REPRESENTATIVES OF THE UNORGANISED SECTOR of workers from across the country gathered in Bangalore in October last year to study the recommendations of the Second National Commission on Labour. The two-day meeting, which began on October 21 at the United Theological College, gave an opportunity to the participants to dissect the recommendations to find its flaws and strengths. One of the terms of reference of the Commission was designing an umbrella legislation for the unorgnised sector.

An earlier meeting in August last year had felt that the whole recommendations were a bundle of contradictions. It was argued that they were meant to destroy the organised sector labour union built over the years while shedding crocodile tears for the unorganised sector workers. The government had been slammed for building up animosity between the unorganised and organised sectors and the Commission`s report was termed a "continuation`` of the process. No one had asked for the setting up of the Commission.  When the government has not implemented the recommendations of the First National Commission on Labour, what was the need of a second Commission anyway?  For long the unorganised workers were being promised a fair deal.  The need of the hour was to effectively implement those assurances.

According to Prof. Babu Mathew (National Law School University, Bangalore), the recommendations should be rejected because they do not provide "an umbrella that does not leak". Minimum wage payable is linked to capacity of the empoyer to pay, which goes against the Supreme Court judgement on minimum wages. The umbrella legislation foresee a national  authority at the top with workers` facilitations centres at the bottom in the shape of a pyramid. This top-down     approach needs to be reversed. Workers` unions, cooperatives, federations, etc. need to be at the top and the national authority has to derive its power from the workers` bodies and not the other way round.

Social Security

The social security and social assistance schemes recommended by the study group on social security involve huge contributions from state governments.  But most states, which are reeling under fiscal deficit,would say these schemes are unaffordable. But the affordability has never been tested.  Whether states have tried to raise sufficient funds need to be reviewed. A surcharge on all major taxes could be imposed to raise the necessary money for social security benefits to be given to the unorganised workers, says R K A Subrahmanya (Secretary Genral, Social Security Associations of India).

And why could not ESI benefits be extended to the unorganised workers? The ESI currently consists of five fixed benefits---medical care, sickness, accident, maternity and funeral benefits. While there was a fair degree of satisfaction where cash benefits were concerned, there was dissatisfaction among the eight million insured regarding medical benefit.  The ILO has recommended a non-integrated package or unpackaging of benefits.

Laws on Social Security

The laws, under social security is extended to the organised sector, are the ESI Act, the EPF Act, the Industrial Disputes Act, the Workmen’s Compensation Act, the Payment of Gratuity Act and the Maternity Benefit Act. Most of these laws are currently restricted to establishments employing a certain number of workers, usually 20.  These could be extended to smaller establishments but the unorganised workers often work in establishments where the employer-employee relationship is not clear or where work is casual or where the worker is self-employed. This is not without example. The Karnataka State`s Unorganised Workers` Welfare Bill extends Workmen`s Compensation Act to all unorganised workers.  But, according to Subrahmanya, a small farmer who employs a labourer, for instance for two days, would not be able to pay Rs. 80,000 compensation in case of  the accidental death of the worker. Therefore, a fund should be instituted before blindly extending the Acts to cover the unorganised workers. Above all, the unorganised workers need employment and minimum wages. If one has no work at all, no social security will come.

The term "unorganised" does not mean the lack of unions or workers` organisations, but that the production process is unorganised.  All the current laws are meant to deny the rights to unorganised workers. For instance, it is meaningless to say that 300 people should have been employed in an establishment in the last 365 days for a particular worker to be eligible for a certain benefit. When will an unorganised labourer be recognised as a worker?

Insistence on laws, guaranteed number of days of employment, etc., could deprive the unorganised workers of their right to social security. The State has to subsidise social security for unorganised workers as the employers cannot be expected to pay for each and every worker.  The state has to levy a cess or charge to raise the necessary funds.  A worker could get unemployment allowance for the non-working period but not the other benefits.  The definition of the unorganised sector is that the `entry and exit are free`.  Continuity of employment or employer-employee relationship is not there, says Subrahmanya.

