UNIT-2

INDIAN LABOUR ORGANISATION

INTRODUCTION

India is a founder member of ILO which came into existence in 1919.At present ILO has 175
members. A unique feature of ILO is a TRIPARTITE character. At every level in the
organization, governments are associated with the 2 other social partners, namely workers
&employers. All the 3 groups are represented on almost all the deliberative organs of ILO.

The three organs of ILO are:

International Labour Conference: General assembly of ILO- meets every year in the
monthof June.

Governing Body: Executive council of the ILO- meets thrice in a year in the months
ofMarch, June & November.

International Labour Office: A permanent secretariat. The work of the conference &
thegoverning body is supplemented by regional conferences, regional advisory committee,
special conference etc..

The ILO aims to ensure that it serves the needs of working women & men by bringing
together governments, employers & workers to set labour standards develop policies &
device programmes. The very structure of ILO, were the workers & employers together have
an equal voice with governments & its deliberations , shows social dialogues in action. It
ensures that the views of the social partners are closely reflected in ILO labour standards,
policies &programmes.

The ILO accomplishes its work through 3 main bodies which comprise governments,
employers & workers representatives. The ILO encourages this tripartism within its
constituents & member states by promoting a social dialogue b/w trade unions & employers.

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IMPACT OF ILO ON LABOUR WELFARE IN INDIA

Director General Labour Welfare (DGLW) is dealing with the matters concerning policy &
legislations related to workers & administration of welfare funds for specified categories of
workers through 9 regions headed by welfare commissioner who implement the welfare
schemes.

DGLW also deals with RASTHRIYA SWASTHIYA BIMA YOJANA (RSBY) which is a
scheme that provides smart card based cashless health insurance cover for BPL families.

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With the growth & expansion of factories in the mid 19 century new avenues for
employment were created resulting in migration of the labour force from rural areas to urban
areas. At this time in the absences of any state control, the employers were less concerned
about the needs of their employee [working hours, low wages etc]. This situation led to
enactment of number of legislations beginning from 1881.

The Factories Act 1881 is the bases of all labour & industrial lose of the companies. After
ILO was formed in 1919, this act was been amended [1934]. It makes provision for safety,
health & hygiene of the workers. It also prohibits child labour.

Under the Mines Act 1923 which applies to workers employed in mines, the hours of work
are limited to 10 hours per day & 54 per week. The periods of work including rest interval
shall not spread over more than 12 hours in a day. For workers employed underground the
daily limit is 9 hours per day. The act does not contain provisions as so over time work.

The government of India set up an enquiry committee in 1926 to ascertain the loop hole for
irregularity payment of wages. The royal commission of labour considered the reports &
suggestion & enacted payment of wages act 1936.

The Industrial Disputes Act 1947 provided for establishment of industrial tribunals by the
appropriate government.

The weekly holiday act of 1942 prescribes one paid holiday a week for persons employed in
shop, restaurant or theatre. The government is empowered to grant additional half a day
holiday with pay in a week.

Standing orders act 1946 defines the terms of employment of workmen in the form of
standing orders which should be in general conformity with the act.

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AGENCIES OF LABOUR WELFARE

1. Employers: Employers provide welfare facilities either individually or collectively

through associations. They play an important role in providing facilities to industrial
workers. The facilities provided are voluntary as well as statutory.

2. Central Government: A no. of acts has passed by the central government for the welfare
of the workers. There is also an implementation and administration of industrial and
labour laws. Appointment of welfare officer is made compulsory.

3. State Government: The state government runs various health centers and educational
centers for the welfare of employees. State governments have the power to implement the
provisions of various laws, appoint appropriate authority etc. They keep a strict vigil on
employers as well.

4. Trade Unions: The various trade unions are supposed to raise the welfare of the workers
and are expected to provide certain welfare facilities to their members. There are varieties
of trade unions running in our country. They offer educational, sports cultural facilities
etc. to their members. However their role is being impaired by the political involvement.

5. Charitable Organizations: The contribution of such organizations in labour welfare is not

so significant. These agencies provide medical, legal aid, educational facilities
scholarships etc, to the various sections of the workers

EMPLOYEE WELFARE

Employee welfare is a term including various services, benefits & facilities offered to the
employees by the employers. The welfare measures need not be monetary but in any kind are
formed. This includes items such as allowances, housing, transportation, medical insurance
etc. It also includes monitoring of working conditions creation of industrial harmony through
industrial relations & insurance against diseases, accidents, which makes the life worth living
for the employees.

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IMPORTANCE OF EMPLOYEE WELFARE

• Compliance

It means conforming to labour laws and government. As an owner, one is required by law to
provide certain benefits for the welfare of the employees. The owner must match the social
security taxes the employees pay and obtain a worker’s compensation insurance policy. And
if the employee is terminated, the owner must have to fund to extend the health insurance.

• Hiring & retention

The employee might accept a job offer by looking into the various welfare measures provided
to the employees. Also, providing employee benefit will help the company to compete with
other businesses to recruit and retain qualified employees. If other employer’s offer better
benefits, good employees may choose to join the competitor company.

• Employee motivation

When the employer provides plans that are good for employees’ welfare, it shows that the
employer values the employees. This makes the employee feel welcomed and happy in the
company, motivate him to work harder. And if the company’s health plan has wellness
coverage, preventive care, employees are more likely to stay healthy which cuts down on the
absenteeism and sick leaves/days.

• Employee well being

For companies that have a large base of employees working under stressful conditions or
living away from their families, it is important to look at fostering personal happiness and
professional growth. Investing in employees pay dividends in terms of higher productivity
and greater loyalty.

• Company image

Providing a good employee welfare plan reflects well on the business and helps in building a
good image. It may even earn the employer some press coverage, giving free publicity to
improve awareness among potential customers. This may boost the company’s sales and
increase the profits.

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BENEFITS OF LABOUR WELFARE

• To provide better physical & mental health to workers and thus to promote a healthy work
environment.
• Facilities like housing schemes, medical benefits, education & recreational facilities for
workers & their families help is rising their standard of living. This makes workers to pay
more attention towards work and thus increases their productivity.
• Employers get stable workforce by providing welfare facilities. Workers take active
interest in their jobs and work with a feeling of involvement and participation.
• Employee welfare measures increase the productivity of the organization & promote
healthy industrial relations thereby maintaining industrial peace.
• The social evil that exists among the labourers such as substance use can be reduces to
greater extent by welfare policies.

LABOUR WELFARE PROGRAMME

These are provided to increase the motivation of employees. These are of two types

1. STATUTORY MEASURES

Statutory measures are the schemes that are compulsory to be provided by the organization
in compliance with various laws governing welfare, safety & health.

STATUTORY WELFARE ACTIVITIES

OR

FACTORIES ACT 1948 & LABOUR SCHEMES ON WELFARE

Section 42 to 49 of factories act 1948 contains provisions relating to welfare of labour.

Section 42 to 45 are applicable to all the factories irrespective of the no. of workers employed
and sec 46-49 apply to factories employing more than specified no. of workers.

Sec 42- Washing facility.

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 Sec 43 - Facilities for storing and drying.

Sec 44- Facilities for sitting [to provide rest b/w work periods]

Sec 45- First aid appliances (150 workers are employed one first aid box. If more
than 500 are employed ambulance room.)

Sec 46- Canteen (250 employees canteen is must, which supplies good and nutrious
food at subsidized rate.)

Sec 47- shelters, rest rooms, lunch rooms (150 workers suitable shelters of restroom
and lunch room with drinking water facilities, adequate shelter and restrooms should
be provided.)

Sec 48: Crèches (if an organization is having more than 30 women workers crèche
should be provided for children under age group 6.)

