Module 4: Labour Legislations 10 Hours: Labour Legislation in India
Module 4: Labour Legislations 10 Hours: Labour Legislation in India
Labour legislation in India - Social security and welfare legislations - Concept of social
security - ILO and social security -Social security measures in India –
PPT of ACTS
The basic principle of industrial legislation is to ensure social justice to the workers . The
object of legislation is the equitable distribution of profits and benefits accruing from industry
between industrialists and workers and affording protection to the workers against harmful
affects to their health safety and morality.In a developing country like India, Labour
legislation becomes especially important because of the following reasons :
1. Labour organizations are relatively weak and in most of the cases, they depend merely on the
mercy of the employers. Individual worker is economically very weak and is unable to bargain his
terms with the employers. Now the prior payment of wages lay off, dismissal, retrenchments etc ,
are all governed by legislation. The economic insecurity of the workers is removed to a great extent.
2. In many organizations, workers may feel occupational insecurity. The workers may not be given by
amount in case of accidents, death, occupational Act, Employees State Insurance Ac, certain benefits
have been statutarily given to workers which the employees otherwise may not get from their
employers.
3. In any factories, there important working conditions on account of which the employees health
and safety is always in danger. The factories Act contains a number of provisions relating to health
safety and welfare of workers. Special provisions have been made for the women.
4. Labour legislation is also necessary from the view point of law and order situation and national
security of the country. State plays a vital role I the continuing production. It helps in the economic
development of the country. The idea of Welfare State is embodied in the Directive Principles of the
constitution and for reason, various labour laws have been enacted to protect the sections of the
society.
5. Labour Legislation is one of the most progressive and dynamic instruments for achieving socio-
economic progress :
There are four principles on which the labour legislation is based viz,
1. Social Justice
2. Social and Economic Justice
3. National economy
4. International conventions
Social Justice:
The concept of social justice refers to providing justice to everyone in the society so that the
poor are not exploited by the rich. It is an in the interest of both employers and employees
that they should consider themselves as two wheels of a cart and firmly believe that one
cannot exist without the other.
Social and Economic Justice: concentrates more on the equal distribution of profits among
employers and employees.thus, removing inequality between the two parties.
National Economy :
Labour legislation ensures industrial peace and helps in the industrialization of the country. The
Directive principles of the constitution contain the idea of welfare state. It is a fundamental of a
welfare state to look after the interest of workers who are the weakest section of the society and
satisfy their physical needs with the increase in productivity the benefits are shared with the
workers, resulting in their prosperity. Thus for the growth of economy and development of the
country, labour legislation acts as guiding principle.
International Conventions :-
International labour origanizations aims at securing the minimum standard of living for the workers
throughout the world. If any convention is passed by govt, it becomes binding if it is ratified by any
country. Thus, labour legislation is guided by these conventions.
In her drive to provide protection to the needy workers, the Government of India has made
Coverage:
This act covers workers employed in factories, mines, plantations, mechanically propelled vehicles,
construction works, railways, ships, circus and other hazardous occupations specified in schedule II
of the Act. It does not apply to the Armed Forces, casual workers and workers covered by the
Employee’s State Insurance Act, 1948.
Administration:
The Act is administered by the State Government by appointing commissioners for this purpose
under Section 20 of the Act.
Benefits:
Under this Act, compensation is payable by the employer to the workman for all personal injuries
caused by industrial accidents which disable him/her for more than three days. In case of the death
of workman, the compensation is paid to his/her dependents. The Act also Specifies that in case a
workman contracts any occupational disease, which is specified in its third schedule, such disease
shall ordinarily, be treated as an employment injury arising out of and in the course of employment.
The compensation is paid depending upon the type of injury. In case of permanent total
disablement, the rate of compensation varies between Rs.60, 000 to Rs.2.74 lakhs. In case of partial
disablement, compensation at the rate of 50 per cent of wages is payable for a maximum period of 5
years.
There is no age limit to the coverage of the Act. In case of injuries causing death, the rate of
compensation varies from Rs.50, 000 to Rs. 2.28 lakhs depending upon the salary and age of the
worker at the time of his/her death.
The employer is under obligation to make the payment of compensation within one month from the
date on which it falls due. In case of default in paying the compensation due under the Act, the
commissioner may direct for recovery of the amounts of arrears with interest @ 12% p.a. on the
amount due. If, in the opinion of the commissioner, delay is without convincing justification, a
runner due not exceeding @ 50% of such amount by way of penalty may also be recovered from the
employer.
Coverage:
The Act covers all workers (whether manual, supervisory or salaried employees) whose income do
not exceed Rs. 6,500 per month and are employed in factories, other than seasonal factories which
run with power and employ 20 or more workers. The State Government can extend the coverage of
the Act with the approval of the Central Government.
