social security & labour welfare

Self Learning Material

Social Security &Labour Welfare

(MBA-961)

Course: Master Business Administration

Semester-III

Distance Education Programme

I.K. Gujral Punjab Technical University

Jalandhar

SyllabusSocial Security & Labour Welfare (MBA 961)

Objective: To acquaint the students with basic Acts pertaining to social security and labourwelfare as applicable in India.

UNIT- I

The concept of scope of social security. Social assistance and social insurance Evolution ofSocial Security. Law relating to social security Payment of wages Act,1936

UNIT-II

Scope, importance, features and implications of the following Acts as applicable in India:Minimum Wages Act, 1948Payment of Bonus Act, 1965Workman’s Compensation Act,1923Maternity Benefit Act,1961

UNIT-III

Scope, importance, features and implications of the following Acts as applicable in India:Employment State Insurance Act,1948Provident Fund & Miscellaneous Provision Act,1951Gratuity Act,1972I.L.O and social Security. The concept of Labour welfare: definition, Scope and Objectives,welfare work and social work

UNIT-IV

Evolution of labour welfare, classification of welfare work, agencies for welfare work. Welfareactivities of govt. of India; welfare work by trade unions Labour welfare work by voluntary socialorganizations. Labour administration; agencies for administrating labour welfare laws in India.

Note : Relevant Case Studies should be discussed in class.

Suggested Reading:

1. A. M. Sharma ‘Social, Security Labour Welfare’ Himalayas Publishing House2. I.L.O Social Security, International labour Office

Table of Contents

LessonNo.

Title Written by PageNo.

1 Introduction to Social Security Ms. Anu Jhamb, AssistantProfessor, Department ofApplied management, UIET,PU, Chandigarh

1

2 Introduction to laws related to LabourWelfare

Ms. Anu Jhamb, AssistantProfessor, Department ofApplied management, UIET,PU, Chandigarh

17

3 The Payment of Wages Act, 1936 Ms. Anu Jhamb, AssistantProfessor, Department ofApplied management, UIET,PU, Chandigarh

32

4 The Minimum Wages Act, 1948 Ms. Anu Jhamb, AssistantProfessor, Department ofApplied management, UIET,PU, Chandigarh

56

5 The Payment of Bonus Act, 1965 Ms. Anu Jhamb, AssistantProfessor, Department ofApplied management, UIET,PU, Chandigarh

78

6 The Workmen’s Compensation Act,1923


96

7 The Maternity Benefit Act, 1961 Ms. Anu Jhamb, AssistantProfessor, Department ofApplied management, UIET,PU, Chandigarh

113

8 Introduction to laws related to SocialSecurity


127

9 Employees’ State Insurance Act, 1948,

Employees’ Provident Fund &

Miscellaneous Provisions Act, 1951

and Gratuity Act, 1972


145

10 International Labour Organisation(I.L.O) & Labour Welfare

Ms. Anu Jhamb, AssistantProfessor, Department of

165

Applied management, UIET,PU, Chandigarh

11 Social Work & Welfare Work Dr. Sulakshana Dwivedi,University Scool of AppliedManagement, PunjabiUniversity, Patiala

184

12 Evolution of Labour Welfare andAgencies for Labour welfare Work

Dr. Sulakshana Dwivedi,University Scool of AppliedManagement, PunjabiUniversity, Patiala

206

13 Labour Administration Dr. Sulakshana Dwivedi,University Scool of AppliedManagement, PunjabiUniversity, Patiala

232

Reviwed by:Dr. Aman Khera, Assistant Professor

UIAMS, Panjab University, Chandigarh

© IK Gujral Punjab Technical University JalandharAll rights reserved with IK Gujral Punjab Technical University Jalandhar

LESSON – 1

Introduction to Social Security

Structure

1.0 Learning Objectives

1.1 Concept and Scope

1.2 Social Assistance and Social Insurance

1.3 Evolution of Social Security

1.4 Summary

1.5 Glossary

1.6 Answers to check your progress

1.7 Suggested Readings

1.8 Terminal and Model Questions

1.0 LEARNING OBJECTIVES:

After studying this chapter, you will be able to:

Understand the object of the Social Security

Understand meaning of Social Security and labour welfare

1.1 CONCEPT AND SCOPE

Social security today is a multi-winged and multifaceted concept. In its extensive

pervasiveness, the meaning is extended and applied to different areas to the extent of its

characteristic harmony. Social security may be said to be an effective guarantee extended by the

State against loss of income of the workers owing to sickness, industrial injury, unemployment,

or old age invalidity. The benefits may either be of lump-sum amount of cash or cash

contribution of recurring nature or both, to the worker under the heading of social security. Thus

social insurance and social assistance are the two basic schemes which fall within the definition

of the term ‘Social Security’.

The Important Components of Social Security are:

(a) Schemes enforced and regulated by the Government or some public authority on

its behalf for the purpose of protecting workers and their families are designated

as “Social Security” programme;

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(b) Under these schemes financial protection is provided to the workers or their

dependents in case of loss of employment, injury, old age invalidity or death ; and

(c) Schemes of providing financial assistances to the persons unable to meet their

necessities irrespective of any reason are also included within the term ‘Social

Security’

Further to understand properly the concept of social security it is worthwhile to study the

activities which are outside the pale of social security. Many activities of state are loosely linked

with and promote social security which immediately are not social security activities. The

activities excluded from social security are the following:

(i) Military defence, prevention of civil strife, police forces and administration of

justice, which provide security of life, limb and property against criminals;

(ii) Education is excluded as it is a social service rather than a form of social security;

and does not provide protection against the risks of life in quite the same sense. It

is, however, intimately related to social security in so far it enables people more

easily to hold their jobs and to adopt themselves to new occupations in periods,

such as the present, of rapid economic and technological change ;

(iii) Employment though outside social security, is associated with it. The Government

actions to maintain high levels of employment by controlling credit and by

budgetary and other measures of economic policy must promote and extend the

span of social security programme;

(iv) Measures and comprehensive policies to eliminate such causes of insecurity as

unemployment, inadequate housing, general health services and illiteracy are vital

elements in a constructive welfare programme, and are intimately linked with, but

distinct from social security;

(v) Firm prices control programmes applied by Governments for economic and

political reasons too have not a direct bearing on social security;

(vi) Food subsidies, rationing and price control are generally excluded, as their main

purposes are different from those of social security;

(vii) Wage subsidies to low paid workers are also outside social security, the problems

of such workers are better solved by minimum wages systems;

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(viii) The relief of distress or famine caused by floods, earthquakes, droughts and other

natural catastrophies is considered to be a form of social security, but large scale

capital works for flood control, irrigation are not.

Social security, according to Lord Beveridge, “is an attack on five giants, viz, want,

disease, ignorance, squalor and idleness.” The concept of social security is essentially

related to the high ideals of human dignity and social justice. In a modern welfare state

comprehensive social security schemes take care of persons from “ womb to tomb”. It is

one of the pillars on which the structure of the welfare state rests.

The social security has now become a fact of life for millions of people

throughtout the world. It has widely influenced the economic and social policies of all

the developed and developing countries. These measures have introduced and

maintained an element of stability and security in the midst of the stresses and strains of

modern life. It is a major aspect of public policy today and the extent of its prevalence is

a measure of the progress made by a country towards the ideal of welfare state.

Social security programmes are now increasingly being accepted as useful and

necessary instruments for the protection and stability of the labour force. It is primarily

an instrument of social and economic justice. It is a dynamic concept the contents of

which change with social, economic and political system obtaining in a given country at a

given time. It is a wise investment which yields good dividends in the long run.

According to Weber and Cohen, “ Social security is a controversial and dynamic

subject with various facets – philosophical, theoretical, humanitarian, financial,

administrative, social and legal.

Fridlander defines social security as “ a programme of protection provided by

society against the contingencies of modern life – sickness, unemployment, old age,

dependency, industrial accidents and invalidism against which the individual cannot be

expected to protect himself and his family by his own ability or foresight”.

It has been defined by the ILO as “ the security that society furnished, through

appropriate organisation, against certain risks to which its members are exposed. These

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risks are essentially contingencies against which the individual of small menns cannot

effectively provide by his own ability or foresight alone or even with private combination

with his fellows. According to it which all state policy has some bearing on social

security, it is convenient to regard social security services only such schemes as provide

the citizen with benefits design to prevent and cure disease, to support him when unable

to earn and to restore him to gainful activity”. Not all such measures, however can be

considered as affording security. For security is a state of mind as well as an objective e

fact.

To enjoy security, one must have confidence that the benefits will be available

when required, and inorder to afford security, the protection must be adequate in quality

and quantity. It further emphasised the importance of comprehensive social security

measures in the preamble to its constitution, in which it proclaimed “ protection of the

worker against sickness, disease and injury arising out of him employment, the protection

of children, young person and women, provisions for old age and injury”.

Check Your Progress A

State whether the following statements are True or False:

1) Social Security is inclusive of social assistance as well as social insurance.

2) Social Security means safety and freedom from fear of want and hunger.

3) Social Security does not have any influence on economic and social policies of a country.

4) Social Security is a controversial and dynamic concept.

5) Social Security has wider aims than the prevention or relief of poverty.

Aims and Objectives

The Objective of social security is to protect the poor and vulnerable and to ensure that

they have an acceptable standard of living. Social security may entail smoothing, consumption

and reducing risk or spreading income over the life cycle.

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The aim of all social security measures is three-fold: compensation, Restoration and

Prevention. Compensation goes to income security and is based upon the idea that during spells

of risks, the individual and his family should not be subjected to a double calamity involving

both destitution and loss of health, limb, life or work. Restoration implies cure of the sick and

the invalid, re-employment and rehabilitation, and is in some ways, an extension of the earlier

concepts of the functions of social security. Prevention is designed to avoid the loss of

productive capacity due to sickness, unemployment or invalidity and to render the available

resources which are used up by avoidable disease and idleness and thus increase the material,

intellectual and moral well-being of the community.

The development of services for prevention and rehabilitation should receive the

highest priority in social security policy. Till now social security has tended to concentrate on

providing access to what are mainly curative health services and on providing cash in defined

contingencies. Prevention needs to permeate virtually all departments of government, the actions

of employers and employees, the activities of voluntary bodies and most important of all, the

actions of individuals and families.

Social Security has wider aims than the prevention or relief of poverty. Where

social security programmes did have as an objective the fight against poverty, the effort was

mainly concentrated on those not at work: family allowances and health services were the only

instruments used to help those who were at work. Its fundamental purpose is to give individuals

and families the confidence that their level of living and quality of life will not, in so far as is

possible be greatly eroded by any social or economic eventuality. In short, its aim has been

widened to include the promotion of the whole quality of life.

Access to social security has become a fundamental human right to which every

individual is entitled as a member of the society. This right has been embodied in the Universal

Declaration of Human Rights adopted by the United Nations General Assembly in 1948 and also

has been granted under numerous national constitutions. But it has been realised in differing

degrees depending upon the tradition, history, level of economic development and a political and

social philosophy of a country.

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The fundamental rights that our Constitution guarantees to every citizen include

the right to life, and as the Supreme court has pointed out the right to livelihood is inherent in the

right to life. The ultimate object of social security is to ensure that everyone has the means of

livelihood. It follows, therefore, that the right to social security is also inherent in the right to

life.

The World Development Report of 1997, states that social security is an essential

ingredient in the protection, development and full utilisation of human resources and should

therefore be looked upon as an investment both for the development of human resources and

human development.

There are two main currents in the movement towards social security viz: social

assistance and social insurance. Though both of them differ in their evolutionary process and

approach, they have been designed to serve the same ends, and both are complementary and

supplementary to each other. They are two sides of the same coin and form an integral part of

the social security system of a country.

ACTIVITY – 1

I(a) Write any two definitions of social security.

________________________________________________________________

________________________________________________________________

________________________________________________________________

(b) State the aims and objectives of social security.

________________________________________________________________

________________________________________________________________

________________________________________________________________

1.2 SOCIAL ASSISTANCE AND SOCIAL INSURANCE

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The concept of ‘Social Security’ is mainly comprised of two synonymous terms viz., (a)

‘Social Assistance’ and (b) ‘Social Insurance’. Though basically Social Insurance and Social

Assistance are meant to ameliorate the conditions of the masses and both are of the main

instruments to provide financial assistance yet, they differ from each other in terms of their

substance and operation. It is appropriate here to discuss the essential features of the concept of

social assistance and those of social insurance.

1.2.1 Social Assistance

The social security schemes of the present world are known by various names in different

countries with particular distinctiveness in terms of area of operation, risk covered and the

benefits available. Social assistance was first introduced by Denmark at the end of nineteenth

century. It was experienced in course of time that the workers who had put in their services did

not prefer to get help from poor relief fund. Therefore, it was soon converted into a legal right for

citizens. The benefits were provided in the form of old age, unemployment, invalidity and

sickness assistance. Subsequently, this scheme was adopted in the same pattern, in Britain, New

Zealand, and United States of America. In some countries social assistance benefits are available

only to the persons who are not covered by the social insurance. However, in most countries

social assistance is followed either because the system of social security is not fully developed or

because complicated administrative or technical problems are involved in its implementation.

Social assistance is infact a broad based ideology which embraces within its coverage all

residents irrespective of whether he or she is in employment or not. Although the fund for social

assistance is basically financed by the Government from its various sources of revenues, yet at

the same time the scheme is also financed by the voluntary contribution from the trusts and the

charitable and religious funds. In course of time, it has been experienced that social assistance

fails to provide security to the needy people of the country, particularly those who are old and

not employed in organized employment.

Social insurance and social assistance are the two synonymous terms as far as their

objects are concerned. Both aimed at the same object i.e., to meet the problem of poverty and the

want faced by a person. In the case of contingency arising owing to an accident resulting in

injury, occupational disease or old age inability, financial assistance is provided to the concerned

parties under the scheme of ‘social assistance’ as well as ‘social insurance’. Originally the idea

of social assistance included payment of allowances in case of loss of employment owing to any

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of the contingencies like injury, occupational disease, old age inability etc. But later the idea has

been developed not only to provide for loss of income but also to provide individualized service

in case of individual needs. The programme of taking preventive measures in order to avoid

occurrence of contingency is also included within the scheme of ‘Social Assistance’. It has been

observed that ultimate objective of social assistance is to help each person to improve his

situation through his own efforts. Hence successful ‘social assistance’ is of much utility because

this phenomenon of social assistance fights (against) contingencies namely, need, distress,

infirmity, helplessness, apathy, maladjustment etc.

