Tag Archives: social security

Labour Code on Social Security 2.0 : Conference on Building and other Construction Workers at Vijayawada – August 2019 !

The Labour Code on Social Security 2.0 released in March 2018 does not show that the central bureaucrats who prepared it developed any empathy with the  working population, even after they received inputs from the people with reference to their earlier code released in 2017. That they are acting as per the directions of some power-brokers becomes clear from the directionless draft.

Those power brokers pretend that they are working in the interests of the employers. They do not even pretend that they are interested in the welfare of the working class. As brokers they are interested only in themselves. And, the bureaucrats who do not apply their mind before acting at the behest those power brokers and have prepared this second version of the labour code on social security, are creating chaos in the nation. A team of power brokers feel that the social security system has been leased out to it.

Let them know that Sec. 1 (4) & 1 (5) of the ESI Act are intended to cover all the segments of the working population , tackling all problems with practical solutions, gradually. This Labour Code on Social Security is totally unwanted and unnecessary.

 

A responsible society would not keep such a law on record .

Vijayawada Presentation 2019

 

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Labour Code: Plea for publicising Draft Rules, Regulations, Schemes & License !

05.04.2017

To

The CPIO (Labour Law Reforms),

Ministry of Labour & Employment,

New Delhi – 110001

Sub: Application under RTI Act – Draft Labour Code on Social Security & Welfare – copies of Rules, Regulatios and Schemes – requested.
Ref: Memo No. No. Z-13025/ 13 /2015-LRC dated 16.03.2017 of the Ministry of Labour & Employment.

Sir,

I invite your kind attention to the reference cited in which the Draft Labour Code on Social Security & Welfare was put on public domain on 16.03.2017,  in the website of  the Ministry of Labour and Employment, Government of India, New Delhi. The Draft Labour Code published is not an all-inclusive document and there are many grey areas. As the nature and the quantum of various benefits (except the Disablement Benefits and Dependants Benefits) have not been specified in the Code/ Act itself, the relevant subordinate legislations (the Schemes, Rules and Regulations including licenses and essential formats) should be put in the public domain along with the Code. But, it has not been done so.

  1. I, therefore, request you to kindly furnish the following information under Sec. 6 of the Right to Information Act, 2005 or put them in public domain in the website of the Ministry along with the Draft Labour Code concerned.
  • Kindly supply the copies of the format of the proposed License (containing the Terms and conditions imposed by the Government on the agencies) referred to in Sec. 88 and 89 of the said Draft Labour Code on Social Security & Welfare;
  • Kindly supply the copies of the proposesd Regulations and the Schemes referred to in Sec. 24 of the said Draft Labour Code on Social Security & Welfare.
  1. I have to state that although it is not necessary to provide, the reason why a citizen asks for certain information as per the RTI Act, 2995, I feel that the facts narrated in the Appendix would facilitate the authorities to supply the information requested for besides highlighting the extent of public interest involved in making the contents of the aforesaid documents public.
  2. I send herewith Postal Order for Rs. 10 being the fee payable under the RTI Act, drawn in favour of the PAO(MS), Ministry of Labour & Employment, New Delhi.

Yours faithfully,

Encl: Appendix and Postal Order

=========================================================================== 

Appendix

Facts that necessitate seeking information regarding the proposed Subordinate Legislations, the Rules, the Regulations (including the license formats) and the Schemes

The Act of 1948 Vs. The Code of 2017:

1. When the ESI Act was enacted in the year 1948, it was venturing into a new area. So, the Act itself assured the people, through its Sec. 46, of the five major kinds of benefits and also the quantum of those benefits that would be made available through the enactment. It was later, in the year 1989, that the quantum of benefits, quantum of contribution and wage limit  were taken to the Rules to facilitate easy revisions. When, the present piece of legislation, the proposed Labour Code, is intended to replace the existing social security machinery, people become apprehensive and want to know whether they stand to gain or lose by that new system.

2. The Executive, therefore, cannot bring in a truncated version of the proposed system in the form of Code and ask the MPs to vote. But, that, exactly, is what the bureaucracy has, exactly, done through this Draft Labour Code. Sec. 24.5 of the Code enumerates the nomenclature of the benefits that would be made available to the workforce. But, the quantum of benefits and the nature of machinery through which such benefits would be provided have not been made known. These issues have been kept reserved for the Executive to make Subordinate Legislations later.

