DRAFT RULES RELATING TO EMPLOYEE’S COMPENSATION UNDER THE CODE ON SOCIAL SECURITY, 2020 NOTIFIED

THE CONTEXT: Ministry of Labour and Employment, Government of India has notified the draft rules relating to Employee’s Compensation under the Code on Social Security, 2020 on 03.06.2021 for inviting objections and suggestions, if any, from the stakeholders.

Analysis:

• Such objections and suggestions are required to be submitted within a period of 45 days from the date of notification of the draft rules.
• The Code on Social Security, 2020 amends and consolidates the laws relating to social security with the goal to extend social security to employees and workers in the organised as well as unorganised sectors.
• Chapter VII (Employee’s Compensation) of the Social Security Code, 2020 envisages, inter-alia, provisions relating to employer’s liability for compensation in case of fatal accidents, serious bodily injuries or occupational diseases.
• The draft Employee’s Compensation rules notified by the Central Government provide for the provisions relating
  • to manner of application for claim or settlement,
  • rate of interest for delayed payment of compensation,
  • venue of proceedings and transfer of matters,
  • notice and manner of transmitting money from one competent authority to another
  • and arrangements with other countries for the transfer of money paid as compensation.
• The draft rules under the Code on Social Security, 2020 relating to Employees’ Provident Fund, Employees’ State Insurance Corporation, Gratuity, Maternity Benefit, Social Security and Cess in respect of Building and Other Constructions Workers, Social Security for Unorganised Workers, Gig Workers and Platform Workers and Employment Information were notified on 13.11.2020.

CODE ON SOCIAL SECURITY: SALIENT FEATURES

• The Second National Commission on Labour (2002) suggested the amalgamation of central labour laws into broader groups such as: (i) Wages, (ii) Industrial Relations, (iii) Social Security, and (iv) Occupational Safety, Health and Working Conditions.
• The Code on Social Security 20 is enacted to amend and consolidate the laws relating to social security with the goal to extend social security to all employees and workers either in the organised or unorganised sector.
• The SS code defines various terms such as, aggregator, gig worker, platform worker, unorganised worker (home based worker and self-based workers).
• Further, the definition of the employee has been widened to include maximum number of employees and workers.
• The SS code provides the social security and protection to the workers in the unorganized sector to ensure access to health care and to provide income security, particularly in cases of old age, unemployment, sickness, invalidity, work injury, maternity or loss of a breadwinner etc.
• The Code provides right to the Central Government and State Government to frame and notify the social security schemes.
• The schemes may be funded by the combination of Central Government, State Government, aggregators, beneficiaries of the scheme, or funded from corporate social responsibility.
• The code places an obligation on the Central Government to constitute the National Social Security Board for the welfare of the unorganised worker as well as for the gig workers and platform workers and can recommend and monitor the schemes for such worker.
• The Central Government will setup and administer the social security fund for the welfare of such workers
• The code provides the compulsory registration of the every unorganised worker, gig worker and platform workers to avail the benefit of the concerned scheme framed under this code.
• The code has revised the applicability of the Employees Provident Fund Scheme (“EPF”). The EPF will apply to the establishment employing 20 or more employees
• ESI scheme will apply to establishment employing 10 or more employs.
• It is also be applicable to an establishment, which carries on such hazardous or life threatening occupation as notified by the Central Government, even a single employee is employed.
• The code covers the gig workers and platform workers under the ESI scheme

The Social Security Code (SS Code) has replaced the following enactments

• The Employee’s Compensation Act, 1923;
• The Employees’ State Insurance Act, 1948;
• The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952;
• The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959;
• The Maternity Benefit Act, 1961;
• The Payment of Gratuity Act, 1972;
• The Cine-Workers Welfare Fund Act, 1981;
• The Building and Other Construction Workers’ Welfare Cess Act, 1996;
• The Unorganised Workers Social Security Act, 2008.

NOTE: THE RULE MAKING POWER OF THE EXECUTIVE/GOVERNMENT IS TERMED AS ‘DELEGATED LEGISLATION/SUB ORDINATE LEGISLATION’.  In 2014, the Central government introduced the Pre-Legislative Consultation Policy. Under this, it has been mandated that every Ministry must place draft bills in the public domain for comments/feedback for 30 days. The document put out for public consultation should also provide reasons for the need of the law, financial considerations and explanation of legal terms in simple language. The document is also required to cover the possible impact it could have on the citizens and their fundamental rights. It is only after the completion of this process that the draft is sent for approval to the Cabinet. THIS PRACTICE MAKES LAW MAKING A MORE INCLUSIVE AND PARTICIPATIVE EXERCICE. But of late, this practice has been observed more in its breach according to PRS legislative research study