The Code On Social Security, 2020 - Is It Really A Game Changer For Unorganised Sector Workers

Author: LawSphereX

Category: Labour & Employment

Published: 2026-08-23T21:14:55.895156+00:00

Updated: 2026-08-26T17:05:58.661+00:00

THE CODE ON SOCIAL SECURITY, 2020: IS IT REALLY A

GAME CHANGER FOR UNORGANISED SECTOR

WORKERS?

Irfan Ahmed Ansari, BE, LLB, Shree L R Tiwari College of Law, Mumbai University

ABSTRACT

The Code on Social Security, 2020, is a major law that aims to boost the well-being of workers in India, specially, those in the unorganized sector, constituting a large portion of the workforce. By consolidating nine major social security legislations into a single code, the Code on Social Security,

2020 (hereinafter referred to as ‘Code’), seeks to simplify the legal landscape

and make social security more accessible to not only the formal employee engaged in organised sectors but also to the workers in the unorganized sector, including gig and platform workers. The Code introduces key provisions for the creation of a national database of unorganized workers, the formulation of social security schemes tailored to their needs, and the establishment of mechanisms to facilitate their registration and access to benefits. This research paper examines the provisions of the Code, its potential impact on unorganised sector workers, and the possible challenges it may face in its implementation. This research critically examines whether the Code on Social Security, 2020, represents a transformative shift in the legal landscape for unorganized sector workers or whether it falls short of its ambitious goals.

The author believes that the Code’s object would be best served and largely depends upon how effectively the provisions of the Code are implemented, how well the awareness about the workers’ rights under the Code be created and how seamlessly the benefits and entitlements be transferred to the workers it aims to protect. By analyzing the key provisions of the Code, its potential benefits, and the challenges inherent in its implementation, this research aims to assess the extent to which the new legislation can be considered a game changer for one of the most vulnerable segments of the Indian workforce. Keywords: Social Security Code, 2020, unorganised sector worker, social security, benefits, Labour Codes, etc.

Introduction Social security refers to a system of public provisions designed to ensure economic security and social welfare for individuals and families, particularly during times of need. It includes a range of benefits aimed at protecting people from various life risks, such as unemployment, disability (temporary or permanent), illness and old age to name a few. Apart from these life risks some social security provisions also includes maternity and paternity benefit to the respective employee. The unorganized sector in India constitutes a significant portion of the workforce, yet historically, it has remained largely outside the purview of formal social security protections. The Code on Social Security of 2020 was enacted as a result of many factors which aimed to change some limits and complexities existing in the Indian social security structure.

As per the Periodic Labour Force Survey (PLFS) carried out by the National Sample Survey Organisation of the Ministry of Statistics & Programme Implementation, in the year 2017- 18, the total employment in both organized and unorganised sector in the country was around 47 crores. Out of this, around 9 crores are engaged in the organized sector and the balance of 38 crores are in the unorganized sector. The workers in the unorganized sector constitute more than 81 per cent of the total employment in the country. 1 A large number of unorganized workers are home based and are engaged in occupations such

as beedi rolling, agarbatti making, papad making, tailoring, and embroidery work apart from those engaged in the agricultural sectors. The unorganised sector workers are primarily those who are working or engaged as street vendors, mid-day meal workers, head loaders, brick kiln workers, cobblers, rag pickers, domestic workers, washermen, rickshaw pullers, landless labourers, own account workers, construction workers, handloom workers, leather workers, audio - visual workers and similar other occupations.2 It is apparent that the benefits and entitlements enjoyed by the workers and employees engaged in the organized sectors are comparatively more than those engaged in the unorganized sectors. Moreover, there are certain employees and workers directly employed in organized sector, are

1 Annual Report 2022-2023, Ministry of Labour & Employment, Chapter-8 Unorganized Worker, Page 99,

available at https://labour.gov.in/sites/default/files/ar_2022_23_english.pdf, (Last accessed on October 03, 2024)

2 Id

already covered under the social security net. However, there are others who are not covered under the social security nets. Since this been the case, the workers and labourers engaged in unorganised sectors were left out in wind as most of them did not enjoy any form of social protection. A notable aspect of the Social Security Code is its attempt to address the needs of unorganized

sector workers. The Code provides a comprehensive definition of unorganized workers, including home-based workers, self-employed individuals, and wage workers in the unorganized sector. It also extends social security benefits to gig and platform workers, who have become a significant part of the workforce in India’s growing digital economy. One of the major motives behind introducing this Code was to extend social security coverage to the unorganized sector, which comprises self-employed individuals, home-based workers and informal workers. Such workers constitute a sizeable section of our labour force but were excluded from benefits enjoyed by employees/workers in regular organized sectors. By incorporating such unorganised sector workers into social security net, including those meant for emerging categories like gig and platform workers, the Code aimed at bridging this gap.

