Social Security PDF

Class notes- Social Security in India
Lecture- 1 Introduction to Social

Security
Meaning of Social Security- Protecting a worker and his family against work or health
related eventualities.
Eventualities like Sickness, Maternity, Disability, Death, Unemployment, Old age.
• Social Security in India covers treatment, rehabilitation or compensation.

• If there is no provision of social security then there can be no human dignity.
• Lack of Social Security in India leads to destitution, crime, child labour, etc.
Definition of Social Security by Sir William Beveridge:

In 1942, Sir William Beveridge headed a committee that reviewed the national
schemes of social insurance in Great Britain during the post war period. In his repost he has
defined social securities as follows – The security of an income to take place of the earnings
when they are interrupted by unemployment by sickness or accident to provide for
retirement through age, to provide against the loss of support by the death of another
person and meet exceptional expenditure, such as those connected with , death, birth and
marriage.
The Beveridge repost argued that there were five giants that were stalking the land and that
should be tackled. They are:
• Want
• Disease
• Ignorance
• Squalor
• Idleness
Major characteristics
• Social Security measures are established by law.
• They provide cash benefits to replace at least a part of income in
• meeting contingencies such as employment, maternity, employment injury, sickness,
old age etc.
• These benefits are provided in three major ways such as social assistance, social
insurance and public services.
The most well-known techniques adopted by social security at present at present are no
doubt social assistance and social insurance which are discussed as follows:
Social Assistance:
Social Assistance schemes will grant benefits to people needing them. Social assistance is a
devise organized by the state by providing cash assistance and medical relief, to such
members of the society as they cannot get them from their own resources.
International Labour organisation on Social assistance

The ILO defines social assistance schemes as one that provides benefits to persons of small
means granted as of right in amount is enough to meet a minimum standard of need and
financed from taxation.
The special characteristics of this measure is that it is financed wholly from the general
revenues of the state and benefits are provided free of cost.
Social Insurance:
Social Insurance was first introduced by Otto Von Bismarck in Germany and since spread its
root across the countries. Social insurance is a plan insurance which aimed for protecting
the wages of those workers who do not have sufficient sources to support their own self or
their families in case of loss of income due to meeting contingencies in their work life.
Basic features of schemes of social insurance:
➢ Certain risks which cannot be faced by the persons in their individual capacity are faced
collectively be a group of persons.
➢ For that purpose, they have pooled together their resources.
➢ Benefits are provided to them in case of contingency.
➢ This makes them maintain their standard up to a subsistence level.
➢ The payment of contributions is obligatory since they are insured against the risk
compulsorily.
Objectives of Social Security:

Compensation, Restoration and Prevention are the three major objectives of Social Security.
➢ Compensation implies security of income. It is based on this consideration that during the
period of contingency of risks, the individual and his/her family should not be subjected to a
double calamity, thus by destitution and loss of health, limb, life or work.
➢ Restoration commutates cure of one’s sickness, reemployment to restore him/her to

earlier condition. In a sense, it is an extension of compensation.
➢ Prevention measures are directed to avoid the loss of productive capacity due to
sickness, unemployment or invalidity to earn.
Social Security measures in India

In 1927 formulating a health insurance scheme received the attention of the
Government of India in 1927. The Royal Commission on Labour also stressed the need for
health insurance for industrial workers. The problem of health insurance was discussed in
the Labour Ministers Conference in 1940, 1941and 1942 which has resulted in the
appointment of a committee presided over by Professor B.P. Adarkar in 1943. Professor B.P.
Adarkar was entrusted with the task of preparing details of the compulsory insurance for
industrial workers. He submitted his report in 1944 with the recommendations based on
compulsory contributory principles wherein contributions by the workers depending upon
their earnings in slabs. The Adarkar’s report was modified by ILO experts and finally it was
passed as the Employees’ State Insurance Act in 1948.
Professor B. P. Adarkar developed the first Social Security scheme in India in 1944.
• The govt enacted the Employees’ State Insurance Act, 1948 (ESI Act) to set up
Employee State Insurance Corporation (ESIC).
• Employees Provident Fund Act, 1952 was enacted to set up Employees Provident
Fund Organisation (EPFO).
• Some earlier schemes like Workmen’s Compensation Act (1923) paved the way for
workers & families to receive benefits in case of injuries.
• The Maternity Benefit Act, 1961 provides for 12 weeks wages during maternity plus
paid leaves.
• The Payment of Gratuity Act, 1972 provides 15 days wages for each year of service
to employees who have worked for 5 years or more in organizations with 10 man
strength or more.
Social security schemes in India

India’s social security schemes cover the following types of social insurances:
1. Pension
2. Health Insurance and Medical Benefit
3. Disability Benefit
4. Maternity Benefit
5. Gratuity
In India, the coverage gap is about 90% of the total estimated workforce. Coverage gap
refers to workers who do not have access to any formal scheme for old-age income.
While a great deal of the Indian population is in the unorganized sector and may not
have an opportunity to participate in each of these schemes, Indian citizens in the organized
sector and their employers are entitled to coverage under the above schemes.
There are two major social security plans in India, the Employees’ Provident Fund
Organization (EPFO) and the Employees’ State Insurance Corporation (ESIC).
The EPFO runs a pension scheme and an insurance scheme. All of these are
supposed to grant EPFO members and their families benefits for old age, disability, and
support in case the primary breadwinner dies.
The ESIC covers low-earning employees providing them with basic healthcare and
social security schemes. Originally aimed at factory workers, the coverage was extended to
include greater parts of the population, e.g. employees in hospitals or educational
institutions. The ESI scheme has been implemented in all states excluding Manipur and
Arunachal Pradesh.
Recently launched schemes
Atal Pension Yojana (APY)

• Under the APY, subscribers would receive a fixed minimum pension at the age of 60
years, depending on their contributions, which itself would vary on the age of joining
the APY.
• The Central Government would also co-contribute 50 percent of the total
contribution or Rs. 1000 per annum, whichever is lower, for a period of 5 years, who
are not members of any statutory social security scheme and who are not Income
Tax payers.
• The pension would also be available to the spouse on the death of the subscriber
and thereafter, the pension corpus would be returned to the nominee.
• The minimum age of joining APY is 18 years and maximum age is 40 years.
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

• Under PMJJBY, life insurance of Rs. 2 lakh would be available on the payment of
premium of Rs. 330 per annum by the subscribers.
• The PMJJBY will be made available to people in the age group of 18 to 50 years
having a bank account from where the premium would be collected through the
facility of “auto-debit”.
Pradhan Mantri Suraksha Bima Yojana (PMSBY)

• Under PMSBY, the risk coverage will be Rs. 2 lakh for accidental death and full
disability and Rs. 1 lakh for partial disability on the payment of premium of Rs. 12 per
annum.
• The Scheme will be available to people in the age group 18 to 70 years with a bank
account, from where the premium would be collected through the facility of “auto-
debit”.
• Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) Yojana: Under the scheme, the
government has promised a direct payment of Rs. 6000 in three equal instalments of
Rs. 2000 each every four months into the Aadhar bank accounts of eligible
landholding Small and Marginal Farmers (SMFs) families.
Pradhan Mantri Kisan Mandhan Yojana

Honourable Prime Minister Narendra Modi recently launched a pension scheme for
farmers from Ranchi, Jharkhand.
• Under the scheme, farmers between 18 and 40 years of age will get Rs 3,000
monthly pension after reaching 60.
• The scheme has an outlay of Rs 10,774 crore for the next three years.
• All small and marginal farmers (with less than 2 hectares) who are currently between
18 to 40 years can apply for the scheme.
• Registration for the farmers’ pension scheme was started on August 9,2019.
• Life Insurance of India (LIC) has been appointed insurer for this scheme.
• The farmers will have to make a monthly contribution of Rs 55-200, depending on
the age of entry, in the pension fund till they reach the retirement date.
• This is an optional scheme.
• The government started registrations for the Pradhan Mantri Kisan Maan-Dhan
Yojana (PM-KMY) on August 9,2019.
• The enrolment for the voluntary scheme is being done through the Common Service
Centres (CSCs) located across the country.
• No fee is charged for registration under the scheme.
• The Centre pays Rs 30 to CSC for every enrolment to ensure that the scheme
witnesses maximum coverage.
Pradhan Mantri Laghu Vyapari Mandhan Yojana, 2019

The new scheme that offers pension coverage to the trading community was launched
from Jharkhand.
• Under the scheme, all shopkeepers, retail traders and self-employed persons are
assured a minimum monthly pension of Rs. 3,000/- month after attaining the age of
60 years.
• All small shopkeepers and self-employed persons as well as the retail traders with
GST turnover below Rs. 1.5 crore and age between 18-40 years, can enrol for this
scheme.
• The scheme would benefit more than 3 crore small shopkeepers and traders.
• The scheme is based on self-declaration as no documents are required except
Aadhaar and bank account.
• Interested persons can enrol through CSCs across the country.
• To be eligible, the applicants should not be covered under the National Pension
Scheme, Employees’ State Insurance Scheme and the Employees’ Provident Fund or
be an Income Tax assessee.
• The Central Government will make matching contribution(same amount as
subscriber contribution) i.e. equal amount as subsidy into subscriber’s pension
account every month.
• Five crore traders are expected to join the scheme in the next three years.
Lecture- 2 Employees’ provident Funds
and Miscellaneous provisions Act,
1952
The Employees’ provident Funds and Miscellaneous provisions Act, 1952 is enacted
to provide a kind of social security. The Act mainly provides retirement or old age benefits,
such as Provident Fund, Superannuation Pension, Invalidation Pension, Family Pension and
Deposit Linked Insurance.
The Act provides for payment of terminal benefits in various contingencies such as
retrenchment, closure , retirement on reaching the age of superannuation, voluntary
retirement and retirement due to incapacity to work.
Four Schemes are framed under the Act by the central government:
• The Employees’ Provident Funds Scheme, 1952.

• The Employees’ Family Pension scheme, 1971.
• The Employees’ Deposit-Linked Insurance Scheme, 1976.
• The Employees’ Pension Scheme, 1995.
The Employees' Provident Fund and Miscellaneous Provisions Act 1952 applies to the
whole India except Jammu & Kashmir.
Application of the Act

Employees' Provident Fund and Miscellaneous Provisions Act 1952 is applicable to:
• Every establishment in which 20 or more are employed.

