Academic Session (2023-2024)

DHARMASHASTRA NATIONAL LAW UNIVERSITY

Jabalpur (M.P.) 482001

Labour Law

“Protection of workers in unrecognised sectors"

Submitted by: Submitted to:

Aryan Sonwani Mrs. Isha Paliwal

6th semester
BALLB/25/21 Labour Law
 ACKNOWLEDGEMENT

I would like to extend my sincere thanks to My teacher and my mentor [Link] Paliwal for
giving me this wonderful opportunity to work on this project and for his able guidance and
advice,

Vice Chancellor, Prof. (Dr.) Manoj Kumar Sinha for their encouragement and Enthusiasm, My
seniors for sharing their valuable tips, And my classmates for their constant support.
 Table of contents

Chapter 01

● INTRODUCTION.
● UNORGANISED WORKERS

Chapter 02

● MAJOR PROBLEMS FACED BY UNORGANISED WORKERS

● NATIONAL SOCIAL SECURITY BOARD

Chapter 03

● UNORGANISED WORKERS SOCIAL SECURITY ACT, 2008,

● NATIONAL COMMISSION FOR ENTERPRISES IN THE UNORGANISED SECTORS.
● JUDICIAL APPROACH

Chapter 04

● CONCLUSION
● REFERENCES.
Chapter 01

INTRODUCTION

Workplaces in India are formal and informal, organized and unorganised, micro, small and
medium. Although statistical information is clearly available for organized and Formal sectors,
the same is not the case with the informal and unorganized sectors. The diversity, nature,
enterprises and the people employed in informal and unorganized workplaces is undermined
and unreported in spite of the fact that, labour force is one of the most important atributes in
building the economy of India. These usorganized sectors are the ones contributing inunensely
not only towards the growth of Nation but also towards building and strengthening the organized
sectors.

In fact, there exists no data regarding the unorganized sectors and the number of workmen
working thereof even with the Government. The estimates given by different Governmental
Agencies are also not certain. The Economic Survey of 2018-19, released on July 4, 2014. says
"almost 97%" of the total workforce is 'in akumal". But the Niti Aayog's Strategy for New India
released in November 2016, said: "by some estimates, India's informal sector employs
approximately 85% of all workers' '. The Report of the Committee on Unorganized Sector
Statistics estimates more than 90% of the workforce in the informal sector, at the same time it
specifies that there are a number of gaps in the statistics on enterprises and employment in the
informal sector in India. As per the latest year data of International Labour Organisation, the
share of informal sectors is 80% which includes own-account workers outside the formal sector,
contributing family workers, employers and members of producers cooperatives in the informal
sector, and employees without fornsal contracts.

As an unorganised worker play a pivotal role in society, so they need special attention. Most
socially and economically deprived sections of the society are engaged in informal economic
activities. The government realised the pivotal role performed by the unorganised sector in the
economy. Therefore, many legislations and schemes are initiated by the government for the
benefit of unorganized workers. These benefits help in motivating the workers for their active
contribution in the prosperity of the industry and when the workers are fully satisfied with the
conditions of service, then they give their best efforts for the growth of the society.

UNORGANISED WORKERS

According to the report of the National Commission on Labour in 1969, Unorganized workers
are other groups of workers who are not covered under the definition and con organise in
pursuit of a common goal due to force such an

1. Casual nature of employment.

2. Ignorance and illiteracy.

3. Establishment of small size with the low capital invested per person employed

4. Scattered nature of establishments.

5. Muscular strength of the employer operating either singly or in combination.

National Commission also gives some categories of workers, which can be categorised as
unorganised workers, which are the following:

● Contract-based workers and it also includes workers engaged in the construction work.

● Informal Casual labour,

● Labour engaged in small industry,

● Handloom/power worm workers

● Beedi and cigar workers.

● Employed in shops and commercial establishments

● Sweepers and scavengers.

● Workers in teaberries

● Tribal Tabour

● Other protected labour.