The huge involvement of State’s fund under ‘social assistance’ can be much reduced if

preventive measures are taken against certain contingencies. This will reduce the chance of

occurrence of the contingencies as well as save the expenses from Government funds. Also the

payment of flat rate of allowances to all workers irrespective of their needs deserves to be

modified to the nature of graduated scheme of social assistance with variable rates.

Social Assistance is one of the oldest forms of social security. There is historical

evidence to show that provisions similar in many ways to modern social assistance schemes

operated many centuries ago. Earlier examples include the laws of ancient Hindu India, which

contained numerous provisions for the care of needy. One of the best documented is the practice

of Zakat, which was instituted in Islamic societies in the seventh century A.D. In Europe, the

development of social assistance is associated with the so-called Poor Laws. Municipal Schemes

to relieve the poor were established in several European cities in the fifteenth and sixteenth

centuries. The social assistance schemes which were established in the number of british

colonies during this century were based directly on the Victorian New Poor Law. Althrough

social assistance scheme first emerged in British colonies, several countries, which were never

colonised by great Britain also established schemes of this kind.

Social Assistance has been defined by the ILO as “ a service or scheme which provides

benefits to persons of small means as of right in amounts sufficient to meet minimum standards

of need and financed from taxation”. As this definition reveals, social assistance schemes are

funded from general revenues rather than from individual contribution with statutory scales of

benefit adjusted according to a person’s means. Social Assistance schemes are designed to held

people who are in financial difficulties. Conditions of entitlement are prescribed by statute and

require that applicants have limited incomes and assets; the assessments of the claimants

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financial status is known as the means test. Other conditions may also be prescribed, for

example claimants may have to prove that they have no relatives to support them, or that they are

physically handicapped or unable to work for other reasons. Social assistance is closely

associated with social work services in many countries; social workers are often require not only

to assess the claimant’s eligibility but to provide case work services and encourage the client to

become financially self-sufficient.

Social assistance represents the unilateral obligation of the community towards its

dependent groups. It is provided by the society or the government to the poor and needy

individuals. The principal features of social assistance are :

i) the whole cost of the programme is met by the state and local units of

government;

ii) benefits are paid as of legal right in prescribed categories of need;

iii) in assessing need, a person’s other income and resources are taken into account;

certain resources, such as a reasonable level of personal savings are disregarded; and

iv) the benefit grant is designed to being a person’s total income upto a community-

determined maximum, taking into account other factors such as family size and unavoidable

fixed obligations such as rent. Grants are not related to the applicant’s previous earning or

customary standard of living.

ACTIVITY - 2

II(a) Highlight the important components of Social Security.

___________________________________________________________________

___________________________________________________________________

___________________________________________________________________

(b) Highlight the significance of Social Security schemes .

___________________________________________________________________

___________________________________________________________________

___________________________________________________________________

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1.2.2 Social Insurance

Social insurance is that scheme of assistances for workers in which graduated rates of

contributions are paid by the workers against the assurance of benefits in case of contingency.

The social insurance implies that it is compulsory for men to stand together with fellows and

jointly cater the needs of each other in case of contingency.

Lord William Beveridge has defined social insurance as "Plan of Insurance of giving in

return for contributions benefits upto subsistence level, as a right and without meanstest so that

individuals may build freely upon it”.

The term “social insurance” has been defined in Chambers Encyclopaedia as under:

“Social insurance is a system where compulsory contribution entitles the insured person

to benefits of a predictable size when certain conditions are fulfilled”.

The aforesaid definition may be enlarged into following ingredients:

(a) Social insurance is a system in which members of the scheme are required to

contribute compulsorily in proportion to their wages.

(b) These members are entitled to get benefits of a specified amount.

(c) The benefits can be obtained on the compliance of the specified conditions.

Social security is a modern idea though in some of its crude forms it might have existed

in medieval craft, merchant guilds and friendly societies in the twelfth century, by way of

attempt to meet the common risk of life by mutual action.

The basic features of the scheme of social insurance are that (a) certain risks which

cannot be faced by the persons in their individual capacity are faced collectively by a group of

persons; (b) for that purpose they have pooled together their resources; (c) also benefits are

provided to them in case of contingency; (d) this makes them maintain their standard up to a

subsistance level; (e) benefit are payable to them according to rates prevalent as a matter of right

in accordance with their salary or income; (f) the payment of contribution is obligatory since

they are insured against the risk compulsorily.

Although it has been proposed by the I.L.O. that the social insurance system should cover

the whole of the population as far as practicable, yet in actual practice it is found that only a

certain category of the population could be covered under it. Contributions are paid, not at a flat

rate, but at a graduated rate by the insured persons. Benefits are also not paid on an uniform

basis, i.e., variable rates are payable to different persons according to their rates of contribution

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and it is not related to the needs of the insured person. Since social insurance is run without any

commercial motive, the State or any other body created on its behalf can enforce the scheme of

‘Social Insurance’. In this context, it has been aptly observed by Lord William Beveridge as

under:

The state in organizing security stifle incentive, opportunity, responsibility in establishing

a national minimum, it should leave room and encouragement for voluntary action for each

individual to provide more than the minimum for himself and his family”

It can be noticed from the above that social insurance should exist only to fulfill the

minimum need of human contingencies and although statutory there should be provision for

withdrawing the same from upon those who could afford to have higher amenities outside the

statutory binding. Based upon this, the Indian social insurance law permits any particular

community to be covered out of it, subject to the satisfaction of the authority that the new

obligation will afford greater benefit than the one provided under the scheme.

Beveridge defined social insurance as the “ giving in return for contribution, benefits upto

subsistence level as of right and without menas-tests, so that an individual may build freely upon

it. Thus social insurance implies that it is compulsory and that men stand together with their

fellows.” This is based upon the principles of compulsory mutual aid.

The principle elements of social insurance are :

i) social insurance is financed by contributions which are normally shared between

employers and workers, with perhaps, state participation in the form of a supplementary

contribution or other subsidy from the general revenue;

ii) participation is compulsory with few exceptions;

iii) contributions are accumulated in special funds out of which benefits are paid;

iv) surplus funds not needed to pay current benefits are invested to earn further income;

v) a person’s right to benefit is secured by his contribution record without any test of need

or means;

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vi) the contribution and benefit rates are often related to what the person is or has been

earning.

The two most important social insurance schemes at present in our country are the employees’

state insurance scheme and the employees’ provident fund and miscellaneous provisions scheme.

Social insurance is the largest single element in and the foundation for the social welfare

system of most countries. It grew out of voluntary insurance arrangements of the medieval

European graft guilds and gradually institutionalised in many countries of the world.

Although details vary from one country to another, social insurance programmes

throughout the world share certain characteristics. The following are the essential elements of

social insurance.

1 Compulsory participation : Most people participating in social insurance programmes

do so as a result of a legal requirement.

2. Government sponsorship: Government create and supervise social insurance

programmes, but do not necessarily manage them.

3. Contributory Finance : Mostly the resources needed to run the programme are

raised through explicity contributions collected from the employer or from both the employer

and employee. A worker’s contribution is a fixed percentage of his or her wage or income.

4. Eligibility Derived from contributions: Eligibility for benefits under social insurance

programmes rests, in part, on current or previous contributions by the individual or the employer.

5. Benefits prescribed in Law: Uniform sets of entitling events and schedules of

benefits are developed, announced and applied to all participants. Administrators of the

programme have little discretion in determining who should get benefits or how much they

should get.

6. Benefits not directly related to Contributions : Social insurance programmes usually

redistribute towards lower-wage workers. The lower-wage workers however, tends to get back

proportionately more than the higher-wage worker.

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Social insurance schemes are today favoured by many social security policy makers.

Because of their contributing funding, the clear links between contributions and benefits and

explicit guarantees of entitlement, many believe that social insurance is preferable to other forms

of protection, such as employer liability, social assistance or demogrant social allowance

schemes. Social insurance principles have been widely adopted and today most industrial

countries have comprenhensive insurance schemes which cover a large majority of the

population and provide protection against the wide range of contengencies. However, social

assistance schemes have not been discontinued and today are widely used to supplement the

benefits paid to members of social insurance schemes. They are also used to cater for those who

have never contributed to social insurance schemes and are ineligible for benefit.

Although many social policy analysts are critical of the use of the social assistance, it is

likely that these schemes will continue to function in the industrial countries for the foreseeable

future. However, the pressing social needs of the developing countries require that outmoded

social assistance schemes be reformed and more appropriate social assistance policies be

developed to increase their relevance to local conditions and they contribute to the task of

providing social security to the majority of the population. From the present day develiopments

it seems that the basic framework of social security is fast changing and both social insurance

and social assistance are moving closer to one another towards the common goal of a national

system of a social security.

Check Your Progress B

Fill in the blanks :

i) Social Security protects the society against the contingencies of _________ & ________.

ii) Social Security schemes take care of persons from ____________ to __________ .

iii) Social Security is an attack on five giants viz: want, disease, _________, __________ &

________ .

iv) The right to Social Security is inherent in the ______________________________ .

v) The aim of Social Security measures is _____________ , Restoration & ____________ .

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1.3 EVOLUTION OF SOCIAL SECURITY

The expression social security was first used officially in the United States of America,

and the expression caught the imagination of the Government, Planners and the employers. In

many countries, the expression has by now acquired a definite and standard connotation. In the

U.S.A., it means a Federal System of old age pension, unemployment, or disability insurance

financed by funds raised by the Government with or without participation of employers or both

the employers and the employees.

Although social security is a very wide term and it has acquired a global character, yet

the irony is that it has not yet acquired any standard or uniform definition. The International

Labour Organisation is to be credited for the first systematic effort to define the term ‘Social

Security’. The I.L.O. definition bears reproduction:

“The security that society furnishes, through appropriate organization against certain

risks to which their members are exposed. Their risks are essentially contingencies against which

the individual of small means and meagre resources cannot effectively provide by his own ability

or foresight or even in private combination with his fellows, these risks being sickness maternity,

invalidity, old age and death. It is the characteristic of these contingencies that the imperil the

ability of the working man to support himself and his dependents in health and decency”.

The concept of social security can be said to be inherent in the traditional joint family

system which has been prevalent in India since ages. Nevertheless, the modern concept of social

security came to attract attention of the authorities concerned in India only in the early twenties

of the present century. With the growth of industrialisation in the wake of World War I, and

under the impact of modern economic forces, the joint family system came to be gradually

undermined. Migration of workers from villages to urban areas led to an increase in the ranks of

industrial workers in the country which generated demands for protection and improvements in

the working and living conditions of industrial workers and the beginning of governmental

attention to social contingencies.

India, a signatory member of International Labour Organization, has been showing

pioneering zeal in almost all matters of policy formulation as well as implementation. Many of

the Recommendations and Conventions suggested by the International Labour Organisation have

also been adopted by India. But the extent of application of these guidelines have yet to reach

their full standard because of difference prevailing in the perception of welfare concept. Welfare,

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after all, is a relative concept invariably associated with the standard of living of the people,

value systems, and the resourcefulness of the country.

The Indian Constitution contains clear provisions relating to her welfare goals. The

welfare ideals have been made abundantly clear in its two parts, viz. the Preamble and the

Directive Principles of State Policy. But the Directive Principles only affirm what is laid out in

the Preamble according to which the functions of the Republic are to secure to all its citizens

social, economic and political justice. As a sequel to this determination, since the time of

independence till now, India has experienced the passing of a series of unending legislations in

various economic, social, industrial and other fields.’

1.4 SUMMARY- The concept of Social Security is multidimensional in its form, and it has

social, psychological, legal, ethical and political overtones, besides economic one. Social

Security is being increasingly recognised as a dynamic concept which has widely influenced the

social and economic policies of all the developed and the developing countries. The concept of

social security in a modern welfare state is broad enough providing comprehensive social

security from ‘womb to tomb’.

1.5 Glossary:

Social Security Measures : measures that will ensure protection by society to its members

against economic and social distress.

Social Assistance : protection against contingencies namely need, distress, infirmity,

helplessness, apathy, maladjustments etc.

Social Insurance : giving in return for contributions, benefits upto subsistence level, as of

right and without means test so that individuals may build freely upon it.

1.6 ANSWERS TO CHECK YOIR PROGRESS

Answers to check your progress A

1-True 2-True 3-False 4-True 5-True

Answers to check your progress B

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i) unemployment, old age ii) womb, tomb iii)ignorance, squalor, idleness

iv) right to life v) compensation, prevention.

1.7 SUGGESTED READINGS

1 A.M.Sharma, 1981. Aspects of Labour welfare and social security, Himalaya Publishing

House: Bombay.

2. Nayan Barua, 1995. Social Security and labour welfare in India, Ashish Publishing

House, New Delhi.

1.8 TERMINAL AND MODEL QUESTIONS

1 Examine the objectives of social security programmes.

2. Distinguish between social assistance and social insurance concepts.

3. Explain the evolution of social security concept.

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LESSON – 2

Introduction to laws related to Labour Welfare

Structure

2.0 Learning objectives

2.1 Introduction

2.2 Importance

2.3 Scope

2.4 Features and Implications

2.5 Summary

2.6 Glossary



2.9 Terminal and model questions


After studying this unit, you should be able to:

Define the rationale of social security laws.

Identify the components of minimum wages.

Identify the methods of payment of bonus.

Understand the object of workman’s compensation.

Know maternity benefit available to women.

2.1 INTRODUCTION

The concept of Social Security is essentially related to the high ideals of human dignity

and social justice. It is in a way one of the pillars of the welfare state Social Security measures

have introduced an element of stability and protection in the midst of the stresses and strains of

modern life.

Social Security Laws are increasingly being accepted as useful and necessary instruments

for the protection and stability of the labour force. It is primarily an instrument of social and

economic justice. It is a dynamic concept. Its content changes with the social and economic

system obtaining in a given time and space.

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Social sufferings such as poverty, unemployment and disease are the sound grounds for

advocating the provisions of social security measures in India as national programme. Social

security is a dynamic conception which is considered in all advanced countries of the world as an

indispensable chapter of the national programme. With the development of the idea of the

welfare state. It has been considered to be the most essential for the industrial workers, though it

includes all sections of society. Social security is that security which the society furnishes

through appropriate organisation, against certain risks or contingencies to which its members are

exposed. These risks are essentially contingencies, against which the Individual cannot afford by

his small means any by his ability or foresight alone. As the state stands for the general well-

being of people, it is the duty of the state to promote social security which may provided the

citizens with benefits, designed to prevent or cure disease, to support him when he is not able to

earn and to restore him to gainful activity To enjoy security, one must be confident that benefits

will be available as and when required.