3. But, in all probability, the draft subordinate legislations, (a) the Rules, (b) the Regulations including the termns of conditions of license and (c) the Schemes would, already, have been prepared and kept in the Ministry. The non-publication of those drafts along with the Draft Code, for public debate gives the bona fide impression that the forces which are behind  this move, want to hide many vital aspects of the proposed social security system away from public knowledge until they get the Code passed by the Parliament and acquire power to do whatever they want through Subordinate Legislation. Or, i.e., if they have not yet prepared those draft Rules, draft Regulations, draft Schemes and draft licences, it would imply that these forces want to destabilise the present social security structure and bring in something which is not known even to themselves.

A service organisation is converted into business organisation:

4. I submit that the ESI Corporation is not a business organisation preparing profit and loss account. It is a service organisation preparing income and expenditure statement. But, the very wordings of Sections 2.58, 2.68, 2.101, 2.109, 2.123 and Sec. 88. show that the intention behind the Code is to handover the operative side of the scheme to private businessmen who enter into the field with profit motive.

5. Sec. 88.1 of the Code says that the “Director General may, by granting a License under this Code, permit any organization or person to act as an intermediate agency for all or any of the purposes” mentioned against each of the six agencies enumerated therein. Those agencies are: (a) Fund Manager Agency, (b) Point of Presence Agency, (c) Service Delivery Agency, (d) Benefit Disbursement Agency, (e) Record Keeping Agency and (f) Facilitation Agencies.

6. Sec, 88.3 of the Code says that “an intermediate agency shall function in accordance with the terms of its License and the Regulations”. Sec. 88.4 implies that the terms and conditions of such a license will be “in accordance with the provisions of this Code and the Regulations”.  Sec. 88. 5 says that the application for such a license will be in a specified form.

7. So, the public must be informed of the concept and intricacies of these Agencies-system, and the contents of the Schemes proposed on all the Social Security benefitis. Because, that alone would provide a holistic view of the ‘reforms’ proposed. Because, that alone would make the people know about the real and consequential effect of the proposed Code.

“Obamacare” was allowed threadbare discussion for three years:

8. There cannot be meaningful public debate when all the draft subordinate legislations are not placed before the public. In the USA, when the Obamacare was introdued in 2009 and made law on 23.03.2010, through the Patient Protection and Affordable Care Act (ACA), there had been extensive public debate over it for more than three years  (from 2009 to 2012) before it was enforced after the Supreme Court upheld it on June 28, 2012.

9. It is essential for the Executive to place in public domain a comprehensive Bill covering all aspects of the subject-matter, including the proposed Schemes, Rules  (that would be framed by the Government)  and the tentative Regulations  (that would be framed by the National Council) with reference to the aforesaid Sec. 24.5 to explain the quantum of benefits made available to the workforce and the manner in which the delivery machinery would function.

10. Please therefore, supply the information requested for in Para 2 of the Applicaton either individually to me or by hosting all of them in the website of the Ministry.

11. In the context, I think it appropriate to bring on record the observations of C.K. Allen, in his book Law and Order, (1945). He agrees with the universal fact that Subordinate legislations provide for convenience, flexibility and efficiency with respect to the delegation of such powers. But, he says, that all these arguments regarding convenience, flexibility and efficiency are “sound arguments for delegation within due limits, the kind, in fact, which has always been recognized as a practical and necessary part of our governmental system. But they become unsound and dangerous if they are used to justify the indefinite extension of executive powers. Speed and efficiency may be bought at too high a price, and indeed we should have learned from many examples that the State which makes efficiency its highest god is very apt to become an all-devouring monster.

Apparent defects indicative of unseemly hurry:

12. Apparent defects of various kinds in numerous places in the Bill show unseemly hurry on the part of the authorities to bring out this Draft Code. Besides, the fundamental flaw with this Draft Labour Code is that the Government of India, is trying to make provisions for “private assistance” and absolve itself of its Constitutional responsibility of providing “public assistance” as mandated as per Art. 41 of the Constitution of India.