According to Section 2(1) of the Unorganised-Workers Social Security Act, 2008 the term
"organized sector means an enterprise, owned by individuals or self-employed wuckers and
engaged in the production or sale of goods or providing service of any kind whatsoever, and
where the enterprise employs workers, the number of such workers is less than ten

Under section 2tnt of the Unorganized Worker Social Security Act. 2008, the term unorganized
worker' means a home-based worker or a self- employed worker or a wage worker in the
unorganized sector. It includes a worker in the organized sector who is not covered by any of
the acts pertaining to welfare schemes as mentioned in Schedule 11 of Unorganized Workers
Social Security Act, 2008.

Chapter 02

MAJOR PROBLEMS FACED BY UNORGANISED WORKERS

In India, 90% of the workforces are engaged in the unorganized sector. As being the weaker
section in the society, they deal with many problems. Even though the unorganized sector
contributes to the economy, they are faced with many challenges. They are-

1. High level of insecurities in jobs: Unorganized workers depend on various jobs due to
insecurity of work. Factors like climate change, locations etc. affect the employment
opportunities for unorganized workers. For example, the agricultural sector in India is
highly irregular and urvassured. This is because of the availability of work to them. They
are engaged only for 3 months in a year and the remaining 9 months they are either
unemployed or they search for alternative jobs to sustain from starvation

2. Minimum wages: Sec 2(h) of Minimum Wages Act, 1948 defines the term "Wages B
means remuneration capable of being expressed in terms of money which would if the
terms of the contract of employment express or implied were fulfilled be payable to a
person employed in respect of his employment or of work done in such employment and
includes house rent allowance". Even though the act defines the tenn, the workers are
not paid minimum wages in most cases. In Peoples' Union for Democratic Rights v.
Union of India, the Supreme Court held that even if poverty forces anyone to work for
minimum wage, Article 23 prohibits employing workers for wages below the statutory
minimum level as it results in forced labour

3. Long working hours: in the Unorganized sector, long working hours are beyond the
labour and regulatory norms which is standard in India. The agricultural sector has no
fixed working hours as there are no laws that regulate the working hours for the
agricultural sector. In the other unorganized sectors, the working hours are fixed from
12-15 hours and their wages depend on the hours their wurk for their employer. As most
of the workers are illiterate and are dependent on the wages given by the employer they
are exploited by the employer as they force the workers to work for more hours
4. Work hazards, occupational safety and living conditions: Unorganized workers are
exposed to dangerous working conditions which affects their health conditions. They
face many health problems because they have low nutrition and their excessive physical
activities due to their low income, they are unable to pay for their medical expenses.
Workers who work in firework factories, tobacco factories, and matchstick factories are
prone to respiratory diseases because of inhaling the tobacco dust, fire powder ete.
Workers in the agricultural sector are affected by excessive use of pesticide, insecticide
and fertilizers. Unorganized workers live in slum areas and unsanitary conditions. Basic
facilities like washing areas, toilet facilities ete, ate below standard. Women and children
are unprotected: Art 39(d) of the Constitution of India talks about equal pay for equal
work. This means that all workers should be given equal wages irrespective of their sex.
Wages given to men are more than the wages given to women and children for their
equal hours of work. Many children are forced to work in households, dhahas, and tiza
shops for low wages. Children work for long working hours and they are exposed to
many hazardous working conditions which affect their health. Women are sexually
harassed and assaulted in many workplaces. Women experience many physical and
 mental problems and they are not aware of their rights. Seasonal Employment: The
workers are employed as a seasonal employer. They are employed only for a particular
season and remain unemployed during the remaining year. Employment is only for 3-4
months. In India Mahatma Gandhi National Rural Workers Employment Guarantee Act
2005 aims to provide employment security by guaranteeing at least 100 days of work in
the most backward districts of the country who can perform manually.

NATIONAL COMMISSION FOR ENTERPRISES IN THE UNORGANISED SECTOR

The Government of India in 2004 constituted the National Commission for Enterprises in the
Unorganised Sector (NCEUS) under the chairmanship of Dr. Arun Sengupta. The Comunissinn
was an advisory body and watchdog for the informal sector. The main objective of the
Commission was to "review the status of the unorganized/informal sector in India including the
nature of enterprises, their size, spread and scope, und magnitude of employment.