• Every establishment which is engaged in any one or more of the industries specified
in Schedule I of the Act or
• Any establishment notified by the central government.
Any establishment to which the Act applies shall continue to be governed by the Act
even if the number of persons employed therein at any time falls below
Definitions
“basic wages”-
“basic wages” means all emoluments which are earned by an employee while on duty or on
leave or on holidays with wages in either case in accordance with the terms of the contract
of employment and which are paid or payable in cash to him, but does not include-
a) the cash value of any food concession;
b) any dearness allowance that is to say, all cash payments by whatever name called
paid to an employee on account of a rise in the cost of living, house-rent allowance,
overtime allowance, bonus, commission or any other similar allowance payable to
the employee in respect of his employment or of work done in such employment;
c) any presents made by the employer;
Schemes under EPF

Employees provident fund scheme 1952
EPF is the main scheme under the Employees' Provident Funds and Miscellaneous Provisions
Act, 1952. The scheme is managed under the aegis of Employees' Provident Fund
Organisation (EPFO).
Under EPF scheme, an employee has to pay a certain contribution towards the scheme and
an equal contribution is paid by the employer. The employee gets a lump sum amount
including self and employer's contribution with interest on both, on retirement.
• Employees drawing less than Rs 15000 per month have to mandatorily become
members of the EPF.
• Employee whose 'pay' is more than Rs 15,000 a month at the time of joining, is not
eligible and is called non-eligible employee.
However, an employee who is drawing 'pay' above prescribed limit (currently Rs
15,000) can become a member with permission of Assistant PF Commissioner, if he and his
employer agree.
Contribution by employer and employee

• The contribution paid by the employer is 12% of basic wages plus dearness
allowance plus retaining allowance.
• An equal contribution is payable by the employee also.
In the case of establishments which employ less than 20 employees or meet certain
other conditions as notified by the EPFO, the contribution rate for both employee and the
employer is limited to 10 percent.
For most employees of the private sector, it's the basic salary on which the
contribution is calculated. For example, if the monthly basic salary is Rs 30,000, the
employee contribution towards his or her EPF would be Rs 3,600 a month (12 percent of
basic pay) while the equal amount is contributed by the employer each month.
It should, however, be noted that not all of the employer's share moves into the EPF
kitty. Out of employer's contribution, 8.33% will be diverted to Employees' Pension Scheme,
but it is calculated on Rs 15,000.
Higher voluntary contribution by employee or Voluntary Provident Fund
The employee can voluntarily pay higher contribution above the statutory rate of 12 percent
of basic pay. This is called contribution towards Voluntary Provident Fund (VPF) which is
accounted for separately. This VPF also earns tax-free interest. However, the employer does
not have to match such voluntary contribution.
Withdrawals from the EPF account

According to the EPF Act, for claiming final PF settlement, one has to retire from service
after attaining 55 years of age. The total EPF balance includes the employee's contribution
and that of the employer, along with the accrued interest.
Partially withdraw
A person is eligible to withdraw money in advance from their PF Account for purposes like
marriage, education, medical treatment etc, subject to the prescribed conditions. Note that
the said advance is totally tax-free and interest-free.
There is, however, a window to partially withdraw the amount for those nearing
retirement. Anyone over 54 can withdraw up to 90 percent of the accumulated balance with
interest.
With effect from December 6, 2018, the employees can withdraw 75 per cent of
their EPF corpus after remaining unemployed for one month and balance 25% he is out of
employment for 60 straight days or more.
Interest on account
The interest rate for every month is 8.65%, which may differ every year (interest rate is
calculated every month, but it is deposited in the account at the end of the financial year)
Employee’s pension scheme, 1995

This scheme can help employees with long years of service receive a modest but
guaranteed pension throughout their retired life. All organised sector employees in India
who are enrolled with the Employees Provident Fund Organisation (EPFO) automatically
become members of the Employees’ Pension Scheme (EPS) as well.
While Employees contribution of 12% goes entirely into the EPF account which gives you a
lump sum on retirement, 8.33% of your employer’s contribution goes into the EPS to fund
your pension payouts post-retirement. The government also adds 1.16% of your pay to the
EPS kitty every month.
The maximum pay on which the EPS to accept employers’ is ₹15,000 per month. It is capped
at ₹1,250 per month (8.33% of ₹15,000).
Employees deposit linked insurance scheme, 1976

The scheme Established the purpose of providing life insurance benefits to the
employees. The benefit under the scheme is to provide the incentive to the members to
save more in the Provident fund account. The benefit under this scheme is linked to the
amount of accumulation in the Provident fund account of the member. All the members of
the employee’s Provident Fund Scheme are covered as members of the employee’s deposit
linked insurance scheme also.
Administration
Administration of the scheme given under this act is done by the central board, state
board, and regional committee, a chief executive committee appointed and constituted by
the central government.
Central board
The Fund shall vest in, and be administered by, the Central Board constituted under section
5A. Central board is created by official gazette notification given by the Central government.
Functions
• All the matter regarding “administration of the Scheme”, such as the progress of
recovery of PF, contribution and other charges, speedy disposal of prosecution,
settlement of claims and sanctions of advances.
• Section 6 and Section 6C discussions how the central board should use their fund
vested on them.
• Duty of the central board is to send an annual report to the Central government, of
its work and activities.
• The central government will submit a report to the comptroller and Auditor General
of India. Comments of Central board is laid down before parliament.
Constitution of the following a person as a member :

• Chairman and a vice-chairman appointed by the central government
• The central Provident fund commissioner, ex-official
• Among Central government officials (not more than five-person)
• A representative of states (not more than 50)
• Representing the employer of the establishment (10 people)
• Representing the employee of the establishment (10 people)
Executive committee: Section 5AA

Executive Committee to assist the Central Board in the performance of its functions. The
Executive Committee shall consist of the following persons as members, namely:-
a) a Chairman appointed by the Central Government from amongst the members of
the Central Board:
b) two persons appointed by the Central Government from amongst the persons
referred to in clause b of sub-section 1 of section 5A;
c) three persons appointed by the Central Government from amongst the persons
referred to in clause c of sub-section 1 of section 5A;
d) three persons representing the employers elected by the Central Board from
amongst the persons referred to in clause d of sub- section 1 of section 5A;
e) three persons representing the employees elected by the Central Board from
amongst the persons referred to in clause e of sub- section 1 of section 5A;
f) the Central Provident Fund Commissioner, ex-officio.
State Board: section 5 B

The central government, after consulting with any of the states constitute the state board in
the following state, as provided for in the scheme.
Constitution of the state board is done by the notification in the official gazette.
Central government from time to time prescribes the duties to be performed by the state
board and the powers exercised by the state government.
Every board of trustee constituted under this section is a Body Corporate-

Being a body corporate, it has perpetual succession, a common seal and
right to sue or get sued in its name.
Regional committee
Until state board is constituted, the Central Government may set up Regional Committee,
which is under the control of Central Government, it works under the advice of the
following person:
Appointment of officers.
(1) The Central Government shall appoint a Central Provident Fund Commissioner who shall
be the chief executive officer of the Central Board and shall be subject to the general control
and superintendence of that Board.
(2) The Central Government may also appoint a Financial Adviser and Chief Accounts
Officer to assist the Central Provident Fund Commissioner in the discharge of his duties.
(3) The Central Board may appoint, subject to the maximum scale of pay, as may be
specified in the Scheme, as many Additional Central Provident Fund Commissioners,
Deputy Provident Fund Commissioners, Regional Provident Fund Commissioners,
Assistant Provident Fund Commissioners and such other officers and employees as it may
consider necessary for the efficient administration of the Scheme, the Pension Scheme and
the Insurance Scheme.
(4) No appointment to the post of the Central Provident Fund Commissioner or an
Additional Central Provident Fund Commissioner or a Financial Adviser and Chief Accounts
Officer or any other post under the Central Board carrying a scale of pay equivalent to the
scale of pay of any Group „A‟ or Group „B‟ post under the Central Government shall be
made except after consultation with the Union Public Service Commission:
EMPLOYEES’ PROVIDENT FUND ORGANIZATION
EPFO is one of the World’s largest Social Security Organisations in terms of clientele and the
volume of financial transactions undertaken.
• Its a statutory body-. Employees’ Provident Funds & Miscellaneous Provisions Act,
1952 and this law extends to the whole of India.
• EPFO comes under the purview of the Ministry of Labor and Employment and came
into being in 1951.
Structure of EPFO
• The Act and all its Schemes are administered by a tripartite Board called Central
Board of Trustees (EPF). It has representatives of Government (both Central and
State), Employers and Employees.
• The Board is chaired by the Ministry of Labour and Employment, Government of
India. The Central Board of Trustees (EPF) operates 3 schemes:
• The Employees’ Provident Funds Scheme 1952 (EPF)-Accumulation plus interest
upon retirement, resignation , death.
• The Employees’ Pension Scheme 1995 (EPS)-Monthly benefits for superannuation/
retirement, disability, survivor, widow (er), children.
• The Employees’ Deposit Linked Insurance Scheme 1976 (EDLI)-The benefit provided
in case of death of an employee who was a member of the scheme at the time of the
death.
• As on date, the Act extends to 187 classes of establishments. Any establishment
falling in any of the 187 categories mentioned above and employing more than 19
persons automatically comes under the purview of the EPF & MP Act 1952.
Functions Of EPFO
• EPFO performs the dual role of being the administration and overseeing the
implementation of the Act and also as a service provider for the covered
beneficiaries which includes both employers and employees i.e., members.
• EPFO assists the Central Board of Trustees (EPF) in the administration of Provident
Fund Scheme, a Pension Scheme and an Insurance Scheme for the registered
establishments in India and includes employees of such establishments and
international workers who are covered.
• EPFO’s functioning includes enforcement of the Act across the country, maintenance
of individual accounts, settlement of claims, investment of funds, ensuring prompt
pension payment and updating records etc.
• EPF Organization is also the nodal agency for implementing Bilateral Social Security
Agreements with other countries.
UAN- Universal Account Number
Universal account number (UAN) is number given to an employee by the Ministry of
Employment and Labour under the government of India, who is maintaining PF account. It
used to know information or track information done by his employer regarding his provided
fund (PF). When an employee joined in the new organisation, he was assigned with new PF
account, after UAN came into existence, the member of the assemble (employee) all his PF
account associated with multiple Ids of difference organization at one place. So through
UAN, difficulties faced by the employee when he/she joins the new organization is
overcome, with UAN they can track the activities if there are any payment issues.
Uses of UAN
• It is a unique number given to an employee, which is independent of employers.
• UAN is used to link all the PF account when the employee is switching his company.
• An employer can authenticate his employee by verifying this number and KYC
documents.
• EPF passbook can be verified by sending SMS EPFOHO UAN ENG TO 7738299899
from the mobile number which is registered under employee provident fund
organization.
• An employee can check his deposit done by his employer through online using UAN
number, and you can also get a monthly update regarding your deposit done by the
employer.
• Transparency Through UAN
• Through UAN employee can check the employer is depositing his PF amount
periodically, by registering on EPF member Portal using his UAN.
• The employee would be able to find out whether his employer is deducted or hold
back his PF.
Lecture- 3
The Employee’s State Insurance Act,
1948
The Employees’ State Insurance Act, 1948 is a social security legislation that provides for
medical care and cash benefit in the contingencies of sickness, maternity, disablement and death
due to employment injury to workers.
Constitutionality of the Act