13. ESI Act is a great provision aimed at rendering distributive justice to the people of the nation. But, that is attempted to be belittled by this Labour Code. Hon’ble High Court of Madras has, in ESIC Vs. S. Savithri 2003 (3) LLJ 250, observed that “The Scheme of the (ESI) Act, Rules and Regulations spelled out that the insurance covered under the Act is distinct and differs from the contract of insurance in general….The Division Bench of the Madras High Court observed that the Act in fact tries to attain the goal of socio-economic justice enshrined in the Directive Principles of State Policy”.

14. Even The Hindu conceded editorially on 01.01.2005 that “The package (of benefits provided by the ESIC) can rarely be matched by private employers on their own because of the heavy costs involved – not to mention the disinclination among employers, with honorable exceptions, to operate health care systems for their workforce”

Fundamental Principles laid down by Prof. Adharkar:

15. Prof.Adharkar, the Father of Social Security in India, had laid down the following as Fundamental Principles, when  a scheme on social security is introduced;

(a). The proposed scheme must not be too ambitious in the  beginning;

(b). It must be simple, clear and straightforward,

(c). It must be financially sound, economical in working and actuarially balanced;

(d). It must minimize disputes and litigation;

(e). It must be workable in the peculiar circumstances of Indian labour and industry;

But, the proposed Labour Code ignores all these principles, which necessitate one to go through the proposed Subordinate Legislations also before arriving at an opinion whether the proposed changes would be an all-encampassing one, workable really  and beneficial to the workforce.

ESI Act itself has the potential for coverage of even homeworkers:

16. The importance of the ESI Scheme to a nation would become evident from this observation. The Act provides security-net to the working population in the organised sector and its long-term goal, as spelt out in Sec. 1 (5) of the Act is to extend the security-net not only to the factories but also to the establishments, industrial, commercial, agricultural or otherwise.

Public Interest and the RTI Act:

17. I submit that I am asking only for the information to which I am entitle to ask as a citizen of the nation. This information asked for by me in para 2 supra is  required in public interest. Hon’ble High Court of Madras has observed, “Public Interest means an act beneficial to the general public. Means of concern or advantage to the public, should be the test. Public interest in relation to public administration, includes honest discharge of services of those engaged in public duty. To ensure proper discharge of public functions and the duties, and for the purpose of maintaining transparency, it is always open to a person interested to seek for information under the Right to Information Act, 2005” (The Registrar, Thiyagarajar College of Engineering, Madurai Vs. The Registrar, Tamilnadu Information Commission – 30.04.2013).

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Overview of ESI Scheme: Powerpoint

The Powerpoint Presentation regarding the Overview of the ESI Scheme is now made available, in public interest, in this website for the benefit of the employers and employees of the factories and establishments, because of specific demands from them. This presentation does not contain all the details pertaining to every issue, which are explained during the lecture. Presentation-slides are prepared only to aid and supplement the delivery of lecture by highlighting certain aspects for clarity and understanding. There need not be continuity between the contents of the slides, as Presentation is different from Write-up.

esi-scheme-overview-for-training-of-employers-and-emplyees

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Social Security in Europe: Warnings & Examples

Successful social security assures successful economy of a nation. West Germany’s economic miracle of the 1960s was, mainly, due to the successful implementation of social security measures.

Some interesting facts pertaining to the 1990s that highlight the important role played by social security measures in Europe and the manner in which the benefits are utilized or misused are given in this article. The relevant snippets are also made available as image files.

East Europe: 1994

Romania:

The dispensary conditions are not conducive and are very unhygienic.

Government was not ready to spend on hospitals and medicine, as they were “not productive”.

Financially strapped governments had neglected health care and this resulted in unprecedented crisis.

Health situation was so bad in much of Eastern Europe that it was beginning to affect the ability of some countries to compete effectively on the world market.

Patients bring basic medical equipments to the hospitals.

Bribe in single case is much more than salary.

Doctors must cope with run-down equipment.

Czech:

Attempts were made to change the medical system from communist model. But, it was basically free, in the communist era. One had only to bribe which was not more than a box of chocolates or flowers.

