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Unorganised sector could be described as that part of the workforce 'who have not been able to organise in pursuit of a common objective because of constraints such as casual nature of employment, ignorance and illiteracy, small size of establishments with low capital investment per person employed,  scattered nature of establishments and  superior strength of the employer operating singly or in combination.'

The unorganised  sector workers are literally everywhere, in fields, in homes, on streets, in small workshops, in forest everywhere. The unorganised  sector has been criticized as a low productivity area where the earnings are meagre. But in absolute terms, this sector contrubutes more to the economy and employment in India. Thus, inspite of their considerable contribution, the unorganized sector lack adequate protection through labour legislations. Workers in this sector do not get social security and other benefits as their countrerparts in the organised sector do.

Social security is a basic need of all people regardless of employment in which they work and live. It is an important form of social protection. Though we have enacted good number of social security legislations to meet the mandate of our Costitution and provide a sort of protection to the people in case of various providential mishaps.

There are legislations that apply wholly or partly to unorganised sector. These legislations are: The Factories Act, 1948, the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Workmen Compensation Act, 1923, the Contract Labour (Regulation and Abolition) Act, 1970, Beedi and Cigar Workers (Conditions of Employment) Act, 1966, Building and Other Construction Workers' (Regulation of Employment and Conditions of Service) Act, 1996, the Mines Act, 1952, and Plantation Labour Act, 1951.

Unorganised Workers' Social Security Act, 2008  empowers the Central Government and the State Governments to frame schemes for providing various social security benefits to unorganized workers, such as life and disability cover, health and maternity benefits, old age protection, education, housing, etc.

In this paper an attempt is made to see whether existing legislations cover the entire area of unorganised sector, and whether they are adequate to give even the minimum of protection, safety and social security to vast and varied workforce in the unorganised sector.

The object of paper are:

1. To know whether existing legislations cover the entire area of unorganised sector,  

2. Whether they are adequate to provide  protection, safety and social security to  unorganised sector.

There are many studies in India on Unorganused Sector. This review of literature aims to show the need for the study of Social Security Legislations to Unorganised Sector.

Himangini Sharma (2017) has done study to analyse the problems faced by the unorganized workers/labours and welfare measures adopted by their employer and government.[4]

Ipseeta Satpathy, B.Chandan Mohan Patnaik, Narayan Tripathy (2017) has done study to understand various dynamics related to workers in  organized and unorganized sector.[5]

Kalyani (2015) in this article author has analyzed the conditions of the unorganized workers who generally considered as the core strength of  Indian labour force.[6]

According  to Dr. G. Rajendran and Mrs. S. Hema (2015) concluded that they are the most vulnerable and deprived section of the society in the need of protection, security, benefits and assistance.[7]

Unorganised Sector

The First National Commission on Labour, under the chairmanship of justice Gajendragadkar, defined the unorganised sector as that part of as the workforce 'who have not been able to organise in pursuit of a common objective because of constraints such as (a) casual nature of employment, (b) ignorance and illiteracy, (c) small size of establishments with low capital investment per person employed, (d) scattered nature of establishments and (e) superior strength of the employer operating singly or in combination.' The Commission listed 'illustrative' categories of unorganised labour: 'These are: (i) contract labour including construction workers; (ii) casual labour; (iii) labour employed in small scale industry; (iv) handloom/power-loom workers; (v) beedi and cigar workers; (vi) employees in shops and commercial establishments; (vii) sweepers and scavenger; (viii) workers in tanneries; (ix) tribal labour; and (x) 'other unprotected labour.'[8]

Social Security

Social security has assumed considerable importance in the recent years. It is one of the basic needs in a welfare State like India. It is based on the ideal of human dignity and social justice. The underlying idea behind social security measure is that a citizen who has contributed or is likely to contribute to his country's welfare should be given protection against certain hazards.

Social security is a dynamic concept. Being a dynamic subject no rigid limit can be laid down for all time to come. It varies from time to time and country to country. Social security may provide for the welfare of persons who become incapable of working by reason of old age, sickness and invalidity and are unable to earn anything for their livelihood.