This expansion of coverage indicate that with changing time the nature of work has been changed considerably and warrants introduction of legal protections in new employment patterns. Historical background The Central Government with furtherance of its motto of ease of doing business and with a view to harmonize the multiple labour legislations prevailing in the country, has consolidated

29 central labour laws (out of 44 existing central laws) into four labour codes i.e. Code on

Wages, 2019; Code on Social Security, 2020; Industrial Relations Code, 2020 and Occupational, Safety, Health and Working Conditions Code, 2020 – (collectively referred to as the “Labour Codes”).3 The Labour Codes had received the approval of both houses of the parliament as well as Hon’ble President’s assent in the year 2019 and 2020 and the draft central rules on all the four

3 Parizad Sirwalla, Labour Codes: Accelerating India’s Labour Law Revolution, available at

https://kpmg.com/in/en/blogs/home/posts/2024/05/labour-codes-accelerating-indias-labour-lawrevolution.html, (Last accessed on October, 03, 2024)

labour codes have already been pre-published by the Central Government. As labour is a concurrent subject any change requires even the State Governments to be on board. As per the latest published data, many of the states and Union Territories had also published the state level draft rules for all four or few of the Labour codes. However, the final notification of making these codes effective is something which has been on the anvil for some time now. 4 Before the introduction of the Social Security Code, India’s social security framework was governed by a range of labour laws, each addressing different aspects of worker welfare. The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, provided for retirement benefits through a provident fund scheme. The Employees’ State Insurance Act, 1948, established a health insurance scheme for employees in larger establishments.

The Employees’ Compensation Act, 1923, focused on compensation for workplace injuries. Other laws, such as the Maternity Benefit Act, 1961, and the Payment of Gratuity Act, 1972, addressed specific areas of worker welfare, including maternity leave and end-of-service benefits. Additionally, the Unorganized Workers Social Security Act, 2008, attempted to extend some level of protection to the unorganized sector but had limited reach and impact. The Code on Social Security, 2020, was thus introduced to unify these disparate laws, address the gaps in coverage, and improve the overall effectiveness of the social security system.

By bringing together various provisions into a single legislative framework, the Code aimed to create a more inclusive and efficient system of social security for all workers, reflecting the evolving needs of the workforce and the challenges of modern employment practices. Earlier, the more complicated process of getting social welfare benefits led to a situation where many low-income earners used to look for alternative forms like borrowing money from relatives who would charge exorbitant interest rates thus putting families into endless cycles of debt or resorting into theft or other shortcuts to generate quick income leading to further increase in money centric crimes.

Therefore, this code aimed at pooling together all the nine significant laws on social security in an attempt to help, simplify and streamline the legal framework thereby making it easy for both workers as well as administrators alike on managing their work.

4 Ibid

The Code mandates the creation of social security schemes covering areas like life and disability insurance, health and maternity benefits, old age protection, and education for unorganized workers. To facilitate access to these benefits, the Code emphasizes the importance of a national database where unorganized workers can register themselves online. This digital approach was intended to reduce bureaucratic hurdles, enhance the targeting of benefits, and ensure that social security schemes are more effectively administered.

Though, the Code introduces key provisions for the creation of a national database of unorganized workers, the formulation of social security schemes tailored to their needs, and the establishment of mechanisms to facilitate their registration and access to benefits, the successful realization of these objectives largely depends upon the effective implementation of the Code, which faces numerous challenges, including awareness among workers, digital literacy, and administrative capacity to name a few. The Code, despite being lauded as a landmark reform with the potential to transform the lives of unorganized sector workers, has also attracted criticism for its perceived limitations and implementation hurdles.

Critics argue that the Code’s reliance on digital registration and selfenrollment may inadvertently exclude the most vulnerable workers, who lack access to digital resources or are unaware of the benefits. Additionally, the funding mechanisms and enforcement provisions outlined in the Code may not be sufficient to ensure its intended reach and impact, particularly in sectors where informal employment relationships dominate. The ambiguity in the definitions of gig and platform workers further complicates the inclusion of these emerging categories of workers within the social security net. Research Objective

1. To study and analyse the provisions related to Unorganised Sector Workers as provided

in Social Security Code, 2020.

2. To study and analyse various schemes put forth for the benefits of Unorganised Sector

Workers.

3. To study and analyse the proposition that “is the Code on Social Security, 2020 really

a game changer for the Unorganised Sector Worker?” in the context of provisions, rights and entitlement of the Code.

4. To evaluate and assess the complications and challenges that may arise during

implementation of the Code concerning the Unorganised Sector Workers. Research Methodology This research adopts a doctrinal research methodology, focusing on the detailed analysis of the Social Security Code, 2020, and its implications for unorganized sector workers in India. The study involves a comprehensive examination of primary legal sources, including the text of the Social Security Code, 2020, related statutes, and relevant government notifications. Additionally, secondary sources such as academic articles, online research databases and legal / annual reports have been reviewed and relied upon relevant data to provide context and support the analysis. The methodology includes a critical evaluation of the key provisions of the Social Security Code, particularly those affecting unorganized workers, and a comparison with the pre-existing legal framework.

This approach allows for an assessment of the extent to which the Code represents a shift in legal protections for this segment of the workforce. The research attempts to explore potential challenges in the implementation of the Code, thus providing a balanced perspective on its effectiveness. The doctrinal research methodology employed in this study enables a thorough legal analysis of the Social Security Code, 2020, situating it within the broader context of social security laws and constitutional mandate that are prevailing in India and evaluating its potential impact on unorganized sector workers. The author has relied upon the data referred in this research and produced the contents herein with due credit to respective authors. Social Security i.

Meaning The concept can be interpreted as a protective framework by the society to its members through a series of public measures against the economic and social distress that otherwise is caused by the stoppage or substantial reduction in earnings resulting from sickness, maternity, employment injury, occupational diseases, unemployment, invalidity, old-age and death.

The International Labour Organization (ILO) is one of the key organizations that work internationally. Social security, according to ILO, encompasses a wide array of measures that societies adopt to provide protection against economic and social distress resulting from the absence or substantial reduction of income due to various contingencies. These contingencies include sickness, maternity, employment injury, unemployment, invalidity, old age, and death, as well as the provision of medical care and support for families with children The ILO defined the term Social security as “the protection that a society provides to individuals and households to ensure access to health care and to guarantee income security, particularly in cases of old age, unemployment, sickness, invalidity, work injury, maternity or loss of a breadwinner. ” The ILO’s Convention No.

