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This article is written by Richa Goel of Banasthali Vidyapith in which she had discussed the protection of rights of the unorganised sector, definitions of unorganised workers, problems faced by them and various social security schemes.

As an unorganised worker play a pivotal role in society, so they need special attention. Most socially and economically deprived sections of the society are engaged in informal economic activities. The government realised the pivotal role performed by unorganised sector in the economy. Therefore, many legislations and schemes are initiated by the government for the benefit of unorganised workers.

Further various social security measures provided by industrial units to their employees in the form of pension, provident fund and gratuity. Non-statutory benefits also provided to workers such as medical facilities, food, canteens etc. These benefits help in motivating the workers for their active contribution in the prosperity of the industry and when the workers are fully satisfied with the conditions of service, then they give their best efforts for the growth of the society.


There are various definitions given by different Commission and others. But here we will be discussing the most important definitions.

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According to the report of the National Commission on Labour in 1969.

Unorganized workers’ are other groups of workers who are not covered under the definition and can organise in pursuit of a common goal due to force such as:-

  1. Casual nature of employment.
  2. Ignorance and illiteracy.
  3. Establishment of small size with the low capital invested per person employed.
  4. Scattered nature of establishments.
  5. Muscular strength of the employer operating either singly or in combination.

National Commission also gives some categories of workers, which can be categorised as unorganised workers, which are the following:

  • Contract-based worker and it also includes workers engaged in the construction work.
  • Informal(casual) labour.
  • Labour engaged in small industry.
  • Handloom/ power worm workers.
  • Beedi and cigar workers.
  • Employed in shops and commercial establishments.
  • Sweepers and scavengers.
  • Workers in teaberries.
  • Tribal labour.
  • Other unprotected labour.

These categories are only ‘illustrative’ and are not exhaustive.

According to the Unorganized Workers Social Security  Act,2008

“Unorganized sector means an enterprise which is engaged in the production or sale of the food or in providing services of any kind  owned by individuals or self-employed workers and where the number of worker working is less than 10 in number.”

Unorganised Workers: “unorganised workers” means as follows.

  • A home-based worker.
  • Self-employed worker.
  • Nature of employment, contract, casual and bonded labour wage worker in the unorganised sector.

It also includes a worker in the organised sector who is not covered by any acts mentioned in schedule II of the Act”.

Based on the distinctiveness, the government has classified the unorganised workforce exclusively in four categories.

  • In terms of employment like construction workers, waiver, fisheries, workers of the paper mill, sawmill etc.
  • The labourers which are most in exploited-Head and shoulder loaders, scavengers, variety of labour works.
  • Labourers who are providing service-Hotel boy, Midwives, Air Hostesses, barber, masseur etc.

Apart from category described above handicrafts, artisans, cobblers, handloom weavers, physically handicapped self-employed persons, lady tailors, a rickshaw puller, carpenters, tannery labour, power loom workers and urban poor, Truck and Auto drivers also come under the ambit of unorganised labour.

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Problems faced by the workers

As being the weaker section of the society they face many challenges. They are as follows.

  • Low wages– Wages is only the factor for which any person/employer works. As the labourer is getting meagre wages. As there is the Minimum Wages Act defines the minimum wage, which needs to be paid to the worker, but the worker fails to get minimum wages. The Supreme Court of India ruled that employing workers at wage rates below the statutory minimum wage levels is considered as the forced labour and is the infringement of Article 23 of the Constitution of India even though economic compulsion might drive one to volunteer to work below the statutory minimum wage.
  • No Knowledge about Work Hazardous and Occupational Safety-The working conditions in the unorganised sector is the leading cause to have an adverse effect on the health conditions of workers. Concerning home workers, most of the studies reported that labourers suffer from health problems.
  • The health problems are mostly related to respiratory due to inhalation of the tobacco dust and body ache, or due to the peculiar posture that has to be maintained at all times of work. Unguarded machinery, various toxic chemical coal, dust lime, dust blaze, the raw material for synthetic generation leads to the death of many unorganised workers because the working conditions are more severe and knowledge of occupational health and safety is negligible.
  • Maximum workers are living in deplorable conditions:-They live in unsanitary conditions and likewise battle with sewer seepage framework overflowing drainage system, flooding and storms. They live in a slum area. The facilities such as washing, urinal, toilets facilities at work are found to be below standard. It could be said that no such facilities were provided to workers in the industries.
  • Extended Hours of Work:-Long hours of work in the unorganised sector beyond the labour and regulatory norms are standard in India. In the agricultural sector, there are no fixed hours of work as there are no laws to act as guidelines for the working conditions of agricultural labourers.
  • In the case of non-agricultural sectors such as fireworks, matchmaking, power looms and so on, workers started their work very early in the morning at 6:00 a.m and continue till the evening. In the handloom sector, the work is organised in such a way that wages were based on 12-15 hours of work per day.  A large number of workers and the labourers are illiterate and as a result, the employers exploit the labourer by forcing them to work for extra hours. Due to long working, social isolation of migrant workers, high level of unemployment, illiteracy and lack of awareness are the major hurdles in organising themselves.
  • No Knowledge About the Trade Union or Labour Union:-Not many but most are not aware of the existence of Trade Union and their rules. The primary purpose of the establishment of the Trade Union is to settle the dispute that may arise between the employer and employee. Trade Union means a Trade Union which is for the time registered under the Trade Unions Act,1926. Trade Union which can be analysed into the following ingredients.