Administration:
The Act is administered by the Employees State Insurance (ESI) Corporation, an autonomous body of
40 persons consisting of representatives of the Central and State Governments, employers,
employees, medical profession and the parliament.
Benefits:
Under this Act, an insured is entitled to receive the following types of benefits:
An insured or a member of his/her family requiring medical help is entitled to receive medical facility
free of charge in a hospital either run by the ESI Corporation or by any other agency.
An insured worker in case of certified sickness is entitled to receive cash payment for a maximum
period of 91 days in any continuous period of one year. The daily rate of sickness benefit is
calculated as half of average daily wages. The insured worker should be under medical treatment at
a dispensary of other medical institutions maintained by the corporation.
An insured woman is entitled to receive cash payment calculated at a full average wage for a period
of 12 weeks of which not more than 6 weeks shall precede the expected date of her confinement.
This benefit is entitled to insured worker in case of industrial accidents and injury. In case of
temporary disablement, the worker is paid 70 per cent of wages during the period of disablement. In
case of permanent partial disablement, the insured individual is entitled to a cash benefit for life to
be paid as a percentage of the full rate. In case of permanent total disablement, 70 per cent of the
wages is paid as monthly pension to the worker for life.
This benefit is available to the dependents of a deceased worker due to industrial accident or injury.
The rate of benefit differs depending upon the relationship between the deceased and the
dependents. For example, the widow of the deceased will receive during her lifetime of until
remarriage, an amount equivalent to three-fifth of the full rate. Every dependent son receives two-
fifths of the full rate till he reaches to the age of 15 years. Every dependent daughter gets the same
amount till she reaches to 15 year or until marriage, whichever is earlier.
Since its inauguration in October 1948, the ESI Corporation has 129 ESI hospitals with 23,690 beds,
43 ESI annexes and 1,450 dispensaries including mobile dispensaries and 66.13 lakhs employees had
received benefits as on 3December, 1998. During a single year 1997-98, the Corporation had
distributed Rs.932 crores by way of sickness benefits, maternity benefits, temporary and permanent
disablement benefits and dependents benefit.
Coverage:
The Act covers workers employed in a factory of any industry specified in Schedule 1 in which20or
more workers are employed or which the Central Government notifies in its official Gazette. The Act
does not apply to co-operative societies employing less than 50 persons and working without the aid
of power. It also does not apply to those new establishments till they become 3 years old.
Administration:
Benefits:
(a) Provident Fund:
Under this benefit, an employee can avail non-refundable withdrawal or take advances from the
Provident Fund Account for various purposes. On superannuation, the employee gets the full
balance at his credit with interest.
(b) Pension:
Under the new pension scheme which has come into force from 16-11 -1995 replacing the 1971
scheme, several types of pension are available to an employee and his/her dependents.
Under the deposit-linked insurance scheme, an amount equal to the average balance in the
Provident Fund Account of the deceased employee during the preceding one year subject to a
maximum of Rs.35, 000 is granted to his/her nominee/legal heir.
Coverage:
The Act is applicable to all establishments not covered under the Employee’s State Insurance Act,
1948.
Administration:
Benefits:
Under the Act, a woman worker is entitled to receive the payment for maternity benefit at the rate
of average daily wages for a total period of 12 weeks. With effect from 1 st February 1996, a woman
worker is entitled to grant of leave with wages for a maximum period of one month in cases of
illness arising out of MTP or tubectomy. Women workers who will undergo tubectomy operation will
get two weeks’ leave.
Coverage:
The Act is applicable to the employees employed in factories, mines, oil fields, plantations, ports,
railways, companies, shops or other establishments employing 10 or more persons.
Administration:
Benefits:
Under this Act, on completion of 5 years of service, the employees are entitled to gratuity payable at
the rate of 15 days wages for each completed year of service subject to a maximum of Rs. 3.5 lakhs
with effect from September 1997. The wage ceiling has been removed with effect from 24 th May,
1994.
Germany was the first country to introduce Social security scheme (1883)
each member of a particular trade (blacksmiths, painters, weavers etc) was
required to contribute at regular intervals;
Money from this fund was used for food,lodging, hospital and feneral expenses of
aged and disabled members.
In USA, Social Security Act came into existence in 1935. (years not important,
this is only fodder material for Essay.)
India has always had a Joint Family system that took care of the social security
needs.
However with rise of migration, urbanization, nuclear families and demographic
changes, Joint family system has declined. Hence we need a formal system of
social security.
Concurrent List
Social Security and labour welfare falls under Concurrent list, it means both union and state
Government can make laws regarding these topics.