102 on Social Security (Minimum Standard) Conventions, 1982 establishes minimum standards of nine branches of Social Security, including medical care, sickness benefit, unemployment benefit, old-age benefit, employment injury benefit, family benefit, maternity benefit, invalidity benefit, and survivors' benefit. ii.

Definition The Code on Social Security, 2020 under Section 2 (78) defines the term Social Security in following words; "social security" means the measures of protection afforded to employees, unorganised workers, gig workers and platform workers to ensure access to health care and to provide income security, particularly in cases of old age, unemployment, sickness, invalidity, work injury, maternity or loss of a breadwinner by means of rights conferred on them and schemes framed, under this Code”5 However, the above definition of Social Security as provided under the Code is put for revision through a Parliamentary Bill No 248 of 2022 titled as The Code on Social Security (Amendment) Bill, 2022, which is as follows; "social security" means the measures of protection afforded to employees, unorganised workers, gig workers and platform workers to ensure access to healthcare and to provide

5 The Code on Social Security, 2020, § 2(78), No. 36 of 2020, Act of Parliament, India.

income security including sickness benefits, unemployment benefits, old age benefit, employment injury benefit, family benefit, maternity benefit, invalidity benefit, survivors’ benefits and all other benefits as provided under the relevant provisions of this Code or under any other law for the time being in force”6 Key Components of Social Security i. Economic Security: Social security provides financial assistance to individuals who are unable to work due to various reasons, including unemployment, sickness, or retirement. This assistance can come in the form of cash benefits or pensions. ii. Health Care Access: Many social security systems include provisions for health care, ensuring that individuals have access to necessary medical services without facing financial hardship. iii.

Income Protection: Social security aims to guarantee a minimum standard of living for individuals and families, particularly during periods of economic distress. This includes unemployment benefits, disability allowances, and maternity benefits. iv. Support for Vulnerable Groups: Social security systems often focus on protecting the most vulnerable populations, such as the elderly, children, and those with disabilities, ensuring they receive adequate support. v. Preventive Measures: Beyond providing assistance after a crisis, social security systems also aim to prevent risks from arising, helping individuals and families adjust to challenges that cannot be avoided The Constitutional Mandates The Indian Constitution includes several provisions that lay the foundation for providing social security benefits to its citizens.

These provisions are largely in consonance with the idea of Social Security as included under various provisions of the International Conventions like Universal Declaration of Human Rights, International Covenant on Economic, Social and 6 The Code on Social Security (Amendment) Bill, 2022, introduced by Dr. Krishnapal Singh Yadav, M. P. , available at https://sansad. in/getFile/BillsTexts/LSBillTexts/Asintroduced/248%20of%202022%20as84202374106PM. p df? source=legislation , (last accessed on October, 03, 2024)

Cultural Rights which also helps in streamlining the laws on Social Security and Polices across various jurisdictions. Indian Constitution mandates to shift its focus from a laissez-faire State to a welfare State, it is imperative that tenets of Social and Economical Justice be achieved through extending Social Security benefits to its subjects. These provisions are primarily enshrined in the Directive Principles of State Policy and other specific articles, which collectively emphasize the State's responsibility to ensure the welfare and security of its people. Directive Principles of State Policy (Part IV) i. Article 38: This article mandates the state to secure a social order for the promotion of the welfare of the people.

It emphasizes minimizing inequalities in income, status, facilities, and opportunities not only among the individuals but also among the groups of people residing in different areas or engaged in different vocations. 7 ii. Article 39: It outlines certain principles of policy to be followed by the state, including: o Ensuring adequate means of livelihood for all citizens. o Distribution of ownership and control of material resources to subserve the common good. o Prevention of concentration of wealth and means of production. o Equal pay for equal work for both men and women. o Protection of the health and strength of workers, men and women, and the tender age of children from exploitation.

o Provisions of opportunities and facilities to children so that they may develop in a healthy manner and in conditions of freedom and dignity and the childhood and youth are protected against any exploitation and against moral and material abandonment. 8

7 INDIA CONST. art. 38

8 INDIA CONST. art. 39

iii. Article 41: This article directs the state to make effective provision for securing the right to work, education, and public assistance in cases of unemployment, old age, sickness, and disablement, and in other cases of undeserved want. 9 iv. Article 42: It instructs the state to make provision for securing just and humane conditions of work and for maternity relief. 10 v. Article 43: This article enjoins the state to endeavor to secure, by suitable legislation or economic organization, or in any other way, to all workers, agricultural, industrial, or otherwise, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities.

11 Preceding Labor Laws Before the Code on Social Security, 2020, India’s social security framework was governed by several distinct enactments and laws, each addressing different categories of workers and aspects of social security:

1. Employees’ Provident Funds and Miscellaneous Provisions Act, 1952: This Act

provided for the creation of a provident fund, pension, and insurance scheme for employees in the organized sector. It mandated contributions from both employers and employees to ensure retirement benefits and financial security.

2. Employees’ State Insurance Act, 1948: This Act established a health insurance

scheme for employees in factories and other establishments with more than a specified number of workers. It provided benefits such as medical care, maternity benefits, and disability compensation.

3. Employees’ Compensation Act, 1923: This law dealt with compensation for workers

who suffered injuries or death due to accidents at work. It established the framework for compensating employees for workplace-related injuries and fatalities.

