Make Social Security Code realistic

Clearer rules that aid implementation and provisions for judicial intervention will help the downtrodden benefit better

By Author Sneha Mohanty   |   Published: 3rd Nov 2020   12:10 am Updated: 2nd Nov 2020   11:59 pm

Around 93% of the workforce in India is in the unorganised sector, states the Economic Survey (2018-19). Since workers in the unorganised sector had little means or ways to avail benefits in the prior legislations regime, the Code on Social Security, 2020, which received the presidential assent on September 28, has come as a harbinger of hope and growth.

The Code compiles a total of nine statutes. It also provides legal representation to gig (‘a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationships’), and platform workers (individuals who use an app such as Uber or a website such as Amazon Turk to match themselves with customers, to provide a service in return for money).

According to the report, ‘The Future of Work is Anywhere – Gig Workforce’ by Noble House, 70% firms had used gig workers for at least one major organisational issue in 2018. In this era of startups, the gig economy is rising, especially driven by e-commerce. The Code allows platform workers, who do not share an employer-employee relationship, to have legal recognition and avail benefits well. So, the Code is certainly a welcome move for workers who work through an online platform and get paid in exchange for their services.

Plus Points

Career Centres: The most innovative aspect of this Code is Career Centres. These centres will lay out a database of the people — who seek to provide employment, who seek employment, vacancies or people who want to seek vocational guidance or want to be self-employed. This creates a bridge between potential employers and employees and also enables individuals to get vocational guidance. These centres will primarily collect data and information of an individual and register them. This brings us to the second novel feature — Registration.
Registration and Coverage: The Code enables workers to register at Career Centres.

Registration of an individual in any database helps keep a record of their personal information as well as the number of employers and employees. Since the Code allows to cover platform and gig workers, freelancers like delivery persons, cab drivers and individuals who get paid for services offered by them by online aggregators will also benefit. It extends social security to agricultural workers as well.

The Code compiles all benefits an employee may receive, including maternity, medical, EPF, etc. Employee’s contributions towards social security are also captured.

Minus Marks

Despite the employee-favouring aspects of the Code, there are some protruding loopholes that make it hard to avail the aforementioned benefits. This means there is a lot of room to make the Code better and employee-friendly. Here are a few gaps that need to be plugged:
Mandatory linking of Aadhaar: An individual must compulsorily have an Aadhaar card to avail the monetary schemes and benefits. It is also required for registration at the Career Centres. This might create a hurdle if an individual does not have an Aadhaar card. Not all parts of India have access to even facilities like computers and the internet, let alone Aadhaar cards. For instance, in a place like Kalahandi district of Odisha, where one struggles to find potable, unpolluted water and electricity, Aadhaar cards and employment benefits are a far-fetched dream.

Moreover, this mandatory Aadhaar linking may go against the landmark Supreme Court judgment: Puttaswamy- II. The Supreme Court in this case had held that the linking of Aadhaar may be mandatory only for benefits that are deducted from the Consolidated Fund of India. Benefits like Gratuity and Provident Fund are funded and contributed by the employers and employees and not the Consolidated Fund of India. So, the Code is in clear violation of the Puttaswamy Judgment rule of linking Aadhaar for entitlements only from the Consolidated Fund of India.

Unemployment: There are already many schemes in place to reduce unemployment and facilitate the unemployed to find jobs/vocations. However, those have been a massive failure. The Code overlooks this aspect in its entirety. Although it does establish a Career Centre to guide an individual towards a vocation they want to pursue, the Code lacks clarity with regard to the type and the nature of the guidance that it may provide. More clarity highlighting this issue and laying down reforms to fix the same is essentially needed.

Reality of ‘Contributions’: The idea of contributions may seem very attractive until the reality of it is brought to light. This especially is a problem for workers who earn a negligible amount per day or per month. The idea of contributing even a percentage of it to a fund that they will have access to only in the due course lessens their total income per annum by a lot.

Implementation Gap: This is a very deep-rooted problem in all the legislations which rely on digitisation and computing of data of individuals for a purpose. In many rural areas of India, where one might not even find electricity and fresh potable water, digitisation is a far-fetched idea. One might even struggle to find a stable internet connection; computers might be a rare sight. The government should first emphasise on uplifting the poorer areas by providing basic facilities of computers and internet.


While the Social Security Code, 2020, is an absolutely welcome move that looks to revamp workplaces and gives workers more incentives, the best way to make this Code more inclined towards workers and help the downtrodden is by making rules with more clarity and implementable provisions for judicial intervention.

The Code will certainly require a lot of policy framing in order to be implemented in its entirety. The government should first look into making the Code a more realistic possibility, else it will remain a good dream.

(The author is final year Law student, Christ University, Bengaluru)


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