Trade Union means any combination whether temporary or permanent made to regulate the relations between workmen and employer, workmen and workmen, employer and employees.

While imposing restrictive conditions on the conduct of any trade or business. But this Act shall not affect.

  1. Any agreement between partners as to their business,
  2. Any agreement between an employer and those employed by him as to such employment,
  3. Any agreement in consideration of the sale of the goodwill of a business or instruction in any profession, trade or handicraft.
  • High Level of insecurity is common-Social security means which provide amenities and assurance to the workers. For instance, the employment of the agricultural sector is irregular and unassured.  This is due to the availability of work to them only for about three months and remaining nine months, they are mostly unemployed and suffer from starvation.
  • Seasonal Employment-The workers are employed as a seasonal employer. They are employed only for a particular season and remain unemployed during the remaining year. Employment is only for 3-4 months. In India Mahatma Gandhi National Rural Workers Employment Guarantee Act,2005 aims to provide employment security by guaranteeing at least 100 days of work in the most backward districts of the country who can perform manually.
  • Women and children are unprotected and get meagre wages: Article 39(d)  of Constitution of India talks about Equal pay for equal work means that all the person should get equal wages irrespective of their age, sex if they work for the same hours. The children are forced to work at hotels, dhaba for low wages.
  • Children and women are paid low wages as compared to male despite working for the same hours. Children and female workers work as household labour at the house of the people living in the urban area.  Such child labourers are subject to long working hours and involved in the hazardous sectors such as carpet weaving, cloth printing, explosives and fireworks, cigarette making, printing and soldering process in electronic industries.
  • Harassment issues at the workplace for women- Sexual Harassment is a big issue that occurs at the workplace. A safe workplace is women’s legal right, but it has been neglected. They still experience a wide range of physical and psychological ailments due to eve-teasing and sexual harassment. In spite of the Act that was enacted in the year 2013 still, the woman is being assaulted at their workplace.
  • Vulnerable Labour Groups:-The study group on the construction of the First National Commission on Labour as well Second National Commission (2002) observed that on quarries, brick-kilns as well as in big construction sites a system of bondage exists and get extended from one generation to the next through labour.
  • The bonded labour involves a debtor-creditor relationship in this system, the creditor advances loan to the labourer and put him in bondage until the loan is returned. The repayment of debt is so arranged that the servant cannot repay it during his lifetime before ensuring lifelong service for the master. It is this feature which differentiates bonded labour from unpaid forced labour.
  • Insecurity due to natural disasters:-There are many natural disasters like floods, droughts, earthquakes, famine etc. which also have a devastating impact on the informal sectors. Natural disasters do not wipe out the productive base of the informal sector, but can also affect the limited household assets of the owner.

Social security to unorganised workers

Social security is essential for the welfare and provides certainty to the workers. Social security measures have manifolds benefits in promoting the workers, increasing the production level of industry and develop the feeling of surety among the workers. It was also helpful for eradicating poverty to some extent. Social security is a fundamental human right (Though not one of the Constitutional Fundamental Right).

The Planning Commission constituted a working group on Social Security during the process of the 12th Five Year Plan. In India out a total workforce of 45.9 crores, 94% is in the unorganised sector, and the remaining 6% is in the organised sector.  The workers in the organised sector are covered under social security legislation like employees Provident Funds, Miscellaneous Provisions Act,1952 and Employees State Insurance Act,1948. The working groups of Planning Commission constituted subgroups in its first meeting to discuss the issues. Taking the benefits of subgroups the working groups have formulated its recommendations. It is hoped that these recommendations would be useful for the formulation of the twelfth five-year plan.