2.2 IMPORTANCE OF SOCIAL SECURITY

India is poor country. In our country, the wages of most of the Industrial workers are not

sufficient. They cannot bring up their families property. In addition to this, most of our workmen

are addicted to several evils. As result of this, they face many social problems like diseases,

unemployment, illiteracy, ignorance and squalor etc. They alone find themselves unable in

fighting against these problems due to their limited economic means and high prices. Social

Security measures may prove very helpful in enabling these poor workers in facing all these

problems. The importance of Security in India can be explained as under:

1. The schemes of social security protect poor workers against social problems and

develop the feeling of hope in their life.

2. The scheme of insurance, helps the widow and the children of deceased worker.

These children can continue their education and they can help in social activities.

3. The scheme of unemployment insurance helps in case of unemployment.

4. The scheme of health insurance relieves the workers from worries and education

improves self confidence among them.

5. The scheme of old age pension helps in maintaining the efficiency and confidence

of the workers because they feel safe and secured about their old age.

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6. The scheme of social assistance is helpful in the development and growth of

national prosperity.

7. Social security schemes help in reducing many social evils like beggary,

dishonesty and prostitution etc.

In the words of Sir William Beveridge. “The more you are poor, the more you need social

security Really social security is a measure to increase the national welfare.”)

Activity 1

Highlight the need and importance of social security schemes in India.

1._______________________________________________________________

_______________________________________________________________

2._______________________________________________________________

________________________________________________________________

2.3 SCOPE

In a free competitive market the level of wages payable to workers is determined by

forces of demand and supply. In a welfare State the protection of the interests of workers is one

of the aims of any legislation which is enacted in the labour field. The same is true with regard to

the Minimum Wages Act enacted by the Indian Parliament. The Indian labour class besides

being illiterate is by and large not organised to protect its interests in a competitive market where

supply of labour is always in excess of demand. Under such conditions the labour class left to

itself is unable to protect its legitimate interests. In a country which is still under-developed the

exploitation of labour in certain industries is a common feature due to the reasons that

unemployment and few avenues for gainful employment force the labourers to accept the

employment even on starvation wages.

Therefore, the Act was enacted to secure the welfare of the workers in a competitive

market by providing for a minimum limit of wages in certain employments. The object of this

Act is to prevent exploitation of the workers and for this purpose, it aims at fixation of minimum

wages, which the employer must pay. What the act purports to achieve is to prevent exploitation

of labour and for that purpose authorises the appropriate government to take steps to prescribe

minimum rates, of wages in the Scheduled industries. What is being prescribed is minimum rates

Page 19 of 250

of wages which a welfare State assumes every employer pay before he employs labour. It is only

with regard to certain specified industries that the provisions for the payment of statutory

minimum wages have been laid down. The legislature undoubtedly intended to apply the those

industries or localities, in which, by reason of causes such as unorganised labour or absence of

machinery for regulation of wages, the wages paid to workers were in the light of the general

level of wages and subsistence, inadequate. The provisions of the Act are intended to achieve the

object of doing social justice or workers employed in the Scheduled employments by prescribing

minimum rates of wages for them. Therefore, the legislature intended to apply this Act not to all

industries but to those industries only where by reason of unorganised labour or want of proper

arrangements for effective regulation of wages or other causes the wages are very low. The

concept of locus standi has also been enlarged with a view to ensure the application of the law.

The Act contemplates that minimum wages rates must ensure not the mere physical need of the

worker which would keep him just above starvation but ensure for him not only his subsistence

and that of his family but also preserve his efficiency as a workman. It should, therefore, provide

not merely the bare subsistence of life but the preservation of the workers health and for some

measure of education, medical requirements and amenities.

In view of Directive Principles of State Policy as enshrined in Article 43 of the

Constitution, it is beyond doubt that the securing of living wages to labourers which ensures not

only bare physical subsistence but also the maintenance of health and decency, is conducive to

the general health of the public. The Minimum Wages Act was enacted to fulfil the aspiration of

the workers as contained in the resolution based on the Geneva Convention held in 1928, which

reads:

“If the labourers are to be secured the enjoyment of minimum wages and they are to be

protected against exploitation by their employers, it is absolutely necessary that restraint

should be imposed upon their freedom, of contract and such restrictions cannot in any

sense be said to be unreasonable. On the other hand, the employers cannot be heard to

complain if they are compelled to pay minimum wages to their labourers even though the

labourers on account of their poverty and helplessness, are willing to work on lesser

wages.”

Therefore, the entire scheme of the Act is a pointer towards the direction of ensuring

minimum wages to workers engaged in certain specified industries. The fact that an employer

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might find it difficult to carry on business on the basis of minimum wages is an irrelevant

consideration. The employer is required to bear this necessary burden in the general social

interest failing which he has no right to exist. The constitutionality of the Act was challenged,

before the Supreme Court in the case of Bijay Cotton Mills Ltd. v. State of Ajmer. The Supreme

Court while upholding the constitutional validity held “it can scarcely be disputed that securing

of living wages to labourers which ensures not only bare physical subsistence but also the

maintenance of health and decency, is conducive to the general interest of the public. This is one

of the Directive Principles of the State Policy embodied in Article 43 of the Constitution. It is

well known that in 1928, there was a minimum wages fixing machinery convention held at

Geneva and the resolutions passed in that convention were embodied in the international labour

code. The Minimum Wages Act was said to have been passed with a view to give effect to these

resolutions. If the laboures are to be secured in the enjoyment of minimum wages and they are to

be protected against exploitation by their employers, it is absolutely necessary that restraints

should be imposed upon their freedom of contract and such restrictions cannot in any sense said

to be unresaonable and the restrictions though they interfere to some extent with the freedom of

conducting business guaranteed under Article 19 (1 )(g)” of the Constitution are reasonable and;

being imposed in the interest of general public, are protected by the Act.

However, the Act does not provide for a review of the decision of appropriate

government but that by itself is not sufficient to make the provisions of the Act unreasonable.

Having regard to the object and scope of the Act and its material provisions, the word

‘employee’ defined in Section 2(i) of the Act does not include an ex-employee. Therefore, only a

person who is in the actual employment of the employer under Section 20 of the Act is entitled to

make the application.

The Minimum Wages Act is, as is all other like legislation, a welfare measure to alleviate

the suffering of sections of the society labouring under economic distress. However, knowledge

of one’s rights or the capacity or strength to enforce it often does not exist among the relevant

classes. It is through public interest litigation, a strategic aim of the legal aid movement, that the

problems of the Poor are now coming to the forefront and the entire theatre of law is changing.

The writ petitions as evidenced in People’s Union for Democratic Rights v. Union of India, is

such an instance of public interest litigation.

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Section 20 of the Act provides for a general scheme for adjudicating grievances of non-

payment of prescribed minimum wages to the employees and other matters in dispute including

questions as to whether an industry would or would not be covered by the Act. Where an

appropriate statutory alternative remedy is available, the aggrieved person is not entitled to

invoke a remedy by way of writ jurisdiction of the High Court.

Check your Progress A

I. Fill in the blanks

(a) Employer is required to pay bonus to employees on the basis of (____________)

(b) The minimum wage is the (_________) in the scale below which the efficiency of a

worker is likely to be impacted.

(c) Wages can be classified into (________________) categories.

(d) Maternity Benefit Act is enacted to promote the welfare of (__________).

(e) The scheme of workmen’s compensation is to pay compensation for (__________)

caused.


The Act does not define minimum wages presumably because it would not be possible to

lay down a uniform minimum for all industries throughout the country on account of different

and varying conditions prevailing from industry to industry and from one part of the country to

another. Wages’ as defined in the Act means all remuneration, capable of being expressed in

terms of money which would, if the terms of employment, express or implied, were fulfilled, be

payable to a person employed in respect of his employment or work done in such employment,

and includes house rent allowance, but wages do not include:

(i) the value of

(ii) any house accommodation, supply of light, water, medical attendance; or

(iii) any other amenity or any service excluded by general or special order of the

appropriate government.

(iv) any contribution paid by the employer to any pension fund or provident fund or

under any scheme of social insurance;

(v) any travelling allowance or the value of any travelling concession;

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(vi) any sum paid to the persons employed to defray special expenses entailed on him

b). the nature of his employment;

(vi) any gratuity payable on discharge.

Broadly speaking, the wages can be classified into following categories:

Where no minimum wages have been fixed in the Irrigation Department of the State

Government, the Supreme Court has directed that such minimum wage should be fixed by the

State Government under the Minimum Wages Act within four months and if there are any norms

fixed for the work to be transacted during the course of the day, the workers will not be deprived

of the minimum wage that may be fixed if they fail to conform to the norms, disciplinary action

may be taken against them for failing to conform to the norms.

2.4.1 THE LIVING WAGE

The concept of living is the wage rate which prevails in most of the economically

advanced countries. Justice Higgins of the Australian Commonwealth Court of Conciliation

defined the living wage as one appropriate for the normal needs of the average employee,

regarded as a human being living in a civilised society. The living wage must provide not merely

of or absolutely essentials such as food, shelter and clothing but for condition of fungal comfort

estimated by current human standards. He further explained that it was a wage sufficient to

insure for the workman food, shelter, clothing, frugal comfort, provision for evil days, etc. as

well as regard for the special skill of an artisan if he is one. Therefore, living wage should enable

the wage earner into provide for himself and his family not merely the bare essentials of food, do

thing and shelter but measure of frugal comfort including education for the children, protection

against ill health, requirements for essential social needs and a measure of insurance against the

more important misfortune including old age. Though it is very difficult to define or even to

describe accurately the contents of living wage, in an expanding national economy, the contents

of these expressions also expend and vary.

2.4.2 FAIR WAGE

Fair wage is a mean between the living wage and the bare minimum wage. Marshal

would consider the rate of wages prevailing in an occupation as fair if it is on level with the

average payment for tasks in other trades which are of equal difficulty and disagreeableness,

which require equally rare natural abilities and an equally expensive training. A fair wage is thus

related to fair workload and the earning capacity. It is a step lower than the living wage. It may

Page 23 of 250

roughly be said to approximate to the need based minimum, in the sense of the wage which is

adequate to cover the normal needs of the average employee regarded as a human being in a

civilised society. Thus, while the lower limit of fair wages must obviously be minimum wages,

the upper limit is equally set by what may broadly be called the capacity of industry to pay. This

will depend not only on the economic position of the industry but also on its future prospects.

Between these two limits, actual wage would depend upon a consideration of certain factors,

namely:

(i) the productivity of the labour,

(ii) the prevailing rate of wages in the same or similar occupations in the same or

neighbouring localities;

(iii) the level of national income and its distribution; and

(iv) the place of the industry in the economy of the country.

The concept of fair wages, therefore, involves a rate sufficiently high to enable the

worker to provide a standard family with food, shelter, clothing, medical care and education for

children appropriate to this status in life but not a rate exceeding the wage earning capacity of the

class of establishment concerned. As time passes and prices raise even the fair wage fixed for the

time being tends to sag downwards and then revision becomes necessary.

The factors which determine the capacity of the employer to pay will be

(a) the productivity of the labour,

(b) the prevailing rates of wages in the same or similar industries in the same or

neighbouring localities;

(c) the present economic position of the industry and the employer, its prospects in

the near future.

The fair wage will grow with the growth and development of the national economy and

the progress made by the industry must be approximate to the capacity of the industry to pay.

As stated the National Commission on Labour a policy dealing with this chronic problem

cannot simply be economic as it is reckoned with relative multi-dimensional, social phenomena

in which the workers and the management, the consumer and the society at large and in

consequence the State are vitally interested. The claim of the employees for a fair and higher

wage depends on the interest of the consumer and the State, the employer’s desire for reasonable

Page 24 of 250

profit, the rise in price which may affect the consumer and the national economy which may

have an adverse effect on the labour itself.

2.4.3 MINIMUM WAGE

The minimum wage is the lowest wage in the scale below which the efficiency of a

worker is likely to be imparted. The minimum wage, includes not only the bare physical

necessities but also a modicum of comfort otherwise known as conventional necessities. The

minimum wage must, therefore, provide not merely for the bare subsistence of life but also for

the preservation of the efficiency of worker. For this purpose the minimum wage must also

provide for same measure of education, medical requirements and amenities. Therefore, any

employer who is unable to pay this minimum wage to workers has no right to exist. Since the

capacity of the employer to pay is treated as irrelevant, it is but right that no addition should be

made to the components of minimum wage for the employee not only his subsistence and that of

his family but also preserve his efficiency as a worker. The concept of minimum wage is in

harmony with the theory that in all civilised countries minimum wage approximately to statutory

minimum wage should be paid by the employer in an industry.

In the light of the above discussion there is a difference between minimum wage and fair

wages. In Sangarn Press v. Its Workmen, the Supreme Court observed that in case of fair wage,

besides the principle of the industry-cum-region, the company’s capacity to bear the financial

burden must receive due consideration. But mere hopeful observation made in the director’s

annual report cannot be the basis for awarding increased wages because such observations are

sometimes made to inspire hope and confidence in shareholders and they cannot be a substitute

for actual audited figures.

The concept of minimum wages was to be dynamic. There is no reason to assume that

fair wages fixed years ago should continue to be fair wage for all time, and any fixation of

minimum wages should be taken not as minimum wages but as fair wages because it is above the

fair wages once fixed.

2.4.4 STATUTORY MINIMUM WAGES

The minimum wage as defined means:

(1) Any minimum rate of wages fixed or revised by the appropriate government in

respect of scheduled employments may consists of:

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(i) a basic rate of wages and a special allowance at a rate to be adjusted at

such intervals and in such manner as the appropriate government may

direct to accord as nearly as possible with the variation of cost of living

index number applicable to such workers;

(ii) a basic rate of wages with or without the cost of living allowance, and the

cash value of allowance in respect of essential commodities at concession

rate where so authorised;

(iii) an all inclusive rate allowing for the basic rate, the cost of living

allowance and the cash value of the concession, if any.

(2) The cost of living allowance and the cash value of the concession in respect of

supplies of essential commodities at concessional rates shall be computed by the

competent authority at such intervals and in accordance with such directions as

may be specified or given by the appropriate government. The Act does not define

Minimum Wages presumably because it would be impossible to lay down a

uniform minimum wage for all industries throughout the country on account of

different and varying conditions prevailing from industry to industry and from

one part of the country to another. The legislature also thought it inexpedient not

to apply the Act to all industry at a time.

