Employees-Compensation-under-The-Code-on-Social-Security-2020-2.pptx

This presentation explores the key provisions of The Code on Social Security, 2020, focusing on its implications for employee compensation in India. We will delve into its scope, definitions, and the various social security benefits it extends to a wide range of workers.

1. Employee's Compensation under The Code on Social Security, 2020 This presentation explores the key provisions of The Code on Social Security, 2020, focusing on its implications for employee compensation in India. We will delve into its scope, definitions, and the various social security benefits it extends to a wide range of workers.

2. Defining Core Concepts: Employee, Employer, and Dependents The Code on Social Security, 2020, defines ' employee ' to encompass a broad spectrum of individuals engaged in various forms of employment, including those directly employed, contractual workers, and even certain categories of gig workers. This inclusive approach aims to ensure wider social security coverage across different employment relationships, ensuring that a significant portion of the workforce is brought under the ambit of protective legislation. Similarly, the definition of ' employer ' is comprehensive, covering not just individuals but also firms, companies, associations, and even government entities that engage workers. This broad scope ensures accountability for providing social security benefits and adhering to the provisions of the Code, establishing clear responsibilities for all entities that engage labor. Crucially, a critical aspect of the Code is its clear articulation of ' dependents .' This includes immediate family members such as spouses, minor children, dependent parents, and in some cases, adult children with disabilities. This provision ensures that the social security net extends beyond the individual employee to support their families, especially in unforeseen circumstances like disablement or death, providing financial stability and care during times of need. Temporary vs. Permanent Disablement The Code meticulously delineates between "temporary disablement" and "permanent disablement." Temporary disablement refers to a state where an employee is temporarily unable to perform their duties due to an employment injury or occupational disease, but is expected to recover and resume work. Compensation for temporary disablement is typically provided for the duration of the incapacity. In contrast, "permanent disablement" signifies a condition where the earning capacity of an employee is permanently reduced or they are entirely incapacitated from performing their usual work or any work they were capable of doing, as a result of an employment injury or occupational disease. This distinction is crucial for determining the type and duration of compensation, often leading to a lumpsum payment or periodical payments for life. Partial vs. Total Disablement Further categorization within disablement includes "partial disablement" and "total disablement." Partial disablement implies a reduction in the earning capacity of an employee in all employments, resulting from an employment injury. This may mean the employee can still work, but not to the same extent or in the same capacity as before the injury. On the other hand, "total disablement" signifies a complete and permanent incapacity for an employee to perform any work whatsoever. This incapacitation is often deemed absolute and can significantly impact an individual's ability to earn a livelihood. The assessment of total or partial disablement is typically based on medical evaluations and prescribed schedules, directly influencing the quantum of compensation an employee is entitled to under the Code.

3. Employer's liability for compensation - Conditions/Exceptions Section 73- Notice to be given to any authority about an accident occuring in the employment premises - seriousness or causing death within 7 days (if covered uner ESIC this section shall not apply) Section 74- Employer's liability for compensation in case of accident/occupational disease. Exceptions- injury that heals in 3 days, employee under the influence of drugs or drinks wilful disobedience or disregard of safety guard/device Injury caused while traveling to and from work will be deemed as injury casued in the course of employment Section 75- Compensation in case of death/injury due to collapse of accomodation in plantation Excludes- Medical officer, medical staff, managerial/administrative staff, any temporary employee, etc. Section 76- Amount of compensation is proportionate to the amount of injury. It provides for the manner of calculation of amount of compensation in case of death, permanent total disablement, permanent partial disablement and temporary disablemnent resulting from the injury. Compensation can be paid in lumpsum as well.

4. Section 77- timely payment is mandatory and in case of any dispute, the undisputed part should be paid irrespective. Appropriate authority to take action for delayed payments within 1 month of due date Interest and damages to be paid by the employer on the order of the authority Reasonable oppurtunity to the employer to be heard Section 78&79 provides for the method of computation of compensation and empowers a competent authority to review the half mothly payment payable under Chapter VII. It may be reviewd on application of employer/employee or suo moto along with the certificate of a medical practitioner. Section 80- the half monthly payments can be converted to lumpsum amounts Section 81- Payment of the compensation is handled fairly and transparntly by the competent authority, protecting bothe the employer and employee/dependents. In case of death, advances can be made upto 3 yrs of wages and later be adjusted against the compensation. Any sum of Rs. 5000 or more payable to the employee should be deposited with the competent auhtority. This acts as a valid discharge of the emloyers liability. The competent authority may publish and serve notices upon the dependents wrt compensation and date of distribution.

