Module IV

SOCIAL SECURITY Of
WORKMEN

Presented By: Ms. Nikita B. Talukdar

 In this Slide Topics are

01 02

The Code of Social Security 2020:

About Chapter IV: Employees State
Insurance, Applicability

03
Benefits
 01
The Code of Social Security 2020:
About
 About
 The Social Security Code, 2020 (“SS Code“) has been passed by both houses of the
Parliament and received Presidential assent on September 28, 2020.
 Code on social security has repealed around 9 labour laws on Social
security.
 The social security code, which along with codes on wages, industrial relations and
occupational safety were passed in 2019 and 2020, is yet to be implemented as the
rules framed under the Act have not been notified.
 According to Labour Ministry sources, the rules framed under the four codes are ready
to be notified and States are in the process of notifying their own rules for the same.
 Imp. Definitions
 S. 2(35) Gig Worker: “Gig Worker” under the SS Code has been defined as a person who
performs work or participates in a work arrangement and earns from such activities
outside of traditional employer-employee relationship.
 S. 2(60 )Platform Work: “Platform work” has been defined as a work arrangement
outside of a traditional employer employee relationship in which organisations or
individuals use an online platform to access other organisations or individuals to solve
specific problems or to provide specific services or any such other activities which may
be notified by the Central Government, in exchange for payment.
 S. 2 (61) “Platform Worker” has been defined as a person engaged in or undertaking
Platform Work. Example: Swiggy, Zomato, Ola , Uber workers using oline platform to
provide services
 Imp. Definitions
performs work or
participates in a work
arrangement

Work arrangement Outside

Eg. Freelancers, Part time,
Traditional Employer Gig Worker
Employee Relation
 use an online platform to
solve specific problems or
to provide specific services

Work arrangement Platform Eg. Swiggy, Zomato

Outside Traditional Worker workers,Ola Uber,
Employer Employee
Content writers.
Relation
 S. 2(85) Unorganised Sector: “Unorganised Sector” means an enterprise
owned by individuals or self-employed workers 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 (10).
 S. 2(86) Unorganised Worker: “Unorganised Worker” means a home-based
worker, self-employed worker or a wage worker in the Unorganised
Sector.
 S. 2 (75) "self-employed worker" means
 any person who is not employed by an employer, but engages himself in
any occupation in the unorganised sector subject to a monthly earning of an
amount as may be notified by the Central Government or the State
Government, as the case may be, from time to time or holds cultivable land
subject to such ceiling as may be notified by the State Government;
 S. 2 (90) "wage worker" means
 a person employed for remuneration in the unorganized sector, directly by an
employer or through any contractor, irrespective of place of work, whether
exclusively for one employer or for one or more employers, whether in cash or in
kind, whether as a home-based worker, or as a temporary or casual worker, or as a
migrant worker, or workers employed by households including domestic workers, with a
monthly wage of an amount as may be notified by the Central Government and the
State Government, as the case may be;
 Chapter IX provides provisions for unorganized workers, gig workers and platform
workers
 Section 109
 (1) The Central Government shall frame and notify, from time to time, suitable
welfare schemes for unorganised workers on matters relating to—
1. life and disability cover;
2. health and maternity benefits;
3. old age protection;
4. education; and
5. any other benefit as may be determined by the Central Government.
 Clause (2) The State Government shall frame and notify, from time to time, suitable
welfare schemes for unorganised workers, including schemes relating to— (i)
provident fund;

1. employment injury benefit;

2. housing;
3. educational schemes for children;
4. skill upgradation of workers;
5. funeral assistance; and
6. old age homes.
 Clause (3) Any scheme notified by the Central Government under sub-section (1), may
be—
 (i) wholly funded by the Central Government; or
 (ii) partly funded by the Central Government and partly funded by the State
Government; or
 (iii) partly funded by the Central Government, partly funded by the State Government
and partly funded through contributions collected from the beneficiaries of the scheme
or the employers as may be specified in the scheme by the Central Government; or
 (iv) funded from any source including corporate social responsibility fund within the
meaning of the Companies Act, 2013 or any other such source as may be specified in the
scheme.
 S. 114. : Schemes for gig workers and platform workers
(1) The Central Government may frame and notify, from time to time, suitable social security
schemes for gig workers and platform workers on matters relating to—
(a) life and disability cover;
(b) accident insurance;
(c) health and maternity benefits;
(d) old age protection;
(e) crèche; and
(f) any other benefit as may be determined by the Central Government.
 02

Applicability of SS Code 2020

 Schedule 1 of the SS Code 2020 provides for the applicability of different
chapters (chapters related to laws it has repealed/subsumed)
 The code applies to establishment.
 S. 2 (29) "establishment" means—
(a) a place where any industry, trade, business, manufacture or occupation is
carried on; or
(b) a factory, motor transport undertaking, newspaper establishment,
audiovisual production, building and other construction work or plantation; or
(c) a mine, port or vicinity of port where dock work is carried out.
 (32) "factory" means any premises including the precincts thereof—
(a) whereon ten or more employees are working, or were working on any day of the
preceding twelve months, and in any part of which a manufacturing process is being carried
on with the aid of power, or is ordinarily so carried on, or
(b) whereon twenty or more employees are working, or were working on any day of the
preceding twelve months, and in any part of which a manufacturing process is being carried
on without the aid of power, or is ordinarily so carried on,

but does not include a mine, or a mobile unit belonging to the Armed Forces of the Union,
railways running shed or a hotel, restaurant or eating place.
 So, the definition of factory for the purposes of Code on Social Security is
different from OSHC Code 2020.
 The ambit of factory under SS Code 2020 is wider than OSHC Code.
 The reason may be to provide social security measures to even in factory where 10
workers are working with power supply or 20 workers working without power supply.
 SS Code 2020:
 Factory means: 10 or 20 workers with or without power supply involved in
manufacturing process. (Definition similar to Factories ACT 1948)
 OSHC CODE 2020:
 Factory means: 20 or 40 workers with or without power supply involved in
manufacturing process
 Applicability
Chapter
Chapter Name
No.
REPEALED Legislations Social Security Code 2020 (Schedule 1)

Employees' Every factory and other Every establishment with 20 or more

III Provident establishment employing 20 or employees.
Fund more employees.