The first systematic attempt to define social security was made by International Labour Organisation which defines social security as "the security that society furnishes through appropriate organisations against certain risk to which its members are exposed."[9] This definition indicates that social security is a provision made by the society. It is social because it represents the culmination of collective efforts, secondly, the provision is organised one. It is not haphazard or dependent upon the resources and the will of these agencies responsible for its dispensation. It is a provision against certain risks only. However it may be noted that the above definition is vague and indeterminate since it does not specify what kind of security is envisaged under the scheme and against what kind of risks.[10]

In India, the National Commission on Labour has endorsed the ILO definition of social security and observes:

Social security envisages that the members of a community shall be protected by collective action against social risks causing undue hardship and privation to individuals whose prime resources can seldom be adequate to meet them.[11]

Leguslations Relating to Unorganised Sector

We have many labour laws in our Statute books. All of them do not cover workers engaged in unorganised/informal sector. All of them are not applicable, and were not mean to be applicable to the employments in the unorganised sector. Some are applicable. But none of the laws that form the base of the social security system covers the whole unorganised sector. There are laws that apply wholly or partly to this sector. These laws are: The Factories Act, 1948, The Minimum Wages Act, 1948, The Equal Remuneration Act, 1976, The Payment of Wages Act, 1936, The Industrial Disputes Act, 1947, The Workmen Compensation Act, 1923, The Payment of Gratuity Act, 1972, the Contract Labour (Regulation and Abolition) Act, 1970, Beedi and Cigar Workers (Conditions of Employment) Act, 1966, Building and other Construction Workers' (Regulation of Employment and Conditions of Service) Act, 1996 etc. which are applicable to the workers in the unorganised sector.

Inspite of the existence of these beneficial laws, the benefits and facilities prescribed under these laws are denied to them in most cases.[12] Hence there is strong need and necessity to extend the facilities to the workers in the unorganised sector.

1. The Factories Act, 1948

The Factories Act, 1948 is designed to protect workers in the factories. The Act has undergone various amendments and was last updated in 1987. The main object of the Act was to ensure adequate safety measures and to promote the health and safety of the workers employed in factories. Various Sections of the Act deal with benefits and welfare facilities and health, safety and hygiene inside the factory premises.

Provisions regarding health of the workers relate mainly to cleanliness, disposal of wastes and affluents, ventilation, control of temperature, elimination of dust and fumes, artificial humidification, overcrowding, lighting, drinking water facilities, latrines, urinals and spittons.[13] Besides, every factory has to make effective arrangements to provide and maintain a sufficient supply of wholesome drinking water for all workers employed therein;[14] and where 250 or more workers are working, employers are required to provide cool drinking water in hot weather.[15]

The provisions of this Act do not apply to the vast masses of workers in the unorganised sector employed in smaller manufacturing units and other sectors.

2. Contract Labour (Regulation and Abolition) Act, 1970

Contract Labour (Regulation and Abolition) Act, 1970 regulates the employment of contract labour in certain establishments and provides for its abolition in certain circumstances. The Act is applicable if the principal employer engages twenty or more contract workers in an establishment. The contractor who employs twenty or more workers in his contract work will be covered under The Contract Labour (Regulation and Abolition) Act, 1970.

There are a number of provisions in the Act for the welfare and safety of contract labour.[16] There shall be provided and maintained by the contractor so as to be readily accessible during all working hours a first aid box equipped with the prescribed contents at every place where contract labour is employed by him.[17]  

Penalties have been prescribed for those who violate the law. This Act is meant for unorgnised labour. But its scope is very limited. The limitation in the law are such that the contractor stands to gain if he engages less than twenty workers. Therefore, it can be seen that the coverage that this Act provides is far from satisfactory

3. Beedi and Cigar Workers (Conditions of Employment) Act, 1966

Beedi and Cigar Workers (Conditions of Employment) Act, 1966 is an Act that provides for the welfare of the workers in Beedi and Cigar establishments, and regulates the conditions of their work and related matters. The Act provides for licensing of all industrial premises where beedi or cigar or both are made. It provides for cleanliness and ventilation and prohibits overcrowding of the premises. Every industrial premises shall be kept clean and free from effuvia arising from any drain, privy or other nuisance and shall also maintain such standard of cleanliness including white washing, colour washing vanishing or painting, as may be prescribed.[18]

The employees who are given raw-material by an employer or a contractor for making beedi and cigars at home are covered under the Act. Persons not employed by an employer or a contractor but working with the  permises of, or under agreement with the employer or contractor are also covered. Section 43 of the Act does not cover the self-employed persons in the beedi and cigar making industry. If the owner or occupier of the dwelling or house is not the employee of an employer, and carries on any beedi and cigar making work as self-employment, the person is not covered under the Act.

4. Plantation Labour Act, 1951

This Act regulates, for the first time, the condition of work of plantation workers and provides for their welfare. The Plantations Labour Act, 1951 makes provision for health and welfare of the plantation workers. It makes provision for housing, medical aid, recreational and educational facilities in accordance with the rules framed by State Governments. The workers are entitled to sickness allowance and maternity allowance under the prescribed conditions.[19] The planters, who are employing more than 150 workers are required to provide and maintain canteens.[20]

In plantation, the position is equally unsatisfactory though some of the better organised estates have provided a high standard of welfare amenities.