Sec 49: welfare officer (Any factory having 500 or more workers, State government
may prescribe the duties, qualifications and conditions of service of welfare officer.)

2. NON-STATUTORY MEASURES

They differ from factory to factory and organization to organization to organization &
industry to industry

DIFFERENT TYPES OF NON-SATUTORY MEASURES

• Personal health care

Some of the companies provide the facility for extensive health check-up

• Flexi-time

The main objective of the flexitime policy is to provide opportunity to employees to work
with flexible working schedules. Flexible work schedules are initiated by employees and
approved by management to meet business commitments while supporting employee
personal life needs.

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• Employee assistance programme

Various assistant programs are arranged like external counselling service so that
employees or members of their immediate family can get counselling on various matters.

• Harassment policy

To protect an employee from harassments of any kind, guidelines are provided for proper
action and also for protecting the aggrieved employee.

• Maternity leave

Employees can avail maternity leave. Paternity leave policies have also been introduced
by various companies also.

• Medi-claim insurance scheme

This insurance scheme provides adequate insurance coverage of employees for expenses
related to hospitalization due to illness, disease or injury or pregnancy

• Employee referral scheme

In several companies, employee referral scheme is implemented to encourage employees

to refer friends and relatives for employment in the organization

CLASSIFICATION OF LABOUR WELFARE ACTIVITIES

Labour welfare activities are broadly classified into 2 types:

1) Intra-Mural Activities
2) Extra-Mural Activities

Intra –Mural activities are all those amenities and services which have been
provided by the employers, inside the factory.

Extra –Mural activities are all those amenities and services which have been
provided by the employers, outside the factory.

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INTRA- MURAL ACTIVITIES EXTRA- MURAL ACTIVITIES

1. Washing and Bathing 1. Housing.

2. Crèches 2. Medical facilities.

3. Rest shelters and canteens 3. Recreational facilities, sports, reading

4. Uniform and protective clothing
5. Drinking water
6. Sanitary and fire fighting
arrangements
7. Occupational safety and health
services
rooms cultural activities.
4. Holiday homes and travel.
5. Educational facilities.
6. Maternity benefits and insurance
schemes.
7. Co-operative stores and societies.

8. Change rooms and good lighting 8. Worker’s clubs

facilities.

INTRA-MURAL ACTIVITIES

1. Health and medical facilities: A healthy workforce is of utmost importance to

industry. The ILO in its conventions and recommendations has laid down standards,
which have had a contributory effect on legislation in India. The ILO convention 25 is
concerned sickness insurance and medical facilities to be provided to an insured
person while convention 103 deals with maternity protection.

2. Canteen: The ILO in its recommendation 102 mentioned this facility with regard to
nutrition, hygiene, finance etc. in India, the factories act places the responsibility on
state governments to make rules that in any specified factory with more than with 250
workers, a canteen or canteens should be provide and certain standards should be
maintained.

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 3. Crèches: The factories act lays down that in any factory with more than 50 women
workers a crèche should be provided and maintained for children less than 6 years in a
clean environment. It should be under the care of women trained in child care and
should have adequate accommodation, lighting and ventilation. Mothers are also
given time to feed their children at necessary intervals.

4. Facilities for storing and drying clothing: It is important to provide suitable places for
keeping clothing not worn during working hours and for drying the wet clothing. This
also includes provision for separate rooms, pegs, lockers and other arrangements
approved by the Chief Inspector in all classes of factories such as engineering
workshops, iron and steel works, oil mills, chemical factories, motor garages,
tanneries etc.

EXTRA MURAL ACTIVITIES

1. Housing Facilities: Some of the employers in the public and private sector provide
housing facilities to their employees. The employees who are not provided
corporation’s quarters are paid house rent allowance.

2. Recreational Facilities: Recreation is considered to be the opposite of work. It has an

important bearing on an individual’s personality as well as his capacity to contribute
to the social development. It provides the worker an opportunity to develop his sense
of physical and mental discipline. Music, dance, drama, sports and games, painting,
carving etc, are different forms of recreation.

3. Transportation Facilities: The growth of industries and workshops outside the city has
made commuting a problem for workers in India. This is because the public transport
system is not fully developed. The employer must ensure that the local bodies should
stream line their operations, increase their fleet and the frequency of buses especially
to labor colonies, industrial estate and townships. The employer can also provide
private transportation facilities if there are serious public transport problems.
Conveyance allowance must be provided to the employees working in night shifts.

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 4. Educational Facilities: Education plays an important part in motivating and enabling
the working population for changes necessary for accelerating progress and for their
mental and physical development. This has been recognized in the social and
economic planning and a suitable financial outlay on education has been made in
different five-year plans. Improvement in the quality of the industrial work force
demands accelerated pace of economic development for which education of workers,
their families and their children is essential.

WELFARE CENTRES

A welfare centre is a centre or a place where the workers/employees receive assistance.

As early as 1931 the royal commission on labour recommended. The appointment of a labour
officer is to eliminate the evil practices of employers against employees; employers did not
pay heed to this recommendation. But the state government took the initiative in 1934, when
it passed the Bombay dispute conciliation act providing for the appointment of labour officer.

The same year Bombay mill owners association was persuaded by the state government to
appoint its own labour officer.

In 1946 labour investigation committee strengthen its position & importance for stress in the
Factories act 1948 which stated that every factory having 500 or more workers is obliged to
employee a welfare officer.

WELFARE OFFICER

A welfare officer is a person who ensures the safety & well being of his employees. Schedule
49 of Factories act provides that every factory where in 500 or more workers are employed,
the employee shall appoint a person who can act as an advisor, counsellor, mediator b/w the
management & the labour for improving the efficiency , productivity of the organisation.

QUALIFICATIONS OF LABOUR WELFARE OFFICER

• A university degree.
• Degree or diploma in social science or social work.

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 • Adequate knowledge of the language spoken by majority of workers in the area where
the factory is situated.
• He should have passed viva-voce test conducted by the commissioner of labour &he
has to get himself enrolled in a list of welfare officers maintained by the
commissioner of labour.
st
• A test is conducted by the commissioner of labour in every quarter, beginning 1 of
January, April, July & October.
• No person shall be allowed to be appointed as welfare officer who has any kind of
connection or interest in the factory & no person shall be allowed to hold such office
after he becomes so interested in the factory.

RECRUITMENT OF WELFARE OFFICER

• The post of a welfare officer shall be advertised in at least 2 newspapers having a

wide circulation in the state, one of which shall be an English newspaper.
• The selection shall be made from among the candidates applying for the post by a
committee appointed by the occupier of the factory.
• The appointment when made shall be notified by the occupier to the state government
has the state government specifies the qualifications, job description of the candidate.

ROLE OF A WELFARE OFFICER

The various roles of a welfare officer are:

1. Supervision
2. Advisor
3. Liaison
4. Counseling

1. SUPERVISOR

The welfare officer plays the role of a supervisor and performs the following activities:

 Safety, welfare & health programmes like housing, recreation and sanitation services.
 Working of joint committees.
 Grant leave with pay.

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 • Addressing the grievance of the workers.

2. ADVISOR

Advising managers in the matters of:

• Formulating welfare policies.
• Apprenticeship training programs
• Complying with statutory obligations to workers
• Developing fringe benefits.
• Workers education.

3. LIAISON

Liaison means communication between two parties or groups. The welfare officer liaison
with many parties such as workers, management, and factory agencies etc.

Liaison with Employees/ workers so that they may:

• Appreciate the need for harmonious industrial relations in the plant

• Resolve disputes, if any
• Understand the limitations under which they operate
• Interpret company policies correctly

Liaison with management so that they may:

• Meet their obligations under the Act.

