Government Proposes To Corporatise EPFO, ESIC
Employees work on laptop computers. (Photographer: Dhiraj Singh/Bloomberg)

Government Proposes To Corporatise EPFO, ESIC

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In a bid to corporatise social security agencies, the government on Wednesday released a draft code that seeks to revamp the structure of Employee Provident Fund Organisation and Employees’ State Insurance Corporation, which would get Chief Executive Officers for the first time.

The draft provides for change in the constitution of EPFO and ESIC, saying the two bodies would be “body corporate”.

At present, EPFO and ESIC work more like autonomous bodies run by trustees and board, respectively under the administrative control of Ministry of Labour & Employment. Both bodies were created by an Act of Parliament.

Besides, it has been a precedent that the labour minister is appointed as chairman of EPFO central broad of trustees as well as ESIC board. Most of the time, the labour secretary has been vice-chairman of EPFO as well as ESIC in the absence of Minister of State for Labour.

The draft code provides that the Centre would appoint chairman and vice chairman of the two bodies. Thus, the appointees could be other than the labour minister and labour secretary.

The draft code also provides for appointment of chief executive officers for the first time, who would be executive heads of EPFO and ESIC. At present, a Central Provident Fund Commissioner and Director General run EPFO and ESIC, respectively. Now, CEOs can be appointed from Indian Administrative Service as well as other services after consultation with the Union Public Service Commission.

Ministry of Labour & Employment has circulated a draft of the Code on Social Security, 2019 and sought stakeholder and public comments till Oct. 25.

The Code will subsume eight Central Labour Acts namely Employees' Compensation Act, 1923; Employees State Insurance Act, 1948, Employees Provident Funds and Miscellaneous Provisions Act, 1952; Maternity Benefit Act, 1961; Payment of Gratuity Act, 1972; Cine Workers Welfare Fund Act, 1981; Building and Other Construction Workers Cess Act, 1996 and Unorganized Workers Social Security Act, 2008.

The government is in the process to concise 44 central labour laws into four broad codes on wages, industrial relation, social security and occupational safety and health.

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