NCEUS submitted several reports during its terure towards protection of Unorganised Sectors.
NCEUS was referred to with the Unorganised Sector Workers' Bill. 2004 which was
prepared by the Ministry of Labour and Employment of the Government of India, arising out of
the recommendations of the Second Labour Commission for its review and revision. Based
upon the Terms of Reference, the Committee proposal "Report of National Commission for
Enterprises in the Unorganised Sector on Social Security for unorganised sector and proposed
a Draft Bill. Also, the Commission prepared a Report on Conditions of Work and promotion of
Livelihoods in the Unorganised Sector recommending measures and Action
plan to provide protection to workers in the non-agricultural sector, focusing separately on wage
workers, self-employed workers and women work in 2007. Further, a Report on
"Comprehensive Legislation Minimum conditions of work and social security [Link]
workers was prepared incorporating two separate Bills on Unorganised Non-Agricultural and
Agricultural Workers was submitted in 2007. Based upon the recommendation of NCEUS, the
Government of India enacted Unorganised Workers Social Security Act, 2008 to provide for the
social security and welfare of unorganised workers.

Chapter 03

UNORGANISED WORKERS SOCIAL SECURITY ACT, 2008,

In the era of liberalisation, globalisation, and privatisation the country has been a drastic change
in the business environment and nature of employment. These changes created many issues in
social security measures.

In this regard the issue of social security to the growing sector of organized workers draws more
attention in emerging india. The government enacted much social security legislation for the
welfare of unorganised workers and also formulated many schemes Unorganised Workers
Social Security Act 2008 is one of the significant activities which is exclusively for the protection
of unorganized workers.
The mechanism under the Act provides a three-tier system for the implementation of the law.

NATIONAL SOCIAL SECURITY BOARD

The Union Government constitutes the National Social Security Board wah the union minister
for Labour and Employment as Chairperson, members nominated by The Union Government
consisting of seven cach representing workers anal employers from unorganized sector, an
eminent person from civil society, two members from the House of the Poople, one member
from the Rajya Sabha and also five each member representing Ministries from the Central and
the State Government following functions: multiple parties composition who performs the

1. They give a recommendation to the Union Government about multiple schemes for the
unorganised workers.

2. Advise the Union Government on matters arising out of the administration of the act.

3. To monitor the social security schemes which are formsilased for unorganised workers.

Review the registration and issue identity cards to the unorganised workers.

5. Review the record of functions performed by the State Government at the state level.

6. Review the expenditure from the funds under various schemes.

7. Undertake another work as assigned by the central Government

STATE SOCIAL SECURITY BOARD

The State Government at the state level is empowered to constitute the Social Security Board
for the objective of proper implementation of the Act. Function and Composition of State Social
Security are the same as the National Social Security Board

The Social Security Boards, which are entrusted with the responsibility of implementation of the
act, are just advisory in nature and are not empowered to perform many functions еxреrt
monitoring and review.

The Boards are not empowered to take decisions on their own. It is up to the Government to
accept the recommendations of the board or not. For effective implementation of any Act and
consistent delivery of social security rights to the workers, a well-defined administrative
mechanism is very essential, which is missing in the Unorganized Social Security Act itself

WORKERS FACILITATION CENTRES

Section 9 of the Act envisages for the setting up of Workers Facilitation Centres (WFC) to:

(a) disseminate information on available social security schemes for the unorganised workers;

(b) facilitate the filling, processing and forwarding of application forms for registration of
unorganized workers

(C) assist unorganised worker to obtain registration from the District Administration

(4) facilitate the enrolment of the registered unorganized workers in social security schemes.

The setting up of WFC is a positive part of the Act, however, it would have been better if the
same was entrusted with wider powers and functions for unorganised workforce. The Act could
have provided it to be a nodal point for the welfare of unorganised workers. The Act could have
provided for Mandatory registrations of employers, employees and self-employed people with
WFC. The establishment of WFC at Districts and Taluka levels depending upon the nature of
the unorganised sector could have fulfilled the gap of registration and data collection of
unorganised workers. Needless to say, any such procedures of the Government should have
provided for least formalities to endow benefits to maximum.