• Appreciate the worker’s view point on various matters connected with the plant
• Maintain harmonious industrial relations in the plant
• Suggest measures for the promotion of the general well-being of workers.

Liaison with inside factory agencies such as the factory inspector, medical officers and other
inspectors with a view to secure a proper enforcement of the various Acts as applicable to the
plant.

Liaison with other agencies of the community, with a view to help workers to make best use
of community services.
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Liaison with the state labour commissioner with a view of administration of welfare which
involves decisions on welfare policy, organisation of welfare activities and assessment of
effectiveness.

4. COUNSELLING

Counselling is a process of helping another person to find and act upon a solution to their
problems, anxieties, uncertainties and issues. The person conducting counselling is called
counselor and the person being counselled is called counselee or client.

Characteristics or Features of Counselling:

1) Two person involvement: Both counselor and counselee are involved.

2) Communication is direct: Communication is direct with no hidden facts. It is an oral

communication and of open type.

3) Good relationship: There should be a good relationship between counselor and counselee.

4) Advising: In counseling, the counselor is more concerned with the problem; he should
also be duly concerned with the client. He has to examine the problem and advice him the
solution that best fits the problem.

5) Listening: The counselor has to listen first to the problem of the client. The counselor has
to allow the client to talk first.

6) Confidential: Confidentiality is to be maintained and generally no information can be

released without the written authority given by the client.

7) Questioning: Counselor has to ask questions regarding the problem and exploring
techniques and enable the client to find on his problem.

Purpose of Counselling

1. To provide help to employees who are having problem before the problem can take a
serious turn. Ex: Alcohol/substance misuse, increased accident rate etc.
2. To ensure that counseling is separate from disciplinary procedures.

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3. The service must be available and benefit all the employees in the organization.
4. Counseling helps the clients to develop self-esteem, confidence and bring about an
attitude change in his/her.
5. Counseling helps the clients to learn problem solving skills, so that he can deal with
issues in an objective and realistic manner.

Skills required for counselling

• Communicative skills.
• Active listening skills.
• Rational problem solving skills.
• Skills concerning demonstrating empathy and feedback.
• Respect or caring.
• Attentiveness.
• Rapport.
• Genuineness.
• Concreteness.

Principles of Good Counseling

• Strengthening communication between managers/officers and employees/labourers

• Making the employee understand performance level exhibited by him
• Involving the employee in problem solving process
• Enabling the employees to identify elements that contributed to success
• Helping the employee to attain performance objectives
• Encourage the employee to learn
• Focusing on behavior and not personality
• Using reinforcement techniques to shape behavior
• Rebuilding trust and confidence in the employee for achieving performance objectives
• Maintaining and increasing the employee’s self-esteem
• Documenting the discussion
• Ensure reward and punishment for deserving employees at all levels

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TYPES OF PROBLEMS OF COUNSELLING

Counselling is not an easy or a smooth task. Some important types of problems for
counselling are:

1. Interpersonal problems and conflicts.

2. Alcoholism, drug abuse.
3. Stress related problems.
4. Frustration, loneliness, alienation etc...
5. Attitudinal changes, culture adjustment and dealing with occupational obsolesce.
6. Accident victims, rehabilitation.
7. AIDS counseling.
8. Other issues/problems are:
 Anger management.
 Retirement issues.
 Counseling employees who are in high risk/threat jobs such as anti-terrorist squad,
working in an enemy country.
 Disturbed family life.
 Inferiority complex.

FUNCTIONS OF COUNSELLING

1. Advising the employees and listening to them.

2. Release of emotional tension.
3. Giving reassurance.
4. Providing re-orientation.
5. Communication

BASIC REQUISITES OF EMPLOYEE COUNSELLING

• Employee counseling needs to be tackled carefully both on the part of the organization &
the counselor.
• The counselor should be flexible in the approach & be a patient listener.
• Time should not be a constrained in the process.
• The counselor should be able to identify the problem & offer concrete advice.

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• The counselor should be able to help the employees by motivating him & also helping
him in taking appropriate decisions.
• The counselor should either be a professional or mature employee
• Active and effective listening is important
• The counsellor should be able to help the employee to boost the morale and spirit of the
employee, create a positive outlook and help the employee take decisions to deal with the
problem

MANAGER AS COUNSELLOR

• Manager as a counsellor must be a person with caring nature and should attract other
persons towards himself and should be very affectionate in nature.
• Manager counsellor must be expert in industrial psychology and social and extrovert in
nature.
• Manager must prove himself to be the closest and the best friends of the employees, only
then they can become open and free with him which is very necessary for an effective
counseling.

QUALITIES OF A COUNSELLOR

• Open and approachable.

• Empathetic.
• He must be concerned and having a genuine interest and willingness to help and support
employees.
• Attentive.
• Trust worthy ie., respecting confidentiality.
• Observant ie., recognizing whether other are actually in deep trouble or problem or
having just a temporary worry.

IMPORTANCE OF COUNSELLING

• Increase efficiency and productivity.

• Reduce frustration and discontentment.
• Increase confidence and self esteem.

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• Improves working relationship.
• Facilitates growth leading to personal and professional development.

FUNCTIONS OF WELFARE OFFICER

• To maintain discipline in the organization.
• To maintain safety & medical administrations.
• Maintain wage and salary administration
• Taking care of Legislations related to the employee concern
• Counseling the workers in personal, family and work environment
• Supervision of health, safety and wealth programmes
• Advising management – apprenticeship, fringe benefits, workers education etc..
• Maintaining & securing industrial peace by resolving industrial disputes.
• Analyzing the benefits given to the workers & advising the employers for future
improvements.
• Arrangement for redressal of workers problems and securing their interest, grievance
solving etc.
• Working on various acts related to environment, society, plantation and social
responsibility.

STATUS OF WELFARE OFFICER

• ENCOURAGEMENT: Welfare officer encourages provision of amenities such as

canteen, shelters for rest, wash rooms, drinking water, post retirement benefits, recreation,
gratuity payments, granting of loans, legal advice to workers etc.

• FACTORY MANAGEMENT: Welfare officer encourages the factory management in

regulating the grant of leave with wages & explains the workers provisions relating to
leaves &other privileges. He also guides the workers regarding submission of leave
application for regulating authorized leave absence.

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• ADVICE ON PROVISIONS OF WELFARE FACILITIES: Welfare officer helps to
advice on provision of welfare facilities such as housing facilities, sanitation, food stuffs,
individual problems, social & recreational facilities etc.

• SOLVING THE GRIEVANCE OF WORKERS: welfare officer brings to the notice of

the management to grievances that the workers have & acts as a liaison between the
management & labour.

• MAINTAINING HARMONIOUS RELATIONS: To establish contacts & hold

consultations with a view of maintaining harmonious relations between factory
management & workers

• TO WATCH INDUSTRIAL RELATIONS: Welfare officer helps to watch industrial

relations with a view of using his influence in the event of a dispute between the factory
management and workers and to help to bring about a settlement by persuasive effort.

• HE ACTS AS A RELATIONSHIP PROMOTER: Welfare officer helps to promote

relations between the concerned departments of the factory and workers which will bring
about productive efficiency in the working conditions and to help workers to adjust and
adapt themselves to these working environments.

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 UNIT-3

SOCIAL SECURITY

INTRODICTION

The wages provided to the employees particularly of the lower level may not be sufficient to
meet their needs like medical, children , education, maternity needs for women employees
and employers wives. Therefore, governments of various countries insist the employers to
provide the security to their employees against the social evils.