The ESI Act serves as a constitutional instrument because of its practice of providing insurance and
medical insurance. While the ESI Act is mostly executed through the ESI Corporation, the Central
Government takes control of most of the proceedings.
This control by the Central Government largely contributes to the constitutionality of the
Act, because Insurance, be it public or private, is listed in the Seventh Schedule of the Indian
Constitution as a Union List subject i.e. it can only be legislated by the Central Government.
Applicability
The ESI Act primarily applies to premises where 10 or more persons are employed and therefore
applies to both organised and unorganised sectors.
• Under Section 2(12) the Act is applicable to non-seasonal factories employing 10 or more
persons.
• Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, restaurants,
cinemas including preview theatres, road-motor transport undertakings and newspaper
establishments employing 10* or more persons.
• Further under section 1(5) of the Act, the Scheme has been extended to Private Medical and
Educational institutions employing 10* or more persons in certain States/UTs.
*Note: However the threshold for Coverage of establishments is still 20 Employees in Maharashtra
and Chandigarh
Seasonal factory
Seasonal factory means a factory which is exclusively engaged in one or more of the following
manufacturing processes, namely, cotton ginning, cotton or jute pressing, decortication of ground-
nuts, the manufacture of coffee, indigo, lac, rubber, sugar (including gur) or tea or any
manufacturing process which is incidental to or connected with any of the aforesaid processes and
includes a factory which is engaged for a period not exceeding seven months in a year —
(a) in any process of blending, packing or repacking of tea or coffee ; or
(b) in such other manufacturing process as the Central Government may, by notification in the
Official Gazette, specify ;
Eligibility
Employees whose monthly wages are Rs 21,000 or below are covered under the ESI Act. The wage
limit for coverage under the Act had been increased from Rs 15,000 per month to Rs 21,000 in
December 2016.
Finance
ESI Scheme, like most of the Social Security Schemes the world over, is a self financing health
insurance scheme. Contributions are raised from covered employees and their employers as a fixed
percentage of wages. The State Governments, as per provisions of the Act, contribute 1/8th of the
expenditure of medical benefit within a per capita ceiling of Rs. 1500/- per Insured Person per
annum. Any additional expenditure incurred by the State Governments, over and above the ceiling
and not falling within the shareable pool, is borne by the State Governments concerned.
Contribution
E.S.I. Scheme being contributory in nature, all the employees in the factories or establishments to
which the Act applies shall be insured in a manner provided by the Act. The contribution payable to
the Corporation in respect of an employee shall comprise of employer's contribution and employee's
contribution at a specified rate. The rates are revised from time to time.
The rate of contribution has been reduced from 6.5 per cent to 4 per cent of the wages. The
employers’ contribution is being reduced from 4.75 per cent to 3.25 per cent and employees’
contribution being reduced from 1.75 per cent to 0.75 per cent effective from 01.07.2019.
ESIC Contribution (revised on 01/07/2019)
Particulars Present Rate Earlier Rate
Employer Share 3.25% 4.75%
Employee Share 0.75% 1.75%
Total 4.00% 6.50%
In 1978, the Insurance Medical Services (IMS) was established under the Ministry of Labour,
Employment, Training & Factories Department by separating ESI branch from Medical & Health
Department.
Principal employer to pay contribution in the first instance
The primary employer has to collectively pay the contribution, both his own and that of his
employees, regardless of whether they are directly employed under him or are working through an
immediate employer.
• If a directly employed employee fails to pay his contributions, then the employer can
recover that contribution only by deducting the wages of said employee.
• The employer bears all the transfer costs of the payment to the Corporation.
Collection of Contribution
• An employer is liable to pay his contribution in respect of every employee and deduct
employees contribution from wages bill and shall pay these contributions at the above
specified rates to the Corporation within 15 days of the last day of the Calendar month in
which the contributions fall due. The Corporation has authorized designated branches of the
State Bank of India and some other banks to receive the payments on its behalf.
Employers to furnish returns and maintain registers in certain cases

According to the provisions given as per the ESI Act, the principal and immediate employers are to
submit all the investment profits, as well as any and all details relating to their employees in any
factory under their jurisdiction. In case of failure to submit a return, that the corporation had
reasonable cause to believe, should have been submitted, the corporation can require the
employers to present all the details.
Social Security Officers and their functions

ESIC has the power to appoint persons as Social Security Officers. Their functions are mostly to serve
a role in inspecting the function of the corporation.
• If required, he can acquire any information from any employer as he sees fit.
• He can enter any corporation at any time and can get all the accounts, books and other
employment documents presented to him without any due notice. This can include
information like wages, expenses, etc.
• He can inspect and look into any matter regarding the employers and employees as and
when required under the jurisdiction of the court.
• He can make copies or take extracts from any register or account back as per his discretion.
Area Covered
Under Section 1(3), the ESI Scheme is now notified in 566 Districts in 34 States and Union Territories,
which include 381 fully notified districts and 185 partially notified districts where scheme is notified
in Districts Headquarters Area & in Centers. The scheme is yet to be implemented in Arunachal
Pradesh and Lakshadweep.
Benefits
Section 46 of the ESI Act grants benefits to employees as social security in case of injury, which can
be availed during the course of employment. There are 6 types of benefits that can be availed:
1. Medical benefit.
2. Sickness benefit.
3. Maternity benefit.
4. Dependants’ benefits.
5. Disablement benefits.
6. Other benefits.
1. Medical Benefit
Full medical care is provided to an Insured person and his family members from the day he
enters insurable employment. There is no ceiling on expenditure on the treatment of an Insured
Person or his family member. Medical care is also provided to retired and permanently disabled
insured persons and their spouses on payment of a token annual premium of Rs.120/- .
2. Sickness Benefit (SB)

Sickness Benefit in the form of cash compensation at the rate of 70 per cent of wages is payable
to insured workers during the periods of certified sickness for a maximum of 91 days in a year. In
order to qualify for sickness benefit the insured worker is required to contribute for 78 days in a
contribution period of 6 months.
Extended Sickness Benefit (ESB): SB extendable upto two years in the case of 34 malignant and
long-term diseases at an enhanced rate of 80 per cent of wages.
Enhanced Sickness Benefit : Enhanced Sickness Benefit equal to full wage is payable to insured
persons undergoing sterilization for 7 days/14 days for male and female workers respectively.
3. Maternity Benefit (MB)

Maternity Benefit for confinement/pregnancy is payable for Twenty Six (26) weeks, which is
extendable by further one month on medical advice at the rate of full wage subject to contribution
for 70 days in the preceding Two Contribution Periods.
4. Disablement Benefit
Temporary disablement benefit (TDB) : From day one of entering insurable employment &
irrespective of having paid any contribution in case of employment injury. Temporary Disablement
Benefit at the rate of 90% of wage is payable so long as disability continues.
Permanent disablement benefit (PDB): The benefit is paid at the rate of 90% of wage in the form
of monthly payment depending upon the extent of loss of earning capacity as certified by a Medical
Board
5. Dependants Benefit (DB)

DB paid at the rate of 90% of wage in the form of monthly payment to the dependants of a
deceased Insured person in cases where death occurs due to employment injury or occupational
hazards.
Earlier in February 2019, the income limit for availing the medical benefit for the dependent
parents of an Insured Person covered under ESI Scheme has been enhanced from the existing
Rs.5000 per month from all sources to Rs.9000 per month.
6. Other Benefits
Funeral Expenses : An amount of Rs.15,000/- is payable to the dependents or to the person who
performs last rites from day one of entering insurable employment.
Confinement Expenses : An Insured Women or an I.P. in respect of his wife in case confinement
occurs at a place where necessary medical facilities under ESI Scheme are not available.
In addition, the scheme also provides some other need based benefits to insured workers.
• Vocational Rehabilitation: To permanently disabled Insured Person for undergoing VR

Training at VRS.
• Physical Rehabilitation: In case of physical disablement due to employment injury.
• Old Age Medical Care: For Insured Person retiring on attaining the age of superannuation or
under VRS/ERS and person having to leave service due to permanent disability insured
person & spouse on payment of Rs. 120/- per annum.
Rajiv Gandhi Shramik Kalyan Yojana