SCHEMES ON SOCIAL SECURITY

Section 3 of the Act empowers the Central Government to formulate and netity, suitable welfare
schemes for unorganised workers on matters relating to
(6) life and disability cover

(b) health and maternity benefit

(c) old age protection, and

(d) any other benefit as may be determined by the Central Government and further specifies the
schemes included in the Schedule 1 to the Act to be deemed to be the welfare schemes.

It empowers the State Government to formulate and notify, from time to time, suitable welfare
schemes for unorganised workers, inchaling schemes relating

(a) provident fued

(b) employment injury benefit,

(c) housing

(d) educational schemes for children

(e) skill upgradation of workers,

(f) funeral assistance: and

(g) old age homes

CRITICISMS

Although the Act provides for a baxic framework for workers in unorganised sector, certain
important aspects are missing in the Act which can be summarised as belows

● A rights based approach for social security as envisaged under the Constitution of India
and other International Instruments vie. Universal Declaration of Human Rights, 1948
International Covenant on Economic, Social and Cultural Rights, 1966, International
Covenant on Civil and Political Rights, 1966, International Convention on the Protection
of the Rights of All Migrant Workers and Members of Their Families, 1990 is missing.

● A complaint mechanism is not provided under the Act in case there are any violation of
rights like non-payment of wages, violence and exploitation.

● The Act does not encompass any provisions on employers engaged in the unorganised
sector. Such provisions, if made mandatory, can go a long way in ensuring social
security to unorganised workers except self-employed peoples.

● The entire fate of the social security measures is vested with the Executive wing.

● At the Central and State levels the Hoards are constipated, but a similar mechanism to
carry the day-to-day functions of the Act is missing. When the estimated workforce in the
unorganised sector is around 90%, the Government should have given priority to this
sector by creating Authorities at all levels including taluka levels for proper
implementation of the Act.

● The Act also misses out on certain humane work conditions like hours of work,
conditions of work, weekly holidays, maternity and paternity benefits, disability, injury,
minimum wages, health rights and other health and safety provisions.

● A huge workforce from amongst children between the age groups of 15 to 18 is in the
unorganised sector. The Chill Labour (Prohibition and Regulation) Amendment Act, 2016
has banned working of children between the age group of 15-18 in Mines. Inflammable
substances or explosives or Hazardous process. It means these children can legally
work in unorganised sectors. Special emphasis on child labour in unorganised sector is
required to he pruvided
 ● India's unorganised sector comprises women workforce to a large extent. To provide for
specific rights to the women working in the unorganised sector, special provisions
relating to health and childcare were needed to be provided.

● The present legislation also does not fulfil the obligations of ILO Conventions and
Recommendations as ratified by India and ILO Declaration on Fundamental Principles
and Rights at Work.

JUDICIAL APPROACH

Sometimes due to failure of proper implementation of legislation, the judiciary comes forward for
the protection of the rights of unorganised workers. Unorganised workers indeed remain outside
the purview of social security measures.

Indian Judiciary played a pivotal role in the development of modem jurisprudence and made a
significant contribution to the protection of interests of weaker section of society which could be
reflected from several decisions, Judiciary also tried to extend the benefits of labour welfare
measurements such as the Employees Compensation Act, Payment of Gratuity Act, Employees
State Insurance Act. Employees Provident Fund etc.

Judiciary has exclusive responsibility for the protection of interest of a weaker section of society.
Through various judgments, the Supreme Court of India emphasised on Right to Livelihood as
an inherent part of Right to Life.

In the case of Rural Litigation and Entitlement Kendra, Dekradun v. Unar Pradesh the court
stated that the right to life under Article 21 of the Constitution of India also includes the right to
livelihood.