MEANING
Social Security refers to the programs through which the government intends to promote the
welfare of the population through assistance measures that guarantee access to sufficient
resources such as food, shelter, health and well-being of the population at large and
potentially vulnerable groups such as children, the elderly, the sick and the unemployed.

DEFINITION
According to Lord Beveridge, Social security “Is an attack on five giants viz wants,
disease,ignorance, squalor &idleness.
(SQUALOR: Means security against all those evils which come through the unplanned and
unorganized growth of cities.)

According to Maurice Strack, “Social security is the program of protection provided

bysociety against those contingencies of life such as sickness, unemployment, old age,
industrial accidents against which the individual cannot be expected to protect himself and
his family by his own ability.”

FEATURES OF SOCIAL SECURITY

• It is a mechanism to solve the problems of insecurities.

• It is a group effort in place of individual effort.

• It protects the workers from various contingencies of life.

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 • It is a collective effort of employee, Employer and government

• Under this, benefits and services are provided in 3 ways;

• social assistance
• social insurance
• public service

• All social security programs differ from country to country aims at providing some
kind of cash payments to individuals to replace at least a part of lost income that has
occurred due to any such contingencies.

OBJECTIVES OF SOCIAL SECURITY

• The main objective of Social Security is to instil confidence among people that their
standard of living and quality of life will not be adversely affected due to
contingencies.

• It is a mechanism to motivate the employees and to boost their morale.

• It aims at covering 3 types of risks like sickness, employee injury and maturity.

SCOPE OF SOCIAL SECURITY

1. Medical care
It includes costs for medical insurance, medical benefits for the aged, medical
services for injured employees through Workmen’s Accident Compensation
Insurance. It also covers costs related to government- financed medical services like
treatment for tuberculosis, mental disorders and public health services conducted by
local health centres.

2. Pension
This includes payments/cash benefits given to the employees in the form of pension
within the scheme of public pension schemes such as National Pensions and

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 Employee’s Pension Insurance, scheme of gratuity for retired employees and the
scheme for Workmen’s Accident Compensation Insurance

3. Welfare and other benefit

These social security benefits include expenses for public assistances other than
medical services such as cash benefits for child allowance, sickness and injury, leave
compensation benefits paid by the Workmen’s Compensation Accident Insurance and
unemployment benefits from Employment Insurance. This also includes long term
care benefits such as long term care insurance benefits, public assistance long-term
care services, atomic bomb victim long-term care insurance system, partial cost
sharing and family-care leave benefits.

METHODS OF PROVIDING SOCIAL SECURITY

Social security is very comprehensive term. It can be provided to the workers in two ways:
1. Social Assistance
2. Social Insurance

SOCIAL ASSISTANCE

It is one of the oldest forms of social security. It is a kind of help which depends upon certain
conditions & legalities between the workers & the state.

Meaning: Social assistance is a service which provides benefits to persons of small means
asa right, in amount sufficient to meet minimum standards of need as financed from taxation.
Thus it is an obligation of the community or the government.

Features of Social Assistance:

1. The whole cost of the project is met by the state and local units of government.

2. Benefits are paid as of legal right in prescribed categories of needs.

3. These are designed to help people who are in financial difficulties.

4. It is a unilateral obligation of the community.

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5. Social assistance does not provide any legal obligation to its members to give monthly
contributions towards its schemes for getting the benefit.

Scope of Social Assistance:

Contingencies which may be covered by social assistance include:

1. Medical care in time of illness.

2. Medical care or cash allowance during absence of work on account of employment injury.

3. Payment of funeral expenses.

VARIOUS SCHEMES UNDER SOCIAL ASSISTANCE

• Workmen’s compensation act 1923

• Maternity benefit act

• Old age benefits

• Pension

WORKMEN’S COMPENSATION ACT, 1923

It provides for payment of compensation to workmen and their dependence in case of injury
and accident arising in the course of employment, and resulting in disablement or death. The
amount of compensation to be paid depends upon the nature of the injury and average
monthly wages and age of workmen.

An employer is liable to pay compensation if the personal injury caused to a workmen by

accident arising out of and in the course of his employment.

Employer is not liable to pay compensation:

• If injury is caused due to wilful disobedience

• If the injury does not result in total/partial disablement of the workmen for a period
exceeding 3 days
• The workmen having being at the time of the accident under the influence of drinks/drugs

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• Wilful removal or disregard by the workmen of any safety guard or other device which
has been provided for the purpose of security, safety of workmen

MATERNITY BENEFIT ACT, 1961

It was passed to regulate employment of women for certain period before and after child
birth, and to provide for maternity benefits and certain other benefits.

Right to Payment of Maternity Benefits

• Subject to the provisions of the Act, every women shall be entitled to and her employer,
employer shall be liable for payment of maternity benefits
• Maternity benefits is a payment to the women at the rate of average daily wage for the
period of an actual absence, i.e. the period immediately presiding the day of delivery the
actual day of delivery, and the period immediately following that day.

Conditions for Payment of Maternity Benefit

• She must have actually worked in an establishment for period of not less than 3 months in
the 12 months , immediately preceding the date of her expected delivery
• The maximum period for which any women shall be entitled to maternity benefit shall be
3months , of which not more than 6weeks shall preside the date of her expected delivery
• She must give a notice in writing in the prescribed form to her employee and should
nominate in the notice. The person who shall be entitled to receive the benefit on her
behalf. She shall state that she will not work in any establishment during the period.
• The employer shall not deduct the normal and usual daily wages of a women for the
reason only that the nature of the nature of the work assigned to her is not of arduous , or
that the pregnant women has been given a different nature of work or facilities given to
her for nursing the child
• Maternity benefit payable to a woman will be forfeited. If she works in any establishment
after she has been permitted by her employee to absent herself.

43
OLD AGE BENEFITS

In India, the aged are generally dependent on the children for support. The presence of the
aged in the poor families acts to the financial burden. The absence of adequate public health
care facilities and the increasing cost of private health care facilities for the aged can throw
the household into a major crisis.

To solve this problem to some extent national old age pension scheme was introduced as a
public response to the deprivation and insecurity faced by the aged.

Pension scheme has been widely accepted. The scheme has been a success as it has benefited
those found to be neglected by their near and dear ones or living alone and did not have a
regular source of income. With the launching of the Indira Gandhi National Old Age Pension
Scheme, individuals who are 65 years or above and belong to the BPL families have also
been benefitted despite the destitute under the previous schemes. The old age pension scheme
has been brought waste to cover all those who are 65 years and above and belong to the BPL
families.

PENSION BENEFITS

The Pension Fund Regulatory and Development Authority (PFRDA) was established in
India on August 23, 2003 to promote, establishing and regulating pension funds. The
president of India is the guardian of PFRDA of India.

TYPES OF PENSION

1. Pension to member
2. Pension to family (on death of member)
3. Scheme certificate
• This certificate shows the service & family details of a member.
• This is issued if the member has not attained the age of 58 while leaving an
establishment and he applies for this certificate
• Member can surrender this certificate while joining another establishment and the
service stated in the certificate is added with the service he is gaining from the new
establishment.

44
 • After attaining the age of 50 or above , the member can apply for pension by
surrendering this scheme certificate (if total service is at least 10 years )
• This is a better choice than withdrawal benefit, as members dies holding a valid
scheme certificate, his family will get pension (death when not in service).