Every establishment with 10 or more

Employees' employees, other than seasonal
State All factories other than the employees.
IV Insurance seasonal factories. It shall also apply to establishment
Corporation which conducts hazardous
occupation.

Every factory, plantation, port, oil

V Gratuity field, Every establishment employing 10 or
mine, and the railway company. more employees on any day of the
 Earlier Law Applicability: Code on Social Security 2020:

Every establishment including Applicable to every establishment

Maternity Benefit mine, factory, and plantation, including Government institutions.
Chapter VI and to every establishment It shall apply to every shop or
wherein persons are employed establishment which employs or
for the exhibition of equestrian, employed 10 or more employees in
acrobatic, and other the preceding 12 months.
performances.

Employees' To a certain class of employers Applicable to the employers and

Compensation for payment of compensation to employees to whom Chapter IV does
their employees for injury by
Chapter VII accident. not apply.
 03

Employee State Insurance

Chapter IV SS Code 2020
 Objectives of ESI Provision
 The SS Code 2020 apart from 8 other laws, has also repealed ESI Act 1948,
one of the most important social security legislations.
 The objectives of ESI Law is to provide for certain benefits to employees in
case of sickness, maternity and ‘ employment injury ’.
 It aims to bring social and economic justice to the poor Labour class of the
land.
 It aims at Labour Welfare.
 Chapter IV deals with the provision related to ESI (Employee state
Insurance).
 Applicablity
 Chapter IV of the Code deals with ESI. (Employee state Insurance)
 The SS Code will apply to "establishments.
 However, this is subject to Schedule 1 of the Code wherein for different chapters the
number of employee to be working in establishments are different.
 S. 2 (29) "establishment" means—
(a) a place where any industry, trade, business, manufacture or occupation is carried
on; or
(b) a factory, motor transport undertaking, newspaper establishment, audiovisual
production, building and other construction work or plantation; or
(c) a mine, port or vicinity of port where dock work is carried out.
 Schedule 1 provides that for the purposes of Chapter IV , the SS code shall be
applicable to:
• Every establishment in which ten or more persons are employed other
than a seasonal factory:
• Provided that Chapter IV shall also be applicable to an establishment,
which carries on such hazardous or life threatening occupation as notified by
the Central Government, in which even a single employee is employed.
 Some Important Definitions for Chapter IV
 Chapter IV DOESNOT APPLY TO SEASONAL FACTORIES.
 S. 2 (74) "seasonal factory " means a factory which is exclusively engaged in

one or more of the following manufacturing processes, namely, cotton

ginning, cotton or jute pressing, decortication of ground-nuts, the manufacture
of indigo, lac, sugar (including gur) or any manufacturing process which is
incidental to or connected with any of the aforesaid processes and includes a
factory which is engaged for a period not exceeding seven months in a
year in a manufacturing process as the Central Government may, by
notification, specify;
 Another important point is that Chapter IV will apply only to those
employee whose wages are less than/equal to the ceiling that will be
notified by the Central Government. (S. 2(26) proviso).
 S. 2 (26) of the code defines EMPLOYEES.
 The first part of the definition is similar to the definition of Code on wages
or OCSHC 2020 definition of employee.
 Lets see the definition.
 S. 2 (26) SS CODE "employee" means any person (other than an apprentice
engaged under the Apprentices Act, 1961) employed on wages by an
establishment, either directly or through a contractor, to do any skilled,
semi-skilled or unskilled, manual, operational, supervisory. managerial,
administrative, technical, clerical or any other work, whether the terms
of employment be express or implied, and also includes a person declared to
be an employee by the appropriate Government,
 but does not include any member of the Armed Forces of the Union.
Provided that for the purposes Chapter IV, the term “employee” shall mean such
employee drawing wages less than or equal to the wage ceiling notified by
the Central Government and includes such other persons or class of persons as
the Central Government may by notification, specify to be employee, for the
purposes of those Chapters:
 Mechanism
HOW ESI LAW WORKS?

Contributions made Contributions made by Contributions made by

by Employer (3.25% Employee (0.75% OF Grants, donations,
OF WAGES) WAGES) CSR

ESI CORPORATION/FUND

Benefits to employee
 Some Important Definitions for Chapter IV
 S. 2 (21) "contribution" means the sum of money payable by the employer,
under this Code, to the Central Board and to the Corporation, as the case may be, and
includes any amount payable by or on behalf of the employee in accordance
with the provisions of this Code;
 Under the ESI Law, employer and employee is required to contribute to the ESI
Corporation.
 The contributions (employer's contribution and the employee’s contribution both)
shall be paid at such rates as may be prescribed by the Central Government. (S.
29)
 S. 2(22) "Corporation" means the Employees' State Insurance Corporation
constituted under section 5.
 Some Important Definitions for Chapter IV
 S. 25- ESI Corporation constituted. Members appointed by Central
Government
 S. 26- ESI Fund
 Thanks!
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