Source : Indus Scrolls

This article has been authored by Sahana Priya Satish, a fourth year law student at Tamil Nadu National Law University, Tiruchirappalli.


The unorganised sector forms a huge proportion of the workforce in India. The economy is highly dependent on this sector for its growth and development. But it has been seen that due to the unregulated nature of this sector, there is a lack of effective legal and institutional framework which makes the workers susceptible to exploitation. In this sector, more than 90 percent of the workforce is comprised of women. Even though the number of women employed in this sector is huge, they are not included in the official statistics as their work is considered to fall within the category of disguised work or unskilled work. This is a major cause for such women being left out from benefits that are awarded to other workers. These women are faced with situations where they have to work long hours for less pay and are met with other challenges which make it difficult for them to find a stable footing in the workforce. The lack of education, skill or any formal training also inhibit such women workers from seeking better job prospects in the formal sector.

Existing Social Security Legislations

There are various legislations that have been put into place for the protection of women working in the unorganised sector. These provisions aim to protect the rights of the women workers as well as prevent their exploitation. Statutes such as the Unorganised Workers’ Social Security Act, 2008, the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, the Bonded Labour System (Abolition) Act, 1976 and Maternity Benefit Act, 1961 have been enacted for this purpose. But these legislations seldom accord any protection to the women workforce in the unorganised sector because of ineffective implementation. One of the greatest drawbacks of the current social security legislations is that the welfare schemes have been made available largely to the organised workers as these legislations require a certain number of workers to be employed in the establishment. This is not a fair expectation from the unorganised workers because they are largely scattered and quite often fail to meet the criteria to avail the benefits provided by these legislations. The unorganised women workers do not have the advantages of maternity benefit and child care facilities in spite of existing legislations. The penal provisions in these provisions are also not deterrent enough to make the employer comply with the same. A large proportion of the unorganised women workers are employed as domestic workers and these women work with no job security and harsh working conditions. They are left without any benefits relating to conditions of work, wages, health etc. This section of workers has been found to be unregulated and is often unprotected by labour law.

Social Security Bill, 2019

The Code on Social Security Bill, 2019, for the first time, provides the benefits and welfare schemes that were earlier available only to organised sector workers to the workers in the unorganised sector, under Section 109. These schemes are to be formulated by the Central and the State Governments on various areas such as health and maternity benefit, education, provident fund, employment injury benefit, housing, skill upgradation etc. The Bill provides for the constitution of a Social Security Fund at the Central level for the provision of security to the unorganised workers. The Bill also provides for formulation of policies and schemes for these workers so that they can reap benefits provided by the Employees State Insurance Corporation.

The Chapter dealing with maternity benefit provides for establishments to have crèche facilities so that women can care for their children without any interruption to their work. Another change brought in by the Bill is that it increases the age of registration as an unorganised worker from 14 years to 16 years, under Section 113. This may be a step in the right direction because a lot of female children are employed in unorganised establishments or as domestic workers which hinders their education and severely affects their health. This provision, if implemented properly, may help in prevention of employment of these female children and afford protection to them. One of the most important provisions in the Bill is that under sub-clause 82 of Section 2, domestic workers form a part of the definition of wage workers. This is a positive step for unorganised women because domestic workers in India are predominantly women and their inclusion in this definition will enable the protection of their rights and prevention of their exploitation.

Wages in the Unorganised Sector

The lack of welfare legislations regulating the unorganised sector makes it increasingly easier to absorb new workers into the unorganised sector. The increase in the flow of new workers into the workforce adversely affects the employment security as well as the income security of the workers and a corresponding reduction in the social security and welfare programmes. Women, making up a huge part of this sector, are faced with a lot of challenges, the primary of them being, low wages. These women often put in long hours and the wages that they are paid are not reflective of the work that they put in. They also have to face discrimination at the workplace because the wages that they receive are usually lower than that received by their male counterparts for performing the same work.

Code on Wages, 2019

The Code on Wages, 2019 has been introduced with the aim to consolidate four previous legislations namely-the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976. Its main purpose is to provide for national minimum wages for all workers and this minimum wage is to include basic rate of wage, cost of living allowance etc. while also taking into account the skills, arduousness of work, geographical locations and other necessary aspects.

The 2019 Code has provided for the formulation of minimum wage on the basis of skill of the workers and the conditions of work under Section 6. The addition of this provision, which was absent in the Minimum Wages Act, 1948, will ensure that the minimum wage that is set will be fair and the amount paid to the workers will be in proportion to the work carried out by them. The Code seeks to remove the concept of ‘scheduled employments’ thereby, bringing into its ambit a larger number of workers. This may be a huge step in including unorganised workers such as domestic workers, who are predominantly women, to be governed by the legislation. The legislation contains provisions for revising the minimum wages every five years. Under Section 8 of the Code, the Committee, appointed for the purpose of fixing or revising the minimum wage, has to consist of employers and employees. This is advantageous to the unorganised women workers because this will ensure that the wages are fixed keeping in mind the interests of the works. In relation to the payment of wages, the Code provides a wide definition for ‘employee’, ‘employer’ and ‘establishment’ which will ensure a broad applicability of the provisions and bring unorganised women workers under its ambit. The provisions relating to the workers on whom the Code becomes applicable also does not mention a fixed wage ceiling, as was in the preceding legislation, which will ensure that the Code covers all the establishments and employers and employees unless specifically exempt.

The Code provides for provisions relating to prohibition of discrimination against employees on the grounds of gender in matters connected to payment of wages. This provision has a wider application due to the use of ‘gender’ instead of the use of ‘men’ and ‘women’ as it was in the earlier provision. The Code provides for the establishment of the Central and State Advisory Board for the purpose of providing increasing employment opportunities to women and to advise on the extent to which women may be employed in establishments. While giving such advice under Section 42, the State Advisory Board has the duty to give regard to the number of women employed, nature of work, duration of work etc. This will enable the governments at both the Central and State level to make such provisions regarding wage which cater to the needs and further the interests of unorganised women workers.


One of the most essential steps that need to be taken is to make women aware of their rights. The enactment of provisions for the protection of women in the unorganised sector will not amount to anything if the group that is intended to be the beneficiaries do not have knowledge of the same. The women employed in this sector should also have the provision to be a part of a trade union because a union’s primary purpose is to work for the enhancement of the rights and conditions of its members and it also gives them collective bargaining powers. Hence, an effective implementation mechanism should be put in place to ensure that all women workers can reap the benefits. It is also the need of the hour to provide training to the women workers in the unorganised sector so that they can actively participate in the formal labour economy.

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