TYPES OF SOCIAL ASSISTANSE PROGRAMMES

• TRANSFER PROGRAMMES
o They provide cash or in-kind benefits for individuals and families in the
programme.
• SOCIAL SERVICES
o Provide specialized assistance targeted towards vulnerable individuals in or at the
risk of social exclusion due to low education, disability, alcohol or drug addiction
etc

CATEGORIES OF SOCIAL ASSISTANCE

• Public works
• Cash or near-cash transfers ( UCTs ,CCTs ,food vouchers ,seed vouchers
• In-kind transfers (food rations, school feeding programs , seeds and agricultural inputs ).
• Price subsidies ( e.g., on rice and fuel )
• Fee waivers (health care, schooling, utilities, transport, etc.)

• Welfare or social services.

Enforcement: It means as to how the provision of Act would be implemented under ESI
Act–app government, state and central is empowered to enforce the provision of ESI Act.

SOCIAL INSURANCE

Meaning: Social insurance is giving in return for contribution, benefits up to

subsistencelevel, as of right & without means-test so that the individual may build freely
upon it.

45
FEATURES OF SOCIAL INSURANCE

• Scheme of social insurance is financed by the contribution made by the employee &
major portion by the employers
• In all the schemes of social insurance participation is compulsory with few exceptions.
• Contributions are accumulated in specific funds out of which benefits are paid.
 A person’s right to benefit is secured by his contribution record without any test of need
or means.
• The contribution & benefit rates are often related to what the person is or been earning.

SCHEMES UNDER SOCIAL INSURANCE

The two most important social insurance schemes in our country are:

1. The employees state insurance scheme.

2. The employee’s provident fund & miscellaneous provisions scheme.
3. Maternity benefits act.
4. Payment of gratuity act.
5. Employee family pension scheme etc.

DIFFERENCE BETWEEN SOCIAL ASSISTANCE & SOCIAL INSURANCE

 Social assistance is given as a voluntary help but social insurance is granted to those
persons only who pay contribution.
 Social assistance is granted only if certain conditions prescribed by the government
are fulfilled but social insurance there is no requirement of any types of financial
mean or need & benefits are granted without it.

FACTORS RESPONSIBLE FOR PROVIDING SOCIAL SECURITY MEASURES IN

INDIA

• Sickness
• Accidents
• Maternity

46
 • Poverty
• Unemployment
• Old age
• Disablement
• Death

SYNOPSIS OF SOCIAL SECURITY LAWS

• The employees state insurance act, 1948 (ESI ACT) which covers factories and
establishments with 10 or more employees and provides for comprehensive medical
care to the employees and their families as well as cash benefits during sickness and
maternity and monthly payments in case of death or disablement .

• The employees’ provident fund & miscellaneous provisions act, 1952 (EPF & MP
act ) which applies to specific scheduled factories and establishments employing 20 or
more employees and ensures terminal benefits to provident fund , superannuation
pension and family pension in case of death during service . Separate laws exist for
similar benefits for the workers in the coal mines and tea plantations.

• The employee compensation act, 1923 (WC Act), which requires payment of
compensation to the workman or his family in cases of employment related injuries
resulting in death or disability.

• The maternity benefit Act ,1961 ( M.B. Act ) which provides for 12 weeks wages
during maternity as well as paid leave in certain other related contingencies .

• The payment of gratuity act ,1972 (P.G. Act ) which provides 15 days wages for each
year of service to employees who have worked for five years or more in
establishments having a minimum of 10 workers .

• Separate provident fund legislation exists for workers employed in coal mines and tea
plantations in the state of Assam and for seamen

• New Initiatives:

• The various central acts on social security are being examined in the light of the
nd
recommendations of the 2 national commission on Labour . Relevant amendments
47
 are proposed in the EPF and MP act also the ESI act. The consultation process is on
with reference to the amendments suggestions received in case of the maternity
benefit act and the Workmen’s compensation act

• Innovative measures are proposed in the running of the social security measures
schemes of EPFO and ESIC. This includes flexible benefit schemes tailored to the
specific requirements of different segments of the population.

EMPLOYEE STATE INSURANCE ACT 1948

Objective

The ESI Act, 1948 covers factories & establishments with 10 or more employees & provides
for comprehensive medical care to the employee’s & their families as well as cash benefits
during sickness & maternity & monthly payments in case of death or disablement.

Scope

The act applies to whole of the India. It is not applicable to establishments where benefits are
superior. Applicable to all the workers engaged.

Employment Injury

An injury is said to be employment injury if,

• Injury arises out of & in the course of employment.

• Injury should have been caused because of an accident or an occupational disease.
• Injury should be personal to an employee.
• Employment must be insurable.

Insurable Employment

An employment in a factory or establishment to which this act applies is called insurable

employment.

Insured Person

Any individual to whom this act applies or with respect to which contributions are payable
such a person is called an insured person
48
Contributions

The principle employer is normally liable to pay the employers contribution at prescribed
rates. The employees’ contribution is normally deducted from wages.

ESI FUND

Contributions from employees & employers are made into the ESI fund & paid to RBI.

Expenses from the Fund

• Providing medical treatment to the injured

• For extending medical benefits to the families
• For maintaining the corporation, medical benefits council, standing committee, regional
boards etc…
• For maintaining hospitals, dispensaries & ancillary services
• For providing health & welfare to insured employees.

Permanent Partial Disablement

• Injury permanent in nature

• These should be loss or reduction in earning capacity in every employment that the
injured person was capable at the time of the accident

Permanent Total Disablement

• The disablement should be permanent in nature

• The injured must be incapacitated

Temporary Disablement

• The injured is temporarily incapable of performing work

• The injured requires medical treatment
• The injured doesn’t have the capacity to perform the work which he was doing prior to
injury

49
IMPORTANCE

Insured persons & their family are entitled to different types of benefits. These benefits are
broadly classified into,

1. Medical benefits
2. Cash benefits

• The employees registered under the scheme are entitled to medical treatment for
themselves & their dependent, unemployment cash benefit in certain contingencies &
maternity benefit for women employees.
• In case of employment related disablement or death there is provision of disablement
benefit & a family pension, respectively.
• Funeral benefit to dependents of insured persons
• Super specialty treatment through private tie up network as well as through its own
super specialty hospitals situated throughout India.
• Outpatient medical facilities are available in 1398 ESI dispensaries
• Inpatient care is available in 145 ESI hospitals
• Cash benefits can be availed in any of 783 ESI centers throughout India
• From time to time ESI relaxes conditions for disbursement of sickness benefit &
super specialty treatment
• Recent years, in addition to insured workers, poor families can also avail facilities in
ESI hospitals & dispensaries.

ESIC (or) ADMINISTRATION OF THE SCHEME

ESIC has been created under the act to administer ESI schemes. It is a statutory body.

• It is a body corporate having a perpetual succession & common seal. It shall save & be
saved in its name.
• It may employ the necessary staff for the efficient transaction of its business
• It is assisted by standing committee which acts as executive body
• To advice the corporation on the medical side, a medical benefit council is constituted.

50
POWERS OF ESIC

• Employment of necessary staff for the efficient transaction of its business

• Raising loans & taking measures for discharging such loans with the sanction of the
central government
• Appointing inspectors for the purpose of the act
• Promoting measures for the improvement of the health & welfare of the insured person
• Taking necessary steps for the rehabilitation & re-employment of insured persons.

DUTIES OF ESIC

• Preparing budget showing receipts & expenditure

• Submitting a copy of the budget for the approval of the central government
• Maintaining correct accounts of its income & expenditure in a prescribed form by central
government
• Auditing the accounts by auditors appointed by central government
• Submitting the annual report of its work & activities to central government
 Valuing its assets & liabilities by a valuer appointed with the approval of central
government
• Placing the annual report, auditor report & budget before the parliament.

