The definition of "self-employed" is "making a living through one's enterprise."
Instead of working for someone else, think about becoming a freelancer[1].
"Working for oneself, directly managing the services, work, etc. done and the
costs, charges, etc. Furthermore, it "generating income directly from a
profession or enterprise, like being a self-employed writer or artist rather
than an employee who gets paid by commission or salary from another"[2]. The act
of The Unorganized Workers Social Security applies to both informal and
self-employed employees.
Section 2(m) of the Act states that an "unorganized
worker" includes self-employed workers. The majority of Self-employed
individuals, including own-account and help family workers, make up the majority
of the workforce in India. Five out of ten employees work for small enterprises
or as self-employed individuals-the act of. India's Unorganized Workers Social
Security intends to offer social security to unorganized workers-including
independent contractors-and address associated issues by taking several actions.
Despite the Act's enactment 12 years ago, only 6% of unorganized workers have
access to social security[3].
Additionally, there were funds in the National
Social Security Administration Fund created by the UWSSA that had not been
utilized since its establishment, according to findings made by the (CAG) in
2016–2017. To guarantee effective protection for independent contractors, more
advancements are still needed.
With particular reference to self-employed
workers, this article will address the social security issue facing India's
unorganized labor force in the context of an informal or unorganized economy. 38 crore out of 47 crore workers are employed in the unorganized sector based on
the (PLFS) that the Ministry of Statistics & Program Implementation's National
Sample Survey Organization carried out in 2017–18.[4]
Two In other words, over
88.85% of India's workforce is unemployed, with the vast majority of these
workers being independent contractors who deal with significant gaps in their
employment and are unable to access social protection programs like social
insurance and assistance.
In 2004-05, 56.61 percent of workers were
self-employed, As stated by the National Commission for Unorganized Sector
Enterprises. This percentage had decreased to 52.2%, according to the 2017–18 PLFS. This vast population of unorganized laborers is unable to rely on access
to basic income security and health care, and as a result, they are unable to
exercise their human right to social security.
Disruptions To Self-Employed Workers' Extension Of Social Safety
Social safety is a basic human right that is necessary to uphold everyone's
right to human dignity as well as social and national cohesiveness. In
actuality, According to Article 22 of the 1948 UDHR, "everyone has the right to
social security as a member of society." It is hardly surprising that in most
equality and democratic countries, like India, the number of social safety and
security laws has increased rapidly.
The Indian judiciary acknowledges social
security as a fundamental right under the Constitution's guarantee of life,
where it is included in the DPSP. Numerous state and federal social security
laws such as the West Bengal Transport Workers Social Security Scheme 2010 and
the Karnataka State Private Commercial Transport Workers Accident Benefit Scheme
have been implemented to carry out this constitutional mandate. However, the
International Labor Organization Social Protection Platform has identified
certain obstacles that still exist in the way of providing social security
benefits to unorganized independent contractors in India and abroad.
These are listed below:
-
"Diverse needs, circumstances, and contributory capacities: Diverse circumstances faced by small farmers, entrepreneurs, cooperative members, professionals, and family workers call for distinct policy approaches.
- Legal exclusion: Employees are frequently the sole focus of social security legislation. Self-employed individuals may find themselves de facto-excluded when they fail to meet specific eligibility requirements (minimum income). Another problem is disguised self-employment, as well as other circumstances involving an ambiguous or unclear work arrangement.
- Administrative obstacles: When it comes to filing taxes, maintaining records, gathering contributions, and getting benefits, self-employed individuals have more work to do. They bear personal responsibility for all administrative procedures in the absence of an employer.
- Insufficient benefits and unmet needs: Independent contractors may not always be inclined to pay into social security if the benefits they receive are insufficient to cover their expenses. Different kinds of benefits and services might be required, depending on their circumstances, to satisfy their needs-especially their most pressing ones.
- Low compliance and lack of enforcement: In certain situations, complying with regulations results in hefty expenses and laborious processes that deter independent contractors from using the systems. In addition, fraud committed by independent contractors cannot be found through labor inspections. Workers who are "invisible" (domestic workers) or do not have a fixed place of employment, such as street vendors or taxi drivers, find inspections challenging.
- Information and organization gaps: The majority of current organizations are under-capable, and a large number of independent contractors are not organized. Owing to their seclusion, they might be ignorant of social security policies and processes.
