Protection of Women in Unorganized Sector under Indian Labour Law

By Suchetana Chakraborty

Introduction

The unorganized sector in most countries typically refers to those workers who do not enjoy the protection of labour laws and social security provisions that are provided to formal sector workers. This sector typically includes casual workers, domestic workers, street vendors, agricultural labourers, and other workers who are employed in small and medium-sized enterprises. Women constitute as much as 90 per cent of the workforce in the unorganized sector, and their conditions of work and employment are often precarious. In this blog, we will examine the extent to which labour laws protect women in the unorganized sector.

Issues Concerning Women’s Labour in India

According to NSSO statistics from 2011–12, the majority of women work in the primary sector, which includes agricultural and farm labour. They are typically found working for family-owned businesses or in low-paying, temporary jobs from home in the manufacturing industry. In the tertiary sector, women are more prevalent in retail commerce, jobs involving education, and paid domestic labour. These industries all give women the freedom to balance both paid jobs and unpaid caregiving duties. There are several issues concerning women’s labour in India. Some of these issues are:

1. Wage gap: Women in India are often paid less than men for the same work, which results in a significant wage gap between men and women. This wage gap is more pronounced in the unorganized sector.
2. Limited access to formal employment: Many women in India work in the informal sector, where they lack job security, social security benefits, and legal protection. Women also face discrimination when it comes to access to formal employment, as employers may not consider them for certain jobs due to gender biases.
3. Occupational segregation: Women in India are often confined to certain occupations that are considered “suitable” for them, such as teaching, nursing, and domestic work. This occupational segregation limits their opportunities for career growth and higher-paying jobs.
4. Lack of maternity benefits: Many women in India do not have access to maternity benefits, such as paid leave and crèche facilities. This makes it difficult for women to balance their work and family responsibilities.
5. Sexual harassment at the workplace: Women in India often face sexual harassment at the workplace, which can lead to physical and emotional harm, as well as a loss of productivity and income.
6. Limited representation in decision-making: Women are underrepresented in decision-making roles in the workplace, which limits their ability to influence policies and practices that affect their working conditions and wages.

Indian Legal Framework

Firstly, it is important to understand the legal framework that governs labour laws in the unorganized sector. For women working in the unorganized sector, many laws have been put in place which typically cover areas such as minimum wages, working conditions, safety and health provisions, social security, and benefits such as maternity leave. These rules seek to both safeguard the rights of female employees and stop their exploitation. A few laws passed for this purpose include the Unorganized Workers’ Social Security Act of 2008, the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act of 1979, the Bonded Labour System (Abolition) Act of 1976, and the Maternity Benefit Act of 1961. However, due to their inefficient implementation, these laws seldom offer any protection to the women working in the unorganized sector.

Code on Wages, 2019

The Indian Code on Wages, 2019 is a legislation that was passed by the Indian Parliament in August 2019. The Code aims to simplify and rationalize the existing laws relating to wages and bonuses, and to ensure that workers receive fair and timely payment for their work.

The key features of the Code include:

1. Universalization of minimum wages: The Code aims to ensure that all workers, including those in the unorganized sector, are paid at least the minimum wage.
2. Simplification of wage structure: The Code simplifies the complex system of wage categories and payment modes that existed under the previous laws, and reduces the number of wage categories to just four.
3. Increase in bonus payments: The Code increases the maximum limit for bonus payments to workers from 20% to 50% of their salary, which is expected to benefit millions of workers in India.
4. Introduction of electronic payment of wages: The Code encourages the use of electronic payment methods, such as direct bank transfer, for payment of wages.
5. Single enforcement mechanism: The Code establishes a single enforcement mechanism for the payment of wages, which is expected to streamline the process and ensure the timely resolution of disputes.

The Code on Wages, 2019 has replaced four existing laws relating to wages, and it is expected to provide greater clarity and transparency in the payment of wages to workers in India. 

Proposed Legislature on Labour Welfare

The Indian Social Security Bill, 2019 is a proposed legislation that aims to provide a comprehensive social security system for all workers, including those in the unorganized sector under Section 109. The bill was introduced in the Lok Sabha (lower house of the Indian Parliament) on December 11, 2019, and it is currently under consideration by a parliamentary committee.

The key features of the bill include:

1. Expansion of coverage: The bill, under sub-clause 82 of Section 2 aims to extend social security coverage to all workers, including those in the unorganized sector. 
2. Establishment of National Social Security Board: The bill proposes to create a National Social Security Board, which will be responsible for formulating and implementing social security schemes.
3. Creation of social security schemes: The bill proposes to create various social security schemes, including a life and disability insurance scheme, a health and maternity benefit scheme, a pension scheme, and an unemployment insurance scheme.
4. Funding mechanism: The bill proposes to establish a Social Security Fund, which will be funded by contributions from both employees and employers.
5. Portability of benefits: The bill aims to make social security benefits portable, which means that workers will be able to access their benefits even if they change jobs or move to a different location.
6. Minimum Age Requirement: It increases the age of registration as an unorganised worker from 14 years to 16 years, under Section 113. This is a significant step taken towards the prevention of child labour and enables the realisation of the right to education under Article 21(A) of the Indian Constitution.

If passed into law, the Indian Social Security Bill, 2019 could have a significant impact on the lives of millions of workers in India, particularly those in the informal sector who currently lack access to social security benefits.

Conclusion

In conclusion, while labour laws do provide some protection for women in the unorganized sector, these protections are often inadequate and poorly enforced. Women workers in the unorganized sector face significant challenges in accessing legal protections, including low levels of awareness and information about their rights, and the informal nature of their work. However, there are also efforts underway to improve the legal protection of women in the unorganized sector, and it is important to continue to support these efforts in order to ensure that women workers are able to access their rights and protections.