The committee, headed by BJD MP Bhartruhari Mahtab, submitted the report on the Code which was moved in the Lok Sabha by Labour Minister Santosh Gangwar 0n 11 December, 2019. Likely to be tabled in the House during the next session of Parliament, the Code amalgamates nine labour Acts, including on compensation, insurance, provident fund, maternity leave, unorganised labour and gratuity.
All labour laws have been subsumed into four Codes: The Code on Wages, 2019; The Occupational Health, Safety and Working Conditions Code, 2019; The Industrial Relations Code, 2019; and The Code on Social Security, 2019.
The standing committee has made some important observations and suggestions regarding the unorganised sector- a segment that has suffered badly due to the pandemic and the subsequent lockdown that led to large scale reverse migration and high retrenchment. These concerns range from expanding the definition of unorganised workers to strengthening their rights.
The committee has said in its report that in view of the pandemic and migration of workers, Inter-State Migrant Workers (ISMW) should be mentioned as a separate category in the Social Security Code, 2019 and a Welfare Fund should be created specifically to cater to their needs.
“This fund should be proportionately financed by six agencies- the sending state, the receiving state, contractors, principal employers and the registered migrant workers (with limited and minimal contribution),” the report said.
The committee has asked for expanding the definition of inter-state migrant workers to include contract workers, self-employed and others.
The parliamentary panel has also suggested creation of a Social Security Fund for the unorganised sector and underlined that this provision should be made a part of the Code itself to remove any room for ambiguity at the implementation stage.
“This fund would be made from contributions by employees, employers, central government, state governments along with diversions from corporate social responsibility funds, donations and other sources,” the panel has said. It would be used for four specific purposes- hospitalisation, health insurance, Life Insurance and Old Age pension.
The report has laid a lot of emphasis on creation of a national database managed by the Central government. This data would be highly useful in providing social security benefits to migrant workers even when they relocate.
Government should also incorporate “Unemployment Insurance” in the Code on Social Security for the unorganised sector workers so that “unprecedented labour market situations” can be taken care of. This has high relevance in the present scenario where job losses have been rampant.
The committee found merit in the apprehensions in some quarters that if unorganised workers are not defined properly, then domestic workers, home based workers and those working on commissions or piece rate, as well as those employed in the agriculture sector and the wage workers may be excluded from the social security benefits.
The committee has also recommended that the social security organisations should have representation of SC/ST/OBC/minority/women.
The panel report said it is a matter of “serious concern” that states are sitting on thousands of crores of rupees collected for welfare of building and other construction workers “even as labours have been left to fend for themselves amid the prolonged lockdown period”.
“It is equally deplorable that the cess collected is being diverted elsewhere contrary to the purpose,” the report said, citing a CAG report on one state. It called for legislative checks in the law itself and framing of regulations on where the cess funds should be spent.
The committee has said the provision of “self-assessment” of cess for building and construction workers should be revisited. There should also be portability of cess funds between states.
The Committee has asked the labour ministry to ensure “incorporation of more protective and pre-emptive provisions” in the definition of “fixed term employment” to ensure rights of workers, almost at par with permanent employees.
Social security has been defined as the measures of protection afforded to employees to ensure access to health care and provide income security, particularly in cases of old age, unemployment, sickness, invalidity, work injury, maternity or loss of a breadwinner by means of rights enshrined in the Code.
The committee noted that the above definition does not cover Life Insurance, Medical Insurance, occupational and accidental insurance. It said the definition should be made all-encompassing and specifically mention the nine provisions in ILO Convention, viz, medical care, sickness benefits, unemployment benefits, old age benefits, employment injury benefits, family benefits, maternity benefits, invalidity benefits and survivors benefits.
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