NTUI Comments on UWSS Bill 2007

Preliminary Objections to the Unorganised Sector Workers Social Security Bill 2007

  1. Section 4 (1) and (2)
    The Bill seeks to provide clearly demarcated division of responsibility between the Central and State governments. In pursuance of this division the bill places the burden of the National Minimum Social Security Benefit on the Central Government. In this regard three issues need to be spelt out very clearly:
    1. It is critical to define the basis of the National Minimum Social Security Benefit. The definition of the National Minimum Social Security Benefit must be within the terms of, in relation to and in quantitative proportion with the statutory minimum wage.
    2. Government, having recognised the need for a National Minimum Social Security Benefit, must accept that this National Minimum cannot be in any way linked to either the contribution of workers or be subject to the availability of funds.
    3. In the event of funds raised through employers’ contributions, taxes and levies falling short, then the costs of the National Minimum must be met through the Central Government’s budgetary funds.
  2. Section 4(1) (i), (ii) and (iii)
    Benefits under the National Minimum laid out in section 4(1) (i), (ii) and (iii) need to be spelt out clearly:
    1. In 4(1) (i) health benefits must include hospitalisation charges and maternity benefits.
    2. In 4(1) (ii) life and disability cover must include employment injury benefit, including provision for wages when recovering from employment injury, as a necessary component of a National Minimum.
    3. In 4(1) (iii) must be conceptualised as and provisioned for as a pension; wherein the computation of the pension must be clearly and unambiguously based on the principle [of 50% of last wages drawn] employed for Government employees’ pension. Therefore the pension must be linked, as a National Minimum, to the statutory minimum wage.
  3. Section 4 (3)
    In order for State Governments to strengthen the National Minimum, state schemes must be focused on expanding quality social security benefits and should not be confused with the National Minimum.
    Hence 4(3)(b) be deleted as it must be included as a part of the National Minimum in 4(1)(ii). In addition state schemes must be focused, reinforce the principal of universality and be easy to implement.
    Hence 4(3)(e) be removed as a part of workers education and not a component of social security. Further, 4(3)(f) and (g) be given up as being one time, cumbersome to administer and in the case of 4(3)(g) being non-universal.
  4. Section 5 (b)
    In keeping with the principle of the National Minimum workers should be exempt from contributing to this National Minimum and therefore to the prescribed National Fund. Further apart from contributions from Government and employers there must be
    provision for an additional special tax or levy that may be decided upon by government.
    Such a provision would be not just in keeping with the notion of the National Minimum but, also in consonance with the egalitarian objectives of a progressive society.
  5. Section 5(d)
    The notion of voluntary contributions for statutory public provisions are without historical experience and their inclusion must be validated through clearly defined expected outcomes.
  6. Section 6
    The provision for merger of existing of welfare schemes and funds with schemes and funds under the bill may be allowed with a clear provision that any merger of schemes must at least result in the beneficiary obtaining the quantum of benefit under the existing scheme and not result in a loss of welfare.
  7. Section 9
    The establishment and incorporation of the prescribed National Social Security Board must include that the said Board must at all times remain the property and responsibility of the Central Government and that its corpus must come exclusively from the Central Government.
  8. Section 10, 11, 12 and 13
    The composition of the executive council and secretariat of the prescribed National Social Security Board and its functioning needs closer and detailed scrutiny in terms of the representation of trade unions as also from the point of accountability and
    transparency.
  9. Section 15(1)(ii)
    The power of government to impose taxes is a sovereign function of a government. It would amount to a severe diminution of powers of government to substitute, through statute, imposition of taxes as a result of its failure to recover statutory contributions.
    Hence this clause should be divided into two clauses, one that covers employer contribution; and another that covers taxes and cesses to be imposed on employers.
  10. Section 19(2)
    The power of state government or their agency to make rules regarding registration of workers, issuance of identity cards, social security numbers is likely to result in nonuniformity between states resulting in inequality amongst workers of different states in
    accessing the National Minimum and in the portability of registration for workers migrating from one state to another. In order for uniformity on this issue there must be adequate clarity on registration of workers laid out in the central enactment.
  11. Section 19(3)
    In keeping with the principle of a National Minimum set out in 1.2 above wherein the National Minimum must be so defined as to exclude any contribution from workers the phrase ‘only if payments of such contributions, as and when prescribed have been made’ be deleted.

15 February 2007