9 INDIA CONST. art. 41

10 INDIA CONST. art. 42

11 INDIA CONST. art. 43

4. Maternity Benefit Act, 1961: This Act provided maternity leave and benefits to female

workers in the organized sector, including paid leave and medical benefits during pregnancy and childbirth.

5. Payment of Gratuity Act, 1972: The Act mandated the payment of gratuity to

employees who had completed a certain period of service with an employer, providing a financial benefit upon termination of employment.

6. Unorganized Workers Social Security Act, 2008: This Act aimed to provide social

security to workers in the unorganized sector, including health and maternity benefits, old age pensions, and other forms of support. However, its implementation was limited, and coverage was not comprehensive.

7. Cine Workers Welfare Fund Act, 1981: This Act established a welfare fund for

workers in the film industry, providing financial assistance and benefits.

8. Building and Other Construction Workers Welfare Cess Act, 1996: This Act

imposed a cess on construction activities to fund welfare schemes for construction workers.

9. Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959: This

law required employers to notify employment exchanges about job vacancies, aiming to facilitate job placement for workers. The Code sought to unify these disparate laws into a coherent framework, addressing the gaps and inefficiencies in the existing system and ensuring broader coverage and better protection for all workers, including those in the unorganized sector. Overview of the Code on Social Security, 2020 Social security is a fundamental human right that ensures individuals and families can maintain a decent standard of living during times of economic distress. The Code is a significant legislative reform in India aimed at consolidating and amending the existing laws related to social security and welfare.

Purpose and Objectives The Social Security Code, 2020, aims to provide a comprehensive framework for social security in India by consolidating and amending several existing labor laws. Its primary objective is to extend social security coverage to all employees and workers irrespective of they belonging to organized or unorganized sector. The Code brings within itself employees and workers such as the self employed workers, home workers, wage workers, migrant workers, the workers in the unorganized sector, gig workers and platform workers for the purpose of social security schemes including, which forms a large portion of India’s workforce. The Code consolidates nine existing laws related to social security: i. The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 ii. The Employees’ State Insurance Act, 1948 iii. The Employees’ Compensation Act, 1923 iv.

The Maternity Benefit Act, 1961 v. The Payment of Gratuity Act, 1972 vi. The Cine Workers Welfare Fund Act, 1981 vii. The Building and Other Construction Workers Welfare Cess Act, 1996 viii. The Unorganized Workers Social Security Act, 2008 ix. The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 Reasons for Introducing the Code on Social Security, 2020 a. Fragmented Legal Framework: Prior to the Social Security Code, India’s social security system was governed by multiple fragmented laws, each covering different aspects and categories of workers. This complexity created challenges in implementation and accessibility. The Code was introduced to consolidate and simplify

these laws into a single comprehensive framework, making it easier to administer and understand. b. Expanding Coverage: A major reason for the Code’s introduction was to extend social security benefits to workers in the unorganized sector, which includes a significant portion of the workforce that previously lacked formal protections. This sector comprises self-employed individuals, home-based workers, and those engaged in informal employment, who were often excluded from the benefits offered to employees in the organized sector. c. Addressing Emerging Work Patterns: The rise of gig and platform-based work necessitated new legal provisions to address the unique needs of these workers. The Social Security Code, 2020, aims to include gig and platform workers within the social security net, reflecting the changing dynamics of employment in the digital age. d.

Improving Efficiency and Implementation: By creating a national database and implementing an online registration system, the Code seeks to enhance the efficiency of benefit delivery and reduce bureaucratic hurdles. This digital approach is intended to streamline the process for workers and ensure more effective administration of social security schemes. e. Enhancing Worker Welfare: The Code aims to improve worker welfare by providing a comprehensive range of benefits, including life and disability insurance, health and maternity benefits, old age protection, and educational support. The goal is to offer a safety net that enhances the overall well-being of workers, particularly those in vulnerable and informal employment.

Key Provisions related to Unorganized Sector Workers The Code on Social Security, 2020 specifically deals with the provisions related to social security for unorganised workers, gig workers and platform workers in Chapter IX of the Code ranging from Sections 109 to 114. i. Key Definitions: Section 2(35): “gig worker” means a person who performs work or participates in a

work arrangement and earns from such activities outside of traditional employeremployee relationship. 12 Section 2(60): “platform work” means a work arrangement outside of a traditional employer employee relationship in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems or to provide specific services or any such other activities which may be notified by the Central Government, in exchange for payment. 13 Section 2(61): “platform worker” means a person engaged in or undertaking platform work14.

Section 2(75): “self-employed worker” means any person who is not employed by an employer, but engages himself in any occupation in the unorganised sector subject to a monthly earning of an amount as may be notified by the Central Government or the State Government, as the case may be, from time to time or holds cultivable land subject to such ceiling as may be notified by the State Government.