Article 42
Provision for just and humane conditions of work and maternity relief
State shall make provision for securing just and humane conditions of work and
for maternity relief.
Organized sector
includes primarily those establishments which are covered by the Factories Act,
1948, the Shops and Commercial Establishments Acts of State Governments, the
Industrial Employment Standing Orders Act, 1946 etc.
This sector already has social security benefits under above laws.
Examples: employees of union and state Government, army, navy, airforce,
Multinational companies, Infosys, TCS and so on.
Unorganized sector
Unorganized sector doesn’t have labour law coverage. These are seasonal and
temporary nature of occupations.
Casual nature of work, labour mobility is high hence bargaining power is low.
provides for 12 weeks wages during maternity as well as paid leave in certain
other related contingencies.
provides 15 days wages for each year of service to employees who have worked
for five years or more in establishments having a minimum of 10 workers.
Provident Fund
But From the point of view of government, Provident Fund is attractive because it generates
forced savings that can be used to finance national development plans.
Social security and ILO
Social security is a human right which responds to the universal need for protection against
certain life risks and social needs. Effective social security systems guarantee income security
and health protection, thereby contributing to the prevention and reduction of poverty and
inequality, and the promotion of social inclusion and human dignity. They do so through the
provision of benefits, in cash or in kind, intended to ensure access to medical care and health
services, as well as income security throughout the life cycle, particularly in the event of
illness, unemployment, employment injury, maternity, family responsibilities, invalidity, loss
of the family breadwinner, as well as during retirement and old age. Social security systems
therefore constitute an important investment in the well-being of workers and the community
as a whole, and facilitate access to education and vocational training, nutrition and essential
goods and services. In relation with other policies, social security contributes to improving
productivity and employability, and to economic development. For employers and
enterprises, social security helps to maintain a stable workforce that can adapt to changes.
Finally, it reinforces social cohesion and therefore contributes to building social peace,
inclusive societies and a fair globalization by ensuring decent living conditions for all.
The Conventions and Recommendations which make up the ILO’s standards framework on
social security are unique: they set out minimum standards of protection to guide the
development of benefit schemes and national social security systems, based on good practices
from all regions of the world. They are therefore based on the principle that there is no single
model for social security, and that it is for each country to develop the required protection.
For this purpose, they offer a range of options and flexibility clauses for the progressive
achievement of the objective of the universal coverage of the population and of social risks
through adequate benefit levels. They also set out guidance on the design, financing,
implementation, governance and evaluation of social security schemes and systems, in
accordance with a rights-based approach. In a globalizing world, in which individuals are
exposed to ever greater economic risks, it is clear that a significant national policy of social
protection can contribute to attenuating the many negative effects of crises. It was for this
reason that the International Labour Conference adopted a new instrument in 2012, the Social
Protection Floors Recommendation (No. 202) . Moreover, the 2019 General Survey ,
focusing on universal social protection for life in dignity and health, prepared by the
Committee of Experts, which will be examined by ILO constituents at the International
Labour Conference in 2019, covers this Recommendation.
Relevant ILO instruments
Medical care
Convention No. 102 - [ratifications ]: provides for preventive care, general
practitioner care, including home visits, specialist care, essential pharmaceutical
supplies as prescribed, prenatal, confinement and postnatal care by medical
practitioners or qualified midwives, and hospitalization where necessary.
Convention No. 130 - [ratifications ]: provides the same benefits as Convention No.
102, plus dental care and medical rehabilitation.
Sickness benefit
Unemployment benefit
Old-age benefit
Family benefit
Maternity benefit
Invalidity benefit
Survivors' benefit
Convention No. 102 - [ratifications ]: periodical payments, corresponding to at least
40% of the reference wage; the rates of relevant benefits must be revised following
substantial changes in the general level of earnings and/or in the cost of living. .
Convention No. 128 - [ratifications ]: periodical payments corresponding to at least
45% of the reference wage; the rates of relevant benefits must be revised following
substantial changes in the general level of earnings and/or in the cost of living.
Social security is defined as the security that the society furnishes through appropriate
organizations against certain risks to which its members are exposed.
According to Lexicon Universal Encyclopaedia, the term social security has been defined as
‘consisting of public programmes intended to protect workers and their families from income
losses associated with the old age, illness, unemployment, or death.
The term sometimes is also used to include a broad system of support for all those who, for
whatever reasons, are unable to maintain themselves’.
The concept of social security is based on ideas of human dignity and social justice. The
underlying idea behind social security measures is that a citizen who has contributed or is
likely to contribute to his/her country’s welfare should be given protection against certain
hazards.
Learn about:- 1. Meaning and Definition of Social Security 2. Concept of Social Security 3.
Characteristics 4. Significance 5. Measures 6. Benefits.