[Answered] Discuss the key features of draft social security code, 2019. Mention various flaws in the draft social security code, 2019.

Demand of the question
Introduction. Contextual Introduction.
Body. Mention key highlights of the draft code. Mention various issues and flaws.
Conclusion. Way forward.

To amalgamate a clutch of existing laws government of India has drafted a social security code and proposes several new initiatives including universal social security for unorganised sector workers and, insurance and health benefits for gig workers. This draft is seen as a major labour reform including others.

Key highlights of the draft:

  1. Insurance, life cover for unorganised sector employees: Central Government shall formulate and notify, from time to time, suitable welfare schemes for unorganised workers on matter relating to life and disability cover; health and maternity benefits; old age protection; and any other benefit as may be determined by the central government.
  2. Corporatisation of EPFO and ESIC: The pension, insurance and retirement saving bodies including EPFO and ESIC will be body corporate. Labour minister, labour secretary, the central PF commissioner and Director General of ESIC may not be by default the head of such organizations.
  3. Benefits for Gig workers: Central Government may formulate and notify, from time to time, suitable social security schemes for gig workers and platform workers and such schemes would encompass issues like life and disability cover, health and maternity benefits, old age protection and any other benefit as may be determined by the Central Government.
  4. Maternity benefits: Subject to the other provisions of this Code, every woman shall be entitled to, and her employer shall be liable for, the payment of maternity benefit at the rate of the average daily wage for the period of her actual absence, that is to say, the period immediately preceding the day of her delivery, and any period immediately following that day.

What are the issues?

  1. It merely clubs together existing schemes in the organised sector.
  2. It has avoided the ambiguities over the basic criteria for availing social security benefits such as the minimum number of employees in an organisation and length of service.
  3. The basic structural and conceptual flaws in the code are,
  4. There is no uniform definition of social security.
  5. No central fund. The corpus is proposed to be split into numerous small funds creating a multiplicity of authorities and confusion.
  6. It is unclear how the proposed dismantling of the existing and functional structures, such as the Employees’ Provident Fund Organisation (EPFO) — is a better alternative.
  7. No clear definition for the crucial categories such as workers, wages, principal-agent in a contractual situation; and “organised-unorganised” sectors.
  8. This will continue to impede the extension of key social security benefits such as PF, gratuity, maternity benefits, and healthcare to all sections of workers.
  9. There is no commitment from the government to contribute to the listed social security measures, even as the Code is clear about employee and employer contributions.
  10. How exactly the government proposes to facilitate their access to PF or medical care is not clear.

The Code on Social Security, 2019 once in place will merge 8 exiting labour laws including Provident Funds and Miscellaneous Provisions Act, 1952, Maternity Benefit Act, 1961 and Unorganised Workers‘ Social Security Act, 2008. Although this is a much waited reform in labour sector, there are some flaws that need to be rectified.

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