Social security schemes set to transform with new code

Draft labour code proposes common registration for different sectors.

Published: 04th April 2018 

Image used for representational purpose. (File | Reuters)

By C Shivakumar

Express News Service

CHENNAI: Your provident fund, pension and insurance schemes are set to become redundant as the Union Labour and Employment Ministry has drafted Labour Code on Social Security, 2018.

Under the new draft, which was released last month, the Union Labour Ministry is focusing on setting up a universalised social security which will require a set-up to service almost 50 crore workers.

Under this, registration will be common for organised and unorganised workers; that means present social security schemes will merge into one. 

The Code prescribes registration of all kinds of employers - be it establishments (that have a commercial purpose) or households (that employ domestic workers). An ‘own-account-enterprise’ will be registered both as an employer and a worker automatically.As the scope of this Code expands almost 10 times compared to the present Employee Provident Fund and Employees State Insurance Corporation, a decentralised structure (with central coordination and regulation) has been proposed. The draft proposes a tripartite body which includes State and Centre boards along with National Social Security Council, headed by the Prime Minister to bring out harmonious co-ordination amongst different ministries and also at the Centre-State level. 

The National Council has been proposed on similar lines to the Goods and Service Tax (GST Council) which has been able to successfully roll out the GST Regime in India. The NSSC has the function to regulate and coordinate this multi-disciplinary jurisdiction of Social Security.However, the draft has raised concerns among the people of the civil society who question the ministry on having a universal security scheme for both organised and unorganised workers. 

R Geetha of the Federation of Unorganised Workers said that till the government regulates the wages and work of the unorganised sector, the universal social security scheme will not work. “Models have to be different for organised and unorganised sectors since there is no direct relation between employers and workers in the unorganised sector. Hence regulation of employment has to be combine with Social Security for unorganised sector workers through sectoral Tripartite Boards,” Geetha said.It is also learnt from sources that the assets and funds under the 16 extant social welfare schemes will be divided among the Social Security Funds (SSFs) to be set up in each state.