Article (January-2021)


Major changes in the law relating to Social Security

Alok Bhasin

Designation : -   Advocate

Organization : -  Bhasin & Bhasin Associates, New Delhi


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Brief background

The Second National Commission on Labour had recommended that labour laws should be broadly amalgamated into five groups: (i) industrial relations; (ii) wages; (iii) social security; (iv) safety; and (v) welfare and working conditions.

The Code on Social Security, 2019

In pursuance to the recommendations of the National Commission and the deliberations made in the tripartite meeting of the social partners, the Central Government introduced The Code on Social Security, 2019 in the Lok Sabha on 11th December, 2019 with a view to amalgamate, simplify and rationalise the relevant provisions of nine central labour enactments relating to social security.

The Code on Social Security, 2019 was referred to the Parliamentary Standing Committee on Labour on 24th December, 2019. The Committee submitted its report on 31st July, 2020 with certain recommendations. After incorporating the suggestions of the Committee, the Central Government decided to withdraw the then pending Code on Social Security, 2019 and to propose a fresh Bill, namely, the Code on Social Security, 2020.

The Code On Social Security, 2020

The Code on Social Security (Bill No. 121 of 2020) was passed by the Lok Sabha on 22.09.2020, and by the Rajya Sabha on 23.09.2020. The Code received the assent of the President on 28.09.2020. Draft Rules under the Code were notified on 13.11.2020. As per media reports, the Central Government intends to enforce the four Labour Codes including The Code on Social Security, 2020 by April, 2021.

The Code on Social Security seeks to amend and consolidate the laws relating to social security with the goal to extend social security to all employees and workers either in the organised or unorganised or any other sectors and for matters connected therewith or incidental thereto. The Code repeals the following nine enactments:

1.    The Employees' Compensation Act, 1923;

2.    The Employees' State Insurance Act, 1948;

3.    The Employees' Provident Funds and Miscellaneous Provisions Act, 1952;

4.    The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959;

5.    The Maternity Benefit Act, 1961;

6.    The Payment of Gratuity Act, 1972;

7.    The Cine Workers Welfare Fund Act, 1981;

8.    The Building and Other Construction Workers Welfare Cess Act, 1996; and

9.    The Unorganised Workers' Social Security Act, 2008.

It is hoped that the amalgamation of the above laws would facilitate their implementation and remove the multiplicity of definitions and authorities without compromising the basic concepts of welfare and benefits to workers; and, further, the use of technology for enforcement of the provisions will ensure transparency and accountability, and facilitate ease of compliance.


Definition of 'social security'

The Code on Social Security defines "social security" to mean:

"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."
The Code, thus, seeks to expand the coverage of "social security" by including even "gig workers" and "platform workers", apart from extending the same to "unorganised workers" and "employees".

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