5. Building and other Construction Workers' (Regulation of Employment and Conditions of Service) Act, 1996

Building and Other Construction Workers' (Regulation of Employment and Conditions of Service) Act, 1996 is an Act to regulate the employment and conditions of service of building and other construction workers and to provide for their safety, health and welfare and other incidental matters. The Act applies to every building or other construction work establishment, which employs or had employed ten or more workers. It covers all Central and State government establishments. The special feature of the Act is that it covers all private residential buildings if the cost of construction is more than Rupees ten lakhs.

In actual practice, the provisions of this Act are beneficial only to the skilled workers and those who work continuously in the industry. Unskilled workers, who do not work with a construction establishment continuously, may not get the benefits available under the Act. It will not be possible for those unskilled, uneducated and purely casual workers to make regular, timely contributions to fund as per the provisions of the law.

6. Minimum Wages Act, 1948

The Minimum Wages Act, 1948 is the most important legislation that has been enacted for the benefit of unorganised labour. It was enacted for fixing, reviewing and revising the minimum rates of wages in the scheduled employments where workers are engaged in the unorganised sector. Under Section 3 of the Act, the appropriate Government has been empowered to fix the minimum rates of wages payable to employees employed in the scheduled employments and in an employment added to either part I or part II of the schedule by notification under section 27.

The Act helps unorganised workers who are working in the scheduled employments. But nearly 60% of the workforce in the unorganised sector is self-employed or home-based. Thus, they remain outside the purview of The Minimum Wages Act, 1948, although they constitute the majority in the sector.

7. Payment of Wages Act, 1936

The Payment of Wages Act, 1936 regulates the payment of wages to certain classes of employed persons. The main purpose of the Act is to ensure regular and prompt payment of wages and to prevent the exploitation of wage earners by prohibiting arbitrary fines and deduction from wages. This Act applies to persons employed in factories, mines, oil fields, railways and various other establishments specified in the Act. The Act is not applicable to self-employed/home-based workers, as they are not persons employed in the category of establishments mentioned in the Act. It does not, therefore protect a large number of workers in the unorganised sector.

8. The Mines Act, 1952

The Mines Act, 1952, was enacted to amend and consolidate the law relating to the regulation of labour and safety in mines. In every mine where more than 150 persons are employed, a first aid room under the charge of medical and nursing staff is to be provided and maintained. In every mine effective arrangements shall be made to provide and maintain at suitable points conveniently situated a sufficient supply of cool and wholesome drinking water for all persons employed therein.[21]

For the safety of the workers there are provisions for conveyance and use of explosives; safety of the roads and working places in mines; inspection of working conditions and sealed off fire areas in mines, ventilation, lighting and fencing.

Though comprehensive, the Act did not break new ground, since it paid more attention to safety measures and provisions of medical facilities in the nature of first aid rather than any comprehensive medical aid to workers.

9. Workmen's Compensation Act, 1923

The Workmen's Compensation Act, 1923 provides for the payment of compensation to workmen for injuries sustained in accidents. The method of claiming compensation for disability is so long and torturous that one rarely gets the compensation to which one is entitled by law. Any qualified medical practitioner can certify the case, and the victim can file a claim in the court of the workmens compensation commissioner with a copy to the employer. The workmens compensation commissioner decides the case, and the revenue department recovers the amount of compensation. But workers who are in the unorganised sector, often find it very difficult to prove who is their employer, and as a result cases are prolonged, and often workers die without receiving any compensation.

10. The Unorganised Workers' Social Security Act, 2008

The purpose of the Act is to ensure that the needs of the workers employed in the unorganised sector are addressed as it contributes to the sustainable economic growth in the country. Apart from Social security the needs include availability of credit, upskilling, use of modern technology, infrastructure and the requirement of a contractual obligation between the employer and employee.

Salient Features:

The Act mentions about constitution of a National Social Security board and State Social Security Board which will give recommendation for formulation of suitable schemes which later shall be monitored and reviewed.

The UWSS Act has laid down provisions wherein it registers and issues a smart identity card with a unique number to the unorganised sector worker.

The Record Keeping function will be performed by the District Administration.

The Workers Facilitation Centres will disseminate the available data on the social security schemes, facilitate the filing-processing and forwarding of the registration application with the assistance of the district administrator.