15 Section 2(90): “wage worker” means a person employed for remuneration in the unorganized sector, directly by an employer or through any contractor, irrespective of place of work, whether exclusively for one employer or for one or more employers, whether in cash or in kind, whether as a home-based worker, or as a temporary or casual worker, or as a migrant worker, or workers employed by households including domestic workers, with a monthly wage of an amount as may be notified by the Central Government and the State Government, as the case may be. 16 The Code provides a comprehensive definition of "unorganized worker" which is crucial for identifying the beneficiaries of the social security schemes. According to Section 2(86), an unorganized worker includes:

12 The Code on Social Security, 2020, § 2 (78), No. 36, Acts of Parliament, 2020, (India)

13 The Code on Social Security, 2020, § 2 (60), No. 36, Acts of Parliament, 2020, (India)

14 The Code on Social Security, 2020, § 2 (61), No. 36, Acts of Parliament, 2020, (India)

15 The Code on Social Security, 2020, § 2 (75), No. 36, Acts of Parliament, 2020, (India)

16 The Code on Social Security, 2020, § 2 (90), No. 36, Acts of Parliament, 2020, (India)

Home-based Workers: Individuals who work out of their homes or other premises of their choice, excluding the premises of the employer. • Self-employed Workers: Those who are not employed by others and earn income through their own businesses, trades, professions, or other activities. • Wage Workers: Those who work for wages in an employment relationship, and whose employment is neither stable nor regular. Additionally, it includes workers in the organized sector who are not covered by any social security scheme governed under Industrial Dispute Act, 1947, Employees’ Provident Fund and Employees’ Compensation. 17 ii. Registration of Unorganized Workers (Section 113) To avail the benefits provided under the Code, every unorganized worker, gig worker or platform worker must register themselves.

The registration process includes: • Self-declaration of Information: Workers need to provide a self-declaration confirming their occupation, age, income, family details, and other necessary information. • Unique Identification: Workers will be issued a unique identification number after successful registration, which will be linked to their Aadhaar numbers to ensure transparency and avoid duplication. • Digital Platform: The government intends to use digital platforms for registration, making it easier for workers to register and update their information as required. 18 iii. Social Security Fund (Section 141) The Code mandates the establishment of a dedicated Social Security Fund to support unorganized workers, gig workers, and platform workers. Key features of this fund include:

17 The Code on Social Security, 2020, § 2 (86), No. 36, Acts of Parliament, 2020, (India)

18 The Code on Social Security, 2020, § 113, No. 36, Acts of Parliament, 2020, (India)

Funding Sources: The fund will be financed through contributions from the central as provided under sub-section (3) of Section 114 and state governments as provided under sub-section (3) of Section 109, employers, and other stakeholders, including donations and grants. • Utilization: The fund will be used to provide social security benefits such as life and disability cover, health and maternity benefits, old age protection, and other welfare measures as prescribed by the government. 19 iv. Formulation of Schemes (Section 114) The Code empowers the Central Government to formulate specific schemes for the welfare of unorganized workers.

20 These schemes may include: • Life and Disability Cover: This may encompass benefits under existing schemes such as the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and the Pradhan Mantri Suraksha Bima Yojana (PMSBY), which provides accidental death and disability insurance. PMJJBY is available to the people in the age group of 18 to 50 years having a bank/post office account who give their consent to join/enable auto debit. Risk coverage under this scheme is for Rs. 2. 00 lakh in case of death of insured, due to any reason, at an annual premium of Rs. 436/- which is to be auto debited from the subscriber’s bank/post office account. 21 The Pradhan Mantri Suraksha Bima Yojana (PMSBY) is also available to the people in the age group of 18 to 70 years with a bank/post office account who give their consent to join/enable auto debit. The risk coverage under the scheme is for Rs 2.

00 lakh in case of accidental death or total permanent disability and Rs. 1. 00 lakh for partial permanent disability; due to accident at a premium of

19 The Code on Social Security, 2020, § 141, No. 36, Acts of Parliament, 2020, (India)

20 The Code on Social Security, 2020, § 114, No. 36, Acts of Parliament, 2020, (India)

21 Unorganised

Worker’s Social Security, available at https://vikaspedia.in/social-welfare/socialsecurity/unorganised-workers%E2%80%99-social-security , (last accessed on October 03, 2024)

Rs. 20 per annum which is to be deducted from the account holder’s bank/post office account through ‘auto-debit’. 22 • Health and Maternity Benefits: Unorganized workers can avail benefits under health schemes like the Pradhan Mantri Jan Arogya Yojana (PMJAY), which offers health insurance coverage, and maternity benefits similar to those provided under the Maternity Benefit Act with an annual health cover of Rs 5 lakh per eligible family. The benefit under this scheme are completely cashless and covers vide range of health issues. • Old Age Protection: Pension schemes such as the Pradhan Mantri Shram Yogi Maan-Dhan (PM-SYM) are designed to provide old-age protection to unorganized workers by ensuring a minimum monthly pension of Rs. 3000/- after the age of 60. The workers in the age group of 18-40 years whose monthly income is Rs.

15000/- or less and are not a member of EPFO/ESIC/NPS (Govt. funded) can join the PM-SYM Scheme. Under this scheme 50% monthly contribution is payable by the beneficiary and equal matching contribution is paid by the Central Government. Under the scheme, the fund towards Government’s contribution is provided to LIC being the fund manager. 23 • Other Benefits: The government may introduce additional benefits based on the evolving needs of the unorganized sector workers. v. Social Security Boards (Section 114) To administer and monitor the implementation of social security schemes, the Code provides for the establishment of social security boards at both the Central and State levels. 24 The roles of these boards include: • Advisory Role: Advising the central and state governments on matters related to the administration of social security for unorganized workers.

22 Id.

23 Supra Note 21

24 Supra Note 20

Scheme Implementation: Overseeing the implementation of social security schemes and ensuring that benefits reach the intended beneficiaries. • Monitoring and Evaluation: Regularly monitoring and evaluating the effectiveness of social security schemes and making recommendations for improvements. vi. Role of Aggregators (Section 114) Recognizing the growing gig economy, the Code includes provisions related to aggregators digital platforms that connect workers to customers (e. g. , ride-sharing services, food delivery apps). Key aspects include: • Contribution to Social Security Fund: Aggregators are required to contribute a percentage or such percentage of their annual turnover to the social security fund as may be notified by the central government, ensuring that gig and platform workers receive social security benefits.