In the case of People Union for Democratic Rights v. Union of India, the court held that begging
is also a kind of forced labour and it is a violation of the right to live with dignity. respect and
fundamental human rights. If any person is taking the service of any labour anul does not pay
the minimum wages, then it is a violation of Article 23 of the Constitution of India

In the case of Sanjit Roy v State Of Rajasthan", it was hell that payment of wages lower than the
minimum wage to the person employed on famine relief work is violative of Article 23. Whenever
Any labour or service is taken by the state from any person, who is affected by drought and
scarcity condition the state cannot pay him less wage than the minimum wages on the ground
that it is given help to them to meet famine situations. The state cannot take advantage of their
helplessness.

Article 21 states that bonded labour should be identified and efforts should be made by the
Government to complete rehabilitation of the labourers. Directive Principles of State policy was
enacted as the guidelines for the government. Under DPSP, the State Government needs to
provide a basic human dignity to bonded labour and if it is not fulfilled, then it will result in the
infringement of Article 21 of the Constitution.

In the case of Daily Rated Casual Labour V. Union Of India", it was held that whenever the
employees are classified into the casual and regular employees it leads to the infringement of
Article 14 and Article 16 of the Constitution. It is also against the spirit of Article 7 of the
International Covenant on Economic, Social and Cultural Rights. 1906. When the labourers are
not paid miniraan wages as prescribed by the Minimum Wages Act, then it amounts to
exploitation of labour. The court also stated that the Government should be the model employer
and not take advantage of its dominant position.

In the case of State V. Ranwar", the High Court of Allahabad stated that "The person cannot
refuse to render the services merely on the ground that such labours belong to the Scheduled
Caste. This is done to protect the interest of weaker sections of society."

In the case of Siddheshwar, Hubli Employees State Insurance Corporation, the court widened
the definition of the employee under this act and also states that this Act applies even to those
persons whose services are lent to the principal employer.

In the landmark case M.C Mehta v Suite of Tamil Nadu, the Supreme Court of India gave order
to the Government to do a murvey and to stop the child labour in the matchstick and cracker
factories. The court also directed that the minimum wage paid by the subcontmetors under
Minimum Wages Act should be directly puid and the provisions of section 21 of the Contract
Labour Act, 1970 should be observed.

Judiciary is active to take all necessary steps for protection of the rights of unorganised workers
and implementing social security welfare schemes and also extend the advantages of various
labour welfare legislation.

Chapter 04

CONCLUSION

Being a welfare state, the primary responsibility is of the Government to fulfill the rights of
workers. The Constitutional mandate can be fulfilled only if necessary and immediate steps are
taken in the direction to protect the rights. The present law requires amendments looking into
the nature and diversity of the unorganised labour force existing in our society. Further, making
amendments and laws would be an absolute futile exercise until and unless the same is made
available to the beneficiaries. The Second National Commission on Labour has remarked that
"The laws or welfare systems that we propose for them cannot be effective unless they
themselves are conscious of the laws, and acquire the strength to ensure that laws are brought
into force, unless there are effective means to implement, monitor and provide quick redress;
unless breaches of the law are punished with deterrent penalties, and unless the organs of
public opinion and movements and organisations mosant vigil, and intercede to ensure that the
provisions of the laws and welfare systems are acted upon."

The present legislation is based on Schemes pronounced and implemented by the respective
Government. Though. Schemes provide benefits to the unorganised labour force but a
comprehensive legislation to provide, protect and fulfil the rights of people working in the
unorganised sector is required.

REFERENCES

Munalini, Protection of Rights of Unorganized Workers", available at

[Link]
[Link] text Apart%20from%20legislation%2C%20the
%20Constitution,by%20the%20goverment%5812%5D.

De Namrata Luhan, "UNORGANISED WORKERS' SOCIAL SECURITY LEGAL APPRAISAL

AND CRITICISMS, Journal of Legal Studies and Research, Vol 5 Imoe 6- ISSN 2455 2437,
Dec. 2019, available at [Link]
content/uploads/2019/12/UNORGANISED-WORKERS%E2%80%99-SOCIAL-
SECURITY-LEGAL-APPRAISAL-AND-CRITICISMS DR-NAMRATA- [Link]

Richm Goel Protection of Rights of Unorganized Workers', available [Link]

in/unorganised-sector-right-protection