Minimum wage, as the name itself implies, represents the level below which wages

cannot be allowed to drop it is prescribed in order to check:

(a) the evil of sweating; and

(b) for the benefit of workers who are not in a position to bargain with their

employer.

The terms appropriate government, competent authority, cost of living index number,

prescribed and scheduled employment used in the above definition of minimum wage has been

defined in the Act itself.

Activity 2

Distinguish between minimum wages, fair wages and living wages.

Page 26 of 250

2.4.5 PAYMENT OF BONUS ACT, 1965

This Act imposes an obligation upon employers to pay bonus to persons employed in

certain establishments on the basis of profits or on the basis of production or productivity and for

matters connected therewith.

The scheme of the payment of Bonus Act, 1965 has been described by the full Bonus of

the supreme Court in Jalan Trading Co. Vs. Mill Mazdoor Sabha, 1969 (II) LLJ 546 (SC) as

follows:

“The scheme of the payment of Bonus Act, broadly stated, is four dimensional:

(1) To impose statutory liability upon an employer of every establishment covered by

the Act to pay bonus to employees in the establishment.

(2) To define the principle of payment of bonus according to the prescribed formula.

(3) To provide for payment to minimum and maximum bonus and linking the

payment of Bonus with the scheme of “set off and set on”; and

(4) To provide machinery for enforcement of the liability for payment of Bonus.”

2.4.6 THE WORKMEN’S COMPENSATION ACT, 1923

The beginning of social security in India was effected with the passing of the Workmen’s

Compensation Act in 1923. Prior to 1923 it was almost an impossibility on the part of an injured

workman to recover damage or compensation for any injury sustained by him in the ordinary

course of his employment. Of course, there were rare occasions when the employer was liable

for the same under the common law for his own personal negligence. The dependants of a

deceased workman could, in rare cases, claim damages under the Indian Fatal Accidents Act,

1885, if the accident was due to the wrongful act, neglect or fault of the person who caused the

death. In 1921, the government made proposals for the grant of compensation and circulated

them for opinion. The proposals received general support and as a result, the Workmen’s

Compensation Act was passed in March 1923 and was put inter force on July 1, 1924.

Subsequently, there were a number of amendments in the Workmen’s Compensation Act.

The object of the Act is to impose an obligation upon employers to pay compensation to

workers for accidents arising out of and in the course of employment. The scheme of the Act is

not to compensate the workman in lieu of wages but to pay compensation for the injury caused.

Page 27 of 250

The Act extends to the whole of India and applies to any person who is employed,

otherwise than in a clerical capacity, in railways, factories, mines, plantations, mechanically

propelled vehicles, loading and unloading work on a ship, construction, maintenance and repairs

of roads and bridges, electricity generation, cinemas, catching or training of wild elephants,

circus, and other hazardous occupations and employments specified in Schedule II to the Act.

Under Sub-Section (3) of Section 2 of the Act, the state governments are empowered to extend

the scope of the Act to any class of persons whose occupations are considered hazardous after

giving three months’ notice in the Official Gazette. The Act, however, does not apply to

members serving in the Armed Forces of Indian Union, and employees covered under the

provisions of the Employees’ State Insurance Act, 1948, as disablement and dependants’ benefit

is available under this Act.

In order to be a “workman” within the meaning of Section 2(l)(n) of the Workmen’s

Compensation Act, firstly, a person should be employed; secondly, his employment should nor

be of a casual nature; thirdly, he should be employed for the purposes of the employer’s trade or

business; and lastly, the capacity in which he works should be one set out in the list in Schedule

II of the Act.

The compensation has to be paid by the employer to a workman for any personal injury

caused by, an accident arising out of and in the course of his employment (Section 3). In

Schedule I to the Act, the percentage loss of earning capacity or disablement caused by different

type of injuries has been listed, However, the employer will not be liable to pay compensation

for any kind of disablement (except death) which does not continue for more than three days, if

the injury is caused when the workman was under the influence of drink or drugs or willfully

disobeyed a clear order or violated a rule expressly framed for the purpose of securing the safety

of workmen or willfully removed or disregarded a safety device. A workman is also not entitled

for- compensation, if he does not present himself for medical examination when required or if he

fails to take proper medical treatment which aggravates injury or disease. In case it is not fatal,

an employment injury may cause any injury resulting in (i) permanent total disablement; (ii)

permanent partial disablement; and (iii) temporary disablement.

2.4.7 THE MATERNITY BENEFIT ACT, 1961

Maternity Benefit Act is a piece of social legislation enacted to promote the welfare of

working women. The Act prohibits the working of pregnant women for a specified period before

Page 28 of 250

and after delivery. It also provides for maternity leave and payment of certain monetary benefits

for women workers during the period when they are out of employment on account of their

pregnancy. Further, the services of a woman worker cannot be terminated during the period of

her absence on account of pregnancy, except for gross misconduct. The salient features of the

Act are as follows:

The maximum period for which a woman can get maternity benefit is twelve weeks. Of

this, six weeks must be taken prior to the date of delivery of the child and six weeks immediately

following that date.

To be entitled to maternity leave however, a woman must have actually worked for not

less than 80 days in the twelve months immediately preceding the day of her expected delivery.

Only working days are to be taken into account when calculating these 80 days. Weekly holidays

and all leave-paid or unpaid be deemed as working days.

To avail of the six weeks’ leave before expected delivery, a notice must be given in

writing stating the date of absence from work and also a certificate of pregnancy. (There is a

form for both which must be filled in). The employer has to pay the maternity benefit in advance

for this period to the concerned employee or any person nominated for this purpose.

For the six weeks’ leave from the date of delivery, another notice must be sent together

with a certificate of delivery after the child is born. The employer has to pay to the employee or

her nominees, maternity benefit within 48 hours of receiving this notice. The failure to give

notice for the subsequent six weeks does not, however, disentitle a woman from maternity’

benefit.

In the case of B. Shah Vs. Labour Court) Coimbatore and Others (1978-1 LLJ 29) the

Supreme Court held that computation of maternity benefit in case of a female worker engaged on

a daily wage basis has to be made for all the days including Sundays and rest days which may be

wage-less holidays upto six weeks preceding and excluding the day of delivery as also for all the

days falling within six weeks immediately following the day of delivery thereby ensuring that the

woman worker gets for the period not only the amount equalling 100% of the wages which she

was previously earning but also the benefit of the wages for all the Sundays and rest days falling

within the aforesaid two periods. This being a beneficial piece of legislation interpretation of law

will have to be in tune with the social justice. It is also in conformity with the Maternity Benefit

Protection (Revised) Convention adopted by the ILO in 1952. The Court struck down the

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decision of the Full Bench of the Kerala High Court in Malayalam Plantations Ltd. Vs. Inspector

of Plantations (A.I.R. 1975 Ker. 86).

Every woman entitled to maternity benefit is also entitled to a medical bonus of rupees

250 if no prenatal confinement and post-natal care has been provided for by the employer free of

charge.

Check your Progress B

II. True / False

(1) Minimum Wages Act is a welfare measure to protect the workers under economic

distress.

(2) The word ‘employee’ defined in Section 2(i) include an ex-employee

(3) Restraints under the legislations are imposed upon the employer’s freedom of

contract.

(4) Minimum wages ensure wages necessary only for physical subsistence.

(5) The central govt. is authorized to fix the minimum wages for scheduled

employments.

2.5 SUMMARY

Social Security legislations came into existence and developed only after industrial

revolution. This chapter highlights legislations enacted to protect the employees from the

exploitation of the employers and promotes social and economic justice to them. Payment of

Wages Act, 1936 provides provisions to regulate the payment of wages and minimum Wages

Act, 1948 provides for fixation of minimum wages by the central govt. for listed employments.

Workmen’s Compensation Act ensures payment of compensation in case of personal injury

caused by an accident during the course of employment. Maternity Benefit Act regulate the

employment of women in maternity.

2.6 GLOSSARY

Wages: Means all remuneration and allowances payable to a person employed in respect

of his employment or of work done in such employment.

Minimum Wages: Minimum wages rate fixed in the scheduled industries for the

maintenance of the worker and his family.


Page 30 of 250

Answers to Check your Progress A(a) Profit(b) Lowest wage(c) Three(d) Working women(e) The injury

Answers to Check your Progress B1. True2. False3. True4. False5. True


1. A.M. Sharma, 1981, Aspects of Labour Welfare and Social Security, Himalaya

Publishing House; Bombay.

2. S.L. Agarwal, 1980, Labour Regulations Law in India, Macmillan Company of

India Ltd., New Delhi.

3. S.N. Misra, 1970, Labour & Industrial Laws, Central Law Publications, Allahabad


1. Explain the concepts of minimum wages, fair wages and living wages.

2. Examine the various provisions relating to payment of wages Act.

3. Explain the main features of the workmen’s compensation Act and its importance

for social security legislations.

Page 31 of 250

LESSON – 3

The Payment of Wages Act, 1936

Structure


3.1 Introduction

3.2 Objectives of the Act

3.3 Salient Features

3.4 Definitions

3.5 Application

3.6 Responsibility for Payment of Wages

3.7 Fixation of Wage Period

3.8 Medium of Payment of Wages

3.9 Authorised deductions

3.10 Illegal deductions

3.11 Prevention and Recovery of illegal deductions

3.12 Authorities & Appellate Authority

3.13 Summary

3.14 Glossary

3.15 Answers to Check your Progress




After studying this Act, you will be able to:

Understand the object of the Act

Understand meaning of wages and Payment of wages

Know Application of the Act

Know about the authorities and appellate authorities.

3.1 INTRODUCTION

Before the enactment of this Act, many evils relating to wages were prevalent at that time

an attempt was made to remedy some of the evils. The Royal Commission on Labour in India

Page 32 of 250

made some valuable recommendations. This Act is mostly based on those recommendations. A

Bill of Payment of wages Act was introduced in the legislative assembly in 1933 but could not

come into existence because of the dissolution of the Assembly. The Act was passed in 1936 and

came into force on 21st March, 1937. The following were some of the evils which were prevalent

before its enactment.

(i) The employers determined the mode and manner of wage payment as they liked.

(ii) Even when paid in cash, wages were paid in illegal tender in the form of

depreciated currency.

(iii) The payment was usually irregular and sometimes there was non-payment

altogether

(iv) A large number of arbitrary deductions were made out of the wages paid to the

workers

(v) Imposition of fines by employers on workers and deduction of even double the

amount of wages for absence period by way of fine was very much customary in

those days.

Hence, the need to protect the wages earned by the worker had been felt by the

government in 1926. These evils attracted the attention of Royal Commission on labour which

made valuable recommendations to check them. The present Act is mostly based on those

recommendations. The payment of wages Act was passed in 1936 and came into force on 21st

March, 1937. Since then it has been amended many times with a view to extend its various

provisions. The Act seeks to remedy the evils by ensuring regularity of payment, payment in

legal tender, preventing arbitrary deductions and restricting employer’s right to impose fines.

3.2 OBJECTIVE OF THE ACT

The objective of the payment of wages Act, 1936 is to regulate the payment of wages to

certain classes of employed persons. It provides regulation in two folds:

1. Payment of wages without delays and

2. Payment without unauthorised deductions.

Regular payment of wages without unauthorised deductions to the employees create

harmonious and cordial relations between the employer and employees. This Act also aims at

recovery of unpaid wages by the employed persons by simple and speedy procedure.

3.3 SALIENT FEATURES OF THE ACT

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The Act clearly lays down the essential elements in the payment, its mode and its

enforcement. The Salient features of the Act are as:

1. The wages required to be paid must be disbursed to the workers by any person

designated with such responsibility in the establishment.

2. The payment must be made before the 7th or 10th day of the month.

3. The payment may be done in currency, using cheques, or by crediting the bank

account wages in kind is not allowed.

4. Only the deductions authorised by law can be made from the wages of workers.

5. An employer is required to maintain a prescribed register containing the particulars of

the employees for three years after the last entry is made.

6. The government appoints inspectors for the purpose of this Act, who shall exercise

their functions within assigned local limits.

3.4 DEFINITIONS

1. Factory [Sec.2(ib)]: It means a factory as defined in the Factories Act, 1948.

2. Industrial or Other Establishment [Sec.2(ii)]: It means any (a) Tramway service,

or motor transport service engaged in carrying passengers or goods or both by

road for hire or reward; (aa) air transport services other than such service

belonging to or exclusively employed in the military, naval or air force of the

Civil Aviation Department of the Government of India;

(b) Dock;

(c) Inland vessel, mechanically propelled;

(d) Mine, quarry or oil field;

(e) Plantation

(f) workshop or other establishment in which article are produced, adapted or

manufactured, with a view to their use, transport or sale:

(g) Establishment in which any work relating to the construction development

or maintenance of buildings, roads, bridges or canals, or relating to

operation connected with navigation, irrigation or the supply of water or

relating to the generation, transmission and distribution of electricity or

any other form of power is being carried on; In the Tamil Nadu Water

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Supply and Drainage Board and another v. M.D. Vijayakumar and others,1

the Tamil Nadu Water Supply and Drainage Board was created for

regulation and development of drinking water and drainage in the State of

Tamil Nadu. It was held that in view of Clause (g) of Section 2(ii) and the

statement of objects and reasons under which the Board has been created,

it is clear that the Board is an establishment in which work relating to

operations connected with supply of water is being carried on and

consequently it is an establishment within the meaning of Section 2(ii)(g)

of the Payment of Wages Act. )

(h) Any other establishment or class or establishments which the Central

Government or a State Government may, having regard to the nature

thereof, the need for protection of persons employed therein and other

relevant circumstances, specified, by notification in the Official Gazette.

In K.L. Garg v. New India Assurance Co. Ltd. and others,2 the petitioner

an employee of the New India Assurance Company was dismissed from

service. He filed an application under Section 15(2) of the Payment of

Wages Act for the recovery of Rs. 1350/- as an ex gratia in lieu of bonus

along with interest amounting to Rs. 1267/- i.e., a total of Rs. 2617. He

also claimed compensation at ten times the wages. The wages deducted

i.e., a sum of Rs. 2617. It was held that the provisions of the Payment of

Wages Act, 1936 are not applicable to the Insurance company as it does

not fall within the definition of “Industrial or other establishment” as

defined in Section 2(ii) of the Payment of Wages Act. No notification as

contemplated in clause (h) of Section 2(ii) has been issued either by the

Central or State Government. In the absence of any such notification, no

application as such was maintainable under Section 15 of the Act against

the Insurance Company.