Let's examine how the Indian government can remove these obstacles by
implementing the required administrative and legislative changes.
Social Security Measures Covering Self Employed Workers In India
To provide social security to workers in India, In the process of drafting two
other bills, the Unorganized Sector Workers' Social Security Bill of 2005 and
the Unorganized Sector Workers' Conditions and Livelihood Promotion Bill of
2005, the Second Labour Commission's recommendations were taken into
consideration when drafting the Unorganized Sectors Workers Bill, 2003 was
implemented during the first UPA government in India. In this regard, social
security was a topic of discussion practically everywhere in India.
Ultimately,
to ensure that workers receive social security, the UPA government drafted the
previous NDA government's "Unorganized Sector Workers Social Security Bill,
2005"
Unorganized Sector Worker Bill, 2003." Even the UPA administration has also
complied with the suggestions made by the NDA government's Second National
Commission on Labor.
The rare piece of legislation has finally been brought to the House of
Parliament's floor. The lawmakers made arguments in support of this legislation.
The expansion of formal social security to include the most vulnerable members
of society was strongly supported. But to give social security a purpose and
relevance for the approximately 40 crore unorganized workers in India, the
Central Government notified 2008 the (UWSSA) i.e, social security act. The
Preamble of the Act specifically addresses social security, the well-being of
unorganized workforces, and issues directly and indirectly related to these
issues.
This gives rise to a broad definition of unorganized workers, which
includes workers who work from home, are self-employed, or receive wages, as
well as those employed by the organized sector and not protected in any other
acts. As per section 2(i) of the act an enterprise or establishment that employs
fewer than ten people per enterprise and is owned by a single person or group of
people and carries out manufacturing, selling, and providing services for goods,
etc. is considered to be part of the unorganized sector.
To assess the social security measures implemented under this Act for India's
unorganized self-employed workforce, let's examine the programs and coverage
under it. It can be stated that the (UWSSA) 2008 provides both the "basic" and
the "contingent" form of social security for unorganized self-employed workers,
concerning Section 3 of Chapter II of the Act. The accountability lies with the
government at the central level.
for implementing the programs covered under Schedule-I of the Act The Central
Government may occasionally undertake other programs as it sees fit, and in
doing so, it may also alter this Act's Schedule. However, state governments are
required to implement programs for the welfare of unorganized workers, such as
funeral support, senior citizen housing, job skill upgrading, educational
programs, provident funds, as well as benefits for employment losses. The UWSSA
is a unique piece of legislation that the Indian Parliament enacted to
strengthen government activities.
However, several aspects of this legislation
are not properly evolved For the informal self-employed workers' benefit from
it. The Act's lengthy title highlights its provisions for social security, the
well-being of unorganized laborers, and other pertinent or ancillary matters.
But The Act doesn't define the term "Social Security." This term is not used in
any substantive sense or within the body of the law's basic provision. There is
no comprehensive legislation regarding the "Social Security" Act in our country;
instead, its emphasis appears to be solely on welfare schemes, unless "social
security," "social insurance," and "welfare" are terms that are interchangeably
used. Nevertheless, this Act left the implementation of programs up to the
government's decision-making and did not grant unorganized workers any
entitlements or rights.
The Act's language is charitable rather than conferring
any rights. Moreover, the programs included in Schedule I of the Act were
previously in place to combat poverty and were limited to employees who were
below the federal poverty line (BPL). The expectation that this Act would extend
protection to informal workers has not materialized, although certain Indian
states have announced programs under it to protect independent contractors in
particular sectors.
The Legislative Standing Commission on Labor discovered that " even subsequently
twelve years since the Act's enforcement, just six percent of the unorganized
workforce are covered by a few forms of social security. The government of India
introduced new social security initiatives.
Including the Pradhan Mantri shramyogi maan-dhan (PM-SYM) pension plan for
non-unionized laborers and (NPS-Traders) national pension scheme for traders
2019.
The 2020 Code For Social Security
The recommendation of the second national commission on labor to combine labor
laws according to topic matter resulted in the enactment of the 2020 Social
Security Code. After receiving the code in December 2019, the committee
submitted its report on July 31, 2020. The new Code on Social Security in 2020
seeks to streamline the administration of labor laws by cutting definitions,
consolidating authorities, and guaranteeing workers' welfare and essential
benefits. Promoting pertinent technologies to guarantee the execution and
conformity of the provisions according to this code is one of its additional
main goals.