DIFFERENT SCHEMES UNDER ESI

Sickness benefit: (Section 46)

An insured person shall be entitled to sickness benefit only if his sickness is certified by a
duly appointed medical practitioner. He will not be entitled to sickness benefit for an initial
waiting period of two days. The sickness benefit cannot be paid more than 56 days in any
year.

Disablement benefit: (Sec .46(1))

An insured person suffering from disablement as a result of an employment injury is entitled

to a benefit known as disablement benefit.

It is allowed subject to the following conditions:

51
• It is periodical payment
• It is payable to an insured person who
• Suffers from disablement
• As a result of employment injury
• Sustained as an employee under conditions mentioned in the act
• The benefit is payable when the injury is duly certified by an insurance medical officer as
provided under the regulations.
• The benefit shall be paid at such rates and subject to such conditions as may be prescribed
by the central government.
• A person who sustains permanent disablement whether total or partial shall be entitled to
periodical payments for such disablement at such rates and for such period and subject to
such conditions as may be prescribed by the central government.

Maternity benefit (Section 50)

An insured woman shall be entitled to maternity benefit in case of

• Confinement
• Miscarriage
• Sickness arising out of pregnancy
• Premature birth of the baby
• An insured woman shall be qualified to claim maternity benefit only if she get certificate
of pregnancy. An insured woman shall in case of miss carriage be also be entitled for the
maternity benefit by meeting some conditions.

Dependent’s benefit (Section 52)

If an insured person dies as a result of an employment injury sustained as an employee, his

dependents who are entitled for compensation under the act shall be entitled to periodical
payment referred as ‘Dependent’s benefit’

In case of death of the insured person, the dependent’s benefit at ‘full rate’ shall be payable to
his window and children as specified under section 52(2).

52
In case, the deceased person does not leave a window or legitimate or adopted child, this
benefit shall be payable to the other dependents as follows:
th
• To a parent or grand-parent, for life at an amount equal to 3/10 of the full rate and if
there are two or more parents or grandparents the amount payable to the parents or
grandparents shall be equally divided between them
• To any other
• Male dependent, until he attains the age of 18 years;
• Female dependent until she attains the age of 18 years or until marriage whichever is
th
earlier, at an amount equivalent to 3/10 of the full rate.

Medical benefit (Section 50)

An insured person or any member of his family whose condition requires medical treatment
and attendance shall be entitled to receive medical treatment.

• The person shall be entitled to medical benefit during any period for which contribution
have been received.
• An insured person and his family shall be entitled for medical treatment such as
provided by dispensary, hospital, clinic or other institutions to which they are allotted.
• Section 59 makes provision for the establishment and maintenance of hospitals,
dispensaries and other medical and surgical services by the corporation with the
approval of state government.

As per section 56 the medical benefit may be provided in the following form:

• Out-patient treatment; or
• Attendance in a hospital, dispensary, clinic or other institutions; or
• By visits to the home of the insured person; or
• Treatment as in-patient in a hospital or other institution

Funeral benefit (section 46)

In case the insured person dies the expenditure on his funeral known as “ Funeral Expenses”
shall be payable to the oldest surviving members of the family.

53
• Where the deceased person did not have a family or was not living with his family or was
not living with his family, the funeral benefit shall be payable to the person who actually
incurred the expenditure on the funeral.
• The amount of such payment shall not exceed $1500 and the payment has to be made
maximum within 3 months of the death of the insured deceased person. The claim for
payment of funeral expenses should be submitted in the prescribed documents within 3
months of the death.

PROVIDENT FUND

Meaning:

The employee’s provident fund is compulsory contributory fund for the future of the
employee after retirement or for his dependents in case of his early death.

PURPOSE

• This benefit is meant for economic welfare of the employees.

• Provident fund scheme of the act provides for monetary assistance to the employees
and/or their dependents during post-retirement life.
• This facility provides security against social risks and these benefits enables the industrial
workers to have better retired life.
• Its aim is the provision for a better future of industrial workers on his retirement and for
the dependents in case of death while in establishment or service.
• It is a big post retirement benefit and a piece of welfare legislation.

OBJECTIVES OF PROVIDENT FUND

• To inculcate the habit of saving among workers on a regular basis.

• To make some provisions for the future of the industrial workers after his retirement.
• To make some provisions for his dependents in case of his early death.
• To provide substantial security and timely monetary assistance to industrial employees
and their families when they are in distress and/ or unable to meet family and social
obligations.

54
• To protect them in old age, disablement , early death of the bread winner and in some
other contingencies.

TYPES OF PROVIDENT FUND

• Statutory Provident Fund

Statutory provident fund is the oldest type of fund and it was started in the year 1925,
through a provident fund act of 1925. This fund was started with a view of providing
savings amongst government employees. Generally this fund is maintained by
government or semi government departments like railways, RBI, college, universities etc.
The employee’s contribution towards the employee’s statutory provident fund and the
amount of interested earned on the accumulated balance is to be included in the income of
employee. The employees over contribution will qualify for rebate u/s 88.

• Recognized Provident Fund

It is a fund to which the commissioner of income tax has given the recognition as required
under the income tax act. Generally this fund is maintained by industrial undertakings,
business houses, banks etc. The employee’s contribution over and above 12% of employee’s
salary will be included in the employee’s salary income for tax purpose.

The employee’s contribution towards this fund will fully qualify for rebate under section
88. Interest on provident fund credit balance up to prescribed rate of 9.5 % is exempted ,
but interest credited over and above such rate is deemed to be employees salary income of
that previous year.

• Unrecognized Provident Fund

It is the provident fund which is not recognized by the commissioner of Income tax. The
employer and the employees both contribute towards this fund. The employee’s
contribution is added in the salary and he will not be allowed any rebate of tax while
computing the total tax of employee. The employee is entitled to relief under section
89(1).

55
• Public Provident Fund
 Few nationalized banks like State Bank of India provides facilities for opening of
public provident fund account.
 It can be opened by any individuals or Hindu Undivided Family.
 One can deposit any amount from 100 Rs to 70,000 in a year in this account.
 It carries a interest rate of 8% max 12 deposits can be made to PPF account once
in a year.
 After 5 years one half of the amount laying in the account can be withdrawn
.Interest enjoyed by PPF account holder is not taxable and the money laying in
this account cannot be attached by any “court decree”.

Introduction and Amendments in the Act

 The employees Provident fund act was passed in 1952.

 The act was amended in 1971 to provide for family pension and life insurance benefits.
 It was again amended in 1976 for introducing deposit-linked insurance scheme.

SCOPE OF PROVIDENT FUND ACT 1952

• APPLICABLE TO:
Any establishment which is a factory engaged in an industry and in which 20 or more
persons are employed.

• NOT APPLICABLE TO:

• Any establishment registered under the Co-operative Societies Act 1912.
• To any establishments belonging to central or state government where this act is not
applicable.
• Any other establishment newly setup until the expiry of a period of 3 years from the
date of its establishment.

56
EMPLOYER OBLIGATIONS TOWARDS EMPLOYEES FOR PROVIDENT FUND

The principal duty has been imposed on the employer to such fund. The act lays down that
both employer and the employees shall contribute towards the fund.

EMPLOYER’S CONTRIBUTION

The employer is required to contribute the following amounts:

 Towards employee’s provident fund and pension fund.

• In case of establishment employing less than 20 persons:
10% of the basic wages, dearness allowance and retaining allowance if any.
• In case of other establishment employing 20 or more persons:12% of wages +D.A.

GRATUITY

Gratuity is one of the retirement benefit .To begin with gratuity was treated as a payment
gratuitously made by the employer to his employee at his pleasure. But now gratuity is
regarded as legitimate claim.