The Act in its Schedule I has laid down a list of the Social Security Schemes to ensure that the workers of the unorganised sector meet their basic needs and that they have a decent standard of living.[22]

The UWSS Act is a significant initiative taken by the government to address and provide remedy to the plight of the workers engaged in unorganised sector for the first time, the Act has also enlisted several welfare schemes which can be availed by the workers.

There are certain inadequacies in the Act which complicates the implementation process at the same time infringes rights of the unorganised workers. The scope of the definition of unorganised workers is narrow and excludes forest and fish workers, domestic workers, cross-border provisional workers, and aanganwadi workers etc.[23]

The foregoing study brings the conclusion that the unorganised sector workers have not acquired a high profile, tasted the benefits that can be gained from organisation, or deprived the advantageous flowing from high visibility. They are extremely poor, illiterate and exploited in many ways. They are exposed to all the vagaries of climate and winter, such as scorching sun, heavy rain and chilly winter while at work. Workers are exposed to serious health hazards which affect their longevity.

 Thus, Governments have paid due attention towards miserable living conditions of unorganised sector workers. Social security for all considered as a basic Human Right Under the Universal Declaration of Human Rights. Every member nation of U.N.O. must strive to further and promote this basic right. Many schemes and policies have been evolved both at central and state level to provide social security to the workers in the unorganised sector. Inspite of these provisions, schemes and policies, the result is not so satisfactory because of non- implementation of the schemes properly.

There are many labour legislation. All of them do not cover workers engaged in unorganised sector. Some are applicable. But none of the laws that form the base of social security system, covers the whole unorganised sector.

The scope of these Act is very limited. It looks anomalous that unorganised workers can receive the limited benefits of the existing labour laws only if they happen to work for employers, in other words, if there is an employer-employee relationship. None of these labour laws can provide protection to the vast majority of unorganised workers who are self-employed or home-based or to other workers who are employed in enterprises where the number of employees does not reach the threshold prescribed by the Acts. Hence these laws have proved inadequate to ensure work security and social security to the workers in the unorganised sector or to safeguard their constitutional rights.

The Unorganised Sector Workers is  very significant  but  the Act has not defined the term social security and hence it is not justiciable. The Act has laid down several social security schemes but has not included them within the body of the Act.

The Act places the unorganised workers in an odd position as, if they fail to make the deposits in time, they are disentitled from the benefits without considering the contingencies that come along which renders the process of contribution complicated.

However, this would not correct to say that nothing has been done to provide effective social protection to workers engaged in unorganised sector. Legislative prescription  have tried to give effect the rights of unorganised sector workers, but unfortunately, the result is not so satisfactory as we thought, it is only because of:

1.Ineffective scale of punished provided by the statute;

2. The workers engaged in unorganised sector are not conscious of the laws and acquire the strength to ensure that laws are brought into force.

1. Gupta Meenakshi, ‘Labour Welfare and Social Security in Unorganised Sector’, (2007), Deep and Deep Publications Pvt. Ltd. New Delhi.

2. Ibid

3. The Unorganised Workers’ Social Security Act 2008

https://www.legalserviceindia.com/legal/article-4011.

4.Sharma Himangini, ‘The Analysis of Problems of Unorganised Labour –A Review, International Journal of Science Technology and Management,Vol.No. 6, Issue No.01, January 2017. www.ijstm.com

5. Ipseeta Satpathy, B.Chandan Mohan Patnaik, Narayan Tripathy, ‘Review of Literature on Working and Living Conditios of wprkers in organized and unorganized sector’,  International Research Journal of Human Resources and Social Sciencs, Vol. 4 Issue 9, September 2017, www.aarf.asia

6. Ibid

7. Supra Note 4

8. Report of the First National Commission on Labour, 1969, p 417.

9. Approaches to Social Security I.L.O. (Geneva 1942), p.83.

10. N.Hasan, The Social Security System of India, 1972,pp2-3.

11. Report of the First National Commission on Labour, 1969, p 162.

12. Report of the Second National Commission on Labour, 2002, 7.312.

13. Chapter III Section 11 to 20, The Factories Act, 1948.

14. Section 18(1), The Factories Act, 1948.

15. Section 18(3), The Factories Act, 1948.

16. Chapter v Section 16to 21, Contract Labour (Regulation and Abolition) Act,1970.

17. Section 19, Contract Labour (Regulation and Abolition) Act,1970.

18. Section 8, Beedi and Cigar Workers (Conditions of Employment) Act, 1966.

19. Section 32, Plantation Labour Act, 1951.

20. Section 11(1), Plantation Labour Act, 1951.

21. Section 19(1), The Mines Act, 1952.

22. The Unorganised Workers’ Social Security Act 2008

https://www.legalserviceindia.com/legal/article-4011.

23. Ibid