This scheme of Unemployment allowance was introduced w.e.f. 01-04-2005. An Insured Person who
become unemployed after being insured three or more years, due to closure of
factory/establishment, retrenchment or permanent invalidity are entitled to :-
• Unemployment Allowance equal to 50% of wage for a maximum period of upto Two Years.
• Medical care for self and family from ESI Hospitals/Dispensaries during the period IP receives
unemployment allowance.
• Vocational Training provided for upgrading skills - Expenditure on fee/travelling allowance
borne by ESIC.
• Incentive to employers in the Private Sector for providing regular employment to the
persons with disability :
• Minimum wage limit for Physically Disabled Persons for availing ESIC Benefits is Rs 25,000/-.
• Employerss' contribution is paid by the Central Government for 3 years.
Atal Beemit Vyakti Kalyan Yojana
Atal Beemit Vyakti Kalyan Yojana is a welfare measure being implemented by the Employee’s State
Insurance (ESI) Corporation.
• It offers cash compensation to insured persons when they are rendered unemployed.
• The Scheme was introduced in 2018.
• The scheme provides relief to the extent of 25% of the average per day earning during the
previous four contribution periods (total earning during the four contribution period/730) to
be paid up to maximum 90 days of unemployment once in lifetime of the Insured Person.
• The claim for relief under the Atal Beemit Kalyaan Yojana will be payable after the three
months of his/her clear unemployment.
Eligibility
• Employees covered under Section 2(9) of the Employee’s State Insurance (ESI) Act 1948.
• The Insured Person should have been in insurable employment for a minimum period of two
years.
• The Insured Person should have contributed not less than 78 days during each of the
preceding four contribution periods.
• The contribution in respect of him should have been paid or payable by the employer.
• The contingency of the unemployment should not have been as a result of any punishment
for misconduct or superannuation or voluntary retirement.
Finance Minister Nirmala Sitharaman in her press conference today, while announcing the second
tranche of relief measures, talked about the steps being taken towards the Employees’ State
Insurance (ESI) for the welfare of workers. These are, however, outside the economic package as
these are still under discussion in Parliament. Currently, ESI is only for those organizations which
employe more than 10 people with them. The FM said that the task are on to make available the
ESI scheme on voluntary basis for those firms employing even less than ten people.
Also, the government is considering to make ESI scheme mandatory for employees working
in hazardous industries which will come into effect after the government issues the notification.
Establishment of Employees’ State Insurance Corporation

The ESI Act exercises its function through the Employees’ State Insurance Corporation,
established via Section 3, a body created to maintain social security. It was established on 24
February, 1952. The corporation is supposed to grant relief to the employees in case of medical
emergencies.
Constitution of Corporation
The composition of the ESIC is defined in Section 4, and it is as follows:
• The Director-General.
• Chairman, appointed by the Central Government.
• Vice-Chairman appointed by the Central Government.
• Not more than 5 persons nominated by the Central Government.
• 1 person to represent each state.
• 1 person representing the Union Territories.
• 10 persons representing employers.
• 10 persons representing employees.
• 2 persons representing the medical profession.
• 3 members of parliament (2: Lok Sabha and 1: Rajya Sabha).
Term of office of members of the Corporation

Via Section 5, the following members are appointed for up to a 4 year period:
• Director-General.
• Chairman.
• Vice-Chairman.
• The 5 people nominated by Central Government.
• The members representing each state.
• The members representing each Union Territory.
Terms of office of members of Standing Committee

The following members are appointed for a two year period:
• The Chairman.
• The 3 members representing the states.
Medical Benefit Council

The Medical Benefit Council is an advisory body on matters related to the administration of medical
benefits under the ESI scheme. It consists of:
• The Director-General of ESIC as Chairman.

• The Director-General of Health Services as co-Chairman.
• The Medical Commissioner of ESIC.
• One member for each state appointed by State Government.
• Three members representing employers.
• Three members representing employees.
• Three members including one woman representing the medical profession.
Tenure of the members of the Medical Benefit council

The following members of the Medical Benefit Council are appointed for a period of 4 years, these
are:
• The Director-General of ESIC as Chairman.

• The Director-General of Health Services as co-Chairman.
• The Medical Commissioner of ESIC.
• One member for each state appointed by State Government.
Principal Officers
The Principal Officers referred to under this Section are the Director-General and/or Financial
Commissioner, to act as the CEO for ESIC.
They serve as whole-time officers and are not permitted to undertake any work outside of office
jurisdiction without the sanction of the Central Government.
The time period for the appointment of any principal officer may not exceed 5 years.
The operation of their fees, disqualification, and cessation of seats operate in the same manner as
that of their subordinates.
Staff
ESIC has the jurisdiction to employ staff of officers as may be necessary for the optimum running of
the corporation, however, according to the prerequisites in Section 17, the sanction for creating any
staff position has to be acquired from the Central Government. Their salary shall be prescribed by
the Central government within a particular range, which cannot be exceeded.
The scale of pay will be determined on the basis of their educational qualifications, method of
recruitment, duties, and responsibilities, etc.
Employees’ State Insurance Fund

The Employees’ State Insurance Fund is the primary monetary source for the ESIC to perform its
functions. All contributions paid under this Act and all other money received on behalf of the
Corporation shall be paid into this fund to be held and administered by the Corporation.
These could be in the form of grants, donations or gifts by the government.
Expenses of the fund

The ESI Fund is responsible for maintaining the expenses of ESIC, which are as follows:
• Payment of benefits and provision of medical treatment and attendance to insured persons
and their families, if required.
• Payment of fees and allowances to members of the Corporation, the Standing Committee
and the Medical Benefit Council, the Regional Boards, Local Committees and Regional and
Local Medical Benefit Councils.
• Payment of salaries, leave and joining time allowances, travelling and compensatory
allowances, gratuities and compassionate allowances, pensions, etc.
• Establishment and maintenance of hospitals, dispensaries, and other institutions and the
provision of medical and other ancillary services for the benefit of insured persons and their
families, if required.
• Payment of contributions to any State Government, local authority or any private body or
individual, towards the cost of medical treatment and attendance provided to insured
persons and their families, if required.
Administrative expenses
Administrative expenses are termed so, those expenses which cover the costs of administration of
ESIC, prescribed by the Central Government.
Budget etc. to be placed before Parliament

The annual report, the audited accounts of the Corporation along with the report of the Comptroller
and Auditor-General of India, and the comments of the Corporation on such report under section 34
and the budget, as finally adopted by the Corporation, shall be placed before the Parliament.
Lecture 4
Payment of Gratuity Act, 1972
Gratuity is the benefit that is received by an employee for the services he/she has
rendered to an organisation. In simple terms, a Gratuity is a form of ‘Gratitude’ paid by the
employer to his employee for his/her services and commitment towards company.
Introduction
The Payment of Gratuity Act is a genre of various statutes like the Minimum Wages
Act, Employment and Social Policy, etc. which is an extension of labour laws and it lays
down the minimum benefits to be provided to the employees. It is a social security
enactment providing for the welfare benefits of the employees working in industries,
companies and organisations. The Act has been amended in 2018 (The Payment of Gratuity
(Amendment) Act, 2018).
Applicability of the Act

1. Every factory (as defined in Factories Act), mine, oilfield, plantation, port and railway.
2. Every shop or establishment to which Shops & Establishment Act of a State applies in which
10 or more persons are employed at any time during the year end.
3. Any establishment employing 10 or more persons as may be notified by the Central
Government.
4. Once Act applies, it continues to apply even if employment strength falls below 10.
The Act doesn’t apply to central or state government employees and other employees covered by
any other act for Gratuity payment. The “Employee” under the Payment of Gratuity Act 1972 means
any person employed on wages for doing any type of work, including those hired in the managerial
or administrative capacity. The key consideration for gratuity payment is that the person should be
employed on wages. Those employed as apprentices are not eligible for gratuity.
Continuous Service
According to this Act, the continuous service means an uninterrupted service during the
employment period. An employee shall be said to be in continuous service even his/her
service in interrupted by way-
1. sickness,
2. accident,
3. leave,
4. absence from duty without leave,
5. leave with full wage,
6. temporary disablement,
7. laid-off period,
8. Maternity leave: 26 weeks (The Payment of Gratuity (Amendment) Act, 2018),
whether such uninterrupted or interrupted service was rendered before or after the
commencement of this Act.
In case of period of one year
Employee will be treated as he in continuous service, if he is employed by employer for
the period of
• 190 days employment under the ground in mines, or in establishment which

works less than 6 days in a week.
• 240 days in case of other any establishments (factories, companies, etc.)
In case of period of 6 months
Employee will be treated as he in continuous service, if he is employed by employer for
the period of
• 95 days employment under the ground in mines, or in establishment which

works less than 6 days in a week.
• 120 days in case of other any establishments (factories, companies, etc.)
In case of seasonal establishments
An employee of a seasonal establishment shall be deemed to be in continuous service if
he has actually worked for not less than 75% of the numbers of days on which the
establishment was in operation during the 1 year or 6 months.
Seasonal Establishments in which, although work is carried on throughout the year, the
number of employees is regularly subject to seasonal fluctuations for reasons associated
with the weather, their sales or their location. For example, hotels and restaurants in
health spas and holiday resorts, gravel and sand pits and stone quarries are deemed to
be seasonal establishments.
Controlling Authority
The controlling authority shall be appointed by the appropriate government for the proper
administration of this Act. The government may appoint different controlling authority for
different areas also.
Payment of Gratuity
Gratuity shall be payable to an employee on the termination of his employment after he has
rendered continuous service for not less than 5years, -
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease :
The completion of continuous service of 5 years shall not be necessary where the
termination of the employment of any employee is due to death or disablement:
A retired person is also entitled to gratuity amount along with his pension.
In the case of death or disablement by accident or disease, the employer is under obligation
to pay the gratuity amount to the employee’s nominee or the legal heir, as the case may be,
irrespective of the number of years continuous services has been rendered.
The Act also has a provision for the minors as a legal heir in which the controlling authority
has to invest the amount in such banks or other financial institutions for the benefit of the
minor until he/she becomes a major.
Calculation of gratuity
[Sec 4 (2)]
Monthly salary
Gratuity = × 15 X Number of years of service
26
• Monthly salary= last month drawn salary by the employee.
• 26 = total number of working days in a month.
• 15 = number of days in half of the month.
Example for monthly salaried employees

Gratuity = (Basic + DA) x 15/26 x number of years.
Example: If an employee had joined a job on 01-08-2004 and retired or got his job
terminated on 30-04-2018, with last drawn basic Salary of Rs 30,000 and DA of Rs 13000, his
Gratuity will be:
(Rs 30,000+Rs 13000) x 15/26 x 14 = Rs 3,47,307.70/-
Note: Here the employee has completed 14 years of service. The seven months of his first
year (August 2005 to March 2006) is to be counted as one year as it is more than six months
of service.
Example for seasonal employees

In the case of seasonal employees, 7 days wages for each season of service completed by
the employee is considered for calculation. Rest of the formula is same as monthly-rated
employees.
For example: If a seasonal employee retires after working from 2006 to 2016, working one
season each year, with Rs 11000 Basic and Rs 7000 DA, his gratuity will be
(Rs 11000+7000) ×7/26 × 11 = Rs 53,307.70/-
Note: Here the employee has worked for one season every year. Hence, the total season is
11
Further, the Act provides for the services rendered for at least 6 months where the gratuity
amount will be calculated at the rate of fifteen days wages based on the rate of wages last
drawn by the employee concerned, provided that the amount paid for the overtime work
will not be considered.
Maximum limit for gratuity payable