Unorganised Social Security Act,2008

In the era of liberalisation, globalisation, and privatisation the country has been a drastic change in the business environment and nature of employment. These changes created many issues in social security measures.

In this regard, the issue of social security to the growing sector of unorganised workers draws more attention in emerging India. The government enacted much social security legislation for the welfare of unorganised workers also formulated many schemes. Unorganised Workers Social Security Act 2008 is one of the significant activities which is exclusively for the protection of unorganised workers.

The mechanism under the Act provides a three-tier system for the implementation of the law.

National social security board

The Union Government constitutes the National Social Security Board with the union minister for Labour and Employment as Chairperson, members nominated by The Union Government consisting of seven each representing workers and employers from unorganized sector, an eminent person from civil society, two members from the House Of the People, one member from the Rajya Sabha and also five each members representing Ministries from the Central And the State Governments. It is multiple parties composition who performs the following functions, as follows.

  1. They give a recommendation to the Union Government about suitable schemes for the unorganised workers.
  2. Advise the Union Government on matters arising out of the administration of the act.
  3. To monitor the social security schemes which are formulated for unorganised workers.
  4. Review the registration and issue identity cards to the unorganised workers.
  5. Review the record of functions performed by the State Government at the state level.
  6. Review the expenditure from the funds under various schemes.
  7. Undertake another work as assigned by the central Government.

State social security board

The State Government at the state level is empowered to constitute the Social Security Board for the objective of proper implementation of the Act. Function and Composition of State Social Security are the same as the National Social Security Board.

The Social Security Boards, which are entrusted with the responsibility of implementation of the act, are just advisory in nature and are not empowered to perform many functions except monitoring and review.

The Boards are not empowered to take decisions on their own. It is up to the Government to accept the recommendations of the board or not. For effective Implementation of any Act and consistent delivery of social security rights to the workers, a well-defined administrative mechanism is very essential, which is missing in the Unorganized Social Security Act itself.

Workers facilitation centres

The Act also provides for the constitution of “Workers Facilitation Centers” by the State Governments to disseminate information social security schemes, assist unorganized workers for the registration and facilitate the enrollment of the registered unorganized workers for social security schemes, but the Act is silent about at which level these workers facilitation centres are to be created.

Social security schemes

Subsection 1 of Section 3 of the Act states that Union Government and State Government shall formulate schemes from time to time covering health and maternity relief, old age protection, life and disability and another benefit which may be notified by the central government.

The social security schemes are provided in Schedule 1 of the Act, which is discussed through ppt.

Role of Indian Judiciary for the protection of the rights of the unorganised worker

Sometimes due to failure of proper implementation of legislations judiciary come forward for the protection of the rights of unorganised workers. Unorganised workers indeed remain outside the purview of social security measures.

Indian Judiciary played a pivotal role in the development of modern jurisprudence and made a significant contribution to the protection of interests of weaker section of society which could be reflected from several decisions. Judiciary also tried to extend the benefits of labour welfare measurements such as the Employees Compensation Act, Payment of Gratuity Act, Employees State Insurance Act, Employees Provident Fund etc.

Judiciary has exclusive responsibility for the protection of interest of a weaker section of society. Through various judgments, the Supreme Court of India emphasised on Right to Livelihood as an inherent part of Right to Life.

In the case of Rural Litigation and Entitlement Kendra, Dehradun v. Uttar Pradesh [1],

The court stated that the right to life under Article 21 of the Constitution of India also includes the right to livelihood.

In the case of People Union for Democratic Rights v. Union Of India[2],

The court held that beggar is also a kind of forced labour and it is a violation of the right to live with dignity, respect and fundamental human rights. If any person is taking the service of any labour and does not pay the minimum wages, then it is a violation of Article 23 of the Constitution of India.

In  the case of Sanjit Roy v State Of Rajasthan[3],

It was held that payment of wages lower than the minimum wage to the person employed on famine relief work is violative of Article 23. Whenever Any labour or service is taken by the state from any person, who is affected by drought and scarcity condition the state cannot pay him less wage than the minimum wages on the ground that it is given help to them to meet famine situation. The state cannot take advantage of their helplessness.

