Recent Trends in Social Security Laws in India

Concept and Importance of Social Security

Being a social animal, a human being is indeed expected to interact with various phases and situations during his life-cycle and sometimes these events involve a situation where he has to face financial constraints. Due to lack of financial resources, these monetary constraints hamper the ability of a person to fulfil the existing monetary requirements. In such situations, social security act as a reliable source in order to provide financial (monetary) assistance.

Thus, social security can be defined as “a type of financial security provided to the members of society (especially employed in an organization) in anticipation of social and economic distress caused by foreseen as well as unforeseen events or contingencies”.

Object – Social security aims at eradicating the issue of economic insecurity from among workers. The primary object of social security measures is to offer assurance and to generate a sense of confidence within the workers as well as their families that their life and standard of living will not be adversely affected and crumbled by any socio-economic contingencies.

Such contingencies/events includes –

• Medical care during sickness
• Work injury
• Maternity
• Old age
• Death of the employee (bread-earner of a family)
• Any kind of disability
• Unemployment
• Expenses on family and children, etc.

According to Sir William Beveridge, social security means  – “The security of an income to take place of the earnings when they are interrupted by unemployment, by sickness or accident- to provide for retirement through age, to provide against the loss of support by the death of another person and meet exceptional expenditure, such as those connected with birth, death and marriage”.[1]

Beveridge’s report [2] (published in November 1942) also stated “five giants” or contingencies which needs to be tackled through social security covers, namely –

• Want
  • Disease
  • Ignorance
  • Squalor
  • Idleness

Legislation Regarding Social Security in India

Status of Social Security in the Constitution of India

Social security is a part of concurrent list (List III) under schedule 7 of Indian constitution-

Item no. 23

                                         –    Social security

                                         –    Social assistance

                                         –    Employment

                                         –    Unemployment

Item no. 24 –                     welfare of labour including –

• working conditions
  • Provident fund (pf)
  • Employer’s liability
  • Workmen’s compensation
  • Invalidity (disability)
  • Old age
  • Maternity benefits

Fundamental Rights [part 3]

The supreme court of India in its landmark judgement of 1986 [3] declared the “right to livelihood” as a fundamental right and an inherent part of “right to life” under article 21[4] of the Indian constitution.

Further, in 1992 [5], the apex court declared – “social security and the protection of the family” as an integral part of the right to livelihood under the right to life by explaining that the ultimate objective of social security is to secure that every individual has the means of livelihood.

Directive Principle of State Policy (DPSP) [Part 4]

Article 41- Right to work, to education and to public assistance in certain cases

Article 41 provides for social security by directing the states to secure the right to work and to provide public assistance in case of – sickness, unemployment, old age, disability, etc.

Article 42- Provision for just and humane conditions of work and maternity leaves

Article 42 ensures social security by securing maternity reliefs for women workers and humane working conditions for the employees.

Article 43- Living wage etc. for workers

Article 43 aims to secure social security by providing living wages to the workers in order to ensure a decent standard of living.

• Other legislation providing social security in India

S.No.	Title	year
	The payment of gratuity rules	1972
	The payment of gratuity act	1972
	Employees compensation (amendment) act	2017
	Maternity benefit(amendment) act	2017
	The personal injuries (emergencies) provision act	1962
	The personal injuries (compensation insurance) act	1963
	The maternity benefit act	1961
	Employees liability act	1938
	The Employees provident fund & miscellaneous provisions act	1952
	The Employees provident fund & miscellaneous provisions (amendment) act	1996
	The employees state insurance act	1948
	The employees compensation act	1923

Social Security acts and rules (by ministry of labour and employment, government of India) [6]

Recent Reforms Regarding Social Security Laws in India

Social Security Code Bill, 2019

On December 11, 2019, current labour minister Santosh Gangwar on behalf of the ministry of labour and employment introduced a “social security code bill, 2019” in Lok Sabha. The bill proposes to set up a social security fund using the funds available under corporate social responsibility to provide welfare benefits to the workers such as -medical covers, pension, disablement reliefs, death benefits, etc.

This fund is available to all the workers including the gig workers, platform workers and even unorganized workers in India.

The labour ministry intends to amalgamate 44 labour laws in four categories i.e.

1. Wages
2. Industrial relations
3. Social security and safety
4. Health and working conditions

The social security code bill itself intends to replace at least nine major labour legislations, namely-

1. Employees Provident Funds and Miscellaneous Provisions Act, 1952 (EPF Act)
2. Maternity Benefit Act, 1961 (Maternity Benefit Act)
3. Employees’ State Insurance Act, 1948 (ESI Act)
4. Payment of Gratuity Act, 1972 (Gratuity Act)
5. Employee’s Compensation Act, 1923 (Employee’s Compensation Act)
6. Building and Other Construction Workers’ Welfare Cess Act, 1996
7. Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 (Employment Exchanges Act)
8. Unorganized Workers Social Security Act, 2008 (Unorganized Workers Act).
9. Cine-Workers Welfare Fund Act, 1981

Highlights of the Bill

1. One of the major highlights of the bill is that once it comes into existence, the employees will have the option to reduce their provident fund contribution (currently 12%) which helps in increasing their take-home pay resulting higher consumption which further leads to economic growth. However, the employer’s contribution to PF remains the same.
2. The bill also proposes to pay gratuity on pro-rata basis – Presently, as per the prescribed payment of gratuity act,1972, the workers/employees get eligible for gratuity only after five years of continuous service but the social security bill, 2019 intents to provide a gratuity to fixed-term contract workers on the pro-rata basis[7].

Conclusion

From the phase of maternity to the point where an employee retires and even after his retirement, social security plays a crucial role in a person’s life. Therefore, it is the utmost responsibility of the government to provide a comprehensive and reliable system of social security which supports the worker from cradle to grave.

It is an unfortunate truth of our country that the major laws providing social security measures are only available to the employees working in the organized sectors i.e. nearly 10% of the working force is eligible to the social security benefits, especially in this coronavirus outbreak 90% of the unorganized working population is vulnerable due to lack of social security.

Therefore, in the present prevailing conditions, it is necessary for the government to introduce legislation for the inclusion of unorganized labour within the purview of absolute social security and the social security bill,2019 seems to be a ray of hope in the dark.

References:

1. Dr. N. H. Gupta, Social Security for Labor in India ,1986 Edition p.32. 
2. Report on “Social insurance and allied services” (by Sir William Beveridge).
3. Olga Tellis v. Bombay Municipal Corporation AIR 1986 SC 180.
4. Article 21- Protection of life and personal liberty (constitution of India).
5. Calcutta Electricity Supply Corporation (India) Limited v. Subhas Chandra Bose AIR 1992 SC 573.
6. labor.gov.in.
7. The Hindu.