Unorganised sector Current Affairs - 2020

Labour Ministry transfers Cess Funds for the Construction Workers to fight against COVID-19

On March 24, 2020, the Ministry of Labour and Employment transferred funds to the account of construction workers in the backdrop of outbreak of COVID-19.


The Labour Ministry has directed the state governments and Union Territories to transfer Rs 52,000 crores to the accounts of construction workers. Around 3.5 crore workers who were registered with the Construction Welfare Boards were benefitted under this.


The step has been taken by the Ministry according to the ruling under Section 60 of Building and Other construction Workers Act, 1996 (BOCW Cess Act). Also, the Cess funds are allowed to be collected under BOCW Cess Act.

BOCW Cess Act

Under the act, the cess is collected from every employer working in construction work of Government or other Public Sector undertaking. It is collected by the state Government.

What is Cess?

In Colonial India, Cess was a taxation prefix. For instance, it was collected as irrigation-cess, education-cess, etc. In modern India, it refers to tax collected for a specific purpose.

Facts Box: Drafts Security Code

The Union Government recently circulated the Draft Security Code that integrates existing labor laws and provides new initiatives to provide social security to workers of unorganized sector, insurance and helath benefits to gig workers. It includes drivers of private vehicle hiring services as well. The code also aims at corporatization of organizations like ESIC And EPFO.

Key Features of the Code

Insurance, life cover, PF for unorganized sector employees

  • According to the code, the Central Government shall formulate welfare schemes for the workers of unorganized sector from time to time on matters relating to life, disability, maternal benefits, health, old age protection.
  • While framing schemes the government will look out for key initiative relating to the workers’ housing, educational scheme for their children, funeral assistance, old age assistance, etc

Corporatization of ESIC and EPFO

The world body for the EPFO And ESIC related world bodies have been added in the scheme. This will bring an end to the autonomous body status of organizations that are responsible for pension, retirement and insurance. It aims to make the EPFO a more structured national body.

Gig Worker

The Gig workers will get insurance, health and maternal benefits under the security code.

Maternal Benefits

Every woman worker under the act will be entitled to payment of maternity benefit. The payment is to be at the rate of average daily wage for the period of her actual absence.

Merging existing labor laws

The Code on Social Security will merge the following laws

  • Employees Compensation Act, 1923
  • Employees Insurance Act, 1948
  • Maternal Benefit Act, 1961
  • Provident Funds and Miscellaneous Provisions Act, 1952
  • Cine Workers Welfare Fund Act, 1981
  • Unorganized Workers’ Social Security act, 2008