Memoranda
(Regd., Public Charitable Trust No 599 / 94–95 IV)
3/2A Basappa Cross Road, Shanthi Nagar, Bangalore 560027
Tel: 080-41144126, Mob: 9731817177 ; E-mail: info@civicspace.in ; kchamaraj@gmail.com ;
Website: www.civicspace.in
5th July 2024
To
The Principal Secretary to Govt.
Labour Department
Govt. of Karnataka
Vikasa Soudha
Bengaluru 560001
Dear Sir,
Subject: Our objections / suggestions for:
(1) The Karnataka Platform-based Gig Workers (Social Security & Welfare Bill) 2024
(2) A State Law on Unorganised Workers’ Social Security
Greetings from CIVIC-Bangalore! We wish to raise our concerns regarding the framing of sector-specific laws for social security, as in the above-mentioned Karnataka Platform-based Gig Workers (Social Security & Welfare Bill) 2024. This is not to deny the need for sector-specific provisions for occupational safety and health:
- Unorganised workers shift sectors: Given the Indian context, unorganised workers shift from sector to sector depending on where jobs are available. Since no unorganised worker, including a platform-based gig worker, works continuously or permanently in one sector, making his eligibility conditional on proving that he has worked in a particular sector for a certain number of days, etc., may make him ineligible to be registered in any sector. This will make a genuine worker, who may be working throughout the year in different sectors, to be termed a ‘bogus’ worker, as is happening with the Building & Other Construction Workers. Hence, it is desirable not to have sector-specific laws for unorganised workers’ social security.
- No National Commission has recommended sector-specific boards and funds: In the last few decades, there were three National Commissions which, inter alia, looked into the issue of social security for unorganised workers, namely, the National Commission on Rural Labour (1991), the Second National Commission on Labour (2003) and the National Commission on Enterprises in the Unorganised Sector (2007). It is significant that none of them recommended the creation of multiple sector-specific boards and funds for providing social security to the unorganised workers. All of them recommended a single National Social Security Board for Unorganised Workers (NSSB) as well as a single National Social Security Fund (NSSF) with single State-level Boards and Funds. They also called for a single National Social Security Scheme comprising old age security, health benefits and life and accident insurance as a common minimum. Given such recommendations and also examples of comprehensive laws framed by them, it is not understandable why sector-specific laws are being framed for social security of unorganised workers in our State.
- Integration and rationalisation of laws/schemes are much-needed: The efforts of the above National Commissions, as well as several civil society organisations, such as the Labour Law Association of India, and also the Union government by enacting the four Labour Codes in 2020, has been to bring in the much-neededintegration and rationalisation of the multiplicity of laws and schemes that were in existence. These multiple laws had varied definitions of ‘worker’, ‘establishment’, etc., ceilings on wages, number of employees, etc., and varied and overlapping benefits, causing confusion for employers and workers alike. The existence of multiple laws and schemes still failed to bring universality of coverage and universality of benefits. By creating sector-specific laws for social security, such as the ones created for construction workers, and now for the platform-based gig workers, we will be going back to the era when there were multiplicity of laws creating multiple boards, several disparate funds and piecemeal benefits, which have been plaguing the system all these decades.
- Portability of registration and benefits not possible with sector-specific laws: Creating sector-specific laws will make portability of registration and benefits for social security across sectors impossible, which is a requirement if an unorganised worker has to get any benefits given the Indian context. Thus, a construction worker who may shift to platform work, will not be allowed to carry forward to the Board proposed to be created for ‘Platform-based Gig Workers’ whatever benefits he was eligible for under the BOCWW Board.
- Needed: a common state law for all unorganised workers: Given that there are adequate laws for organised sector workers through the Union Acts for ESIC and EPFO, our concern is that, after 75 years of Independence, it is time that there is a single law that will provide universal social security for all unorganised workers under a State law. A comprehensive law at State level universalising social security can be achieved by framing a Bill that covers all unorganised workers, as recommended by the National Advisory Council (NAC), excluding only:
(1) those in government or semi-government employment;
(2) income-tax payees; or self-employed professionals such as doctors, lawyers, etc.
(2) those already covered under ESIC and EPFO; and
The Construction Workers Welfare Board, already covered under a Central Act, or any other existing Welfare Boards and Welfare Fund/Funds constituted under any other law, may be excluded; or merged into the Board and Fund created under this State Act, where possible.
- Elements of a state law for unorganised workers’ social security: The Unorganised Workers’ Social Security Act of 2007 was supposed to achieve universal social security, but failed to do so due to its inherent deficiencies. We need to bring a State law that does not have those deficiencies. It needs to have a definition of an unorganised worker that eliminates wage limits, limits on number of employees in an establishment, etc. that prevent universalisation. It should have an in-built source of funds within the law, through contributions from employees, cesses on employers, and levy on state taxes to provide government’s contribution, to create a common fund for social security. The Act should provide a comprehensive scheme within the Act, provide all the nine ILO benefits through a single annual contribution by employees, employer and government; and also specify the quantum of benefits as mandated under ILO Convention 102 on Social Security.
- Creating multiple funds and sector-specific boards may not be viable: Currently, it appears that it is being assumed by the Karnataka government that separate laws need to be framed for the manner in which each cess is to be levied and that those funds should be kept separately for use only for that particular sector by creating separate sector-specific boards. Thus, the creation of the now separate Platform-Based Gig Workers Board.