This Code streamlines the provisions of nine Central labor laws.
According to Section 2 (75) of the Code, a "self-employed worker" is someone who
makes a monthly salary working in the unorganized sector income as determined by
the Central or State Governments. They may also own cultivable land subject to a
notified ceiling. Section 2(78) of The term "social security" describes programs
that offer protection to platform laborers, freelancers, informal workers, and
employees. by providing access to healthcare and other benefits.
This Code
provides income security for individuals enduring old age, joblessness, illness,
disability, workplace accident, childbirth, or the death of a primary provider
through programs and rights. Section 2(79) of the code defines "social security
Organization" as any organization established under the Code, including:
Section 6 creates the National Social Security Board for Unorganized Workers;
Section 6 sets up the State Unorganised Workers' Social Security Board; Section
7 establishes the State Building and other Construction Worker's Welfare Boards;
and Section 7 creates any other organization or special purpose vehicle that the
Central Government designates as the social security an organization.
Section 4
establishes the Central Board of Trustees of the Employees' Provident Fund.
Section 5 creates the Employees' State Risk Management Corporation.
Self-employed workers are defined as Unorganized Sector and Unorganized Workers
under the Code.
A business owned by an individual or self-employed worker that
produces or sells goods or services and employs fewer than ten people is
classified as being in the "unorganized sector" under Section 2 (85) of the
Code. A home-based, self-employed, or wage worker in the unorganized sector is
referred to as an "unorganized worker" under Section 2 (86) of the Code.
It also
encompasses employees in the organized labor sector who are not protected by
this Code's Chapters III through VII or the Industrial Disputes Act of 1947. The
Code empowers the Central Government to establish social security schemes for
unorganized, gig, and platform workers, as well as their families, to receive ESIC benefits. The Code allows the Central Government to establish social
security programs for self-employed workers.
Section 45 (1) of the Code
authorizes the Central Government to establish a program for unorganized
workers, gig workers, and platform workers, as well as their families, to
receive benefits as specified by the CorporationThe contribution, user fees,
benefit scale, eligibility requirements, and other scheme terms and conditions
are detailed in Section 45(2).
The "Social Security Fund" is covered in great
detail in this Code as well.
- Section 141 of the Code mandates that the government of India define a Social Security Fund to ensure the well-being of unorganized laborers and freelancers. The sources of funding for the fund's operation and its employees on the platform must be mentioned:
- under Section 109 Subsection (3);
- under Section 114 Subsection (3);
- of any other Social Security Fund established under any other central labor law, as well as from the list of offenses under this Code that affect the Central Government.
- The funding specified in each of clauses (i), (ii), and (iii) shall be established and maintained in a separate account.
- Subsection (1) specifies that the Social Security Fund must be used for the objectives listed in Subsection (2), for which individual accounts must be created and kept up to date.
- The Central Government will specify the process for establishing and managing the Social Security Fund.
- For the benefit of unorganized workers, the State's Government shall establish a Social Security Fund, into which the amounts received from (i) amounts received from the State Government for violations of this Code; and (ii) from additional sources as the State Government may indicate.
The fund shall be managed and utilized for the benefit of Unorganized Workers in
the manner that the State Government may specify.
Limitation Of The Code
There is no legally enforceable right to worker protection through social
security under Section 109 of this code, that addresses social security programs
for unorganized workers. For the creation of social security schemes, there is
also no set process, legal deadline, or minimum content requirement. As such,
the Code does not offer a social security system that is based on rights.
In
actuality, the Code gives unorganized workers' legitimate legal right to social
security absolutely no consideration. Additionally, the National Commission for
Enterprises in an unorganized sector recommends that Every employee has access
to a bare minimum standard of social security, but the Code doesn't go into
great detail about this.
