India’s new social security code is progressive, but definition loopholes may deprive 4.2 cr home-based workers of benefits

Rukmini (name changed) is a home-based worker from Fulia, West Bengal, a region known for its handwoven Jamdani sarees. Her weaves carry on a centuries’ old tradition. And in recent times, adapting to the demands of the international market, Rukmini also handcrafts scarves using her age-old loom. In Fulia, there are thousands of home-based weavers like Rukmini.

Despite producing exquisite weaves for the national and international market, home-based weavers, in Fulia, barely make minimum wage often earning lesser. A saree, that takes almost a week to weave on the loom and sells at premium prices in retail stores, may mean only a fraction of that price as wages for them. This means that these home-based workers live from day to day, with no savings to fall back on in times of need. This could be a health emergency, a pandemic, or a natural disaster, such as when Cyclone Amphan wreaked havoc in the state earlier this year. During these times, the workers turn to money-lenders, incurring debts that will take decades to pay off. Formal banking institutions remain inaccessible to most of them.

Rukmini’s story resonates not just with other home-based weavers in Fulia but with 4.2 crore home-based workers across India. The vulnerabilities home-based workers face because of their meagre earnings are only compounded because they lack social security. They and their families have no access to dependable health or accident insurance, old-age pensions, disability coverage, or maternity benefits. But can India’s recently-passed Social Security Code change that?

Social security is a right

Home-based workers from a significant section of India’s unorganised sector, which is approximately 93 percent as per government estimates. Often, social security for these workers is treated as an extra expense that is non-conducive to business or as a philanthropic obligation. This approach completely undermines the status of workers and reduces them to beneficiaries of charity programmes instead of workers with entitlements. Social security is a key indicator of decent work as stated by the International Labour Organisation and the right of all workers.

Article 23 of the Indian Constitution gives all citizens a right to work without exploitation i.e. protection from forced or trafficked labour. Social security considerably reduces the vulnerability to exploitative work practices. From a purely ‘business perspective’, access to social security fosters a more productive, healthier and committed workforce. Workers with access to social security are also more secure in times of crises, such as a pandemic, requiring lesser stop-gap expenditure from the government.

Key Demands of Women in Home-Based Work

Home-based work in India is a major source of employment for working women, forming 16 percent of total employment for women as opposed to 9 percent for men, as per the latest estimates. Women home-based workers operate in a wide range of sectors from garments to food processing, agarbatti and bidi making, recycling and many more. They have also been crucial in the fight against the pandemic – producing masks and PPE for frontline health workers and also providing cooked food to essential workers.

So what then, are their key social security demands? Women home-based workers demand old-age pension that is not conditional to their marital status or the age and employment status of their husbands and children. They require unemployment allowance to sail through seasonal periods of less or no work and medical benefit to access healthcare without drawing down on their savings. They also require maternity benefits and accessible, affordable and safe childcare. These home-based workers also demand due compensation in the case of injury as many are employed in hazardous industries like ship-breaking, bangle making, the production of leather goods and also chemical dyes.

They are often counted as not eligible for these because they work from home but the absence of these benefits force women to either leave the workforce or heavily hampers their productivity.

For informal workers’ social security, several worker welfare boards have been set up as a result of continued advocacy by workers’ organisations. For example, the Building and Construction Workers’ Welfare Board, the Unorganised Worker Welfare Board, Mathadi (headload workers’ boards), and Beedi Workers Welfare Schemes.

Looking at their success in bringing some sectors of unorganised work under the social security net, there had been demands of expanding their coverage to more regions and sectors and include home-based workers too. While this demand remains unaddressed, the government has gone ahead and introduced a new Social Security Code. Can this code new bring unorganised workers closer to accessing these benefits?

Decoding the Social Security Code

Emerging from a recommendation of the Second National Commission on Labour (2002), the Social Security Code is an attempt to simplify labour laws connected with social security. It is an amalgamation of nine existing laws pertaining to various aspects of social security such as Employees’ State Insurance Act (1948), the Maternity Benefit Act (1961) and the Payment of Gratuity Act (1972), the Building and Other Construction Workers Cess Act (1996) and the Unorganised Workers’ Social Security Act (2008).

For 4.2 crore home-based workers, who are not recognised as workers in most contexts of policy, the code is a welcome change as it counts them as eligible for social security under its chapter on unorganised workers. However, the definition of home-based workers is not a comprehensive one.