But it is not viable to keep on creating separate funds for each sector and setting up multiple sector-specific boards covering just a few lakhs of workers under each board. This is an unviable measure as there are more than 1.5 crore unorganised workers in the State. So how many funds and boards shall we create before we cover all 1.5 crore workers? If it is believed that creating multiple funds and boards is the way forward, the above question has to be responded to by realistically estimating the number of boards required to cover 1.5+ crore workers, the administrative cost involved, and the time-frame that will be required to universalise social security in this manner.
The aim should be to create a single social security fund in which all contributions are pooled together. This was the recommendation of the Labour Law Association and the aim of merging various laws and schemes into the SS Code. If at all, separate funds and boards can be created for wage workers and for self-employed workers.
- Raising Government’s contribution: There are many ways of raising the funds to provide the employers’ contribution and government’s contribution as exemplified by the Madhya Pradesh Social Security and Welfare Act. Government’s contribution to the single State-level fund can be raised by imposing cesses on:
- State-level taxes such as the Motor Vehicles Tax, Property Tax, Stamp duty, Excise and Service Tax, etc.
- a cess on royalty on certain products, such as granite, or other minerals;
- a cess on market turnover, such as in cocoon markets, or on large farmers in APMC yards ;
- a cess on exports of IT sector, etc.
Also, it may not be necessary to amend each of these Acts under which the cess has to be imposed. It should be possible to merely state in the single comprehensive law on social security that the above Acts are being amended and the following cesses are being imposed in the following manner.
If the Finance Acts of 2016 and 2017 to bring in the Electoral Bond scheme could amend the FCRA, RBI Act, IT Act, Companies Act and the Representation of People (RP) Act within the Finance Act, it is difficult to fathom why the cesses on several taxes, royalties, turnover, wages paid to workers, etc. of States cannot be brought about through a single Bill.
- Raising employers’ contribution: It is being assumed that it is difficult to get employers of unorganised workers to register themselves and contribute their share for the social security of their unorganised workers. It should be noted that all traders, and even MSMEs are registered under some law, such as the Companies Act, municipal trade laws, Shops & Establishments Act, Contract Labour Act, etc. It is possible to get the lists of such employers registered under these Acts and direct them to contribute their share towards the social security of their unorganised workers by the following measures. Employers’ contribution can be raised by:
- a cess on every transaction where possible, such as on aggregators of platform-based gig-workers; or
- annual turnover of a company; or
- man-days of unorganised workers employed in a year; or
- amount of wages paid to unorganised workers during a year, etc.
- Employees’ contributions: Employees’ contributions can be raised by allowing all of them to register through a self-affidavit (no need to mention sector) at the local gram panchayat / municipal office or on-line e-shram portal through the following Area-based approach. Those unable to pay a contribution can be identified and categorised through income certificates, while everyone else can be asked to pay a certain amount for defined benefits in the law.
- Area-based approach rather than sector-specific approach is the solution: The ILO had recommended, in fact, that in the Indian context where more than 93% workers work in the unorganised sector, an ‘Area-based approach’ rather than a sector-specific approach was preferable. This means that all unorganised workers living in an Area, i.e. Gram Panchayat or municipal ward, irrespective of the sector they are working in, should be registered in the area where they live in a common portal. This is a model that can easily bring about universalisation of coverage, and enable portability of registration and benefits across sectors.
- Area-based pilot project implemented in Karnataka: The Department of Labour, GoK, and the German Society for International Cooperation (GlZ) had implemented a pilot project on ‘social security benefits for unorganised workers’ in six districts of Karnataka from 2009 to 2014 under the bilateral agreement between Gol and the Government of Germany. This project had pioneered the concept of ‘single-window approach’ to facilitate the access to social security benefits among unorganised worker households by setting up 250 Worker Facilitation Centers (WFCs) at Grama Panchayat and urban ward level in six districts though a GO. The WFCs were closed once GIZ stopped funding them. One more GO of 4th March 2014 upscaled the above pilot project initiated with the help of GIZ to all taluks of the State with one WFC per taluk. This GO can be found at the following link:
There is a need to revive this model that was piloted in Karnataka on an ‘Area-Based’ approach at Grama Panchayat and ward level and not sector-specific basis.
- Tripartite Boards at district, taluk and block level: It may be felt that having a single Social Security Authority at state level will not be able to deal with 1.3 crore workers and that is why sector-specific boards are necessary. A solution to that would be to establish area-based tripartite Boards. The GO of 4th March 2014 directed the establishment of a State-level Steering Committee, State-level Implementation Committee, District-level and Taluk-level Coordination Committees to oversee implementation of social security. These were, however, committees with only officials and not tripartite committees with representation to trade unions and CSOs. These can be converted to tripartite committees to enable proximity to all unorganised workers, irrespective of sector, for collective bargaining, enforcement of wages and social security, regulation of working conditions and occupational safety and health (OS&H) and grievance redressal at a proximate level. This system can effectively replace the sector-specific approach which cannot provide universal social security coverage, or proximity for and accessibility at grassroots level to all workers.
There is a need to revive these committees which are all area-based. It would be interesting to understand why these committees went into oblivion, why the WFCs were closed and why we are back to advocating sector-specific boards for registration, etc. The setting up of these boards at State, district and taluk levels in 2014 can be found at the following link:
- Suggested Draft Bill for a State law on Unorganised Workers’ Social Security: I am attaching herewith a Suggested Draft Bill for a State law on Unorganised Workers’ Social Security which incorporates the above suggestions. I request you to kindly consider the same and bring in measures to provide universal social security to all unorganised workers with all nine ILO social security benefits during your tenure and create a model for the entire country.
Yours sincerely,
Kathyayini Chamaraj
Executive Trustee
9731817177