 34 nominated
members representing Members of Parliament, unorganised workers, employers of
unorganised workers, civil society, Central Ministries and State Governments.
• Adequate representation to persons belonging to the Scheduled Castes, the
Scheduled Tribes, the Minorities and Women.
• The functions of National Board, inter-alia, include: to recommend to the Central
Government suitable schemes for different sections of unorganised workers;
monitor the implementation of schemes and advise the Central Government on
matters arising out of the administration of the Act.
• Section 6 has provision for constitution of similar Boards at the State level.
Identification and Registration of Workers at the District level and issuance of
Smart Cards to them.7

LIMITATIONS OF THE ACT:
Unpaid women workers are excluded: Unpaid women workers are not covered
by the Act because they do not fall within the definitions of self-employed
workers, wage workers or home-based workers. According to these definitions,
getting wages or monthly earnings are condition precedent for being considered as
unorganised workers. Therefore, the thing which gives pain is that the monetary
value of women’s work is not measured. However, it should not be a reason for
denying social security to women workers. Moreover, the problems of security,
sexual harassment, proper accommodation for migrant women workers, issues
relating to nature of work and industrial safety, gender wage gap, non-payment of
wages, child care facilities at work spot etc. have been totally ignored.

Unorganised workers deprived of other existing benefits: It is pertinent and
relevant to mention here that many labour laws in India are of universal
application to all workers irrespective of the number of workers working in the
establishment. But it is laid down in Section 2(m) of the Act that the unorganised
worker “include a worker in the organised sector who is not covered by any of the
Acts mentioned in Schedule II 16 of the Act.8

It leads to the inference that the benefits under The Workman’s Compensation Act
and the Maternity Benefit Act are now denied to the workers working in
establishment employing less than 10 workers.
Therefore, it is clearly evident that Section 2(m) of the Act limits the applicability
of the Acts mentioned in Schedule
In other words, we can say that Section 2(m) takes away certain rights all
workmen enjoy de jure.

Social security-not justiciable: A right is justiciable if the aggrieved party can
seek remedy in a Court of law, in case it is violated. But to make a right justiciable
it should be clearly defined. The object of the Act is to provide social security and
welfare to the unorganised workers, but it does not confer any defined right to
social security for them. The schemes relating to social security are mentioned in
Schedule I of the Act. This clearly means that these schemes can be changed at any time by way of a notification, and not after discussion in the Parliament. This
denies the unorganised workers the benefit of consistency and justiciability. It is
also a fact that these schemes are arbitrarily changed by the government through
administrative notifications. Therefore, it is submitted that the content of the
schemes should not be changed without the approval of the Parliament. Moreover,
the government should not change the schemes unilaterally.

No Social Security Fund: It is very surprising to know that the Act does not
provide for the creation of a social security fund for unorganised workers, even
though the Parliamentary Standing Committee has made the following observation
The committee feels that social security schemes cannot just work without any
statutory backing and assured resources allocation. It would not be proper to tailor
the schemes or reduce their number on the consideration of funds. Funds flow
system for the schemes has been kept virtually undefined and wide open thereby
allowing total flexibility to the government in the matter of deciding and
operationalising the schemes as per its convenience. Thus, the committee are
inclined to infer that an ad hoc approach has been adopted on such an important
aspect of the Bill. This will only make the schemes dysfunctional. The Committee,
therefore, strongly recommend that a proper, transparent and institutional
mechanisms devising clear and unambiguous methodology for generating
resources be laid down paving the way for creation of a National Social Security
and Welfare Fund. The Committee are of the opinion that creation of National
Social Security and Welfare Fund will ensure permanency, continuity and
sustainability of social security benefits. Therefore, the Act should have provided
for the creation of a social security fund and a financial memorandum for
budgetary allocation for the fund.

No mechanism for implementation of the Act: The Act has been introduced by
the Ministry of Labour, the social security schemes mentioned in schedule I are
managed by various ministries. Section 8 of the Act gives the record keeping
functions of the provision of social security for unorganised workers to the district
administration, the Panchayats and to the local urban bodies. Labour
administration has no role to play in the implementation of the Act. This is very
painful.9 Therefore, a modal ministry is essential for its effective implementation.

No grievance redressal machinery: The Act does not provide for a grievance
redressal mechanism, even though it was strongly recommended by the
Parliamentary Standing Committee on Labour. Grievance redressal mechanism is
a sine qua non for the fair and effective implementation of an Act. Moreover, there
is no provision for penalties in the Act to punish those employers who violate the provisions of the Act. In addition to it, there would be no action against the
bureaucrats who refuse to register any unorganised worker under any of the
scheduled schemes. These problems are required to be taken care of.

ROLE OF JUDICIARY IN PROTECTION OF
UNORGANISED WORKERS:
When there is a failure of proper implementation of legislations, the judiciary protects the
rights of unorganized workers. Apart from legislations, the Constitution of India grants
fundamental rights to the unorganized workers. Any person who works but not paid
minimum wages for the work he does, then it violates Art 21 of the Constitution of India.
Article 21 states that the bonded labour should be recognized by the government. Every
State Government has to provide basic human dignity to bonded labour.

 Sanjit Roy V. State of Rajasthan10, the court held that whenever any person who
works for the state is affected by drought or scarcity, the state shall not pay him
minimum wages as it violates Art 23 of the Constitution of India. Any labour work
done by prisoners and if they are not paid minimum wages, it means it is forced
labour and it infringes Art 23 of the Constitution
.