The definition of “home-based worker” in the code covers only “homeworkers”, or the piece rate sub-contracted home-based workers i.e. employed by a series of sub-contractors to produce goods from their homes in exchange for a piece-rate. Own-account home-based workers — another key sub-category of home-based workers — will most likely fall under the code’s definition of “self-employed worker” which is actually an umbrella definition covering all types of self-employed workers, not just home-based workers.

Careful understanding of these definitions is important as home-based workers often switch between own-account work and piece-rate work depending on availability of work. This means that while they may come under the code’s “home-based worker” definition for three months, they may fall under the same code’s “self-employed worker” definition for another three months.

Furthermore, many collectives and enterprises of home-based workers are taking steps towards moving their businesses online to access a wider market, more so during the pandemic. This means such home-based workers may get classified under the newly formed category of “platform workers” who have been defined as workers who use an online platform to access other organisations or individuals to solve specific problems or to provide specific services.

Overlapping and incomplete classification under definitions, as discussed above, has a direct bearing on access to social security for these home-based workers. Consider this -- for platform workers and gig workers, coverage under social security schemes is only optional in the code while such coverage has been mandated for traditional unorganised workers (which includes home-based workers and self-employed workers). So, where does this leave home-based workers who operate online? Will continuing to build their online marketing platforms hurt their chances of being included in social security schemes that could prove to be their safety nets in challenging times?

Coming to the social security provisions themselves, the definition in the code includes all key aspects of social security as per the ILO convention – “access to health care, 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.” In Chapter IX titled Social Security for Unorganised Workers, Platform Workers and Gig Workers, all of these have been listed as themes for Central or state governments to make social security schemes on, barring one, “unemployment benefits”. Despite being a long-standing demand from the sector, it has been resolutely left out. Also missing are any details of provisions, implementation and delivery of such social security schemes for unorganized workers.

To its credit, the code does place the onus on the employers of unorganised sector workers to make social security contributions. But the issue of implementation remains. There is currently no data being collected by the government to specifically classify sub-contracted homeworkers. With supply chains being so convoluted, it is not an easy task then to identify the final employer. This identification is crucial as the final employer will be eligible for contributing to the funding of these schemes for home-based workers.

Such issues can be flagged and resolved only by active engagement with representatives of workers’ organisations of home-based workers. However, Central Trade Unions have been openly complaining about the Ministry of Labour’s lacklustre attitude towards holding regular consultations with them. CTUs claim that consultations are either circumvented altogether or done only in letter and not in spirit – their recommendations ignored.

The annual Indian Labour Conference which has been a national-level forum for various stakeholders to hold crucial discussions on labour legislation in our country since the 1940s has not held a session after 2015. Scope of representation of workers in social security organisations in the Code is also dismal. While in the National Social Security Board for Unorganised Workers there is provision for only seven representatives of unorganised workers out of a total of 42 members, in the state board this number is seven out of 33 members. No specific provisions are given for representation of different sectors of unorganised work, women workers, transgender workers, or members from Scheduled Castes and Scheduled Tribes and other minority communities.

The way forward

To start with, the development and finalisation of Social Security Rules should be a consultative process. The government plans to have the draft rules out by the 15^th of November 2020, after which the Ministry of Labour should allow for ample time for CTUs and civil society stakeholders to respond to the draft rules; this feedback should be carefully considered and discussed, in consultations held with the Central Trade Unions.

Further, definitions should be consolidated keeping in mind the shifting nature of home-based work, so that no worker loses out on social security. Unemployment benefit should be included in the set of proposed benefits and access to social security benefits should be made mandatory for all categories of unorganised workers, unlike the current status where some workers win and some lose.

Further, CSR funds as an option for funding social security for informal workers should be removed from the code, as social security is a right and not charity. Lastly, the power of existing state-level labour welfare boards should be recognised. Currently, their status post introduction of the Social Security Code remains unclear. If they continue to exist, resources should be pumped into these boards to strengthen them and widen their reach to a larger set of unorganised workers. They have been successful in various parts of the country and can be looked at as a viable model for the delivery of social security benefits.

The author is Programme Coordinator at HomeNet South Asia Trust, a network of home-based worker organisations spread across eight countries."

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Sonakshi Agarwal