1. (1991) I L.L.J. 260 (Madras)2. (1992) I L.L.J. 190 (P & H)

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3. WAGES [Sec.2(vi)]; ‘Wages’ means all’ remuneration whether by way of salary,

allowances of otherwise expressed in terms of money or capable of being so

expressed.

The definition of expression ‘wages’ is made sufficiently wide by

including within the expression:

(a) Any remuneration payable under any award or settlement between the

parties, or order of court.

(b) Any remuneration to which the person employed is entitled in respect of

overtime work or holiday’s or any leave period;

(c) Any additional remuneration payable, under the terms of employment

(whether called a bonus or by any other name);

(d) Any sum which by reason of the termination of employment of the person

employed is liable under any law, contract or instrument which provides

for the payment of such sum, whether with or without deductions, but does

not provide for the time within which the payment is to be made.

(e) Any sum to which the person employed is entitled under, any scheme

framed under any law for the time being in force'.

(1) The value of any house accommodation, or the supply of tight, water,

medical attendance or other amenity or of any service excluded from the

computation of wages by a general or special order of the State

Government:

(2) Any contribution paid by the employer in any pension or provident fund,

and the interest which may have accrued thereon;

(3) Any travelling allowance or the value of any travelling concession;

(4) Any sum paid to the employed person to defray special expenses entailed

on him by the nature of his employment:

(5) Any gratuity payable on the termination of employment in cases other

than those specified in clause (d) above. From this, it is understood that

the legislator’s intent is to safeguard the interest of the worker by making

provisions for wages and benefits and thus provide economic security. It

was held in State of Rajasthan and Others v. Bhawani Shankar and

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Another,3 that remuneration payable under the Labour Court award setting

aside termination of workman’s service would be wages. Any claim for it

was held to be maintainable under the Payment of Wages, 1936. It was

further held that the workman could avail remedy either under the

Payment of Wages Act or the Industrial Disputes Act, 1947. The amount

of lay-off compensation under Section 25-C of the Industrial Disputes Act,

1947, does not come within the definition of wages as given in this Act.4

Where the rule framed under the Motor Transport Workers Act, 1961

provided that each member of certain class of staff is entitled, as a part of

a uniform, two pairs of Pathani chappals a year, the claim relating to value

of Pathani chappals would fall within the definition of wages.5 It was held

in K.L. Garg v. New India Assurance Co. Ltd. and others, 6 that an

application for recovery of loan was not maintainable as loan did not fall

within the definition of wages under Section 2(vi) of the Payment of

Wages Act, 1936 nor the amount claimed could be said to be a deduction

as provided under Section 7 of the Act. In Payment of Wages Inspector v.

B.E.S. & Co.,7 the Supreme Court observed that, “A workman whose

service is terminated in consequence of transfer of an undertaking whether

by agreement or by operation of law has a statutory right under Section

25-F of the Industrial Disputes Act 1947, to compensation unless such

right is defeated under proviso to that section. The same is the position in

the case of closure under Section 25-FFF of that Act. Such compensation

would be wages as defined by Section 2(vi)(d) of the Payment of Wages

Act, 1936, as it is sum which by reason of the termination of employment

of the person employed, is payable under any law... which provides for the

payment of such sum whether with or without deduction but does not

provide for the time within which the payment is to be made”. It was held

3. (2005) I L.L.J. 1011 (Raj.).4. Trichinopoly Mills Ltd. v. Swaminaihan and others, (1956) I L.L.J. 269 (Mad); Refer also to Anusuyabai v. J.H.

Mehta, AIR 1960 Bom 201.

5. S.R.T. Corporation v. Industrial Court, AIR 1971 MB 54.6. (1992) I L.L.J. 190 (P & H).7. AIR 1969 SC 590.

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in Purshottam v. Potadar,8 that expression by reason of the termination of

employment in sub-clause (d) of Section 2(vi) must in the context have the

same meaning as the expression, ‘payable on the termination of

employment’ which is used in sub-clause (b). In other words gratuity

which may be payable to an employee by reason of the termination of the

employment would fall under sub-clause (b) provided it is shown that it is

payable under any law, contract, or instrument. It is true that an award

made by industrial adjudication framing a scheme of gratuity becomes

enforceable under Sections 18 and 19 of the Industrial Disputes Act and in

that sense it is a scheme which is enforceable by virtue of the operation of

law. But that would not justify the conclusion that the gratuity itself is

payable under any law. It is payable under an award which is made

enforceable by Section 18 of the Industrial Disputes Act. Therefore, it

cannot be said that the gratuity under an award is payable under any law.

Having regard to the object which the legislature had in mind in widening

the scope of the definition it would not be unreasonable to hold that the

word ‘instrument’ has a wider denotation in the context and cannot be

confined only to documents executed as between the parties. The scheme

of the definition and the context of sub-clause (d) read with sub-clause (6)

seems to suggest that the word ‘instrument’ would include awards made

by Industrial Courts of competent jurisdiction.9 When an award is made

and it prescribes a new wage structure, in law the old contractual wage

structure becomes inoperative and its place is taken by the wage structure

prescribed by the award. 10 When industrial disputes are decided by

industrial adjudication and awards are made, the said awards supplant

contractual terms in respect of matters covered by them and are substituted

for them. Therefore, the term ‘wages’ as defined in Section 2(vi), of the

Payment of Wages Act, 1936, as it stood prior to its amendment in 1957,

includes wages fixed by an award. Though it is well settled that awards

8. AIR 1966 SC 856.9. Ibid.10. Md. Quasim Larry v. Muhammad Samsuddin, AIR 1964 SC 1999.

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have on many occasions the effect of altering or modifying the contractual

terms of employment between an industrial employer and his employees,

it would be difficult to hold that the award as such is a contract.11

3.5 APPLICATION OF THE ACT

The Act extends to the whole of India. This Act provides for its application:

1) In the first instance

2) By the notification by the Government

This Act applies in the first instance to the payment of wages to persons employed in any

factory, persons employed upon railways by a railway administration and persons employed in

an industrial or other establishment specified in sub-clause(a) to (g) of clause (ii) of sec. 2.

The Act may be applied to any industrial or other establishment other than those specified

under sec.2(ii)(a) to (g) by the central or state government by notification in the official gazette.

The appropriate govt. May, after giving three months notice of its intention of so doing,

by notification in the official gazette, extend the provisions of this Act or apply any of them to

the payment of wages to any class of persons employed in any establishment.

3.6 RESPONSIBIUTY FOR PAYMENT OF WAGES

Every employer shall be responsible for the payment to persons employed by him of all

wages required to be paid under the Payment of Wages Act, 1936 (Sec.3) The following persons

shall also be responsible for the payment of wages.

(a) In factories, the person named as the manager;

(b) In industrial or other establishment, the person, if any, who responsible to the

employer for the supervision and control of the industrial or other establishment:

(c) Upon railways (otherwise than in factories), the person nominated by the railway

administration in his behalf for the local area concerned (Provision to Sec.3).

(d) In the case of contractor, a person designated by such contractor who is directly

under his charge; and

(e) In any other case, a person designated by the employer shall be responsible for

such payment. In Cominco Binani Zinc Ltd. v. Pappachan, 12 the appellant

11. Purshottam v. Potadar, AIR 1966 SC 856.12. (1989) I L.L.J. 452 (Kerala).

Page 39 of 250

company was obliged to provide and maintain a canteen for its employees. The

company entrusted the running of a canteen to the contractor. It was held that the

responsibility to provide and maintain a canteen under Section 46 of the Factories

Act cannot make the management the ultimate employer for the worker engaged

in the canteen for all purposes. They are not workmen of the management.

Therefore the liability of the principal employer is restricted only to pay wages if

contractor fails to pay the same by virtue of Contract Labour Act, 1970. In

Agarwala P.C. v. Payment of Wages Inspector, M.P. and Others 13 Jiyajirao

Cotton Mills became a sick company. It owed to its workmen wages for certain

periods. Payment of Wages Inspector initiated action under Section 15 of the

Payment of Wages Act, 1936 against the Directors of the Company. The

authorities under the Act held the Directors personally liable to pay the wages.

That was affirmed by the High Court. The Directors filed appeal challenging the

judgment of the High Court. They were allowed and the appeals filed by the

functionaries under the Act were dismissed. Referring to the provisions of the Act

as amended by Madhya Pradesh Act, 1964, the Supreme Court observed that the

High Court held the appellant Directors liable by introducing the expression

“occupier” used in the Factories Act, 1948 and not in the Payment of Wages Act,

1936. The basic premises on which the High Court proceeded were clearly

untenable. On a plain reading of the Payment of Wages Act it could not be held

that Directors had any personal liability.

3.7 FIXATION OF WAGE PERIOD

Every person responsible for the payment of wages under Sec.3 shall fix periods known

as wages-periods, in respect of which such wages shall be payable [Sec.4(1)]. No wage period

shall exceed one month.

Time of payment of wages (sec.5s): The rules relating to time of payment of wages are as

follows :

1. Wages to be paid before 7th or 10th day: The wages of every person employed

upon or in any railway, factory or industrial or other establishment upon or in

which less than 1,000 persons are employed, shall be paid before the expiry of the

13. 2005 III L.L.J. 1077 (S.C.).

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seventh day of the following wage-period. In case the number of workers exceeds

1,000 the wages shall be paid before the expiry of the tenth day of the following

wage-period [Sec.5 (1)].

2. Wages in case of termination of employment: Where the employment of any

person in terminated by or on behalf of the employer, the wages earned by him

shall be paid before the expiry of the second working day from the day on which

his employment is terminated.

3. Exemption: The State Government may, by general or special order, exempt the

person responsible for the payment of wages from the operation of the above

provisions in certain cases [Sec.5(3)]. No such order shall be made exception

consultation with the central govt.

4. Wages to be paid on a working day: All payment of wages shall be made on

working day [(Sec.5(4)].

3.8 MEDIUM OF PAYMENT OF WAGES

All wages shall be paid in current coin or currency notes or in both. Payment of wages in

kind is not permitted. The process of payment of wages in cash is very cumbersome where the

number of workers is very large. It is also risky where the sum involved is large and the factory

or industrial establishment is situated at a remote place. In order to obviate these difficulties and

save the workers from carrying cash on the pay day and mis- speed it, a provisions has been

added to Sec.6 by the Payment of Wages (Amendment) Act, 1976. According to it, the employer

may after obtaining the written authorisation of the employed person, pay him the wages either

by cheque or by crediting the wages in his bank account, the provision in Amendment Act for

paying wages by cheque or depositing wages in bank account will also inculcate the banking

habit among the workers and also make the process of payment simpler for employer.

3.9 AUTHORISED DEDUCTIONS:

Section 7 to 13 of the Act deal with permissible and non-permissible deduction which can

be made from the wages of the worker.

The wages of an employed person shall be paid to him without deduction of anything

except those which are authorised by or under this Act. Every payment made by an employed

person to his employer or agent is deemed to be a deduction.

The following deductions are permitted :

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3.9.1 FINES: Deduction by way of lines from the wages of an employed person shall be made

only in accordance with the provisions of the Act, which are as follows :

(a) An employed person can be fined only for acts and omissions which are specified

in a list which is approved by the State Government or the prescribed authority.

(b) The list must be exhibited in the place of work.

(c) Before the fine is imposed on an employed person he must be given an

opportunity of showing cause why the fine should not be imposed.

(d) The total amount of the fine which can be imposed upon person in any wage

period must not exceed an amount equal to three percent of the wages payable to

him during the wage period.

(e) No fine can be imposed on a person who is below the age of 15 years.

(f) No fine can be recovered by installment or after the expiry of ninety days from

the day on which it was imposed.

(g) Every fine shall be deemed to have been imposed on the day of the act or

omission in respect of which it is imposed.

(h) All fines and realization thereof shall be recorded in a register to be kept by the

person responsible for the payment of wages in the form as may be prescribed.

All such realisation shall be applied only to such purpose as are beneficial to the

person employed in the factory and are approved by prescribed authority.

3.9.2 Deductions for Absence from Duty: Deduction from wages are permitted for absence

from duty. Absence from duty means “absence from the place where the employed person is

required to work.” If the employed person though present at such place, refuses to perform his

work in pursuance of a stay-in-strike, of for any other cause which is not reasonable he is

deemed to be absent from duty. The ratio between the amount of such deduction and the wages

payable must not exceed the, ratio between the period of absence and the total period. In the

Bank of India, Bombay and another v. T.S. Kelawala Bombay and others,14 the Bank employees

demanded wage revision and pending acceptance of demand decided to go on 4 hours strike

daily. Bank issued a circular to deduct full day’s wages of such employees who participated in

the strike. It was held that strikes and demonstrations are legitimate forms of protest and they are

not banned in this country. By an administrative circular the legitimate mode of protest allowed

14. (1988) II L.L.J. 264 (Bom).

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and recognized by law cannot be stifled. It was further held that Payment of Wages Act is

regulatory. Section 7(2) read with Section 9 of the Act provides the circumstances under which

and the extent to which deduction can be made. It is only when the employer has right to make

deduction, resort should be had to the Act to ascertain the extent to which the deduction can be

made. No deduction exceeding the limit provided by the Act is permissible even if the contract

so provides. There cannot be any contract contrary to or in terms wider than the import of

Sections 7 and 9 of the Act. Therefore wage deduction cannot be made under Section 7(2) of the

Payment of Wages Act if there is no such power to the employer under the terms of contract.15 In

Surendranathan Nair and others v. Senior Divisional Personal Officer (Rlys.)16 some of the

railway employees had applied for casual leave for participating in an agitation against the

Railway Administration. The leave was refused but the employees participated in the agitation.

The management deducted the wages treating the period of leave applied for as absence from

duty. It was held that the leave rules to the railway employees are contained in the Railway

Establishment Code and the rules made there under. The Code derives its authority from Article

309 of the Constitution and the rules are made under the delegated power. These rules have

general application to all non-gazetted railway servants. Rejection of leave under such

circumstances was legal and proper. Absence from duty, especially for the purpose of

participation in an agitation against the management is unauthorised. An unauthorised absentee

has no right to compel payment of wages for the period of unauthorised absence. In Mineral

Miner's Union v. Kudremukh Iron Ore Co. Ltd.17 it was held by the Karnataka High Court that

deduction of wages for the strike period is justified provided strike was illegal. In French Motor

Car Co. Ltd. Workers Union v. French Motor Car Co. Ltd.,18 three questions have been decided.

Some employees of the company indulged in go slow and resorted to strike for 3 days and 29

employees were not allowed by the employer to resume work unless they sign a guarantee bond.