Poland:

The director of the hospital threatened that he would close it, as there was no essential facility to treat patients.

Doctors who treat patients privately get them operated in State hospitals and do not pay for the service and equipment.

Eastern Europe:

Entitlement of the people to wide range of medical services that was available in the communist era had begun to diminish and got eroded.

State-run medical institutions paid doctors less than bus drivers.

(Refer to the uploaded article, ‘Creaking Health Care’ –The Hindu: 3.12.1994)

West Europe: 1996

Social Security costs became enormous and the E.U. government exchequers were bleeding, because of unemployment benefits.

The reason was that because of the high economic growth and the generous social security benefits, the West European workers began to imagine that their services were costlier and starting demanding very heavy amount as wages.

The European goods had, thus, lost competitive edge.

Employers and Trade Unions could not agree on terms of revival.

West European manufacturers shifted their factories to east Europe.

Social security system encourages workers with less talent and large families to remain unemployed and live off social security hand-outs.

Foreign workers are seen as blocking jobs for indigenous workers.

High taxation affects the workers and they do not have access to common luxuries.

In smaller economies people set up their own businesses.

“Germany’s entry into the United States system of hire and fire” is described “as socially obscene”.

( Refer to the uploaded article ‘Germany, Belgium resist ‘Alliance for Jobs’ –The Hindu: 2.5.1996 )

2007

Malingering in Temporary Disablement Benefit in Germany.

One has to see to believe it.

( Refer to the uploaded news item with photo in the Times of India: 20.1.2007 )

This, in a country where the general level of honesty is admirable, as could be from one incident cited by Mr. Rahul Singh in the Outlook 27.08.2001.

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Inspection of factories

An article published in the Business Standard in December, 2010 brought out how the employees of the factories in Vellore felt that their legitimate rights would be protected only when the factories were inspected by the inspectors periodically. Long working hours, penalty for visit to toilets more than twice during a day, etc., were highlighted in that article.

As far as the ESIC is concerned, numerous cases of concealed employment are not detected because of absence of availability of information, lacunae in the Inspection Policy and lack of adequate number of Social Security Officers with reference to the actual work-load in such cases.

The ESIC has permitted the employers to register themselves online and get Employer’s Code Numbers generated. As a result, various kinds – repeat various kinds – of further problems have cropped up.

Monetary liability for the ESIC is, at present, created in respect of every TIC generated online by an employer or by a person posing as an employer even when the organisation is not sure whether the case is genuine and whether contribution as per rules would be forthcoming or not.

The EPFO is also facing only some of these problems. For more on this issue, please visit

http://www.business-standard.com/india/news/epfo-to-begin-endinspector-raj/466476/

But, the laxity in inspection does not  result in incorrect financial outgo as the EPFO pays benefits only with reference to the contribution paid, while the ESIC pays benefits not only on the basis of contribution paid but also on the basis of contribution payable but not paid.

The ESIC has not put in place adequate monitoring mechanism. The availability of man-power in the cadre of Social Security Officers is very very less when compared to the magnitude of the work in hand.

The government wants to do away with inspections, of course, for certain legitimate reasons. Please visit the following link:

http://www.thehindubusinessline.in/2002/12/14/stories/2002121402500100.htmB

But, controlling corruption and doing away with inspection are not synonymous. The government should also find a way and convince the working population how the problems faced by them would be located and solved.

Periodical and proper inspection of all factories and establishments will, alone, ensure coverage and protection of the workforce.

The very concept of compliance under the ESI Act is based on mutual trust and that was why the word ‘may’ is used instead of ‘shall’ in Sec. 45 (2) of the ESI Act, 1948.

But, the concept of Public Administration is “You do not get what you expect; you get only what you inspect’.

In other words, “Do not expect what you do not inspect”.

It would be helpful to the insured population if the inspection system of the ESI Corporation is streamlined to be ‘employee-friendly’ so that all employees are covered in time and contributions made to be paid on all items of wages as defined  under Sec. 2 (22) of the ESI Act, 1948.

ESI Corporation can ensure willing participation of labour in the making of the nation.

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ESIC Medical Colleges

Are they necessary? And, if so, how many?

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