Wednesday, April 4, 2018

Your PF, pension will become redundant under new Labour Code on Social Security

C Shivakumar @ 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 of 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 for Registration of all kind 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 employer and worker automatically
As the scope of this Code expands to almost 10 times as 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 for a tripartite body which includes State and Centre boards along with National Social Security Council.
As per the document, which has been accessed by The New Indian Express, an overarching Regulatory body National Social Security Council, headed by the Prime Minister and composed of Ministers of Finance, Health and also Chief Ministers and administrators of all states and Union territories apart from workers and employers is envisaged as the apex body 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 concern among the civil society who question the ministry on having a universal security scheme for both organized and unorganized workers.
R Geetha of Federation of Unorganised Workers says that  till the government regulates the wages and work of unorganized 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 employer and workers in the unorganised sector. Hence Regulation of employment has to be combined 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.
The draft also provides for persons who are currently old and infirm, and not in workforce to be registered under ‘Special Registration’. Such special registered persons are eligible for Social Assistance programme of the state government, the draft says.
Why the civil society opposes the draft:
1. The new code will cater to organised and unorganised sectors by the same method.
2. Govt representation is more and workers is very less under the new code
3. Models have to be different for organised and unorganised sectors since there is no direct relation between employer and workers in the unorganised sector 4.Tripartite system has to be followed , one third representation to workers in all the Social Security organisations.
4. Separate Welfare Boards for big sectors employing over 10 lakh workers in each state and not the system in the model code.

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