INDIA – NCEUS prepares draft bills on unorganised workers

Ministry of Small Scale, Agro & Rural Industries’s PRESS RELEASE:

The National Commission for Enterprises in the Unorganized Sector NCEUS, set up by the Government of India as an advisory body and a watchdog for the informal sector, under the Ministry of Small Scale Industries and Agro and Rural Industries, has examined in depth, the conditions of work and scope of labour laws with respect to the unorganised sector, both in agriculture and non-agriculture.

TheCommission’s findings show that forty per cent of the workers in the unorganised agricultural and non-agricultural sector are wage workers and sixty per cent are self-employed. Among the self-employed, the overwhelming majority are own account or assisting family workers and only 1.15 % (among non-agricultural workers) are employers.

The vast majority of the self-employed in the unorganised sector themselves work under poor conditions and the productivity of their enterprises is low. Measures to protect the livelihood of the self-employed workers and to promote the productivity of the unorganised enterprises, will not only have an impact on the condition of the self-employed, but also on the condition of the unorganised wage workers who work in the unorganised enterprises. Thus, regulation of the condition of work of wage workers needs to go hand in hand with the protection and promotion of livelihood of the self-employed workers and enhancing the growth and productivity of the unorganised sector enterprises.

The Commission had earlier proposed a draft Bill “Unorganised Sector Workers (Conditions of Work & Livelihood Promotion) Bill, 2005” for comments and feedback. Based on the comments received from states, trade unions and other stake holders, the Commission has revised the earlier proposal and has now proposed two Bills “Unorganised Non-agricultural Sector Workers (Conditions of Work and Livelihood Promotion) Bill, 2007” and the “Unorganised Agricultural Sector Workers (Conditions of Work and Livelihood Promotion) Act, 2007” to cover unorganised agricultural workers and non-agricultural workers respectively. Part 1 of each of the Bills contains provisions relating to the regulation of conditions of work of wage workers. Part 2 of the Bill relates to the protection and promotion of livelihoods of the unorganised workers.

The Draft Bills provide for basic and minimum conditions of work for all unorganised wage workers and home workers. Instead of relying on bureaucratic implementation and costly and time consuming legal redressal procedures, the Commission has accorded priority to conciliation and has proposed the participation of workers’ representatives and elected representatives of the local bodies in the conciliation and dispute resolution committees.

The proposed Bills also mandate that the appropriate governments take the necessary steps to protect and promote these livelihoods through appropriate policies and programmes, and have provided for an institutional machinery to take a holistic view of the sector and to mobilise the necessary resources to help the sector overcome such constraints and facilitate its growth. To this end, the Commission has also proposed a National Fund for Unorganised Workers.

Provisions Relating to Regulation of Conditions of Work:

  • 1. The Commission has proposed maximum hours of work, overtime rates, days of paid rest following continuous weekly employment, and prohibition of night work for adolescents for all agricultural and non agricultural unorganised wage workers.
  • 2. It has proposed a National Minimum Wage for employments not notified under the Minimum Wages Act with stipulation that the concerned State Government shall amend the Prescribed Minimum Wage (wherever lower than National Minimum Wage) to bring it in conformity with the National Minimum Wage. The National Minimum Wage will be fixed after taking into account the minimum basic needs of the wage and home workers and his/her family and variations in the cost of living in different areas.
  • 3. The Commission has proposed specific modalities to ensure proper valuation of skilled and unskilled women’s work. It has also prescribed that no deductions will be made from wages, advances or payments to be made to wage workers, seasonal migrants or home workers, except in accordance with law.
  • 4. It has proposed that representative organisations of both unorganised self-employed and wage workers have the right to collective bargaining and representation in various fora.
  • 5. The Commission has proposed that all unorganised workers be entitled to compensation in the event of work related injury.
  • 6. Several of the clauses in the Bills proposed by the Commission relate specifically to non-discrimination and to issues faced in particular by women workers, home workers or out workers, and seasonal migrants.
  • 7. The Bill for non-agricultural workers includes provisions entitling worker to a wage slip providing details of remuneration received. Further, a wage worker, except a daily wage or casual worker will be entitled to receive a letter of employment from his employer stating the terms of employment. The onus of proof that compliance with the provisions of this Act has been made has been placed on the employer.
  • 8. Provision for settlement of disputes has been through Conciliation Committees (CC) which will be tripartite in character and will functions at an appropriate sub-district level, while at the district level, a similarly constituted Dispute Resolution Council (DRC) is to be created.

Provisions Relating to Protection and Promotion of Livelihood:

  • 1. The Bill mandates the appropriate government to ensure protection and promotion of livelihoods through creation of gainful employment, skill upgradation, promotion of labour organisation and cooperation, provision of raw material, technology, marketing and storage facilities, social security benefits, affordable credit facilities through banking and non-banking institutions, respecting the traditional right of workers over common property resources and their right to inhabitance, ensuring area development for livelihood needs of street vendors and slum dwellers, promotion of association of self employed workers and social protection for migrants.
  • 2. The Commission has proposed the creation of National Boards for promotion of livelihood of Unorganised Workers in the agricultural and non-agricultural sectors respectively which will monitor & review the existing schemes, advise the Government regarding the promotion of gainful employment opportunities and promotion of livelihood options at the national level, and to help the government fulfill the other objectives mentioned in the Bill. Similarly at the state level, there will State Boards for promotion of livelihood of Unorganised Workers in the two sectors.
  • 3. The Commission has suggested the constitution of a National Fund for Unorganised Workers (Agricultural & Non agricultural) by the Central Government, to be utilized only for the programmes and Projects recommended by the National Board for Promotion of Livelihood of Unorganised Workers (agricultural) and National Board for Promotion of Livelihood of Unorganised Workers (non-agricultural) as provided for in the two Bills. The creation of a National Fund will play a catalytic role in the promotion of livelihoods of the unorganised sector workers.

The two draft Bills have been placed on the Commission’s website ( for feedback and comments. In addition, the Commission will seek the views of state governments and will hold consultations with stakeholders before finalising these drafts for submission to government.

NCEUS, Ministry of SSI & ARI, New Delhi: (Phalguna 4, 1928), February 23,2007

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