• Coverage of Gig Workers: This provision extends social security benefits to gig and platform workers, who often fall outside traditional employment categories. 25 vii. Grievance Redressal Mechanism (Section 109) The Code establishes a grievance redressal mechanism to address disputes and grievances arising from the implementation of social security schemes. Key features include: • Adjudicating Authorities: Designated authorities at various levels to hear and resolve grievances related to social security benefits. • Expedited Process: The process is designed to be swift and efficient to ensure timely resolution of disputes.

25 Id.

Appeal Provisions: Workers have the right to appeal decisions, ensuring fairness and transparency in the grievance redressal process. viii. Compliance and Penalties (Section 133) To ensure compliance with the provisions of the Code, penalties are prescribed for employers and other stakeholders who fail to adhere to the regulations. Key provisions include: • Penalties for Non-Compliance: Employers who do not register unorganized workers or fail to provide mandated benefits can face monetary penalties and other sanctions. • Enforcement Mechanism: The Code establishes an enforcement mechanism to monitor compliance and take action against defaulters. 26 Impact on Unorganised Sector Workers The introduction of the Code on Social Security, 2020 would be beneficial for the unorganised sector workers as it would lead to achieve objectives of the Code and provide following benefits; i.

Broader Coverage One of the most significant aspects of the Social Security Code, 2020 is its aim to extend social security benefits to workers in the unorganized sector, a group that has traditionally been excluded from formal protections. The Code includes provisions for gig and platform workers, who represent a growing segment of the workforce, thereby broadening the scope of social security coverage. ii. Simplified Framework By consolidating nine existing social security laws into a single Code, the legislation aims to simplify and streamline the legal framework governing worker welfare. This

26 The Code on Social Security, 2020, § 114, No. 36, Acts of Parliament, 2020, (India)

consolidation is expected to reduce bureaucratic complexities and make it easier for workers to access and understand their entitlements. iii. Enhanced Benefits The Code proposes a comprehensive range of benefits, including life and disability insurance, health and maternity benefits, old age pensions, and educational support. These provisions are designed to offer a more robust safety net for unorganized workers, improving their overall well-being and financial security. iv. National Database and Digital Registration The creation of a national database for unorganized workers and the introduction of an online registration system are intended to improve the efficiency of benefit delivery. Accordingly, the central government has launched e-shram portal from August 2021 onwards.

This portal helps to facilitate delivery of Social Security Schemes/Welfare schemes to the unorganised workers including vendors and street-side sellers. This digital approach aims to streamline the registration process and ensure better targeting and distribution of benefits. v. Welfare Boards and Schemes The Code empowers the central and state governments to establish welfare boards and formulate specific schemes tailored to the needs of unorganized workers. This flexibility allows for the development of targeted interventions that can address the unique challenges faced by different categories of workers. Challenges and Limitations The Code on paper looks revolutionary, but the critics argue that like any other new legislation to take effect, this Code is also bound to face hurdles and difficulties before it put in to effect.

The major challenges and limitations which may likely to crop up before the effective implementation of the framework envisaged in the Code are as follows; i. Implementation Challenges: Despite its ambitious goals, the effective implementation of the Social Security Code

faces significant hurdles. Many unorganized workers may lack the digital literacy required to navigate online registration systems, potentially excluding those who are most in need of support. Additionally, administrative capacity and funding issues could impede the timely and effective delivery of benefits. Even if the provisions of the Code made effective and binding upon notification by the government, the complexity of the bureaucratic process may delay the disbursement of benefits and create barriers for workers seeking assistance. ii. Limited Awareness and Access: The success of the Code depends on widespread awareness and accessibility. Workers in the unorganized sector may not be fully aware of their rights under the new Code or may face barriers in accessing the benefits due to a lack of information or supportive infrastructures and framework.

Apart from this, effective monitoring and evaluation of the implementation process are crucial to ensure that benefits reach the intended recipients. iii. Ambiguities in Definitions: The Code includes new categories of workers, such as gig and platform workers, but there are ambiguities in the definitions and coverage of these groups. This could lead to gaps in coverage or inconsistencies in the application of benefits, leaving some workers outside the social security net. e. g. Driver - The Code mandates different schemes for different categories of workers depending upon their definitions as provided in the Code. However, there may be some overlap between their definitions. Consider the example of a “Driver” working for an App-Based Taxi Aggregator. In this case, there is no employee-employer relationship.

No appointment letters is issued, Social Security benefits are absent, work hours aren’t regulated by the employer, and therefore the driver may prefer to work for a competitor taxi aggregator. Therefore, the character of the work involved may lie outside the purview of a “traditional employer-employee relationship”, making him a “Gig Worker”. However, the driving force is in a position to pursue this job is only through a web platform. This would meet the definition of a “Platform Workers” also. Such a driver can also be an “Unorganised Worker” as he could also be self-employed. With

such overlap across definitions, it’s unclear how schemes specific to those categories of workers will apply. 27 iv. Financial and Administrative Feasibility: The financial sustainability of the schemes and the capacity of the welfare boards to administer them effectively are major concerns. The success of the Code will depend on adequate funding from both the central and state governments and the ability to manage and disburse benefits efficiently. v. Potential for Exclusions: The requirement for self-registration and the digital nature of the benefits administration might inadvertently exclude the most vulnerable workers as the code mandates for registration on platforms like e-Shram portal. Those who are illiterate or lack access to technology can’t easily get on boarded. This could weaken the Code’s goal of inclusivity and comprehensive coverage.