It has been held that on the principle of ‘no work no pay’ the management was justified in

deducting the wages of 3 days i.e., the strike period. Further the authority under the Payment of

Wages Act is not competent to examine whether the strike was legal or not. The wages of the

workmen could be deducted under Section 7(2)(b) for absence from duty. However, the absence

15. Bank of India, Bombay and another v. T.S. Kelawala Bombay and others, (1988) II L.L.J. 264 (Bom).

16. (1988) I L.L.J. 227 (Kerala).17. (1989) I L.L.J. 227 (Karn).18. (1991) I L.L.J. 107 (Gauhati).

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from duty by an employee must be voluntary and it cannot cover his absence when he is forced

by circumstances created by the employer from carrying out his duty. Therefore no deduction

can be made from wages of 29 employees whose absence was not voluntary, inasmuch as they

were not allowed to resume their work without signing the guarantee bond. The third question

related to non-payment of variable. D.A. and the case of employees was that such non-payment

should be treated as deduction. It was held that the question whether the employees are entitled

to get variable D.A. or not cannot be treated as deduction, and as such, the wage court has no

jurisdiction to entertain this claim.

(a) deduction for damage to or loss of goods expressly entrusted to the employed

person for custody; or for loss of money for which he is required to account,

where such damage or loss is directly attributable to his neglect or default;

(b) deduction for house accommodation supplied by the employer or by Government

or any housing Board set up under any law for the time being in force (whether

the Government or the Board is employer or not) or any other authority engaged

in the business of subsidising house accommodation which may be specified in

this behalf by the State Government by notification in the official Gazette;

(c) deduction for such amenities and services supplied by the employer as the State

Government or any officer specified by it in this behalf may by general or special

order authorise.

Explanation.—The word “services” in this sub-clause does not include the supply

of tools and raw material required for the purposes of employment;

(d) deductions for recovery of advances of whatever nature (including advances for

travelling allowance) and the interest due in respect thereof, or for an adjustment

of overpayments of wages.

3.9.3 Deduction for Damage or loss: Deduction from wages are permitted for damage or loss

of goods expressly entrusted to the employed person for custody or for loss of money which he is

required to account where such loss is directly attributable to his neglect or default. A deduction

shall not be made until the employed person has been given an opportunity of showing cause

against the deduction.

A deduction shall not exceed the amount of damage or loss caused to the employer. All

deductions and realisation thereof must be recorded in a register.

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3.9.4 Deductions for Recovery of Advances and Overpayment of Wages: Deduction are

permitted for recovery of advances or for adjustments of overpayment of wages:

(a) Recovery of advance of money given before the employment began shall be made

from the first payment of wages in respect of a complete wage-period but no

recovery shall be made or such advances given for travelling expenses and (b)

Recovery of advances of wages not already earned shall be subject to rules made

by the State Government.

3.9.5 Deduction for Income Tax: Payable by the Employed Person Deduction can be made

for income-tax payable by an employed person.

3.9.6 Deductions by Orders of The Court: If any deduction is directed by the court (e.g. in

execution of a decree against the employed person, it must be done). In Municipal Corporation v.

N.L. Abhyankar,19 a representative Union requested the employer to collect levies from the

employee and remit the same to it. The employer refused to do so and the Union made an

application to the Labour Court requesting the Court to order the employer to accept their

request. The Labour Court ordered the employer to collect the levy as requested by the Union. In

appeal the employer's contention was that no deductions other than those permissible under the

Act can be made. It was held that while it is correct that no deductions can be made from the

wages of an employee, other than those deductions which have been specifically set out in

Section 7(2) of the Act, clause (h) of sub-section (2) of Section 7 clearly allows deduction

“required to be made by order of a Court or other authorities competent to make such order”. In

view of this the Industrial Court or Labour Court are competent to make the order for deduction.

In the Manager, Rajapalayam Mills Ltd. v. Labour Court, Madurai and another,20 an employee

resigned from service. While in service the employee had taken loan for house building. The

employer, after the resignation of the employee adjusted certain salary amount due to be paid to

the employee against the house building loan. In a claim for salary by the employee it was held

that after resignation the employee ceased to be in the employment and therefore, his relationship

with the employee after resignation will be governed by the Contract Act and the provisions of

sub-sections (1) to (3) of Section 7 of the Payment of Wages Act will not apply. In such a case it

would be open to the employer to adjust the entire amount due on account of wages under

19. (1979) II L.L.J. 258 (Bombay).20. (1987) II L.L.J. 59 (Mad).

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Section 7(4) of the Payment of Wages Act. In Nathulal v. M.P. State Road Transport

Corporation and others,21 a driver in the employment of Madhya Pradesh State Road Transport

Corporation was found responsible for causing accident and was directed to pay Rs. 3,700/- as

damages to Transport Corporation and the same was directed to be deducted in monthly

installments of Rs. 25/- from his salary. This order was challenged by the petitioner. It was held

that section 7(2)(c) of the Payment of Wages Act permits deduction for damages only when the

damages or loss is directly attributable to the negligence or default of the employee and in order

to hold an employee negligent it is essential that he should be afforded an opportunity of being

heard against such a charge. In the present case no such opportunity has been given to the

petitioner employee and therefore the order of deduction is liable to be quashed.

3.9.7 Deductions for Provident Fund: Deduction may be made of the contribution payable by

the employed person to the provident fund.

3.9.8 Deduction for Payment to Co-Operative Societies and Insurance Schemes:

Deduction may be made for payments to cooperative societies or to a scheme of insurance

maintained.

3.9.9 Deductions for House Accommodation: Deduction made for house accommodation

supplied by the employer or by the Government or any Housing Board set-up under any law in

force.

3.9.10 Deductions for Acceptance of Counterfeit Base Coin: Deductions for recovery of

losses sustained by a railway administration on account of acceptances by the employed person

of counterfiet or base coins or mutilated, or forged currency notes.

3.9.11 Deductions for Recovery of Losses Resulting From Failure to Invoice or to Collect:

Deductions for the recovery of the losses sustained by railway administration because of the

failure of the employed person to invoice, to bill to collector to account for the appropriate

charges due to that administration whether in respect of fares, freight, demurrange, wharfage or

carriage, or in respect of sale of food in catering establishments or in respect of sale of

commodities in grain shops or otherwise.

3.9.12 Deduction for incorrect Rebates or Refunds: Deductions for the recovery of the losses

substained by a railway administration on account of any rebates of refunds incorrectly granted

by the employed person where such loss is directly attributable to his neglect or default.

21. (1986) II L.L.J. 255 (MP).

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3.9.13 Other Deductions:

(a) Deductions made with the written authorisation of:

(i) The employed person or

(ii) The president or secretary of the registered trade union of which the employed

person is a member, for contribution to the National

(b) Relief Fund or any defence Savings Scheme.

(c) Deduction made with the authorisation of the person employed for payment of

any premium on his life insurance policy or for the purchase of the securities of

the Government of India, or for deposits in the Post Office Saving Bank.

3.10 ILLEGAL DEDUCTIONS

3.10.1 Illegal deduction: There are some other deductions which may considered as any

deductions other than those authorised under section 7 of the Act would constitute illegal

deductions. Examples of illegal deductions are as follows:

(1) When an employer deducts from the wages of an employed person any amount of

damage to or loss of goods expressly entrusted to him for custody, or for loss of money for

which he is required to account, where such damage or loss is not directly attributable to his

neglect or default, then deduction would considered as illegal deduction.

(2) Where deductions are made from the wage of the person employed for tools or raw

materials supplied to him required for the purpose of employment, such deduction would

constitute illegal deductions.

(3) Deductions made from the wages of person employed for recovery of losses sustained

by railway administration on account of any rebates or refunds incorrectly granted by the

employed person where such loss is not directly attributable to the neglect or default of an

employed person in such cases deductions would constitute illegal deductions.

(4) Deduction made for payment of any premium on a life insurance policy without the

written authorisation of the employed person or any dependent of employed person, then such

deduction would considered illegal deductions.

(5) Where deductions, wholly or partly made for payment to cooperative societies,

exceed 75% of the wages and in any other case exceed 50% of the wages, such excess

deductions would constitute illegal deduction.

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Activity 1

Highlight the various provision of deduction from wages for the following reasons:

1. Deduction for absence of duty____________________________________________________________________

____________________________________________________________________

2. Deduction for Income Tax____________________________________________________________________

____________________________________________________________________

3. Deduction for provident fund

____________________________________________________________________

____________________________________________________________________



(a) Wage-period (____________) exceed one month.

(b) Appropriate Govt. is (________________________)

(c) The payment of wages must be done (_________________) of the month.

(d) Inspectors are appointed by (___________________)

(e) (_________) has right to appeal within (__________) days from the date on

which order or direction was made by the authority.

3.11 PREVENTION AND RECOVERY OF WRONGFUL DEDUCTIONS

Law does not allow an employer to make any type of deduction out of the wages of a

worker except those authorised by this Act. The following rules provide for the prevention and

recovery of wrongful deductions made by the employer out of the wages of worker:

1. An employer who is found to have acted in contravention of the provisions of this Act

and has either made wrongful deductions or has delayed the payment of wages may be punished

with a fine upto Rs. 500.

2. According to Sec. 15 where any wrongful deduction have been made from the wages

of a worker or any payment of wages to the worker has been delayed, legal practitioner or an

Page 48 of 250

officer of a trade union duly authorised by the worker to act his behalf or Inspector of Factories

may, within 12 months of the date of deduction or the date on which the payment or wages was

due apply to the prescribed authority for a deduction. If the application is made after the period

of 12 months. If may be admitted if the authority is satisfied that the delay was on account of

judicial experience to hear and decide such application for refund of deductions wrongly made

out of the wages of a worker. Prescribed authority will give opportunity to both the parties to

explain their position and if the claim for refened of wrongful deductions of wages of the worker

is proved, it shall direct the employer to pay to the worker the amount wrongfully deducted plus

compensation upto ten times the amount so withheld or an amount upto Rs.25 per worker where

payment of wages was wrongfully delayed. Compensation can be ordered to be paid only along

with the delayed wages. No compensation can be ordered to be paid only along with the delayed

wages. No compensation shall be payable if the delayed wages have already been paid before the

making of an application for direction by the worker before the prescribed authority. An order

for the payment of compensation independently of an order for payment of delayed wages cannot

be made. Application can be made only for the recovery of delayed wages and Industrial

Tribunal because the latter amount is not included in the definition of the term wages.

3.12 AUTHORITIES & APPELLATE AUTHORITY

The Act provides for the appointment of inspectors for the purpose of this Act. He helps

in the enforcement of provision of this Act. He has all the powers of inquiring, searching &

seizing the registers and documents in order to ascertain whether the provisions of this Act or

rules made there under are observed.

Sec.15 of this Act provides for the appointment of any authority to hear and decide the

claims of persons employed in that area. Such authority shall decide all the matters incidental to

such claims. The appropriate govt. may appoint such authority for any specified area by

notification in the official gazette. Procedure before the authority appointed begins when the

employed person files on application to the authority. The application must be made within 12

months from the date on which the deduction from the wages was made or the payment of the

wages was due to be made.

The Act also provides for appellate authority under Sec. 17 to appeal against the orders

and directions of the authority appointed under Sec.15. Both the employer and employee has a

right to appeal within 30 days from the date on which the order or direction was made by the

Page 49 of 250

authority. Such a person may file on appeal only if the memorandum of appeal is accompanied

by a certificate by the authority to the effect that the appellant has deposited the amount payable

under the direction appealed against.

In Rakesh Kumar Jaiswal alias Guddu v. Prescribed Authority (Payment of Wages Act)

Deoria and others,22 the prescribed authority under the Payment of Wages Act, 1936 allowed the

workman’s application for payment of wages and compensation under Sections 16 and 15(2) of

the Act. Aggrieved by the said order the employer made an application for recalling of ex parte

order dated October 18, 1995. This application was rejected by respondent No. 1 on the ground

of limitation. Thereafter, employer preferred an appeal under Order XLIII of the Civil Procedure

Code before respondent No. 2 praying that order dated October 18, 1995 has been passed ex

parte and the restoration application has also been rejected by respondent No. 1. The respondent

No. 1 while rejecting the restoration application filed by the employer observed that the order

dated October 18, 1995 has been passed after hearing both the parties and the employer was

directed to pay wages and compensation with cost within one month. But the employer instead of

paying the wages etc. to the workman has filed this restoration application after the expiry of

limitation period. The employer has stated before respondent No. 2 that the application dated

December 21, 1995 was filed under Order IX, Rule XIII of the C.P. Code for setting aside the ex

parte order passed against petitioner and therefore the employer is entitled to file an appeal under

Order XLIII of Code of Civil Procedure and that is why this appeal has not been filed under

Section 17 of the Payment of Wages Act.

The High Court held that the respondent No. 2 while dealing with the matter has

observed that since restoration application filed under Rule 8 of the Payment of Wages

(Procedure) Rules, 1937 has already been rejected by the Prescribed Authority on the ground of

limitation, therefore no appeal will lie against the impugned order as the said rule do not say that

an appeal will lie against the order of rejection of the application for setting aside an ex parte

order and has dismissed the appeal filed by the employer. The High Court, therefore, held that

the order passed by the respondents did not warrant interference and hence the petition was

dismissed.

Section 17(2) lays down that any order dismissing either wholly or in part an application

made under Section 15(2) or a direction made under Section 15(3) or Section 15(4) shall be final

22. (2002) III L.L.J. 369 (All.).

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unless an appeal under Section 17(1) is preferred against any such order or direction. Section

17(3) provides that where an employer prefers an appeal under this section, the authority against

whose decision the appeal is filed may, pending the decision of the appeal, withhold payment of

any sum in deposit with it. Where a direction to withhold payment of such sum is made by the

Court of Appeal such authority shall, and in other cases, may withhold payment of any sum so

deposited with it.

Section 17(4) lays down that the Court of Appeal as referred to in Section 17(1) may in

its discretion, submit any question of law for the decision of the High Court. Where any such

question is so referred, the Court of Appeal shall decide the matter in conformity with the

decision of the High Court.