In the case of Deena vs Union of India[4],

The court held that the labour work that is taken from the prisoners it without paying sufficient wages is considered forced labour, and it is an infringement of Article 23 of The Constitution.

The prisoners have the right to claim the reasonable wages for their service rendered, and the court must enforce the claim of labourers.

In the case of Bandhua Mukti Morcha v. Union Of India[5]

The court held that whenever the public interest litigation if initiated alleging the practice of bonded labour, the government needs to accept it as the opportunities and to examine the issues or problem of labour and make efforts to eradicate the practice of bonded labour and protect the labours. Article 23  of the Constitution of India, which prohibits the practice of bonded labour protects and helps the labours to earn for their livelihood.

In the case of Neeraja Chaudhary v. State of Madhya Pradesh[6]

Justice Bhagwati held that it is not sufficient for the Government to find about the existence of bonded labour, but it is also necessary that the labourers should be rehabilitated because if they are not rehabilitated, then they would be driven to despair, poverty and helplessness.

Article 21  states that bonded labour should be identified and efforts need to be made by the Government to complete rehabilitation of the labourers. Directive Principles of State policy was enacted as the guidelines for the government. Under DPSP, the State Government needs to provide a basic human dignity to bonded labour and if it is not fulfilled, then it will result in the infringement of Article 21 of the Constitution.

Judicial trends concerning the extension of the benefits of social security schemes to unorganised workers

In the case of  Daily Rated Casual Labour V. Union Of India[7], it was held that whenever the employees are classified into the casual and regular employees.leads to the infringement of  Article 14 and Article 16 of the Constitution. It is also against the spirit of Article 7 of the International Covenant on Economic, Social And Cultural Rights,1966. When the labourers are not paid minimum wages as prescribed by the Minimum Wages Act, then it amounts to exploitation of labour. The court also stated that the Government should be the model employer and not take advantage of its dominant position.

In the case of  State V. Banwari[8],

The High Court of Allahabad stated that “The person cannot refuse to render the services merely on the ground that such labours belong to the Scheduled Caste. This is done to protect the interest of weaker sections of society.

In  the case of Siddheshwar,  Hubli v Employees State Insurance Corporation,

The court has widened the definition of the employee under this act and also states that this Act applies even to those persons whose services are lent to the principal employer.

In the landmark case M.C  Mehta v State of Tamil Nadu[9],

The Supreme Court of India gave order to the Government to do a survey and to stop the child labour in the matchstick and cracker factories. The court also directed that the minimum wage paid by the subcontractors under Minimum Wages Act should be directly paid and the provisions of section 21 of the Contract Labour Act, 1970 should be observed.

In the case of Delhi Jal  Board v. National Campaign For Dignity and Rights of Sewerage and Allied Workers[10

Neither the lawmakers nor those entrusted with the duty of implementing laws enacted for the welfare of unorganized workers have put in place appropriate mechanism for the protection of persons employed by or through contractors to whom service meant to benefit the public at large are outsourced by state and its agencies for doing workers, which are inherently hazardous and dangerous to live nor have they made provision for payment of reasonable, compensation in the event of death.

Therefore Judiciary is active to take all necessary steps for protection of the rights of unorganised workers and implementing social security welfare schemes and also extend the advantages of various labour welfare legislation.


As many problems are faced by unorganised workers such as low wages, exploitation of workers, cruel conditions of workers etc. so the legislative system of India protects the rights of the unorganised workers with the help of various articles covered under the constitution of India.

The Government of India took a  step by enacted a legislation ‘Unorganized Social Security Act, 2008’ for providing underlying social security to the unorganised workers who work in an unorganised sector. In pursuance of this Act, the Government of India has implemented numerous schemes such as Aam Admi Bima Yojana(Life Insurance), old age pension scheme, Rashtriya Swasthya Bima Yojana (health insurance) etc.

The Central Government, under the requisite section and the State Government under the specified section, have been empowered to make the rules for the smooth functioning.

The Central Government has power under section 11 to give direction to the State Government and National Board for the proper implementation of the provisions of this Act.


1) 1985 SCR (3) 169

2)1983 SCR (1) 456

3)1983 SCR (2) 271


5)1984 SCR (2)67

6)(1984) 3 SCC 243

7) 1988 SCR (1) 598

8)1957 CriLJ 539

9) (1996) 6 SCC 756

10)12 July, 2011


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