5. Section 82- notice of accident to be given as soon as possible and claim be preferred within 2 yrs of occurence Section 83- for accidents occuring outside indian territory i.e. employees working abroad (seamen, aircraft crew, indian companies/vehicles in foreign countries) Notice/claim- if the injured is a seaman/aircraft crew(not master/captain) notice/claim to be served on the master of the ship/captain of the aircraft. Section 84- In case of an injury, free initial medical examination is manditory withtin 3 days also periodic examination to be held. Refusal or obstructing medical check up can lead to suspension of compensation, unless a valid reason can be provided. Section 85- Employers liability of paying compensation remains even if the employees are employed through a contractor. The employer has the right to be indemnified by the contractor or any other person from whom the employee must have recovered the compensation. Any indemnity dispute shall be settled by the competent authority. Section 86- it is the employers right to recover the compensation paid from a 3rd party when the 3rd party's actions have led to the injury of an employee. Section 87- In case of insolvency of the employer the rights are transferred to the insurer. This transfer ensures that the employee can claim benefits under Chapter VII even if the employer is incapable Section 88- the competent authority can request a statement from the employer upon receiving information about an employee's death. It shall detail the circumstances and application of compensation if any. The compensation shall be deposited within 30 days of the notice. In case of denial by the employer the dependents can file a compensation claim.

6. Section 89- outlines the process for registering the agreements related to lumpsum payments(compensation, half monthly payemnts, etc.). The competent authority may review or refuse registration of such agreements if found inadequate or obtained through fraud, undue influence, etc. Section 90- any dispute arising out of employee compensation, liability, amount and duration of compensation or whether the injured is an employee or not, etc. shall be settled by the competent authority in absence of an agreement. Note- Civil courts are explicitly barred from adjudicating upon such disputes. Section 91&92- State government shall appoint competent authority through a notification. In case of multiple competent auhorities in an area, the State government by an order regulate distribution of business amongst them. Eligibility- must be a lawyer/member of state judicial service for at least 5 yrs. (Experience in personnel management/HR development/Industrial relations is preferred) The competent authority shall be decided upon by considering the place of accident, reidence of claimant/dependent or where the employer's principle of is located. Matters can be transferred to another competent authority either for report or disposal, if so, relevant documents shall also be transferred along. No transfer order shall be made without providing the party an oppurtunity to be heard. Section 93- outlines the form and manneer of applications for claims and settlements. E- applications can be made in the prescribed manner. The State govt. shall prescribe time limit for disposal and costs if any. Section 94- if found insufficient, the authority shall call upon the employer vide a SCN as to why they should not make an additional deposit. In case of failure, the authority shall determine the total amount payable and order the emplloyer to deposit the remaining balance. Section 95- The competent authority shall have all the powers of a civil court for the purpose of taking evidence on oath, enforcing attendance of witness, compelling production of documents and material objects, etc.

7. Section 96- Allows for representation by a legal practioner, an official of insurance company, inspector cum facilitator or any other authorised person instead of the party themselves Section 97- Central government shall prescribe the procedure, format, documentation requirements for recording evidence Section 98- if deemed fit, the competent authority shall submit any question of law for the decision of the High Court Section 99- An appeal shall be preferred to the High Court against decisions of the competent authority, relating to social security disputes of interest/damages, one time compensation, conversion to lumpsum and decisions regarding dependents claim upon employee's death, etc. Before appealing a decision, the employer shall deposit the amount payable under the order of the competent authority. The period of limitation to appeal shall be 60 days. CASE LAWS: Jaya Biswal v Branch Manager, Iffco Tokio General Insurance Veer Bahadur Singh v Lokendra Singh Dhakre Dinabandhu Panda v Bajaj Alliance General Insurance Co Ltd Golla Rajanna v Divimanager