The payment of gratuity act, 1972 provides a retirement benefit to the workmen who have
rendered long and clean service to the employer and have thus contributed to the prosperity of
the employer.

a. Gratuity is a reward for long and meritorious service.

b. Gratuity is one of the retirement benefits.
c. “Gratuity is a lump sum payment by an employer to an employee as a retirement
benefit after superannuation or on the termination of services for recognized reasons”.

OBJECTIVES OF THE PAYMENT OF GRATUITY ACT 1972

• Gratuity enables the employee to meet the new situations which mean a reduction in
earning or even total stoppage of earnings.

57
 • The general principal underlying gratuity scheme is that of faithful services over a
long period the employee is entitled to claim a certain amount as a retirement benefit.

Main Provisions of Act

st
The act received the assent of the president of India on 21 Aug 1972 and came into force on
th
16 Sep 1972.

Scope of the Act

1. The Act is applicable to whole of India except in states of Jammu and Kashmir.
2. The Act applies to every factory, mine, shop or establishment, port and Railway
Company.
3. Every establishment or shop in which 10 or more employees are or were employed.

APPROPRIATE GOVERNMENT

It may be either central or state government.

CONTINUOUS SERVICE

It is a period of not less than 5 yrs .minimum 5 years service is necessary to qualify an
employee for the payment of gratuity. Continuous service means uninterrupted service .It
includes services which are interrupted by sickness, accident, leaves, absence from duty
without sanctioned leave, lay –off, strike and lockout.

EMPLOYEE

All persons are not entitled for gratuity, only those persons who are employees under this act
are entitled for gratuity.

EMPLOYER

Employer may be a central or state govt.

58
FAMILY

In case of male employee the family shall be deemed to consists of himself, his wife, his
children whether married or unmarried- his dependent parents and the dependent parents of
his wife and the children of his pre-deceased son if any.

RETIREMENT

Termination of service of an employee due to any reason other than superannuation will fall
within the scope of retirement.

WAGES

Wages means all which is earned by an employee while on duty or on leave in accordance
with the terms and conditions of his employment and which are paid or payable to him in
cash.

WHEN GRATUITY IS PAYABLE?

An employee who has put in not less than 5yrs of continuous service will become entitled for
gratuity on termination of his service for the reasons below:

 Superannuation.
 Retirement or resignation.
 On death or disablement of the employee due to accident or disease.

The completion of the continuous service of 5 years shall not be necessary where the
termination of employment is due to death or disablement of the employee. In case of the
death of the employee, the gratuity would be paid to his nominee or legal heirs if there is no
nominee.

CALCULATION OF GRATUITY

In Case Of Non-Seasonal Establishment:

Gratuity payable=15 days wages X no.of completed years of service [part of a year in excess
of 6 months is counted as 1 year].

GRATUITY = 15*NO.OF COMPLETEDYEARS*LAST PAY DRAWN

26

59
 In Case Of Seasonal Establishment:

Gratuity payable=7 days wages*no.of seasons for which employed.

Case of Piece-Rated Employees:

Wages (excluding overtime wages) for the period of 3 months.

15 days wages immediately preceeding the Termination of his employment

No.of working days in 3 months.

Note: The amount of gratuity payable should not exceed 3,50,000 in any case.

Maximum Amount Of Gratuity Payable

Should not exceed 3,50,000 in any case

Forfeiture of gratuity

• Willful omission causing any damage or loss to employer

• For any mis conducted for which the services employees are terminated

• Any act of violence, disorderly conducted for which employees services are
terminated.

TYPES OF FRINGE BENEFITS OR VARIOUS LABOUR WELFARE

MEASURES UNDER FACTORIES ACT

1.Payment for time 2. Employee 3.safety & health 4.welfare 5.old age &
not paid security recreational retirement benefits
facilities

60
Hours of Retrenchme
work nt
Safey Canteens provident fund
measures
compensation
Paid Workmens Consumer deposit linked
Lay-off compensation societies insurance
holidaysShi
compensation
ft premium
Health benefits Housings gratuity
Holiday pay
Legal aids medical benefits
Paid vacation
Employee pension
counselling

Welfare
organisation
holiday homes

Educational
facilities

Transportation

Parties and
picnics

miscellaneous

I. PAYMENT OF TIME NOT WORKED:

1. HOURS OF WORK:
 Sec 51 of factories act 1948 specifies that no adult worker shall be required to work in
a factory for more than 48n hours in any week.
 Sec 54 of act restricts the working hours to 9 in a day
 In some organizations working hours are less that legal requirement.
61
 2. PAID HOLIDAYS:
 According to factories act 1948 an adult worker shall have a weekly paid holiday
preferable Sunday.
 When the worker is deprived of weekly holidays he is eligible for compensatory
holiday of the same no. in the same month.

3. SHIFT PREMIUM:
Companies operating second and third shifts pay premium to the workers who are
required to work during the odd hours shift.

4. HOILDAY PAY:
Generally organization offer double the normal rate of the salary to those workers, who
work on paid holidays.

5. PAID VACATIONS:
Working in manufacturing , mining and plantations who worked for 240 days during a
calendar year are eligible for paid vacation at the rate 1 day for every 20 days worked in
case of adult worker and at the rate of 1 day for every 15 days worked in case of child
workers.

II. EMPLOYEE SECURITY:

• Physical and job security to the employee should also be provided with a view to
promoting security to the employees and his family members.
• Confirmation of the employee on the job creates a sense of job security.
• Further a minimum and continuous wage or salary gives a sense of security to the
life.
• Payment of wage act, the minimum wages act, payment of bonus act, provides
income, security to the employees.

2. RETRENCHMENT COMPENSATION:
 The non-seasonal industrial establishment employing 50 or more workers has to give
one months notice or one month’s wages to all the workers who are retrenched after
one year’s continuous service.

62
  Compensation is paid at the rate of 15 days wages for every completed year of service
with a maximum of 45 days wages in a year.
 Workers are eligible of compensation even in case of closing down of undertaking.

2. LAY-OFF COMPENSATION:

In case of lay-off compensation employees are entitled to lay –off compensation at the
rate of 50% of the total of the basic wages and dearness allowance for the period of their
lay –off except foe weekly holidays .lay-off compensation can be normally paid up to 45
days in a year .

III. SAFETY AND HEALTH:

Employee’s safety and health should be taken care of in order to protect the employees
against accidents, unhealthy working conditions & to protect workers capacity.
Factories act 1948 stipulated certain requirements regarding working conditions with a
view to provide a safe working conditions with a view to provide a safe working
environment. These provisions relate to cleanliness, disposal of waste, ventilation,
spittoons, drinking water etc.

1. SAFETY MEASURES:
Provisions relating to safety measures include:
• Fencing of machinery.
• Work on or near machinery in motion.
• Probation of employment of women and children near cotton openers.
• Precaution in case of fire against dangerous fumes, inflammable dust etc.

2. WORKERS COMPENSATION:
• This act is intended to meet the contingency of invalidity and death of a worker due
to an employment injury or an occupational disease specified under act at the sole
responsibility of the employer
• The act covers the employees whose wage is less than rs.500 per month. amount of
compensation depends upon the nature of injury and monthly wages of the

63
 employee. Dependents of the employee are eligible for compensation in case of
death of the employees.

3. HEALTH BENEFITS:
 Today various medical benefits like hospital clinical and dispensary facilities are
provided by the organization not only to employees but also to their family
members.
Benefits under ESI Act:
Employees state insurance act deals about the health benefits. This act is applicable to
all factories, establishments, running with power and employing 20 or more workers .
Employees in these concerns and whose wages do not exceeds rs 1000 per month are
eligible for benefits under act.

