BUSINESS ENVIRONMENT

Chapter 29
LABOUR WELFARE AND
SOCIAL SECURITY
 Labour Welfare
 In its Resolution of 1947, the ILO defined Labour Welfare as
“such services, facilities and amenities as adequate canteens,
rest and recreation facilities, arrangements for travel to and
from their houses, and such other services amenities and
facilities as contribute to improvements in the conditions under
workers are employed”.

 The Committee of Experts on Welfare Facilities for Industrial

Workers convened by the ILO in 1963 divided welfare
services into two groups – (a) within the precincts of the
establishment and (b) outside the establishment
 Welfare and Amenities Within the
Establishment
1. Washrooms
2. Washing and bathing facilities

3. Creches

4. Rest shelters and canteens

5. Arrangements for drinking water

6. Arrangements for prevention of fatigue

7. Health service including occupational safety

8. Administrative arrangements within a plant to look after welfare

9. Uniforms and protective clothing

10. Shift allowance.

 Welfare Outside the Establishment
1. Maternity benefits
2. Social insurance measures, including gratuity, pension, provident
fund and rehabilitation
4. Medical facilities, including programmes for physical fitness and
efficiency, family planning and child welfare
5. Education facilities including adult education
6. Housing facilities;
7. Recreation facilities, including sports, cultural activities, library and
reading room
8. Holiday homes and leave travel facilities
9. Workers’ co-operatives, including consumers’ co-operative stores,
fair price shops and co-operative thrift and credit societies
10. Vocational training for dependants of workers;
11. Other programmes for the welfare of women, youth and children
12. Transport to and from the place of work
 Social Security
 Modern Welfare States are expected to take care of the citizens
from the “cradle to the grave”.

 As the International Labour Organisation (ILO) states, social

security envisages that the members of a community shall be
protected by collective action against social risks causing
undue hardship and privation to individuals whose private
resources can seldom be adequate to meet them. It covers,
through an appropriate organisation, certain risks to which a
person is exposed. These risks are such that an individual of
small means cannot effectively provide for them by his own
ability or foresight alone or even private combination with his
colleagues.
 Legislative Enactments
 There are some important legislative enactments in India
for the provision of social security. These enactments may
be broadly classified into two categories:
• Acts that provide security in cases of employment injury,
maternity and sickness.

• Acts that cover the risks of old age and unemployment.

The following three Acts come under the first category
1. The Workmen’s Compensation Act, 1923.
2. The Maternity Benefits Act, 1961.
3. The Employees’ State Insurance Act, 1948.

The Acts that come under the second category are:

1. The Employees’ Provident Fund and Miscellaneous Provisions
Act, 1952
2. The Coal Mines Provident Fund, Family Pension and Bonus Act,
1948
3. The Payment of Gratuity Act, 1972
4. The Industrial Disputes Act, 1947.
 Workmen’s Compensation

 The Workmen’s Compensation Act, 1923, amended

several times, applies to workmen who are employed in
factories, mines, plantations, transport and construction
work, railways and certain hazardous occupations.
 Maternity Benefits

 The Maternity Benefit Act, 1961, enacted with a view to

achieving uniformity in matters relating to maternity
protection, applies to all factories, mines and plantations,
except to those to whom the Employees’ State Insurance
Act applies.
 Employees’ State Insurance Scheme
 The Employees’ State Insurance Act, 1948, applies in the
first instance to all non-seasonal factories run with power
and employing 10 or more persons and factories run
without power and employing 20 or more persons. Under
the enabling provisions contained in the Act, the Act is
being extended by the State governments to new classes of
establishments, namely shops, hotels, restaurants,
cinemas, including preview theatres, road motor transport
undertakings, and newspaper establishments employing 20
or more persons.
 Provident Fund

 The Act provides insurance against old age, retirement,

discharge, retrenchment or death of the workers. It is
against these risks that the schemes guarantee the
necessary protection to workers and their dependants. The
Act and the scheme extend to the whole of India. It applies
to factories and establishments falling under any notified
industry employing 20 or more persons.
 Lay-off and Retrenchment Compensation

 Workers, employed in any factory, mine or plantation

having an average daily employment of 50 or more where
the work done is not of an intermittent or seasonal
character, are entitled to compensation for lay-off,
provided that they have put in the prescribed qualifying
service in the preceding twelve calendar months.
 Gratuity Scheme
 The Payment of Gratuity Act, 1972 is applicable to
factories, mines, oil fields, plantations, ports, railways,
motor transport undertakings, companies, shops and other
establishments. The Act provides for payment of gratuity
at the rate of 15 days’ wages for each completed year of
service subject to a maximum of Rs. 3,50,000.
 Employees’ Pension Scheme

 Under the Scheme, pension at the rate of 50 per cent pay is

payable to the employees on retirement/super-annuation
on completion of 33 years’ contributory service.