8. Chapter Introduction Social Security and Cess for Building & Construction Workers (Sections 100-104) Sections 100 to 104 of the Code on Social Security, 2020, specifically address the social security and cess provisions for building and other construction workers. This crucial segment of the Code mandates the establishment of dedicated Welfare Boards at the state level. These provisions are designed to provide a comprehensive social safety net for a workforce often engaged in hazardous conditions. They aim to deliver essential benefits such as life and disability cover, health and maternity benefits, and housing support, directly acknowledging the high-risk nature of their work and the need for robust protection mechanisms. These sections highlight a critical focus on safeguarding a vulnerable segment of the workforce often engaged in high-risk environments.

9. Sections 100-104 Collection of cess not exceding 2% but not less than 1% of the construction cost Does not include cost of land or any other compensation paid/payable to an employee/kin Proceeds deposited in the Welfare Board Interest payable on delay in payment of Cess Government has power to exempt Cess Self-assessment of Cess - any discrepancy shall be referred and appropriate assessment order be made Penalty for non-payment within specified time

10. Continued Focus Building & Construction Workers: Further Provisions (Sections 105-108) Collection of Cess Mechanisms for collecting the cess from employers for funding the welfare schemes are detailed, ensuring a steady financial base. Welfare Fund Utilisation Guidelines on how the collected cess will be managed and utilised for the benefit of construction workers are outlined, promoting transparency. Registration and Beneficiary Identification Provisions for easy registration of workers and identification of beneficiaries are included, simplifying access to benefits. Sections 105 to 108 elaborate on the administrative and operational aspects of the social security framework for construction workers, including cess collection, fund management, and beneficiary registration processes.

11. Sections 105-108 Appeal to an appellate authority Registration of building workers as beneficiaries (18-60 yrs) not less than 90 days in the preceding year Cessation as a beneficiary (ceases to be a beneficiary upon 60 yrs or not engaged for 90 days) Exception - in continuos service of 3 yrs before 60 yrs Welfare fund and its application Purpose - protect high risk, prone to accidents and in case of death

12. New Age Employment Social Security for the Modern Workforce (Sections 109-114) The Code on Social Security, 2020, significantly broadens its scope to include unorganised workers, gig workers, and platform workers. This reflects a crucial recognition of evolving employment landscapes. Unorganised Workers Provisions extend benefits to workers in the informal economy, who previously lacked formal social security coverage. Gig Workers For the first time, workers engaged in short-term contracts or task-based work through digital platforms are brought under a social security umbrella. Platform Workers Individuals performing work facilitated by online platforms are now recognised and provided for, addressing their unique employment model. Sections 109 to 114 empower the government to formulate specific schemes for these categories, ensuring their protection and welfare.

13. Framing of schemes for unorganised workers and gig workers - Life and disability cover Health and maternity benefits Oldage protection and education and any other benefit. State government shall- PF employment injury benefit housing educational schemes skill upgradation funeral assisstance oldage home any other scheme wholly or partly funded by the Central or State government or through CSR fund

14. Funding and record keeping Helpline facilitation centres Mandatory registration (16 yrs and above) NSSB u/s. 6 shall be the Board for the welfare of gig workers and platform workers (5 reps of aggregators, gig worker platform wrokers, state government, director general of corporation, joint secretary of Central govt., any other expert) Challenges faced by gig workers - Lack of job security Irregular wages Uncertainity of emloyment status and related stress Absence of work place entitlements

15. Regulatory Framework Authorities and Assessment (Sections 122-126) These sections detail the establishment and powers of various authorities responsible for administering and implementing the Code. This includes their roles in assessment, adjudication of disputes, and ensuring the smooth functioning of the social security framework. Adjudicating Authority Responsible for hearing and deciding on matters related to contributions, benefits, and other disputes. Inspecting Authorities Empowered to conduct inspections to ensure compliance with the provisions of the Code. Assessment Procedures Outlines the methods and criteria for assessing contributions due from employers, ensuring fair and accurate calculations.