According to the Payment of Gratuity (Amendment Act, 2018) the maximum amount of
gratuity payable to an employee has been extended to Rs. 20 Lakhs against the earlier limt
of Rs. 10 Lakh which was set in 2010.
• Nothing in this section shall affect the right of an employee to receive better terms
of gratuity under any award or agreement or contract with the employer.
Deduction of gratuity
[Sec 4(6) (a)]
The gratuity of an employee, whose services have been terminated for any act, wilful
omission or negligence causing any damage or loss to, or destruction of, property belonging
to the employer, shall be forfeited to the extent of the damage or loss so caused.
[Sec 4(6) (b)] the gratuity payable to an employee [may be wholly or partially forfeited]
• If the services of such employee have been terminated for his riotous or disorderly
conduct or any other act of violence on his part, or
• if the services of such employee have been terminated for any act which constitutes
an offence involving moral turpitude, provided that such offence is committed by
him in the course of his employment.
Payment of gratuity is not applicable to employee who has been dismissed from the service
for the reason of indiscipline or misconduct.
Compulsory Insurance
Section 4A of the Act provides for the compulsory insurance to every employer other than
those belonging to the Central Government or State Government through Life Insurance
Corporation. However, those employers are exempted from this provision who have an
established and registered gratuity fund in their company. The government may also make
rules for the enforcement of this section as and when necessary. Violation of this provision
by anyone may lead to penalty.
Power to Exempt
The Act provides the power to exempt to the appropriate government by notification to
declare any establishment, factory, mine, oilfield, plantation, port, railway company or shop
exempted from gratuity if the government is of the opinion that the establishment has
favourable benefits not less than what this Act has been providing. The same law applies to
any employee or class of employees.
Nomination
According to this Act, it is necessary for the employee to prescribe for the name/names of
the nominee soon after completing one year of service. In case of a family, the nominee
should be one among the family members of the employee and other nominees shall be
void. Any alteration or fresh nomination must be conveyed by the employee to the
employer who shall keep the same in his safe custody.
Determination of the Amount of Gratuity

The person entitled to receive the gratuity amount shall send an application in writing to the
employer. The employer shall calculate the gratuity amount and provide notice in writing to
the concerned employee and the controlling authority. The payment should be made within
30 days from the date payable to the employee. Failure of payment within the prescribed
limit will result in payment of simple interests. However, if the delayed payment is because
of the employee then the employer is not entitled to pay the simple interests.
Inspectors Appointed for the Purpose of this Act and their Powers
The government may appoint an inspector or inspectors who are deemed to be a public
servant under Section 21 of Indian Penal Code for the purpose of ascertaining whether any
of the provisions of this Act are being violated or not complied with and take necessary
measures to ensure the fulfilment of all the provisions of this Act.
Recovery of Gratuity
If the employer delays in the payment of gratuity amount under the prescribed time limit,
then the controlling authority shall issue the certificate to the collector on behalf of the
aggrieved party and recover the amount including the compound interest decided by the
central government and pay the same to the person. However, these provisions are under
two conditions:
• The controlling authority should give the employer a reasonable opportunity to show
the cause of such an Act.
• The amount of interest to be paid should not exceed the amount of gratuity under
this Act.
The Payment of Gratuity (Amendment) Act, 2018
Key Amendments
• The amendment has side tracked the ceiling limit of the maximum amount of gratuity payable i.e
Rs.10 lakh set in 2010. This upper cap prescribed by Section 4(3) of the Act, has been removed.
• Section 4(5) of the Act prescribes that if the terms of employment contract provide for a higher
amount of gratuity over and above the ceiling limit stated in the Act, then the employee will be
entitled to such higher amount. This transition has been introduced for the implementation of
the 7th Central Pay Commission, whereby the ceiling of gratuity for Central Government
employees has been enhanced from Rs. 10 lakhs to Rs. 20 lakhs.
• Instead of mentioning and specifying the ceiling amount in Act, the amendment empowers the
Central Government to notify the ceiling proposed so that the limit can be revised from time to
time keeping in view the increase in wage and inflation, and future Pay Commissions.
• Introduced in relation to the period of maternity leave. The period of maternity leave for
females in continuous service was twelve weeks under section 2A of the earlier Act. The
amendment has modified the maternity leave period from 'twelve weeks' to 'twenty-six weeks
'in order to keep the Act in tune with the recently amended Maternity Benefit Act. This also
resolves calculation of continuous service for the payment of gratuity to employees who are on
maternity leave.
Conclusion
The Payment of Gratuity Act, 1927, is a welfare statute provided for the welfare of the
employees who are the backbone of any organisation, company or startups. The gratuity
amount encourages the employee to work efficiently and improve productivity. Recently, by
the Payment of Gratuity (Amendment) Act, 2018, the central government has tried to
promote social welfare by providing leverage to the female employees who are on
maternity leave from ‘twelve weeks’ to ‘twenty-six weeks.
However, the scope of this Act is limited to large scale companies or organisations
and is not applicable to organisations where the number of employees is less than 10. Yet,
the Act in its entirety is complete and therefore it overrides other Acts and statues in
relation to gratuity. The only need of the hour is to change or modify the implementation of
the Act as this Act is still not followed by many companies or corporations.
Lecture- 5 THE WORKMEN'S
COMPENSATION ACT, 1923
The Workmen’s Compensation Act, aims to provide workmen and/or their dependents some
relief in case of accidents arising out of and in the course of employment and causing either death or
disablement of workmen. It provides for payment by certain classes of employers to their workmen
compensation for injury by accident. Before 2010, Employee’s Compensation Act, 1923 was known
as Workmen’s Compensation Act.
Act does not apply where workman covered under ESI Act
Since a workman is entitled to get compensation from Employees State Insurance
Corporation, a workman covered under ESI Act is not entitled to get compensation under
Workmen’s Compensation Act, as per section 53 of ESI Act, 1948.
Employees entitled to compensation:

Every employee (including those employed through a contractor but excluding casual employees),
who is engaged for the purposes of employers business and who suffers an injury in any accident
arising out of and in the course of his employment, shall be entitled for compensation under the Act.
Employers Liability for Compensation (Accidents)

The employer of any establishment covered under this Act, is required to compensate an employee:
Who has suffered an accident arising out of and in the course of his employment, resulting into
(i) Death,
(ii) permanent total disablement,
(iii) permanent partial disablement, or
(iv) temporary disablement whether total or partial, or who has contracted an occupational
disease.
Employer Shall Not Be Liable:

1. In respect of any injury which does not result in the total or partial disablement of the workmen
for a period exceeding three days;
2. In respect of any injury not resulting in death, caused by an accident which is directly
attributable to-
a) the workmen having been at the time thereof under the influence of drink or drugs,
(alcohol) or
b) the wilful disobedience of the workman to an order expressly given, or to a rule expressly
framed, for the purpose of securing the safety of workmen, or
c) the wilful removal or disregard by the workmen of any safeguard or other device which he
knew to have been provided for the purpose of securing the safety of workmen.
d) The burden of proving intentional disobedience on the part of the employee shall lie upon
the employer.
e) when the employee has contacted a disease, which is not directly attributable to a specific
injury caused by the accident or to the occupation; or
f) when the employee has filed a suit for damages against the employer or any other person,
in a Civil Court.
Contracting Out:
Any contract or agreement which makes the workman give up or reduce his right to compensation
from the employer is null and void insofar as it aims at reducing or removing the liability of the
employer to pay compensation under the Act.
Definition of Disablement
Disablement is the loss of the earning capacity resulting from injury caused to a workman by an
accident. Disablements can be classified as (a) Total, and (b) Partial.
It can further be classified into (i) Permanent, and (ii) Temporary, Disablement, whether permanent
or temporary is said to be total when it incapacitates a worker for all work he was capable of doing
at the time of the accident resulting in such disablement.
• Total disablement is considered to be permanent if a workman, as a result of an accident, suffers

from the injury specified in Part I of Schedule I or suffers from such combination of injuries specified
in Part II of Schedule I as would be the loss of earning capacity when totalled to one hundred per
cent or more. Disablement is said to be permanent partial when it reduces for all times, the earning
capacity of a workman in every employment, which he was capable of undertaking at the time of the
accident. Every injury specified in Part II of Schedule I is deemed to result in permanent partial
disablement.
• Temporary disablement reduces the earning capacity of a workman in the employment in which
he was engaged at the time of the accident. Accident Arising Out Of And In The Course Of
Employment. An accident arising out of employment implies a casual connection between the injury
and the accident and the work done in the course of employment. Employment should be the
distinctive and the proximate cause of the injury.
3 tests for determining whether an accident arose out of employment