In Hajari Rain v. Khadi Mandir, Bikaner,23 an application under Section 15(2) was filed

after the expiry of the limitation period. The application for condonation of delay was granted by

the Authority. It was held that the appellate court can decide the correctness of the order of

condonation of delay. It was further pointed out that for condoning delay, reasons are necessary

and such reasons are to be supported by evidence. If the Authority while condoning the delay in

making an application, fails to record the reasons for condonation, the order granting

condonation is liable to be set aside. In Laxman Panda v. Chief Mechanical Engineer, W. Rly.24

it was held that the employer or the other person under Section 17(1)(a) may file an appeal if the

total sum directed to be paid to a single worker by way of wages and compensation exceeds

rupees three hundred; there is no right of appeal if the sum exceeding rupees three hundred is

directed to be paid collectively to an unpaid group of workers. An appeal may also be preferred

where an application for claim is dismissed on merits, that is where he is held not to be entitled

to the amount as claimed by him. The employee has a right of appeal provided that claims

application is entertained by the authority, but a direction on the merits of the applications is

refused.25 But where the application is dismissed not on merits but on the ground that the

authority has no jurisdiction to entertain the application there is no refusal to give direction and

therefore there is no right of appeal against such an order. It was held in Daru v. Manager,

23. AIR 1979 Raj 76. However in Prem Narayan Varma v. D.T.M. Bhusawal, AIR 1954 Bom 78, it was held that

no appeal can be filed against an order of the Authority condoning the delay in filing the application for claims.

24. (1955) II L.L.J. 5.25. C.S. Lal v. Shaikh Badshah, 56 Bom LR 895.

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Ahmedabad Spinning and Manufacturing Co. Ltd.26 that Section 17(1) provides a right of appeal

to the District Court and there is no further right of appeal under the Act. Therefore only a

revision application may be made to the High Court under Section 115 of the Civil Procedure

Code; but in the opinion of the Bombay High Court it would be better if the decisions under the

Payment of Wages Act are challenged under Article 227 of the Constitution.27

In Hajari Ram v. Khadi Mandir, Bikaner,28 an appeal under Section 17 was filed. The

amount to be deposited in view of the direction under Section 15(3) was deposited by a cheque

before the time for an appeal had expired. The Authority issued the certificate on the same date

on which the cheque was produced. The Authority, by treating the cheque as valid tender, stated

in the certificate that the amount has been deposited in pursuance of the direction issued by it.

The certificate was filed along with the memo of appeal. However the cheque was encashed after

the period of limitation for filing the appeal had expired. It was held that this was sufficient

compliance with the provisions of Section 17(1-A). It could not be said that the certificate could

only be issued by the Authority after encashment of the cheque.

It was held in Executive Engineer U.P.S.E.B. v. Prescribed Authority and others,29 that if

statute prescribed thing to be done in a particular manner, it has to be done in that manner and

not otherwise. Section 17 of the Payment of Wages Act provides that no appeal shall lie unless

the memorandum of appeal is accompanied by a certificate by the authority to the effect that the

appellant has deposited the amount payable under the direction appealed against. The High Court

observed that in the present case the prescribed certificate of deposit of amount payable under

the order appealed against did not accompany the memorandum of appeal nor was the amount

subsequently deposited within the limitation period. Therefore, the question of application of

“Section 29(2) of the Limitation Act, 1963 would not arise. Hence the appeal was not

maintainable.

In Mohd. Nasir and another v. District Judge, Rajouri and another,30 the appeal was

preferred before the appellate authority against the order of Prescribed Authority without

depositing the amount ordered to be paid under the order appealed against and even then the

Court set aside the award and allowed the appeal. In the present writ petition preferred against

26. (1955) I L.L.J. 555.27. Dani v. Manager, Ahmedabad Spinning and Manufacturing Co. Ltd., (1995) I L.L.J. 555.28. AIR 1979 Raj 76.29. (2002) III L.L.J. 142 (All.).30. (2002) I L.L.J. 266 (J. & K.).

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the said setting aside of the award the High Court observed that Section 17(1-A) of the Payment

of Wages Act was mandatory and the appeals under Section 17 of the Act were not maintainable

as they had not complied with that provision.

In U.P. State Electricity Board, Lucknow and others v. District Judge Gorakhpur and

others31 an application under Section 5 of the Limitation Act was made for condoning delay in

filing appeal under Section 17 of the Payment of Wages Act, 1936. The application was rejected

by the District Judge on the ground that Section 5 of the Limitation Act cannot be called in aid

for application to Section 17 of the Payment of Wages Act. Allowing the petition the High Court

observed that the Payment of Wages Act was not a complete Code in itself and it did not exclude

the application of Section 5 of the Limitation Act to proceedings under the Payment of Wages

Act. Hence, the matter was relegated to the lower authority for decision of the application on

merits.

The Act also provides for the penalties for committing offences under the Act. The state

govt. may, by notification in the official gazette, make rules for the purpose of carrying into

effect the provisions of the Act.

Activity 2

Highlight the various provision under different sections for appeal to Authorities and AppellateAuthorities

Appeal u/s 15 Appeal u/s 17


II. True / False

(a) Wages include any contribution paid by the employer to any pension or provident

fund, and the interest that may have accrued thereon.

31. (2003) I L.L.J. 260 (All.).

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(b) Wages in kind is allowed

(c) ‘Employed Person’ includes the legal representative of a deceased employed

person.

(d) Deductions for absence from duty are unauthorised deductions.

(e) Deductions with the consent of employees does not contravene the Act.

3.13 SUMMARY

The Payment of wages Act deals with delay in payment of wages and unauthorised

deductions made from wages of people employed in factories, railways and other industrial

establishment. The Act provides the provisions to regulate the payment of wages and describes

the appointment of authorities for enforcement of provisions and decide the claims under the

Act. It also describes the penalties and procedure to deal with complaints made by the persons

employed.

3.14 Glossary

1. Appropriate Govt.: It means the central govt. or the state govt. as the case may be.

2. Wage-Period: A fixed time period for which the wages are to be paid.

3. Authorised deductions: Deductions which can be legally made from the wages are

known as authorised deductions.

4. Appellate Authority: Authority to whom appeal can be made against the orders

and directions of legally appointed authority.



(a) Shall not(b) Central or State Govt.(c) Before 7th or 10th day(d) The Govt.(e) Both employers or employed, 30 days


1. False2. False3. True4. False

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5. True

3.16 SUGGESTED READINGS.



2. S.L. Agarwal, 1980, Labour Regulations Law in India, Macmillan Company of India

Ltd., New Delhi.

3. S.N. Misra, 1970, Labour & Industrial Laws, Central Law Publications, Allahabad.

4. Bare Acts, The Payment of Wages Act,1936

3.17 TERMIBNAL AND MODEL QUESTIONS

1. Define wages under the payment of Wages Act, 1936.

2. State the authorised and unauthorised deductions given under the Act.

3. What was the need to enact this Act?

4. Describe the authorities and their powers & functions mentioned under the Act.

5. What remedies are available to the persons employed under the Act?

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LESSON – 4

The Minimum Wages Act, 1948

Structure


4.1 Introduction


4.3 Applicability of the Act

4.4 Definitions

4.5 Fixation and Revision of Minimum Wages

4.6 Procedure for fixing and Revising Minimum Wages

4.7 Inspectors and their Powers

4.8 Procedure for deciding claims

4.9 Power of the Central Govt. to make rules

4.10 Summary

4.11 Glossary






Understand the object of this Act

Analyse the fixation and revision of minimum wages

Know the procedure for fixing, revising and payment of minimum wages

Have knowledge about authorities and procedure for deciding claims

4.1 INTRODUCTION

In a force competitive market the wages payable to workers is determined by forces of

demand and supply. The Indian labour class besides being illiterate is by and large not organized

to protect its interests in a competitive market where supply of labour is always in excess of

demand. Under such conditions the labour class is unable to protect its legitimate interests. In a

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country which is still under developed, the exploitation of labour in certain industries is a

common feature and the labouress are forced to accept the employment on starvation wages.

Therefore the Act was enacted to secure the welfare of the workers in a competitive

market by providing for a minimum limit of wages in certain employments. The Act is to prevent

exploitation of the workers and for this purpose, it aims at fixation of minimum wages which the

employer must pay.


The object of Minimum Wages Act, 1948 is to fix minimum rates of wages for those

employments where there is a big chance of exploitation of labour or where sweated labour is

most prevalent. These certain employments are specified in Part I and Part II of the schedule of

this Act. More categories of employment can be added under this Act. The Act is directed

against exploitation of the ignorant, less organized and less privileged members of the society by

the employer. It aims to provide social justice to the workmen employed and for that purpose it

aims at fixation of minimum wages which the employer must pay.

The Act provides for fixation by the central govt. of minimum wages for employments

detailed in the schedule of the Act. This Act enjoins upon an employer a statutory liability to pay

minimum wages irrespective of his capacity to pay. The Act contemplates that minimum wages

rates must ensure fulfillment of physical need of the worker not only for his subsistence and that

of his family but also preserve his efficiency as a workman.

Salient features of the Act: The important features of the Act are:

1. The Act provides for the fixation of:

(a) Minimum time rate of wages

(b) A minimum piece rate

(c) A guaranteed time rate and

(d) An overtime rate for different occupations, localities or classes of work and for

adults, adolescents children and apprentices.

2. The minimum rate of wages and a cost of living allowance or

(i) A basic rate of wages and a cost of living allowance or

(ii) A basic rate of wages with or without the cost of living allowance and the cash

value of the concessions in respect of essential commodities supplied at

concessional rates.

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(3) The Act lays down that wages shall be paid in cash although it empowers the

appropriate government to authorise the payment of minimum wages either

wholly or partly in kind in particular cases.

(4) It provides that the cost of living allowance and case value of the concessions in

respect of supplies of essential commodities at concessional rates shall be

computed by competent authority at certain Intervals. In case of undertaking

controlled by the Union Territories and central government, the Director Labour

Bureau is the competent authority.

(5) The Act empowers the appropriate government to fix the number of hours of

work per day, to provide for a weekly holidays and the payment of overtime

wages of which minimum rates of wages have been fixed under Act.

(6) The Act lays down for appointment of inspectors and other authorities to hear and

decide claims arising out of payment of wages less than minimum rates of wages

and other matter regarding rest or overtime.

(7) All establishment covered by the Act are required to maintain registers and office

records in the prescribed manner.

(8) The Act provides the procedure for dealing with complaints arising out of the

violation of the provisions of the Act and for Imposing polities for offences

committed under this Act.

4.3 APPLICABILITY OF THE ACT

The Minimum Wages Act, 1948 extends to the whole of India. It applies to the

employments detailed in the schedule of the Act and in certain cases may, in the discretion of the

appropriate govt. be extended to any other employment.

4.4 DEFINITIONS

In this Act, unless there is anything repunant in the subject or context.

(a) “adult”. “adolescent”, and “child”, have the meanings respectively assigned to

them in section 2 of the factories Act, 1948.

(b) “appropriate government” means.

(i) In relation to any scheduled employment carried on by under the authority of the

central government or a railways administration or in relation to a mine, oil-field

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or major part, or any corporation established by central Act. the central

government and

(ii) in relation to any other scheduled employment the State Government.

(c) “Competent authority” means the authority appointed by the appropriate

government by notification in its official gazette to ascertain from time to time the

cost of living index applicable to the employees employed in the scheduled

employments specified in such notification.

(d) “cost of living index number” in relation to employees in any scheduled

employment in respect of which minimum rates of wages have been fined, means

the index number ascertained and declared by the competent authority by

notification in the official gazette to all cost of living index number applicable to

employees in such employment.

(e) “employer” means any person who employers, whether directly or through

another person, or whether on behalf of himself or any other person, one or more

employees in any scheduled employment in respect of which minimum rates of

wages have been fined under this Act, and includes, except in such section (3) of

section 26.

(i) In a factory, where there is varied on any scheduled employment in respect of

which minimum rates of wages have been section (1) of section 7 of the factories

Act; 1948 as manager of the factory;

(ii) In any scheduled employment under the control of any government in India in

respect of which minimum rates of wages have been fixed under this act, the

persons or authority appointed by such government for the supervision and

control of employees or where no persons or authority is so appointed, the head of

the department;

(iii) in any scheduled employment under any local authority in respect of which

minimum rates of wages have been fixed under this Act, the person appointed by

such authority for the supervision and control of the employees or where no

person is so appointed, the chief executive officer of the local authority;

(iv) in any other case where there is carried on any scheduled employment in respect

of which minimum rates of wages have been fixed under this Act, any person

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responsible to the owner or the supervision and control of the employees or for

the payment of wages.

(f) “Prescribed” means prescribed by rules made under this Act;

(g) “Scheduled Employment” means an employment specified in the schedule or any

process or branch of work forming part of such employment. The list of scheduled

employments is given below and is not a closed list in view of section 27 of this

Act.

Employment in agriculture that is to say, in any form of farming including the

cultivation and till age of the soil, dairy farming the production, cultivation, governing

and harvesting of any agriculture or horticultural commodity, the raising of live-stock

bees or poultry, and any practice performed by farmer or on a farm as Incidental to or in

conjunction with farm operation including any forestry of timbering operations and the

preparation for marked and delivery to storage or to market or to carriage for

transportation to market of farm produce.

(h) “Wages” means all remuneration, capable of living expressed in terms of money,

which would, if the terms of the contract of employment, express or implied, were

fulfilled be payable to a person employment in respect of his employment or of

work done in such employment and includes house rent allowance but does not

include:

(i) the value of:

(a) any house accommodation, supply or light, water medical attendance or

(b) any other amenity or any service excluded by general or special order of the

appropriate government:

(ii) any contribution paid by the employer to any pension fund or provident fund or

under any scheme or social insurance;

(iii) any travelling allowance or the value of any travelling concession.

(iv) any sum paid to the person employed to defray special expresses entitled on him

by the nature of his employment; or

(v) any gratuity payable on discharge

(i) “Employer” means any person who is employed for hire or reward to do any

work, skilled or unskilled, manual or clerical in a scheduled employment in

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respect of which minimum rates of wages have been fixed and includes an

outworker to whom any articles or materials are given out by another person to be

made up, cleaned, mashed, altered, ornamented, finished, repaired, adapted or

otherwise processed for sale for the purpose, of the trade of business of that other

person where the process is to be carried out either in the have of the out worker

or in some another promises not being premises under the control and

management of that other, person and also included an employee declared to be

an employee by the appropriate government; but does not include any member of,

the aired forces of the union.

Notes: The definition of the employer is wide enough to include a person working

on job basis or piece work.

Illustration: A an outdoor worker, engaged by B. prepared goods at his residence

or at some, other place or premises not controlled by B and thereafter supplier to B. He is

already covered by the definition of ‘employee’ as given in the Act provided he is

working in the scheduled employment, in respect of which minimum rates of wages have

been fixed under the minimum wages Act.

CHECK YOUR PROGRESS A

1. State whether the following statements are true or false.

(a) The Minimum Wage is the lowest wage in the scale to preserve the efficiency of a

workman.