16. Appointment of inspector cum facilitator Maintenance of records, registers, filing returns, etc Employers not to reduce wages Assessment and determination of dues from employer Appeal to Appellate Authority not below the rank of joint director of corporartion(within 60 days of the order and after depositing 25% of the ordered contribution) Appeal to be decided in 6 months

17. Ensuring Adherence Compliance and Recovery Mechanisms (Sections 127-132) These sections lay down the procedures for ensuring compliance with the Code's provisions and for the recovery of dues from employers. Facilitating Compliance The Code encourages voluntary compliance through clear guidelines and simplified procedures for employers. Recovery of Arrears Specific legal mechanisms are provided for the swift and effective recovery of unpaid contributions and other amounts. Penalties for Default Stipulations for penalties and interest on delayed payments reinforce the importance of timely contributions. The focus is on creating a robust system that ensures workers receive their entitlements without undue delay, fostering trust and security.

18. Interest applicable on due amount Power to recover damages - Employer shall be liable to penal damages Recovery to be made as arrears of land revenue Validity of Certificate Modes of recovery

19. Offences and Penalties (Sections 133-138) Sections 133 to 138 of The Code on Social Security, 2020, meticulously delineate various offences and the corresponding penalties, forming a critical framework for ensuring compliance and deterring any form of non-adherence. These provisions are instrumental in upholding the integrity of the social security system and safeguarding the rights of workers. The Code stipulates a graduated scale of penalties, ranging from substantial fines to imprisonment, with the severity dependent on the nature and gravity of the offence. This robust enforcement mechanism underscores the government's unwavering commitment to ensuring that employers fulfill their obligations under the Code, thereby protecting the welfare of their employees. 1 Failure to pay contributions/deductions : Strict penalties are imposed for employers who fail to deposit the required contributions within the stipulated timeframes, impacting workers' access to benefits. (1 yr and 1 lakh) Any other contribution: 2-6 months and 50k. Deducting or attempting to, employer contribution from the wages - imprisonment and fine. Violating the code - subject to penalties Penalizing women employees (maternity benefits) is an offence under the Code 2 Submission of false information : Offences include furnishing false statements, returns, or information, which could lead to severe fines or even imprisonment to prevent fraudulent activities. Offences by companies: Director, secretary, etc consenting or conived are liable Cognizance of offences by courts 3 Obstruction of inspections : Any act of hindering inspecting authorities from performing their duties is also treated as an offence, ensuring proper oversight and enforcement. Failure to pay gratuity/compensation will attract penalties Prior opportunity before prosecution. Compounding of offences. 4 Repeat offences : The Code often provides for enhanced penalties for subsequent or repeated breaches of its provisions, serving as a stronger deterrent for habitual defaulters. (2 yrs and 2 lakhs) / (3 yrs and 3 lakhs)

20. Data and Oversight Employment Information & Monitoring (Sections 139-140) These crucial sections mandate the collection of employment information and establish mechanisms for continuous monitoring. They facilitate the maintenance of comprehensive databases on workers and establishments, aiding policy formulation and efficient delivery of benefits. Reporting of vacancies to career centres: Ensures transparency and efficiency of recruitment process by linking employers with potential employees through designated career centres. Employers are not obligated to hire. Exempted Vacancies: Agricultural/domestic service jobs, staff of parliament or state legislatures, jobs with duration of less than 90 days, vacancies filled through promotions or absorption, UPSC/SSC etc. Database Management: Creation and maintenance of a national database of all workers, including unorganised, gig, and platform workers. Information Sharing: Provisions for sharing data with relevant government agencies to improve social security coverage and delivery. Monitoring Framework: Establishing a robust system to track compliance, identify gaps, and evaluate the effectiveness of schemes.

21. Forward Look Conclusion: Towards Inclusive Social Security Transformative Step The Code on Social Security, 2020, represents a significant leap forward in India's social security framework for employee compensation. Modern Relevance It adeptly recognises and addresses new forms of work and the modern realities of employment, encompassing evolving economic structures. Dignified Protection The Code aims to provide dignified protection and essential financial security to all workers across India, ensuring their welfare and peace of mind.