Effective Date of the Code The majority of the provisions of the Code are yet to be notified by the central government. However, some of the provisions related to Provident Fund Scheme and Pension Scheme have been notified by the central government with effect from May, 3rd, 2023. 28 Apart from above, the Ministry of Labour and Employment has also notified Section 142 of the Code, which allow collection of Aadhaar details for beneficiaries of various social security schemes, on April, 30th, 2021 and the said Section came into force on May, 3rd, 2021. Comparative Analysis with the International Perspectives To better understand the potential impact of the Social Security Code, it is useful to compare

27 Sivapriya Ambalavanan & Priyanka, A Critical Analysis on the CODE ON SOCIAL SECURITY 2020,

available at https://clp.cvv.ac.in/a-critical-analysis-on-the-code-on-social-security-2020/ , (last accessed on October, 03, 2024) 28 Kriti, Government notifies effective date of Social Security Code provisions relating to Provident Fund Scheme, available at https://www.scconline.com/blog/post/2023/05/05/govt-notifies-social-security-code-effective-date-for-pfpension-scheme-provisions/ , (last accessed on October, 03, 2024)

India's approach with that of other countries: i. United States: The U. S. has a more fragmented social security system, with various programs for different worker categories. Lessons can be learned regarding the importance of universal coverage. ii. European Union: Many EU countries offer comprehensive social security systems that cover both formal and informal workers, emphasizing the need for inclusive policies. iii. Latin America: Countries like Brazil have implemented successful social security programs for informal workers, highlighting best practices that India can adopt. Case Laws The Code on Social Security, 2020, is relatively new, and specific case laws directly interpreting or applying its provisions might still be limited.

However, the judicial landscape concerning unorganized sector workers can be better understood by looking at landmark judgments that highlight the principles of social security and labor welfare which the new Code aims to codify and extend. Some relevant case laws that illustrate the judicial approach towards the welfare of unorganized sector workers, even if they do not directly cite the Code on Social Security, 2020 are referred below;

1. People's Union for Democratic Rights v. Union of India29 (Asiad Workers' Case)

o Facts: The case involved the exploitation of construction workers employed in the construction projects for the 1982 Asian Games in New Delhi. o Ruling: The Supreme Court held that non-compliance with labor laws, including minimum wage legislation, amounted to forced labor. The Court emphasized the importance of ensuring the welfare of workers, including those in the unorganized sector.

29 People's Union for Democratic Rights v. Union of India, AIR 1982 SC 1473

o Significance: This case underscored the need for enforcement of labor laws and protection of unorganized workers' rights.

2. Bandhua Mukti Morcha v. Union of India30

o Facts: The case was brought by a non-governmental organization seeking the release of bonded laborers in the stone quarries of Haryana. o Ruling: The Supreme Court recognized the right to live with human dignity under Article 21 of the Constitution and directed the government to implement welfare measures for bonded laborers, who are part of the unorganized sector. o Significance: The judgment stressed the state's duty to protect the rights of workers in the unorganized sector and implement social security measures.

3. Olga Tellis v. Bombay Municipal Corporation31

o Facts: The case involved pavement dwellers in Mumbai who were being evicted by the municipal corporation. o Ruling: The Supreme Court held that the right to livelihood is a part of the right to life under Article 21 of the Constitution. o Significance: This ruling highlighted the importance of protecting the livelihoods of unorganized sector workers and ensuring their access to basic amenities and social security.

4. Sanjit Roy v. State of Rajasthan32

o Facts: The petitioner challenged the payment of less than minimum wages to workers employed in famine relief work. o Ruling: The Supreme Court held that paying less than the minimum wage violates Article 23 of the Constitution, which prohibits forced labor.

30 Bandhua Mukti Morcha v. Union of India , AIR 1984 SC 802

31 Olga Tellis v. Bombay Municipal Corporation, AIR 1986 SC 180

32 Sanjit Roy v. State of Rajasthan, AIR 1983 SC 328

o Significance: This judgment reinforced the principle that workers, including those in the unorganized sector, are entitled to fair wages and social security.

5. M.C. Mehta v. State of Tamil Nadu33

o Facts: The case dealt with the employment of children in matchbox factories in Tamil Nadu. o Ruling: The Supreme Court issued directives for the rehabilitation of child workers and compensation to their families. o Significance: The judgment recognized the need for comprehensive social security measures for families dependent on child labor, indirectly addressing the vulnerabilities of the unorganized sector.

6. Justice K S Puttaswamy v. Union of India34

o Facts: The constitutional legitimacy of the Aadhaar system was challenged by retired Karnataka High Court judge Justice K. S. Puttaswamy (Retd. ). He was of the view that the plan mandating the linking of Aadhaar with the bank account will infringe his right to privacy, hence challenged the same. o Ruling: The nine Judge Bench of Supreme Court unanimously reaffirmed the right to privacy as a fundamental right covered under Articles 14, 19 and 21 of the Constitution of India. The Court rules that the right to privacy is an essential part of the human dignity and protects an individual’s freedom to make personal choices. The Court also ruled that the basic right such as right to privacy can only be limited if there is a compelling state interest involved.

The Court ruled that the mandatory linking of the Aadhaar to bank accounts was unconstitutional, but that using Aadhaar for welfare schemes as that of any social security scheme implemented by government and linking it to PAN was constitutional.