A. Sickness Benefit: Insured employee is entitled to get cash benefits for a maximum
of56 days in a year under this benefit.

B. Maternity Benefit: Insured women employees are entitled to maternity leave for
12weeks[6 weeks before the delivery and 6 weeks after the delivery]

C. Disablement Benefit: Insured employees who are disabled temporarily or

permanentlydue to the employment injury and occupational diseases are entitled to get
the cash benefits.

D. Dependents Benefit: If an injured person dies as a result of an employment

injurysustaines as an employee, his dependents who are entitled to compensation
under the act shall be entitled to periodical payment referred to as dependent benefit.

E. Medical Benefits: This benefit shall be provided to an injured employee or to a to

amember of his family, where the benefits is extended to his family.
 Outpatient treatment or attendance in hospital clinic etc.
 Treatment as in-patient and a hospital
 By visits to home of the injured person.

64
 VOLUNTARY ARRANGEMENT:

Most of the larger organization provide health services over and above the legal requirement
to their employees free from requirement to their employees free from cost by setting up
hospital , clinics etc.

IV. WELFARE RECREATIONAL FACILITIES:

1. CANTEENS: Factories employing more than 250 workers have to provide canteen which
is statutory obligation according to the factories act.
 Others have provided this facility voluntarily.
 Food stuffs are provided at subsidized prices.
 Some companies provide lunch rooms when canteen facilities are not available.

2. CONSUMER SOCIETIES: Most of the large organizations located far away from towns
and which provide housing facility near the organization setup consumer stores in the
employees colonies and supply all necessary goods at fair prices

3. HOUSING:
 Of all the requirements of the workers decent and cheap housing accommodation
is of great significance.
 Some organizations provide decent and cheap housing facilities by providing
quarters near the factory.
 Some organizations arrange for housing loans to employees and encourage them
to construct houses.

4. LEGAL AID: Organizations also provide assistance or aid regarding legal matters to
employees as and when necessary through companies lawyers and other lawyers.

5. EMPLOYEE COUNSELLING: Organizations provide counseling services to the

employees regarding their personal problems through professional counselors. Employee
counseling reduces absenteeism, turn over etc.

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 6. WELFARE ORGANISATION AND WELFARE OFFICER: some organizations set up
welfare officer with a view to provide all types of welfare facilities at one centre and
appointed welfare officers to provide the welfare benefits continuously to all employees.

7. HOLIDAY HOMES: Few large organization established holiday homes at a no. of hill
stations and other centers with low changes of a accommodation.

8. EDUCATIONAL FACILITIES: Organization provides educational facility not only to

the employees but also to their family members. Involves setting up of schools,
reimbursement of fees, providing grant – in –aid to other schools where a considerable
no. of students are from the children of employees.

9. TRANSPORTATION: companies provide conveyance facilities to their employees from

the place of their residence to place of work as most of the industries are located outside
the town.

10. PARTIES AND PICNICS: Companies provide these facilities with a view to include a
sense of association, belongingness, openness and freedom among employees.

11. MISCELLANEOUS: organizations provide other benefits like organizing games, sports,
with awards setting up of clubs, performance awards, festival gifts, birthday gifts etc.

V. OLD AGE AND RETIREMENT BENEFITS:

Employers provide some benefits to the employees after retirement and during old age
with a view to create a feeling of security about the old age.
These benefits include
 Provident fund
 Pension
 Deposit linked insurance
 Gratuity
 Medical benefits.

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THE PRINCIPLE SOCIAL SECURITY LAWS ENACTED IN INDIA
ARE THE FOLLOWING

ESI ACT 1948

This act covers factories and establishments with 10 or more employees . it deals with
comprehensive medical care provided to employees and their family members . In addition it
also provides for cash benefits during sickness and maternity and also monthly payments in
case of death or disablement.

THE EMPLOYEES PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT

1952

These applies to specific scheduled factories and establishments employing 20 or more

employees and ensure terminal benefits to provident fund, superannuation pension, and
family pension in case of death during the service.

THE WORKMEN’S COMPENSATION ACT 1923

This act requires the payment of compensation to the workmen or his family in case of
employment related injuries resulting in death or disablement.

MATERNITY BENEFITS ACT 1961

These acts provide for 12 weeks wages during maternity as well as paid leaves in certain
other related contingencies.

THE PAYMENT OF GRATUITY ACT 1972

This act provides 15 days wages for each year of service to the employees who have worked
for 5 years or more in an establishment having a minimum of 10 workers.

GROWTH OF LABOUR WELFARE AND SOCIAL SECURITY IN

INDIA

Labour welfare and social security measures have grown and extended to both organizational
and unorganized sector employees.

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ORGANISED SECTOR EMPLOYEES
ESI act, PF act, workers compensation Act, etc deals with the social security to the workers in
organized sector. In addition there are a large number of welfare funds to certain specified
segments of workers such as beedi, construction workers etc.

UNORGANISED SECTOR EMPLOYEES

Labour welfare and social security schemes are extended to unorganized sector employees
under the unorganized sector workers social security scheme.

STOCK-OPTION SCHEME: This scheme allows the employees to purchase the shares of the
company at fixed and reduced prices. Employees are motivated when the company allows
them to buy the shares at the concessional prices. (2 MARKS)

T5 OF WELFARE MEASURES

Most of the organizations have been extending the welfare measures to their employees year
after year for the following merits:

1. Meets Employee Demand: Employees demand more and varied types of

fringebenefits rather than pay like because of reduction in tax burden on the part of
the employees.

2. Buys Employees Loyalty: Providing employees welfare measures leads to

employeesatisfied employees because loyal to the organization.

3. Buys Employees Commitments: Employees increase their commitment to the

jobhaving availed of welfare measures.

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4. Loyalty to Employee Family Members: Since welfare measures are also provided
tothe employees family members they become loyal to the organization having
availed of welfare measures.

5. Meets Trade Union Demands: Trade unions compete with each other for
gettingmore and new variety of fringe benefits to their members. By providing
various fringe benefits these trade unions demands are met.

6. Satisfies Employers Preference: Employers prefer fringe benefits to pay-hike,

sothey will be more satisfied and are motivated by these welfare measures.

7. Improves Human Relations: Human relations are maintained when the

employeesare satisfied economically, socially, and psychologically. These fringe
benefits satisfy the workers economic, social, psychological needs. Consumer stores,
canteens, recreational facilities etc satisfy the workers social needs. Whereas
retirement benefits satisfy psychological problems about post retirement like.
However most of the benefits minimize the economic problems of employees .Thus
fringe benefits improve human relations.
8. Create & Improve Sound IR: Welfare measures satisfy employees and trade
unionsand thus prevent grievances &industrial disputes leads to sound IR.

9. Provide Qualitative Work Environment &Work Life: Welfare measures

improvethe quality of work life as well as general life.

10. Provide Security To The Employees Against Social Risks Like Old Age

11. Protects The Health Of The Employees And To Provide Safety To The Employees
Against Accidents.

12. Create a Sense of Belongingness among Employees & to retain them: By

welfaremeasures employees prefer to stay with the organizations for longer period.
Therefore, fringe benefits are called GOLDEN HAND-CUFFS.

13. Meets Requirements Of Various Legislations Relating To Fringe Benefits.

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DEMERITS OF WELFARE MEASURES

Cost to the Employer: Providing welfare measures to the employees and their familymembers
invariably increases cost of labour to the employer

As A Matter of Right: Employees and their family members feel that they have legal rightsto
get welfare measures. Therefore employees sometimes may not be satisfied.

Discrepancies & De-Motivation: Employer may commit some mistakes while providingwelfare
measures which may lead to discrepancies .These situations leads to employee de-motivation.