are:
1. At the time of injury workman must have been engaged in the business of the employer and must
not be doing something for his personal benefit;
2. That accident occurred at the place where he as performing his duties; and
3. Injury must have resulted from some risk incidental to the duties of the service, or inherent in the
nature condition of employment
Occupational Diseases
Section 3
An occupational disease is any chronic ailment that occurs as a result of work or occupational
activity. It is an aspect of occupational safety and health. An occupational disease is typically
identified when it is shown that it is more prevalent in a given body of workers than in the general
population, or in other worker populations.
If any injury or disease is caused which is specified in Part A, B and C of Schedule llI, it shall
be deemed to have been an occupational disease or injury “arising out of and in the course of
employment” enabling the employee to claim compensation.
Thus the Schedule III is divided in Part A, B & C in the following manner:—
A. If a employee employed in any employment specified in Part A of Schedule III contracts any
disease specified therein it shall be presumed that such disease is “occupational disease”
peculiar to that employment. For this no length of service is prescribed.
B. If a employee is employed in any employment specified in Part B of Schedule III for a period
of 6 months and attracts any disease specified therein, it shall be presumed that such
disease is “occupational disease” peculiar to that employment.
C. If a employee is employed in any employment specified in Part C of Schedule lll for a period
as is prescribed by the Central Govt, attracts any disease specified therein as occupational
disease, it shall be deemed to be an injury peculiar to that employment.
Occupational Diseases or Injuries could be arisen out of and in the course of employment Schedule
III read-with Section 3
Name of Diseases Length of the Service required
As specified in Part A No specific period of service prescribed
As specified in Part B 6 months service required
As specified in Part C Period of Service as specified by the Central Govt.
The reason behind above conditions are, current employer shouldn’t be blamed for the
occupational disease caused to an employee by the previous employment. There should be certain
service time gap to decide whether current employer or previous employer is liable for the
occupation disease caused to an employee.
Diseases which are specified in part A, B & C of the Schedule lll, need not to be proved that they
are 'occupational diseases' as they are already declared by schedule lll. In respect of any disease
not covered by schedule lll, it is must for an employee to prove that such a disease was contracted in
the course of employment.
SCHEDULE 3
LIST OF OCCUPATIONAL DISEASES
S. No. Occupational disease Employment
1 2 3
PART A
1 Infectious and parasitic diseases (a) All work involving exposure to
contracted in an occupation where there contracted in an occupation health or
is a particular risk of contamination. laboratory work;
(b) All work involving exposure to veterinary
work;
(c) Work relating to handling animals,
animal carcasses, part of such carcasses, or
merchandise which may have been
contaminated by animals or animal
carcasses;
(d) Other work carrying a particular risk of
contamination.
2 Diseases caused by work in compressed All work involving exposure to the risk
air. concerned.
3 Diseases caused by lead or its toxic All work involving exposure to the risk
compounds. concerned.
4 Poisoning by nitrous fumes. All work involving exposure to the risk
concerned.
5 Poisoning by organo phosphorus All work involving exposure to the risk
PART B
1 Diseases caused by phosphorus or its All work involving exposure to the risk
toxic compounds. concerned.
2 Diseases caused by mercury or its toxic All work involving exposure to the risk
3 Diseases caused by benzene or its toxic All work involving exposure to the risk
homologues. concerned.
4 Diseases caused by nitro and amido toxic All work involving exposure to the risk
derivatives of benzine or its homologues concerned.
5 Diseases caused by chromium, or its toxic All work involving exposure to the risk
compounds concerned.
6 Diseases caused by arsenic or its toxic All work involving exposure to the risk
7 Diseases caused by radioactive All work involving exposure to the
substances or radiations. substances and ionising action of radioactive
ionising radiations.
8 Primary epitheliomatous cancer of the All work involving exposure to the risk
skin, caused by tar, pitch, bitumen, concerned.
mineral oil, anthracene, or the
compounds, products or residues of
these substances.
9 Disease caused by the toxic halogen All work involving exposure to the risk
derivatives of hydrocarbons (of the concerned.
aliphatic and aromatic series).
10 Diseases caused by carbon disulphide. All work involving exposure to the risk
concerned.
11 Occupational cataract due to infra-red All work involving exposure to the risk
radiations. concerned.
12 Diseases caused by manganese or its All work involving exposure to the risk
toxic compounds. concerned.
13 Skin diseases caused by physical, All work involving exposure to the risk
chemical or biological agents not included concerned.
in other items.
14 Hearing impairment caused by noise. All work involving exposure to the risk
concerned.
15 Poisoning by dinitrophenol or a All work involving exposure to the risk
homologue or by substituted concerned.
dinitrophenol or by the salts of such
substances.
16 Diseases caused by beryllium or its toxic All work involving exposure to the risk
17 Diseases caused by cadmium or its toxic All work involving exposure to the risk
18 Occupational asthma caused by All work involving exposure to the risk
recognised sensitising agents inherent to concerned.
the work process.
19 Diseases caused by fluorine or its toxic All work involving exposure to the risk
20 Diseases caused by nitroglycerine or All work involving exposure to the risk
other nitroacid esters. concerned.
21 Diseases caused by alcohols and ketones. All work involving exposure to the risk
concerned.
22 Diseases caused by asphyxiants carbon All work involving exposure to the risk
monoxide, and its toxic derivatives, concerned.
hydrogen sulfide.
23 Lung cancer and mesotheliomas caused All work involving exposure to the risk
by asbestos. concerned.
24 Primary neoplasm of the epithelial lining All work involving exposure to the risk
of the urinary bladder or the kidney or concerned.
the ureter.
25 Snow blindness in snow bound areas. All work involving exposure to the risk
concerned.
26 Disease due to effect of cold in extreme All work involving exposure to the risk
cold climate. concerned.
27 Disease due to effect of cold in extreme All work involving exposure to the risk
cold climate. concerned.
PART C
1 Pneumoconioses caused by sclerogenic All work involving exposure to the risk
mineral dust (silicosis, anthraoosilicosis, concerned.
asbestosis) and silico-tuberculosis
provided that silicosis is an essential
factor in causing the resultant incapacity
or death.
2 Bagassosis. All work involving exposure to the risk
concerned.
3 Bronchopulmonary diseases caused by All work involving exposure to the risk
cotton, flax hemp and sisal dust concerned.
(Byssinosis).
4 Extrinsic allergic alveelitiscaused by the All work involving exposure to the risk
inhalation of organic dusts. concerned.
5 Bronchopulmonary diseases caused by All work involving exposure to the risk
hard metals. concerned.
6 Acute Pulmonary Oedema of High All work involving exposure to the risk
Altitude. concerned.
SCHEDULE IV
(See section 4)
FACTORS FOR WORKING OUT LUMP SUM EQUIVALENT OF COMPENSATION AMOUNT IN
CASE OF PERMANENT DISABLEMENT AND DEATH.
Completed years of age on the last birthday of Factors

the employee immediately preceding the date on
which the compensation fell due
Not 16 . . . . . . 228.54
more
than
17 . . . . . . 227.49
18 . . . . . . 226.38
19 . . . . . . 225.22
20 . . . . . . 224
21 . . . . . . 222.71
22 . . . . . . 221.37
23 . . . . . . 219.95
24 . . . . . . 218.47
25 . . . . . . 216.91
26 . . . . . . 215.28
27 . . . . . . 213.57
28 . . . . . . 211.79
29 . . . . . . 209.92
30 . . . . . . 207.98
31 . . . . . . 205.95
32 . . . . . . 203.85
33 . . . . . . 201.66
34 . . . . . . 199.4
35 . . . . . . 197.06
36 . . . . . . 194.64
37 . . . . . . 192.14
38 . . . . . . 189.56
39 . . . . . . 186.9
40 . . . . . . 184.17
41 . . . . . . 181.37
42 . . . . . . 178.49
43 . . . . . . 175.54
44 . . . . . . 172.52
45 . . . . . . 169.44
46 . . . . . . 166.29
47 . . . . . . 163.07
48 . . . . . . 159.8
49 . . . . . . 156.47
50 . . . . . . 153.09
51 . . . . . . 149.67
52 . . . . . . 146.2
53 . . . . . . 142.68
54 . . . . . . 139.13
55 . . . . . . 135.56
56 . . . . . . 131.95
57 . . . . . . 128.33
58 . . . . . . 124.7
59 . . . . . . 121.05
60 . . . . . . 117.41
61 . . . . . . 113.77
62 . . . . . . 110.14
63 . . . . . . 106.52
64 . . . . . . 102.93
65 or more . . . . . 99.37
Amount of compensation
The amount of compensation payable will be as follows, namely :-
(a) where death results an amount equal to fifty per cent of the monthly wages of the deceased
workman multiplied by the relevant factor; or an amount of fifty thousand rupees, whichever is
more;
(b) where permanent total an amount equal to disablement results from sixty the injury per cent of
the monthly wages of the injured workman multiplied by the relevant factor, or an amount of sixty
thousand rupees, whichever is more; For the purposes of clause (a) and clause (b), "relevant factor",
in relation to a workman means the factor specified in the second column of Schedule IV against the
entry in the first column of that Schedule specifying the number of years which are the same as the
completed years of the age of the workman on his last birthday immediately preceding the date on
which the compensation fell due. Where the monthly wages of a workman exceed two thousand
rupees, his monthly wages for the purposes of clause (a) and clause (b) shall be deemed to be two
thousand rupees only;
(c) where permanent partial disablement results from the injury (i) in the case of an injury specified
in Part II of Schedule I, such percentage of the compensation which would have been payable in the
case of permanent total disablement as is specified therein as being the percentage of the loss of
earning capacity caused by that injury, and (ii) in the case of an injury not specified in Schedule I,
such percentage of the compensation payable in the case of permanent total disablement as is
proportionate to the loss of earning capacity (as assessed by the qualified medical practitioner)
permanently caused by the injury;
(d) Where temporary a half monthly payment of the sum disablement, whether equivalent to
twenty-five per cent of total or partial, results monthly wages of the workman, to from the injury be
paid in accordance with the provisions of sub-section (2).
(3) On the ceasing of the disablement before the date on which any half-monthly payment falls due,
there shall be payable in respect of that half-month a sum proportionate to the duration of the
disablement in that half-month.
SCHEDULE I
PART I
LIST OF INJURIES DEEMED TO RESULT IN PERMANENT TOTAL

DISABLEMENT
Serial Description of injury % Percentage of loss of
No. earning capacity
1 Loss of both hands or amputation at 100

higher sites
2 Loss of a hand and foot 100
3 Double amputation through leg or 100

thigh, or amputation through leg or
thigh on one side and loss of other
foot
4 Loss of sight to such an extent as to 100
render the claimant unable to
perform any work for which eye sight
is essential
5 Very severe facial disfigurement 100
6 Absolute deafness
PART II
LIST OF INJURIES DEEMED TO RESULT IN PERMANENT PARTIAL
DISABLEMENT
Amputation Cases - Upper limbs - Either arm
1 Amputation through shoulder joint 90
2 Amputation below shoulder with 80

stump less than
20.32 cms. from tip of acromion
3 Amputation from 20.32 cms. from tip 70
of acromion to less than 4" below tip
of olecranon
4 Loss of a hand or of the thumb and 60
four fingers of one hand or
amputation from 11.43 cms. below tip
of olecranon
5 Loss of thumb 30
6 Loss of thumb and its metacarpal 40

bone
7 Loss of four fingers of one hand 50
8 Loss of three fingers of one hand 30
9 Loss of two fingers of one hand 20
10 Loss of terminal phalanx of thumb 20
Amputation cases - Lower limbs
10A Guillotine amputation of tip of thumb 10

without loss of bone
11 Amputation of both feet resulting in 90

end bearing stumps
12 Amputation through both feet 80

proximal to the metatarso-phalangeal
joint
13 Loss of all toes of both feet through 40
the metatarso-phalangeal joint
14 Loss of all toes of both feet proximal 30
to the proximal inter-phalangeal joint
15 Loss of all toes of both feet distal to 20

the proximal inter-phalangeal joint
16 Amputation at hip 90
17 Amputation below hip with stump not 80

exceeding 12.70 cms. in length
measured from tip of great
trenchanter but not beyond middle
thigh
18 Amputation below hip with stump 70
exceeding 12.70 cms. in length
measured from tip of great
trenchanter but not beyond middle
thigh
19 Amputation below middle thigh to 60
8.89 cms. below knee
20 Amputation below knee with stump 50

exceeding 8.89 cms. but not
exceeding 12.70 cms.
21 Amputation below knee with stump 50
exceeding 12.70 cms.
22 Amputation of one foot resulting in 50

end bearing
23 Amputation through on foot proximal 50
to the metatarso-phalangeal joint
24 Loss of all toes of one foot through 20

the metatarso-phalangeal joint
Other injuries
25 Loss of one eye, without 40

complications, the other being normal
26 Loss of vision of one eye, without 30

complications or disfigurement of
eyeball, the other being normal
26A Loss of partial vision of one eye 10

