Major changes proposed to the provident fund under The Code on Social Security, 2020

S No.

Heads of Changes

Section under Employees' Provident Fund & Miscellaneous Provisions Act, 1952

Relevant extract of the Section Employees' Provident Fund & Miscellaneous Provisions Act, 1952

Section under The Code on Social Security, 2020 ("SECURITY CODE")

Relevant extract of the Section the SEURITY CODE

Remarks

1

Definition of "agent"

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2(1)

"agent" when used in relation to an establishment, means every person, whether appointed as such or not, who acting or purporting to act on behalf of the owner, takes part in the management, control, supervision or direction of such establishment or part thereof

The word "agent" here used in relation to an establishment to put it under the ambit of the SECURITY CODE

2

Definition of "aggregator"

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2(2)

"aggregator" means a digital intermediary or a market place for a buyer or user of a service to connect with the seller or the service provider

India's development in IT sector has made it necessary to provide a specified definition for aggregator. After the advent of "SECURITY CODE”, an onus of contributing towards social security may be placed on digital intermediaries to contribute towards social welfare of its workers

3

Definition of "appropriate government"

2(a)

(if) in relation to an establishment belonging to, or under the control of, the Central
Government or in relation to an establishment connected with a railway company, a major port, a
mine or an oilfield or a controlled industry, 1
[or in relation to an establishment having
departments or branches in more than one State,] the Central Government; and
(ii) in relation to any other establishment, the State Government

2(3)

(a) in relation to.................major ports, air transport service, telecommunication, banking and insurance company
or a corporation or other authority established by a Central Act or the central public sector undertaking or subsidiary companies set up by the central public sector undertakings, subsidiary companies set up by the principal undertakings or autonomous bodies owned or controlled by the Central Government, including establishment of contractors for the purposes of such establishment, corporation or other authority, central public sector undertakings, subsidiary companies or autonomous bodies or any company in which not less than fifty-one per cent. of the paid-up share capital is held by the Central Government, as the case may be, or in relation to an establishment having departments or branches in more than one State, as the case may be, the Central Government; and
(b) in relation to any other establishment, the State Government

Word ''controlled industry'' is defined with a better understanding under the SECURITY CODE. The legislature has enumerated specific industries under the definition of appropriate government to provide an efficient understanding of the word "controlled industries"

4

Inter State migrant workers

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2(41)

" means a person who is employed in an establishment
and who—
(if) has been recruited directly by the employer or indirectly through contractor in one State for employment in such establishment situated in another State; or
(ii) has come on his own from one State and obtained employment in an establishment of another State (hereinafter called destination State) or has subsequently changed the establishment within the destination State, under an agreement or other arrangement for such employment and drawing wages not exceeding eighteen thousand rupees per month or such higher amount as may be notified by the Central Government from time to time

Defined under the SECURITY CODE to provide social security to this class of workers. Till present the word "migrant worker" is defined only under the Inter State Migrant Worker Act, 1979. The new insertion under this SECUIRTY CODE will help in better policy formulation for coverage of workers in the unorganised sector workers who do tend to be missed because of address proofs, working temporarily in other states etc.

5

Establishment

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2(29)

"establishment" means—
(a) a place where any industry, trade, business, manufacture or occupation is carried on; or
(b) a factory, motor transport undertaking, newspaper establishment, audio-visual production, building and other construction work or plantation; or
(c) a mine, port or vicinity of port where dock work is carried out. Explanation. —For the purposes of Chapter III, where an establishment consists of different departments or has branches, whether situate in the same place or in different places, all such departments or branches shall be treated as parts of the same establishment

Defined under the SECURITY CODE to provide an understanding for the execution of laws that applies on establishments and any person seeking redressal regarding the aspect whether a particular institution is required to contribute towards social security

6

Gig worker

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2(35)

"gig worker" means a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship.

India has a large number of workers in its 'Gig Economy' ('gig economy' involves a temporary contractual job or short-term contract or freelance work that a person may take, on a project-to-project basis, for which the payment is made once the task is completed) and needs to protect such workers by establishing some form of social security for them. Hence, as per Section 2(35) of the SECURITY CODE the term Gig worker’ has been defined

7

Platform work

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2(61)

" means a work arrangement outside of a traditional employer employee relationship in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems or to provide specific
services or any such other activities which may be notified by the Central Government, in exchange for payment

Defined under the SECURITY CODE to specify the work of platform workers

8

Platform worker

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2(61)

"platform worker" means a person engaged in or undertaking platform work.

Defined under the SECURITY CODE to protect such workers which traditionally fail to fall under any heads of a scheduled industry to which generally the aspects relating to social security apply

9

Social Security

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2(78)

"social security" means the measures of protection afforded to employees, unorganised workers, gig workers and platform workers to ensure access to health care and to provide income security, particularly in cases of old age, unemployment, sickness, invalidity, work injury, maternity or loss of a breadwinner by means of rights conferred on them and schemes framed, under this Code

Newly defined under the SECURITY CODE to avoid any ambiguity in law. This will make working easier for courts, lawyers, and the compliers of the SECURITY CODE

10

Unorganised Sector

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2(85)

"unorganised sector" means an enterprise owned by individuals or self-employed workers and engaged in the production or sale of goods or providing service of any kind whatsoever, and where the enterprise employs workers, the number of such workers is less than ten (10)

Newly defined under the SECURITY CODE. Till present there was no particular definition provided under any law. The intent of the legislature under the SECURITY CODE is to widen the scope of labour laws and social security as a welfare legislation

11

Unorganised Worker

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2(86)

"unorganised worker" means a home-based worker, self-employed worker or a wage worker in the unorganised sector and includes a worker in the organised sector who is not covered by the Industrial Disputes Act, 1947 or Chapters III to VII of this Code

Newly defined under the SECURITY CODE. Till present there was no particular definition provided under any law and definitions for interpretation would have to borrowed from acts such as the Industrial Disputes Act, 1947. The intent of the legislature is to widen the scope of labour laws and for the SECURITY CODE to serve as a welfare legislation

12

Framing of schemes for unorganised workers.

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109

The Central Government shall frame and notify, from time to time, suitable welfare schemes for unorganised workers on matters relating to—
(if) life and disability cover;
(ii) health and maternity benefits;
(iii) old age protection;
(iv) education; and
(v) any other benefit as may be determined by the Central Government.
(2) The State Government shall frame and notify, from time to time, suitable welfare schemes for unorganised workers, including schemes relating to—
(i) provident fund;

(ii) employment injury benefit; (iii) housing;

(iv) educational schemes for children;

(v) skill upgradation of workers; (vi) funeral assistance; and

(vii) old age homes.

Benefits and schemes to be made for the unorganized class

13

Provident Funds

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16

The Provident Fund Scheme, establish a Provident Fund where the contributions paid by the employer to the fund shall be ten per cent. of the wages for the time being payable to each of the employees (whether employed by him directly or by or through a contactor), and the employee's contribution shall be equal to the contribution payable by the employer in respect of him and may, if any employee so desires, be an amount exceeding ten per cent (10%)

Newly defined under the SECURITY CODE to avoid any ambiguity in law. This will make working easier for courts, lawyers, and the compliers of the SECURITY CODE