Agricultural Labour

The Central Agricultural Workers` Bill has been pending in the form of an unfinished agenda since 1997.  The unorganised sector is not homogeneous and can not be dealt with under a single umbrella legislation, says Durgam Subba Rao, a lawyer, who recommends two separate enactments for agricultural workers, viz., one for conditions of service and one for social security.  Social security is to be provided by extending ESI, Workmens Compensation, Maternity Benefit, old age pension, provident fund, etc., to all agricultural workers. The ESI hospitals should be opened in every mandal/taluk and block headquarter. The contributions of the unorganised workers could be used to strengthen the existing primary health centres which could provide all the services an ESI would give, says Vasudevan of All India Blue Star Employees Federation.

Umbrella Legislation for Unorganised Workers

While the Industrial Relations Bill runs into 100 pages in the Commission`s report, the umbrella legislation for unorganised workers is a mere five or six pages. It shows that the Commission has no real commitment to this section of workers, says Prof. Babu.

The NCL report recommends lesser protection for the organised workers while demanding greater protection for the unorganised workers, more flexibility for the organised sector and greater rigidity for the unorganised sector. What the Commission has done is to define the `informal sector` by categorising the characterisitics of wage employment and those of self-employment, combining the two to give the informal sector, and then framing an umbrella legislation for both accordingly.  It needs to be debated whether this is what is required.  There is tremendous heterogeneity in the unorganised sector, but an umbrella legislation is suited to address homogeneity, says Prof. Mathew.

While aminimum umbrella legislation for welfare is welcome, there is a need for sector-specific legislation for protecting employment itself. If employment itself is dwindling, there is no point in fighting for welfare for that employment.  The existing sector-specific legislation has employment as well as welfare aspects.  But there is a genuine fear that this umbrella legislation could be a precursor to abolishing sector-specific legislation, such as for construction, textiles. There is also pressure from the World Bank to lay hands on social security funds to make them more `productive`. The intention is that these funds should come to the share market. The social security part of the umbrella legislation is welcome.  But the bottom line is that the existing laws should not be repealed.  That would be a bombshell.  The umbrella legislation should spell out the benefits and quantum more clearly.  Floor level benefits should be spelt out.  The manner of funding should show from where the money is coming.  If there is any deficit, it should be spelt out how the gap is to be bridged, says Prof. Mathew.

According to M A Patil (Sarva Shramik Sangh, Mumbai), the unorganised workers` Bill should be accepted with modifications because that was what the sector had been demanding all along.  If the Bill is rejected now, it would be detrimental to the unorganised workers.

Unorganised Workers` Welfare Bill

The Unorganised Workers` Welfare Bill as recommended by the Commission could supersede the existing state laws.  But strangely, its `application` has not been defined.  It is not clear whether it applied to an unorganised wage worker or a self-employed worker. One of the objectives of the Bill, the progressive elimination of child labour, has no corresponding action plan. The recommendation regarding the applicability of labour laws only to those establishments where 20 or more workers are employed would have some advantages and some disadvantages.  Establishments with less than 20 workers would come under the Small Enterprises Act.  By giving a definition only of `establishment` and not industry, it would be possible to extend benefits under the I. D. Act  to many workers who used to be excluded when the Act was applicable only to `industries`.  Expanding the scope of the definition of worker to anyone earning less than Rs. 25,000 per month would put an end to controversies regarding the definition of `worker`, says Babu. And the definition of the term `establishment` would be such that it would never cover the units in the unorganised sector. The Bill would not apply to workers working in such       undefined workplaces and they would not get any benefits under this Bill. But, according to Patil, the Bill has defined all those not covered by the Small Enterprises Act as the unorganised.  The Small Enterprises Act would cover all those small establishments where the employer is identifed and registered.

Strategies

There should be no deregulation where there is regulation and  there should be regulation where there is none. The organised sector trade unions are to be told that the unorganised workers support their fight and they should reciprocate by supporting the demands of the unorganised workers.  Conferences at various places are need to create awareness on the Unorganised Sector Bill. Once the position paper is ready, the unorganised sector representatives intend to invite the central trade union leaders for dialogue. For the purpose, the national Centre for Labour will evolve a position paper on the recommendations of the Second National Commission on Labour in the context of globalisation and examine the umbrella legislation in detail identifying the strong and weak points. It will also examine all existing legislation pertaining to unorganised sector of labour and recommend appropriate legal regime for the unorganised/informal sector.