The Legislative Standing Committee on Employment and
Labor has Without a legislative foundation, the Social Security Code's retention
of administrative provisions from the UWSSA, 2008 will not produce the desired
effects. unorganized workers nor quickly increase the scope of social security
coverage. The Committee asks the Ministry to amend the pertinent Clauses so
that, within a given time frame, all workers in the unorganized sector will have
legally binding social protection.[6]
The Code does not ensure self-employed and informal workers have a minimum legal
entitlement to social security benefits. The fundamental obstacles to the
efficient implementation of social security for independent contractors are not
dealt with. Apart from the legal eligibility, and coverage concerns, there are
fundamental obstacles when it comes to expanding social security to
self-employed workers. Contributory schemes may not be appropriate for
self-employed workers who do not have an employer to bear the burden of
contributing to their earnings.
Self-employed workers may lack the ability to
maintain records and comply with social security schemes. Social security
schemes should be tailored to the unique needs of unorganized self-employed
workers. The Code of 2020 provides cost-effective provisions for financing
social security schemes for unorganized laborers.
Although Section 109 empowers
the government of India to establish a Fund for social security for the workers,
the code lacks a clear mandate for financial support for social security
schemes. Section 110 (1) of the Code allows for schemes to be funded by the
state government, partially by the state government, and partially by
beneficiary contributions or through any other funding source, such as the fund
from corporate social responsibility.
Nevertheless, there is no compulsory provision for the government at the central
or state extent to which social security programs should receive funding for
unorganized labor. In the Social Security fund under the (UWSSA), 2008 such lack
of clarity and directive on central and state government regarding the funding
is potentially deadly for enforcing the Code of 2020.
The standing committee on
labor and employment stated that the government has not made a firm commitment
to funding schemes for the informal sector. The 9th report of the parliament
standing committee is recommended by the committee.
The financing pattern needs
to be made explicit in legislation to guarantee the successful execution of
various programs for employees of the unorganized sector.[7] While social
protection is the goal of the code on Social Security 2020, it is unfeasible for
unorganized independent contractors. For them, receiving social security is
still an unattainable goal.
Self-Employed Workers' Social Security Under The Sight Of International Organizations
The ILO's Social Protection Platform highlights the significance of social
security for independent contractors. The majority of workers in numerous
nations are self-employed, including those who work for one another and help out
those closest to them. One in seven workers is either an independent contractor
or a small business owner. In the past, employee benefits have been the primary
objective of social security legislation.
Many nations are addressing the unique
challenges faced by self-employed workers by expanding labor and social security
laws to them. However, more progress is needed to provide effective protection
to self-employed workers[8]. The ILO has made recommendations for implementing
and enforcing social security provisions worldwide.
Increasing the scope of legal representation:
- Self-employed people ought to be covered by the social security system to guarantee sufficient coverage if their employment status changes or their opportunities for paid and unpaid work are combined.
- Redefining terms like "contributor" or "insured person" in social security legislation can broaden its coverage for workers.
- Promote mandatory coverage over voluntary coverage.
Encourage coverage that is required rather than optional:
- Remove geographical barriers by expanding access points for independent contractors, and streamline and accelerate registering and other managerial processes, such as via online or mobile registration.
- Provide integrated service delivery systems, like one-stop shops, to help independent contractors-especially those operating in remote areas-get better access to social protection.
- Promote social security eligibility by forming alliances with groups that represent independent workers (such as cooperatives or associations of rural producers).
- Facilitate funding and contribution collection systems.
- Simplify, for example, the self-employed's tax declaration and payment processes and social insurance contributions by using mono-tax mechanisms.
- Simplify the payment of social security contributions by allowing contributions to priority branches of the program or extending the timeframe for contribution payments; additionally, introduce distinguished contributing provisions or integrated social insurance contributions.
Constitutional Protection To Unorganized Sector
The judiciary has contributed significantly to the development of industrial law
and has created strategies and novel approaches to guarantee social justice for
the most vulnerable members of society, as demonstrated by several rulings. As a
result, the Indian judiciary has always taken the initiative to increase social
security coverage to remove the vulnerability that unorganized workers face.
The
court noted in the leading case[9] that social security is guaranteed by
Articles 41 and 47 and places an optimistic responsibility on the state to
enhance public health and the standard of living-the fundamental right to have a
source of income from birth to crave India. The Indian Constitution's framers
included certain specific provisions about labor welfare in parts III and IV,
which deal with the DPSP and fundamental rights, respectively.
Article 14: According to the Indian Constitution, there are two types of
equality: equal protection under the law and equality before the law. As Dr.
Jennings states: "Equality before the law implies that the law should be applied
equally and fairly among equals. The rule is therefore that similar things
should be treated similarly rather than unlike things.