Loss of -
A - Fingers of right or left hand
Index finger
27 Whole 14
28 Two phalanges 11
29 One phalanx 9
30 Guillotine amputation of time without 5

loss of bone
Middle finger
31 Whole 12
32 Two phalanges 9
33 One Phalanx 7
34 Guillotine amputation of tip without 4

loss of bone
Ring or little finger
35 Whole 7
36 Two phalanges 6
37 One Phalanx 5
38 Guillotine amputation of tip without 2

loss of bone
B - Toes of right or left foot
Great toe
39 Through metatarso-phalangeal joint 14
40 Part, with some loss of bone 3
Any other toe
42 Part with some loss of bone 1
Two toes of one foot, excluding great toe

Three toes of one foot, excluding great toe
Four toes of one foot, excluding great toe
48 Part-with some loss of bone 3
Calculation of Compensation
Compensation in case of death of employee
While calculating the compensation of the workman, age of the workman and relevant
factor is taken in to account.
50% of monthly wages of the deceased employee X relevant factor with corresponding age of
injured workman specified in Schedule IV. Or 1,20,000/- rupees of compensation whichever is more.
Compensation in case of permanent total disablement

60% of monthly wages of employee X relevant factor with corresponding age of injured workman
specified in Schedule IV . or 1, 40,000/- rupees of compensation. Whichever is more.
For above the calculation of the compensation in case of death or permanent partial disablement,
the monthly wage of workman is limited to 15,000/- Rupees only. Or the government may prescribe
and change the monthly wage amount for calculation of the compensation.
The Central government Jaunary 2020 has changed the amount of wages to be considered for
calculation of compensation to workers under the Employee’s Compensation Act 1923. The amount
of wages considered previously for the calculation of compensation was just Rs 8,000. Now, it will be
Rs 15,000, according to the notification by the Ministry of Labour and Employment.
DISTRIBUTION OF COMPENSATION
• Compensation must be paid to the dependents only. No other persons except dependents
having are right to claim compensation.
• Compensation should not be paid directly to the workman by his employer in case of injury
or death etc.
• Employer should deposit the workman compensation with the commissioner.
• The deposited compensation to workman shall be paid through the commissioner to the
workman.
• If no dependent is there for deceased (dead) workman, there is no necessity to pay
compensation by the employer. [Sec 8 (4)].
• If two or more dependents exist for a deceased workman, the compensation amount shall
be distributed by the commissioner according to his wish. [Sec 8 (5)].
• If the workman dependent is of legal disability ((a minor), or mental capacity) or neglect of
children, the compensation amount shall be invested for their according to the directions of
the commissioner.
REPORTS OF FATAL ACCIDENTS AND SERIOUS BODILY INJURIES

After the occurrence of the accident results in death of the workman, or serious bodily injury of the
workman, employer should give notice to the authority appointed by the state government within 7
days.
APPOINTMENT OF COMMISSIONER
(1) The State Government may, by notification in the Official Gazette, appoint any person who is or
has been a member of a State Judicial Service for a period of not less than five years or is or has been
for not less than five years an advocate or a pleader or is or has been a Gazetted officer for not less
than five years having educational qualifications and experience in personnel management, human
resource development and industrial relations”
(2) Where more than one Commissioner has been appointed for any area, the State Government
may, by general or special order, regulate the distribution of business between them.
(3) Any Commissioner may, for the purpose of deciding any matter referred to him for decision
under this Act, choose one or more persons possessing special knowledge of any matter relevant to
the matter under inquiry to assist him in holding the inquiry.
(4) Every Commissioner shall be deemed to be a public servant within the meaning of the Indian
Penal Code (45 of 1860).
General principles of the Act

• There must be a casual connection between the injury and the accident and the work done in the
course of employment;
• The onus is upon the applicant to show that it was the work and the resulting strain which
contributed to or aggravated the injury;
• It is not necessary that the workman must be actually working at the time of his death or that
death must occur while he was working or had just ceased to work; and
• Where the evidence is balanced, if the evidence shows a greater probability which satisfies a
reasonable man that the work contributed to the causing of the personal injury it would be enough
for the workman to succeed. But where the accident involved a risk common to all humanity and did
not involve any peculiar or exceptional danger resulting from the nature of the employment or
where the accident was the result of an added peril to which the workman by his own conduct
exposed himself, which peril was not involved in the normal performance of the duties of his
employment, then the employer will not be liable.
Employer’s fault is immaterial
The compensation is payable even when there was no fault of employer. In New India Assurance Co.
Ltd. v. Pennamna Kuriern - (1995) 84 Comp. Cas. 251 (Ker HC DB), claim of workmen for
compensation under Motor Vehicle Act was rejected due to negligence of employee, but
compensation was awarded under Workmen’s Compensation Act on the principle of ‘no fault’.
Compensation payable even if workman was careless

Compensation is payable even if it is found that the employee did not take proper precautions. An
employee is not entitled to get compensation only if (a) he was drunk or had taken drugs (b) he
wilfully disobeyed orders in respect of safety (c) he wilfully removed safety guards of machines.
However, compensation cannot be denied on the ground that workman was negligent or careless.
Contributory negligence
Employees owe a duty to their employers to carry out their work with reasonable care so as to avoid
accidents and injury. Employers are vicariously liable for the negligence of their employees but are
entitled to claim a contribution or indemnity from their negligent employee in appropriate
circumstances. So if there is negligence on the part of both employee and the employer then the
employer will be liable to pay compensation to the extent of his own negligence, not of the
employee. Hence, the compensation amount may reduce as the employer will not be liable for the
negligence of the employee.
Number of Workmen Employed Is Not Criteria

In definition of ‘workman’ in schedule II, in most of the cases, number of workmen employed is not
the criteria. In most of cases, employer will be liable even if just one workman is employed. The Act
applies to a workshop even if it employs less than 20 workmen and is not a ‘factory’ under Factories.
Payment of compensation only through Commissioner

A Commissioner for Workmen’s Compensation is appointed by Government. The compensation
must be paid only through the Commissioner in case of death or total disablement. Any lump sum
payment to workman under the Act must be made only through Commissioner. Direct payment to
workman or his dependents is not recognized at all as compensation.
The Employee's Compensation (Amendment) Act, 2018

• Duty to inform employee of right to compensation: The Bill introduces a provision which
requires an employer to inform the employee of his right to compensation under the Act.
Such information must be given in writing (in English, Hindi or the relevant official language)
at the time of employing him.
• Penalty for failure to inform: The Bill penalises an employer if he fails to inform his
employee of his right to compensation. Such penalty may be between fifty thousand to one
lakh rupees.
• Appeals from the Commissioner’s order: The Act provides that any dispute related to an
employee’s compensation will be heard by a Commissioner (with powers of a civil court).
Appeals from the Commissioner’s order, related to a substantial question of law, will lie
before the High Court.
• Further, the Act stipulates that appeals can be made against orders related to
compensation, distribution of compensation, award of penalty or interest, etc. only if the
amount in dispute is at least three hundred rupees.The Bill raises this amount to ten
thousand rupees. It permits the central government to further raise this amount.
• Withholding payments pending appeal: Under the Act, if an employer has appealed against
a Commissioner’s order, any payments towards the employee can be temporarily withheld.
The Commissioner may do so only by an order of the High Court, until the matter is disposed
of by the Court. The Bill deletes this provision.
Class notes- social Security in India
Lecture- 6
Maternity Benefit Act, 1961
Motherhood is a very special experience in a woman’s life. A woman needs to be
able to give quality time to her child without having to worry about whether she will lose
her job and her source of income. That is where the concept of maternity leave and the
benefits it entails, comes in handy. The Maternity Benefits Act, 1961, gives her the
assurance that her rights will be looked after while she is at home to care for her child.
The object of the Act is to regulate the employment of women in certain
establishments for certain periods before and after childbirth and to provide for maternity
benefits and certain other benefits.
The Maternity Benefit Act, 1961 has been amended through the Maternity (Amendment)
Act, 2017 The provisions of the Maternity Benefit (Amendment) Act, 2017 (“Amendment
Act”) came into effect on April 1, 2017, and the provision with regard to crèche facility came
into effect with effect from July 1, 2017.
Constitutional Protection
Article 15(3) of the Indian Constitution empowers the State to make special provisions for
women.
Article 42 requires that the State shall make provision for securing just and humane
conditions of work and for maternity relief.
Applicability
The Act is applicable to establishments such as
• Factories, (“factory” as defined in the Factories Act, 1948),

• Mines (“mine” as defined in the Mines Act, 1952) and
• Plantations (“plantation” means a plantation as defined in the Plantations Labour
Act,1951).
The Maternity Benefit Act also applies to establishments belonging to Government and
establishments wherein persons are employed for the exhibition of equestrian, acrobatic
and other performances.
The Act is also applicable to every shop or establishment defined under law, wherein
ten or more persons are employed on a day during the preceding twelve months and which
is applicable in relation to shops and establishments in a particular state.
Eligibility
A woman must be working as an employee in an establishment for a period of at least 80
days in the past 12 months to be entitled to maternity benefit under the provisions of the
Maternity Benefit Act.
Employment of, or work by women prohibited during certain periods