 Daily Rated Casual Labour v. Union of India, the court held that if the
workers are classified into regular and working employees, then it leads to
infringement of Art 14 and 16 of the Constitution. No person can refuse to render
services to any worker on the ground that they belong to scheduled caste. The
judiciary should protect the rights of unorganized sector and should implement
social security welfare schemes for the benefit of the unorganized workers
.

POLICIES FOR UNORGANISED WORKERS:
Social security is necessary for the welfare of unorganized workers. There was no specific
legislation on social security for unorganized workers. The unorganized workers are
covered under various policies formulated by the government.

National Policy on Skill Development:
The National Policy on Skill Development empowers individuals to improve skills,
knowledge, nationally and internationally recognize qualifications to gain better job
opportunities. The aim of this policy is to enhance individual's employability and ability
to adapt to changing technologies.
It aims to improve productivity and standard of living for workers. The objective of the
policy is to create opportunities to workers including women and youth who are skilled in
the work they do. It also aims to develop a high-quality workforce related to current and
emerging market needs. It helps to attract investment in skill development and strengthen
competitiveness in the country
.

National Policy on Safety, Health and Environment at Work Place
Safety and health of the unorganized workers have a positive impact on productivity,
economic and social development. The goals of this policy are to improve safety, :-
and environment at workplaces.
The objectives are to reduce work related accidents, harmful diseases and cover the
financial requirements for the people affected. It also aims in spreading awareness about
safety, health and environment related issues. It establishes suitable schemes for
unorganized workers regarding subsidies. It enforces all rules and regulations regarding
safety, health and environment at workplace. It ensures that all the workers and
employers have rights and responsibilities in achieving safe and healthy working
conditions.

National Policy on HIV AIDS
National Policy on HIV AIDS is necessary to provide guidelines to unorganized workers
about the HIV AIDS infection. To fight against HIV AIDS, stigma and discrimination is
an important challenge. Due to lack of understanding, most employers from both public
and private sector have not taken up workplace intervention.
In the next 10- 12 years, India's growth will create around 10 million jobs and most
workers will be young workers. If there is a spread of HIV AIDS, then it would affect the
economic growth of the country16. In order to prevent this, workplace policies should
have appropriate services and provide information regarding the same. The aim of this
policy is to prevent the transmission of HIV AIDS amongst the workers. It also aims to
provide access to treatment and protects the rights of the affected workers.

National Child Labour Policy:-  On 14th August 1987, the National Child Labour Policy was approved by the cabinet.
The main objective of this policy was to eliminate child labour in hazardous working
sectors. In this scheme, the target group was for children aged below 14 years and who
worked in places where children were affected with health problems.
The policy aims to launch for the welfare of children who are working in areas where
there is high concentration of child labour. The policy focuses on rehabilitation of
children who work in hazardous working areas. Activities like formal, non- formal
education, raising public awareness by conducting campaigns and rallies are etc.
conducted by the government to eliminate child labour.

CONCLUSION:
Unorganised labour system is not new for our country. Its origin can be traced from the
caste hierarchy and feudal structure. In our country unorganised labour, which forms 93
percent of the total labour force, is in existence in its various forms and are facing
numerous problems. The main problem of unorganised labour is related to their social and
economic exploitation. The social security schemes in India cover only a small segment
of the organised workforce. The condition of unorganised labour is very miserable in the
absence of sufficient labour legislations.
Therefore, in view of the above, The Unorganised Workers’ Social Security Act, 2008
was enacted so as to confer the benefit of social security schemes upon the unorganised
workers. However, the analysis and evaluation of the provisions of the Act reveals that
Act has inherent structural gaps and inadequacies that make the Act totally ineffective in
providing social security to the unorganised workers. Social security to unorganised
workers has been narrowed down to ten paltry social security schemes. The Act does not
guarantee any justiciable right to social security for workers. It also does not contain a
provision for the creation of social security fund. Moreover, the Act is discriminatory and
takes away rights emanating from other existing labour legislations. It has no provision to
punish those employers who violate it.
The problems of women unorganised workers do not figure in the Act. Absence of
dispute redressal mechanism makes the Act more ineffective. The national and state
boards for unorganised workers are toothless bodies. Therefore, in view of the above the
Act must be taken as a beginning and we have yet to cover a long distance.
Though, the rights of the unorganized workers are protected by various articles in the
constitution of India. The unorganized workers should be given awareness regarding their
health, living, and wages and should not be exploited by the employers in their working
areas.

BIBLIOGRAPHY:
BOOKS:

1) Meenu Paul, Labour and Industrial Laws, Allahabad Law Agency, New
Delhi, 9
th Ed. 2014

2) S.C. Srivastva, Social Security and Labour Laws

WEBSITES:

1) https://031010cqh-y-https-advance-lexis-com-p443.slimkm.org/

2) https://www.legalserviceindia.com/legal/article-3001-protection-of-
rights-of-unorganized-workers.html

DOCUMENTS:

1) 1. UNORGANISED WORKERS IN INDIA WITH SPECIAL
REFERENCE TO THE UNORGANISED WORKERS’ SOCIAL
SECURITY ACT, 2008: SOME REFLECTIONS
(2010LJ 1)
2) SOCIAL SECURITY PROTECTION FOR THE UNORGANISED
WORKERS IN INDIA - A MYTH OR REALITY?

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