In
Randhir Singh v. UOI,[10]
the Apex court ruled that Articles 14, 16, and 39 of the Indian constitution do
not specifically declare that "Equal pay for equal work" is undoubtedly an
objective of the constitution and should therefore be considered a fundamental
right. As a result, this right may be upheld in situations where there are
uneven pay scales due to illogical categorization. The Supreme Court has upheld
this ruling in multiple cases.
According to the ruling in
Dhirendra Chamoli v. State of Pt[11], casual
employees paid daily are likewise covered by the equal pay for equal work
principle. Consequently, it was decided that those working as casual employees
for a daily wage at Nehru Yuwak Kendra in the nation were performing work
equivalent to that of Class IV employees appointed regularly and were thus
entitled to the same pay and working conditions. Neglecting the minimum wage is
equivalent to labor exploitation. The government is unable to capitalize on its
position of dominance. An employer of choice ought to be the government.
The
apex court in FAI.C and CES. v. Union of India that government employees holding
the same position and carrying out similar work can have different pay scales
set for them based on variations in their level of responsibility,
dependability, and confidentiality. As a result, this will not violate the
implicit Article 14 principle of equal pay for equal. The Court ruled that the
type of work performed must determine equitable compensation. Workload alone is
insufficient to evaluate it.
The court in below cited leading case[12] "invalidated the Rajasthan Famine
Relief Works Employees Act, 1964, holding that it violated Article 23 of the
Indian Constitution whenever the state took labor or services from someone who
was affected by drought or scarcity". The court based this decision on the
ruling in the Asiad workers case, which held that the state could not take
advantage of the helplessness of the person and pay them less than the minimum
wage because they are being provided to meet the needs of a famine.
The Apex
court declared in the leading case[13] that bonded labor is an antiquated form
of forced labor that contravenes Article 23 of the Constitution. The state is
required by the constitution to defend everyone's fundamental rights, the court
further ruled, particularly in cases where the victim is a member of society's
weaker groups and is unable to defend himself against a strong adversary who is
taking advantage of him.
Conclusion
To conclude, the state of unorganized workers in India who work for themselves
is still a major concern for social security, even with the implementation of
laws like the (UWSSA) and the most recent Code on Social Security,2020. Although
these laws are intended to offer fundamental welfare benefits, they do not
ensure that self-employed people will have full coverage or that their rights
will be enforced.
Despite recent global trends calling for greater coverage and
constitutional provisions highlighting the right to social security,
administrative and structural barriers still exist. The government must work
together to strengthen legislative protections, streamline administrative
procedures, and guarantee sufficient funding for social security programs to
address these deficiencies. In addition, the judiciary's interpretation and
enforcement of unorganized workers' constitutional protections is essential to
guarantee their right to a respectable living.
To give India's enormous
population of independent contractors real social security going forward, a
comprehensive strategy combining legislative changes, judicial activism, and
global best practices is necessary. We can work toward a more inclusive and
equitable society where everyone, regardless of employment status, has the
fundamental right to social security and a reasonable standard of living by
addressing these issues and putting effective measures in place.
End-Notes:
- Collins English Dictionary. Copyright © Harper Collins Publishers
- Most material © 2005, 1997, 1991 by Penguin Random House LLC. Modified entries © 2019 by Penguin Random House LLC and Harper Collins Publishers Ltd
- (Page 126 of the report)
- Press Information Bureau, Govt. of India, Ministry of Labour & Employment, Posted On: 24 MAR 2021 3:23 PM by PIB Delhi
- https://www.social-protection.org/gimi/Emodule.action?id=33 @ ILO I Social Protection Platform
- Report of the Parliamentary Standing Committee on Labour and Employment (Page 151 of the report)
- (Page 154 of the report)
- https://www.social-protection.org/gimi/Emodule.action?id=33 @ ILO I Social Protection Platform
- Life Insurance Corporation of India vs. Consumer Education and Research Centre, 1995 5CC (5) 482.
- Randhir Singh v. Union of India, AIR 1982 SC 879
- Dhirendra Chamoli v. State of U.P, AIR 1986 5C 172
- Sanjit Roy vs. State of Rajasthan, Air 1983 SC 328
- Bandhua Mukti Morcha vs. Union of India, AIR 1984 50 802
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