33 M.C. Mehta v. State of Tamil Nadu, AIR 1997 SC 699

34 Justice K. S. Puttaswamy v. Union of India, 10 SCC 1 2017

o Significance: The judgment reaffirmed that linking of Aadhaar is no where unconstitutional for getting any benefits and entitlements of various welfare schemes introduced by the government towards the larger interest of providing social security to the marginalised sections of the society. Moreover, the relevant authorities can also review and track persons abusing the welfare scheme and limit overlapping and multiplicity and concentrations to few people. Conclusion The social security is a critical component of modern welfare systems, designed to provide a safety net for individuals and families against life's uncertainties. It plays a vital role in promoting social cohesion and economic stability within societies.

While the organized sector enjoys a well-established social security framework, the government has made efforts to extend similar benefits to unorganized sector workers through various social security schemes and legislations. The introduction of the Code on Social Security, 2020, marks a significant step towards integrating unorganized sector workers into the social security framework. By providing comprehensive definitions, mandatory registration, a dedicated social security fund, and the formulation of targeted schemes, the Code aims to ensure that unorganized workers have access to essential social security benefits. The establishment of social security boards, the inclusion of gig and platform workers, and the robust grievance redressal mechanism further strengthen the framework.

The Code seeks to enhance the social and economic security of unorganized sector workers, contributing to their well-being and empowerment. Since, the provisions of the Code are still to come into effect, this Code is expected to address long-standing gaps in social protection and improve the quality of life for millions of workers, especially those engaged in unorganised sector, when notified officially and made effective. The Social Security Code, 2020, has the potential to be a game changer for unorganised sector workers in India. By expanding coverage, simplifying regulations, and introducing essential benefits, the Code aims to enhance the welfare of millions of workers. However, its success will depend on effective implementation, awareness among workers, and addressing existing gaps.

Future Outlook Looking ahead, it is crucial for the government, civil society, and worker organizations to collaborate in promoting awareness and ensuring that the benefits of the Code reach all intended recipients. Continued advocacy and policy development will be essential to strengthen the social security framework and protect the rights of unorganised sector workers in India.

Bibliography Statutes:

1. INDIA CONST. art. 38,

2. INDIA CONST. art. 39,

3. INDIA CONST. art. 41,

4. INDIA CONST. art. 42

5. INDIA CONST. art. 43

6. The Code on Social Security, 2020, § 2(60), No. 36 of 2020, Act of Parliament, India.

7. The Code on Social Security, 2020, § 2(61), No. 36 of 2020, Act of Parliament, India.

8. The Code on Social Security, 2020, § 2(75), No. 36 of 2020, Act of Parliament, India.

9. The Code on Social Security, 2020, § 2(78), No. 36 of 2020, Act of Parliament, India.

10. The Code on Social Security, 2020, § 2(86), No. 36 of 2020, Act of Parliament, India.

11. The Code on Social Security, 2020, § 2(90), No. 36 of 2020, Act of Parliament, India.

12. The Code on Social Security, 2020, § 113, No. 36 of 2020, Act of Parliament, India.

13. The Code on Social Security, 2020, § 114, No. 36 of 2020, Act of Parliament, India.

14. The Code on Social Security, 2020, § 141, No. 36 of 2020, Act of Parliament, India.

15. The Code on Social Security (Amendment) Bill, 2022, introduced by Dr. Krishnapal

Singh Yadav,

M.P.,

available at: https://sansad.in/getFile/BillsTexts/LSBillTexts/Asintroduced/248%20of%202022%2 0as84202374106PM.pdf?source=legislation , (last accessed on October, 03, 2024) Case Laws:

1. People's Union for Democratic Rights v. Union of India, AIR 1982 SC 1473

2. Bandhua Mukti Morcha v. Union of India , AIR 1984 SC 802

3. Olga Tellis v. Bombay Municipal Corporation, AIR 1986 SC 180

4. Sanjit Roy v. State of Rajasthan, AIR 1983 SC 328

5. M.C. Mehta v. State of Tamil Nadu, AIR 1997 SC 699

6. Justice K. S. Puttaswamy v. Union of India, 10 SCC 1 2017

Report:

1. Annual Report 2022-2023, Ministry of Labour & Employment, Chapter-8 Unorganized

Worker, Page 99, available at: https://labour.gov.in/sites/default/files/ar_2022_23_english.pdf, (Last accessed on October 03, 2024) Online Resource:

1. Parizad Sirwalla, Labour Codes: Accelerating India’s Labour Law Revolution,

available at https://kpmg.com/in/en/blogs/home/posts/2024/05/labour-codesaccelerating-indias-labour-law-revolution.html, (Last accessed on October, 03, 2024) 2. Unorganised Worker’s Social Security, available at https://vikaspedia.in/socialwelfare/social-security/unorganised-workers%E2%80%99-social-security , (last accessed on October 03, 2024)

3. Sivapriya Ambalavanan & Priyanka, A Critical Analysis on the CODE ON SOCIAL

SECURITY 2020, available at https://clp.cvv.ac.in/a-critical-analysis-on-the-code-onsocial-security-2020/ , (last accessed on October, 03, 2024)

4. Kriti, Government notifies effective date of Social Security Code provisions relating to

Provident Fund Scheme, available at https://www.scconline.com/blog/post/2023/05/05/govt-notifies-social-security-codeeffective-date-for-pf-pension-scheme-provisions/ , (last accessed on October, 03, 2024)