(1) No employer shall knowingly employ a woman in any establishment during the six weeks
immediately following the day of her delivery, [miscarriage or medical termination of
pregnancy].
(2) No woman shall work in any establishment during the six weeks immediately following
the day of her delivery [miscarriage or medical termination of pregnancy].
(3) Without prejudice to the provisions of section 6, no pregnant woman shall, on a request
being made by her in this behalf, be required by her employer to do during the period
specified in sub-section (4) any work which is of an arduous nature or which involves long
hours of standing, or which in any way is likely to interfere with her pregnancy or the normal
development of the fetus, or is likely to cause her miscarriage or otherwise to adversely
affect her health.
(4) The period referred to in sub-section (3) shall be-
(a) the period of one month immediately preceding the period of six weeks, before the date
of her expected delivery;
(b) any period during the said period of six weeks for which the pregnant woman does not
avail of leave of absence under section 6.
Maternity Benefit
The maximum period for which any woman shall be entitled to maternity benefit shall be
twenty-six weeks of which not more than eight weeks shall precede the date of her
expected delivery:
• Women having two surviving children will be eligible to get 26 weeks to leave and
• Women having more than two children will get 12-week leave from their working.
• If any women adopt a child then she will also get 12-week long maternity leave.
• ‘Commissioning mother’ and ‘Adopting mother’ will get the benefit of 12 weeks
maternity leave
• Organizations will also facilitate work from home conditions
• Mandatory provision of Creche when introduced organizations having more than 50
employees.
Right to payment of maternity benefits

Every woman shall be entitled to, and her employer shall be liable for, the payment of
maternity benefit at the rate of the average daily wage for the period of her actual
absence, that is to say, the period immediately preceding the day of her delivery, the actual
day of her delivery and any period immediately following that day.
The average daily wage means the average of the woman's wages payable to her for
the days on which she has worked during the period of three calendar months immediately
preceding the date from which she absents herself on account of maternity
Notice of claim for maternity benefit and payment

Any woman employed in an establishment and entitled to maternity benefit under the provisions of
this Act may give notice in writing in such form as may be prescribed, to her employer, stating that
her maternity benefit and any other amount to which she may be entitled under this Act may be
paid to her or to such person as she may nominate in the notice and that she will not work in any
establishment during the period for which she receives maternity benefit.
Payment of maternity benefit in case of death of a woman

If a woman entitled to maternity benefit or any other amount under this Act, dies before receiving
such maternity benefit or amount, or where the employer is liable for maternity benefit under the
second proviso to sub-section (3) of section 5, the employer shall pay such benefit or amount to the
person nominated by the woman in the notice given under section 6 and in case there is no such
nominee, to her legal representative.
Payment of medical bonus

Every woman entitled to maternity benefit under this Act shall also be entitled to receive from her
employer a medical bonus, of Rs. 1000/- , if no pre-natal confinement and post-natal care is
provided for by the employer free of charge.
The Central Government may from time to time, by notification in the Official Gazette,
increase the amount of medical bonus subject to the maximum of Rs. 20,000/-.
Leave for miscarriage, etc.

In case of miscarriage or medical termination of pregnancy, a woman shall, on production of such
proof as may be prescribed, be entitled to leave with wages at the rate of maternity benefit, for a
period of six weeks immediately following the day of her miscarriage or, as the case may be, her
medical termination of pregnancy.]
Leave with wages for tubectomy operation
In case of tubectomy operation, a woman shall, on production of such proof as may be prescribed,
be entitled to leave with wages at the rate of maternity benefit for a period of two weeks
immediately following the day of her tubectomy operation.
Leave for illness arising out of pregnancy, delivery, premature birth of

child, [miscarriage, medical termination of pregnancy or tubectomy
operation
A woman suffering from illness arising out of pregnancy, delivery, premature birth of child,
[miscarriage, medical termination of pregnancy or tubectomy operation] shall, on production of such
proof as may be prescribed, be entitled, in addition to the period of absence allowed to her under
section 6, or, as the case may be, under section 9, to leave with wages at the rate of maternity
benefit for a maximum period of one month.
Nursing breaks
Every woman delivered of a child who returns to duty after such delivery shall, in addition to
the interval for rest allowed to her, be allowed in the course of her daily work two breaks of the
prescribed duration for nursing the child until the child attains the age of fifteen months.
The Ministry of Women and Child Development recently, vide its office memorandum dated
2nd November 2018, issued the "National Minimum Guidelines for Setting up and Running
Crèches under Maternity Benefit Act, 2017 (the "Crèche Guidelines").
Features of the Crèche Guidelines
Interestingly, the Crèche Guidelines categorize certain norms as non-negotiable while others
as preferable norms. Briefly, the salient features are:
Group of Children - The crèche facility is for children of age groups of 6 (six) months to 6
(six) years of all employees including temporary, daily wage, consultant and contractual
personnel.
Distance of crèche- It should be located near/at the work place site or in the beneficiaries'
neighbourhood within 500 (five hundred) metres.
Timings- The crèche timings can be flexible depending on the working hours and timings of
the parents which should ideally mean for 8 (eight) to 10 (ten) hours.
Space- The crèche centre should have a minimum space of 10 (ten) to 12 (twelve) sq. ft. per
child to ensure that children can play, rest and learn.
Human Resource- There is a recommended adult child ratio with helpers, one crèche in
charge and one guard to be employed in a crèche unit of up to 30 (thirty) children.
Records- Requirement of maintaining stock registers and attendance registers for staff and
children and certain admission forms to be filled.
Monitoring and supervision- A Crèche Monitoring Committee to be set up comprising of

representation from the parents, one crèche in-charge, one crèche worker and one
admin/HR person.
Training- Prior to starting work with the children at the crèche, all the workers of the crèche
need to undergo a pre service training of 5-6 months.
There is an exhaustive list of norms and standards to be followed in a crèche on matters like
crèche environment, equipment, safety and protection, health and nutrition practices,
hygiene and sanitation practices and crèche activities.
A key aspect of these guidelines is the formulation of a Child Protection Policy as per the
sample policy provided which prescribes the appointment of a Complaints Committee to
investigate and address complaints relating to any child abuse.
Dismissal during absence of pregnancy

(1) When a woman absents herself from work in accordance with the provisions of this Act,
it shall be unlawful for her employer to discharge or dismiss her during or on account of
such absence or to give notice of discharge or dismissal on such a day that the notice will
expire during such absence, or to vary to her disadvantage any of the conditions of her
service.
(2) (a) The discharge or dismissal of a woman at any time during her pregnancy, if the
woman but for such discharge or dismissal would have been entitled to maternity benefit or
medical bonus referred to in section 8, shall not have the effect of depriving her of the
maternity benefit or medical bonus:
PROVIDED that where the dismissal is for any prescribed gross misconduct, the employer
may, by order in writing communicated to the woman, deprive her of the maternity benefit
or medical bonus or both.
Any woman deprived of maternity benefit or medical bonus, or both, or discharged or
dismissed during or on account of her absence from work in accordance with the provisions
of this Act, may, within sixty days from the date on which order of such deprivation or
discharge or dismissal is communicated to her, appeal to such authority as may be
prescribed, and the decision of that authority on such appeal, whether the woman should or
should not be deprived of maternity benefit or medical bonus, or both, or discharged or
dismissed shall be final.]
No deduction of wages in certain cases
No deduction from the normal and usual daily wages of a woman entitled to
maternity benefit under the provisions of this Act shall be made by reason only of-
(a) the nature of work assigned to her.
(b) breaks for nursing the child allowed to her.
Appointment of Inspectors
The appropriate government may, by notification in the Official Gazette, appoint
such officers as it thinks fit to be Inspectors for the purposes of this Act and may define the
local limits of the jurisdiction within which they shall exercise their functions under this Act.
Forfeiture of maternity benefit

If a woman works in any establishment after she has been permitted by her
employer to absent herself under the provisions of section 6 for any period during such
authorized absence, she shall forfeit her claim to the maternity benefit for such period.

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Class notes- Social Security in India

Lecture- 1 Introduction to Social

• Social Security in India covers treatment, rehabilitation or compensation.

Definition of Social Security by Sir William Beveridge:

International Labour organisation on Social assistance

➢ For that purpose, they have pooled together their resources.

➢ Benefits are provided to them in case of contingency.

➢ This makes them maintain their standard up to a subsistence level.

Objectives of Social Security:

➢ Restoration commutates cure of one’s sickness, reemployment to restore him/her to

Social Security measures in India

Social security schemes in India

Recently launched schemes

Atal Pension Yojana (APY)

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

Pradhan Mantri Suraksha Bima Yojana (PMSBY)

Pradhan Mantri Kisan Mandhan Yojana

Pradhan Mantri Laghu Vyapari Mandhan Yojana, 2019

• The Employees’ Provident Funds Scheme, 1952.

Application of the Act

• Every establishment in which 20 or more are employed.

Schemes under EPF

Contribution by employer and employee

Withdrawals from the EPF account

Employee’s pension scheme, 1995

Employees deposit linked insurance scheme, 1976

Constitution of the following a person as a member :

Executive committee: Section 5AA

State Board: section 5 B

Every board of trustee constituted under this section is a Body Corporate-

Constitutionality of the Act

(a) in any process of blending, packing or repacking of tea or coffee ; or

ESIC Contribution (revised on 01/07/2019)

Particulars Present Rate Earlier Rate

Employer Share 3.25% 4.75%

Employee Share 0.75% 1.75%

Total 4.00% 6.50%

Employers to furnish returns and maintain registers in certain cases

Social Security Officers and their functions

2. Sickness Benefit (SB)

3. Maternity Benefit (MB)

5. Dependants Benefit (DB)

• Vocational Rehabilitation: To permanently disabled Insured Person for undergoing VR

Rajiv Gandhi Shramik Kalyan Yojana

Establishment of Employees’ State Insurance Corporation

Term of office of members of the Corporation

Terms of office of members of Standing Committee

Medical Benefit Council

• The Director-General of ESIC as Chairman.

Tenure of the members of the Medical Benefit council

• The Director-General of ESIC as Chairman.

Employees’ State Insurance Fund

These could be in the form of grants, donations or gifts by the government.

Expenses of the fund

Budget etc. to be placed before Parliament

Applicability of the Act

• 190 days employment under the ground in mines, or in establishment which

• 95 days employment under the ground in mines, or in establishment which

Example for monthly salaried employees

Example for seasonal employees

Maximum limit for gratuity payable

Determination of the Amount of Gratuity