(b) The capacity of the employer to pay is irrelevant in fixing minimum wage.

(c) There is no difference between minimum wages and fair wages.

(d) The minimum wage means a wage that enables the worker to over his bare

physical need.

(e) It is obligatory upon the central government to appoint a central advisory board

for fixing and revising of minimum rates of wages.

4.5 FIXATION AND REVISION OF MINIMUM WAGES

Section 3 provides that the appropriate government shall (a) for the minimum rates of

wages payable to employees employed in an employment specified in Part I or Part II of the

schedule and in an employment added either partly by notification under section 27. In respect of

employees employed in an employment specified in Part II of schedule, the appropriate

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government may instead of fixing minimum rates of wages for the whole state fix such rates of

any part of state or for any specified class or classes of such employment in the whole state of

part thereof.

(b) Review at interval not exceeding five years the minimum rates of wages so fixed and

revise the minimum rates of wages are not reviewed within five years, such rates may be

reviewed after the expiry of 5 years and until so revised, the minimum rates in force immediately

before expiry of 5 years shall continue in force. Further if the number of employees is less that

1,000 engaged in an scheduled employment in the whole state, minimum rates of wages need not

be fixed till the number rises to 1,000 or more.

(2) The appropriate government may fix:

(a) minimum rate of wages for time work (here in after referred to as minimum time

rate)

(b) A minimum rate of wages for piece work (here in after referred to as a minimum

piece rate)

(c) A minimum rate of remuneration to apply in case of employees employed on time

work for the purpose of securing to such employees minimum rate of wages on a

time work basis (here in after referred to as guaranteed time rate)

(d) a minimum rate (whether a time rate or piece rate) to apply in substitution for the

minimum rate which would otherwise be applicable in respect of overtime work

done by employees (what is known as overtime rate).

The minimum rates of wages so fixed and so revised shall not apply to employees

employed in a. scheduled employment during the pending proceedings before a Tribunal or

National Tribunal under the Industrial Disputes Act. 1947 or before any like authority or during

the period of operation of an award. Where such proceeding or award relates to the rates of

wages payable to ail the employees in the scheduled employment, no minimum rates of wages

shall be fixed or revised in respect of such employment during the said period, in fixing or rising

rate of wages shall be fixed or revised in respect of such employment during the said period, in

fixing or rising rate of wage under section (3)

(a) Different minimum rates of wages may be fixed for:

(i) different scheduled employment.

(ii) different classes of work in the same scheduled employment.

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(iii) adult, adolescents, children and. apprentices,

(iv) different localities

(b) minimum rates of wages may be fixed by any one or more of the following wage

periods namely:

(i) by the hour

(ii) by the day

(iii) by the month or

(iv) by such other longer wages period as may be prescribed. Where such rates are

fixed by the day or by the month the manner of calculating wages for a month or

for a day as the case may be, may be indicated. Where any wage periods have

been fixed under section 4 of the payment of wages Act 1936 minimum wages

shall be fixed in accordance there with

Minimum rate of wages and computation there of:

(i) Section 4 provides that a minimum rate of wages fixed or revised by the

appropriate government may consist of a special allowance at a rate to be adjusted

at such intervals and in such manner as the appropriate government may direct to

accord or nearly as particular with the variation in the cost of living index, or

(ii) A basic rate of wages with or without the cost of living allowance and the cash

value of the concession in respect of supplies of essential commodities at

concessional rate when so authorised; or.

(iii) An all Inclusive rate allowing for the basic rate, the cost of living allowance and

the case value of the concessions, if any. The cost of living allowance and the

cash value of concessions in respect of supplies, of essential commodities at

concession rates shall be computed by the competent authority of such intervals

and in accordance with such directions as may be specified or given by the


The special allowance mentioned above is a variable amount forming part of the wages,

being linked with the cost of living index number.

The following considerations are not relevant in fixation of wages:

(a) the fact that an employer may find it difficult to carry out his business on the basis

of minimum wages;

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(b) the financial capacity of the employer;

(c) the fact of the company having incurred losses during the previous years.

(d) employer's difficulties in importing raw material, and

(e) the region-cum – industry principles.

4.6 Procedure for Fixing and Revising Minimum Wages

Section 5 provides that in fixing or revising minimum rates of wages, the appropriate

government shall, either

(a) appoint as many committees and such committees; as it considers necessary to hold

enquiries and advise it in respect of such fixation or revision as the case may be (a committee

without men of experience and knowledge would be illegal-A.S.D. Basha V. State of Madras-

1962-63-FJR 50) for the purpose or

(b) by notification in the official gazette, publish its proposals for the information of

persons likely to be affected thereby or specify a date not less than 2 months from the date of

notification on which the proposals shall be taken into consideration.

After considering the advice of committee or committees appointed under clause (a) or

considering all representation received by it user clause (b) above, the appropriate government

shall, by notification in the official gazette, fix or revise the minimum rates or wages in respect

of each scheduled employment. The fixation or revisions shall come into force on the expiry of

three months from the date of issue of the notification.

In state of Madras V.P.N. Ram Chander Rao (1956 LLJ-558) it was held that the

notification not, specifying in what manner and at what intervals special allowance made payable

is to be adjusted is defective and is vitiated by an error of law apparent on the face of the record.

In Bengal Motion Pictures Employee’s Union, vs. Kohinoor Pictures (P) Ltd. and other

(1968 IIJ 387) it was held that employees who are in receipt of higher wages that those fixed

under the notification should continue to enjoy the same, was not warranted by the provisions of

the Act. Government cannot either convert a voluntary payment into compulsory payment.

The appropriate Government shall while revising the minimum rates of wages, by the

mode specified in clauses (b) consult the Advisory Board also.

This power to fix or revise the minimum wages in subsection 5(2) is limited only to

employment specified in schedule under section 27 of the Act, the appropriate government may

add any employment to the schedule. The fixation of minimum wages depends on the prevailing

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economic conditions. The cost of living in a place, the nature of the work, to be performed and

the conditions in which the work is performed. Where a notification is issued by the government

authorising the employer to deduct the sums mentioned in the notification towards the costs of

means supplied to the workers by him, it was held that the notification gives only an option to

the workers by him and does not impose any obligation upon him (Chandra Bhawan & Lodging

V. State of Mysore A.I.R. 1970 S.C. 2042).

Where a committee has no representation of the employees the proposals given by it are

not by the committee and as such notification fixing minimum wages was of no force and effect

(N.R. Jain V. Labour Commission Raj. A.I.R. 1957)

ACTIVITY 1

1 Highlight the provisions of the following in the Minimum wages Act, 1948 .

a) Fixation of Minimum Wages

__________________________________________________________________

__________________________________________________________________

__________________________________________________________________

b) Revision of Minimum Wages

__________________________________________________________________

__________________________________________________________________

__________________________________________________________________

Advisory Board

According to section 7 the appropriate government shall appoint an Advisory Board for

the following purpose of:

(i) Co-cordinating the work of committees and sub-committees appointed by it for fixing

& revising minimum rates of wages.

(ii) Advising the appropriate government generally in the matter of fixing and revising

minimum rates of wages. Under section 8 the central Government shall appoint a Central

Advisory Board for the purpose of (i) advising the central and the state government in the matter

of fixation and revision of minimum rates of wages and other matters under the act, and (ii) for

co-cordinating the work of the Advisory Board. The central Advisory Board shall consist of

persons to be nominated by the Central Government representing employers and employees in

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the scheduled employments who shall be equal in number and independent persons not

exceeding one-third of the total number of members, one of such independent persons, shall be

appointed as the chairman of the Board of the Central Government.

Similarly each of committees, sub-committees and the Advisory Board consists of person

to be nominated by the appropriate government representing employers and employees in the

scheduled employment who shall be equal in number. Independent persons not exceeding one

third of its number of members shall also be appointed, one of which such independent persons

shall be appointed as the chairman by the appropriate government (sec. 9).

Section 9 does not require that the representative of employees should actually be

employees in the employment in question not does it require that a person who has experience or

knowledge in one capacity or another of the problems of employees in a particular industry

cannot represent those employees for the purpose of nomination user sec. 9(1) Salt works V.

State A.I.R. 1971 Guj. 14)

The expression “independent person” in this section means a person other than those who

are employee and employees in relation to the scheduled employment in respect of which

minimum wages are sought to be fixed.

Correction of Errors

Section 10 provides that appropriate government may at any time by notification in the

official gazette, correct clerical or. arithmetical mistakes in any order fixing or revising minimum

rates of wages under this Act or errors arising therein from any accidental slip or omission every

such notification shall, as soon as may be, after it is issued, be placed before the Advisory Board

for information.

Wages in Kind

Section 11 provides that the minimum wages shall be payable in cash. The appropriate

government may by notification in the official gazette, authorise the payment of minimum wages

wholly or partly in kind where it is customary. Similarly it may authorise the supply of essential

committees at concession rates. The cash value of wages in kind and of concessions in respect of

essential commodities at concessional rates shall lie estimated in the prescribed manner.

Payment of Minimum Wages

Section 12 provides that where minimum wages have been in force in any scheduled

employment, the employer shall, pay wages at a rate not less than the minimum fixed for every

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category of employees without any deduction except as may be authorised under the payment of

wages Act 1936.

Fixing hours for a normal working pay. etc.

Section 13 provides that in scheduled employment where minimum wages fixed under

the Act, the government may:

(a) fix the number of hours of work which, shall constitute a normal working day

inclusive of one or more specified intervals;

(b) provide a day of rest in every period of 7 days and for the payment or remuneration

on respect of such days of rest arid (c) provide for payment for work on a day of rest at a rate not

less than overtime rate.

The above provisions shall apply to the following classes of employees only to such

extent and subject to conditions prescribed.

(a) Employees engaged on urgent work or in any emergency which should not have been

foreseen or prevented.

(b) Employees, engaged on preparatory or complementary work.

(c) Employees whose employment is essentially inter mitten.

(d) Employees engaged in any work which for technical reasons has to be completed

before the duty is once.

(e) Employees engaged in a work which would not be carried on except at times

dependent on the irregular action of natural forces. Employment of employee is essentially

intermittent when it is declared to be so by the appropriate government on the ground that the

daily hours of duty of the employee or if there is no daily hours of duty as such for the employee

the hours of duty normally include periods of inaction during which the employee may be a duty

but is called upon to display either physical activity or sustained attention.

Overtime

Section 14 lays down that where an employee, whose minimum rate of wages is fixed

under this Act by the have, by the day or by such longer wage period as may be prescribed works

on any day in excess of the number of hours constituting a normal working day, the employer

shall pay him for every hour or part of an hour so worked in excess, at the overtime rate fixed

under this Act or under any law of the appropriate government for the time being in force

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whichever is higher. Nothing in this Act shall prejudice the operation of the provisions of section

59 of the factories Act, 1948 in any case where those provisions are applicable.

Wages of Worker who works for less than normal working day

Section 15 lays down that if an employee whose minimum rate of wages has been fixed

by the day, works or any day or which he uses employed for a period less than the requisite

numbers of hour constituting a normal working day, he shall be entitled to receive wages for a

full normal working day.

But however, he shall not be entitled, to receive wages for full normal working day in the

following cases;

(i) the failure to work is caused by his unwillingness to work and not by omission of the

employees to provided him with work.

(ii) in duck other cases and circumstances may be prescribed.

Wages for two or more Classes of work

Section 16 lays down, where an employee does two or more classes of work to each of

which a different minimum rate of wage is applicable the employee shall pay to such employee

in respect of time respectively occupied in each such of work, wages or not less than the

minimum rate in force in respect of each such class.

Minimum time rate wages for piece work

Section 17 provides that where employee is employed on piece work, for which

minimum time rate and not a minimum piece rate has been fixed, the employer shall pay to such

employee wages at not less than the minimum time rate.

Maintenance of registers and records section 18 provides that every employer shall

maintain such particulars of employees employed by him, the work performed by them, the

wages paid to them the receipts given by them and such other particulars, and in such form as

may be prescribed.

Every employee shall keep exhibited, in such manner as may be prescribed in the factory,

workshop or place where the employees in the scheduled employment may be employed, or in

the case of out-workers, in such factory, workshop or place as may be used for giving out work

them notices in the prescribed form containing prescribed particulars.

The appropriate government may by rules made under this Act, provide for the issue of

wage, books or wage slips to employees employed in any scheduled employment in respect of

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which minimum rates of wages have been fixed and prescribe the manner in which entries shall

be made and authenticated in such wage book or wage slips by the employer or his agent.

4.7 Inspectors and their powers

Section 19 provides that the appropriate government may by notification in the official

gazette, appoint such persons, as it thinks fit to be inspectors for the purpose of this Act and

define the local-limits, within which they shall exercise, their functions.

The inspector may have the following powers:

(a) enter all the reasonable hours with such assistance (if any being person in the service

of govt. or any local or other public authority, as he deems fit) any premises a place where

employees are employed or work is given out to our workers in any scheduled employment for

the purpose of examine any register, record of wages or notices required to be kept or exhibited

under this Act and require the production there of for inspections.

(b) examine any person whom he finds in any such premises or places.

(c) require any person giving out works and any out workers to give information.

(d) seize, or take copies or such register, record of wages or notices as he may consider

excellent in respect of an offence under this Act which he has reason to believe, has been

committed by an employer and

(e) exercise such other powers as may be prescribed. Every inspector shall be deemed to

be public servant within the meaning of Indian Penal code.

Claims

Section 20 provides the procedure for filing claims where an employee has any claim:

(i) arising out of payment of less than the minimum rate of wages fixed for his class of

worker; or

(ii) In respect of payment of remuneration for days of less; or

(iii) In respect of payment of remuneration for work done on such days under clause (b)

or (c) or section 13 (1) or

(iv) of wages at the overtime rate under section 14 to employees employed or paid in that

area.

The following persons can apply to the authority appointed, by appropriate government

to hear and decide for any specified area all claims for a direction:

(a) the employee himself, or

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(b) any legal, practitioner authorized in visiting to act on his behalf, or

(c) any official of a registered trade union authorized in writing to as on behalf of the

employee, or

(d) any Inspector, or

(e) any person acting with the permission of the authority.

Application for claims

The applications should be presented within 6 months from the date on which the

minimum wages or other amount becomes payable. But it can be admitted by the authority after

the said period of 6 months if the applicant satisfied the authority that he had sufficient cause for

not making the application within the prescribed time. (Case-chief officer town municipal

council V. Chandra Dattatraya Patil A.I.R. 1969, Mys 202).

4.8 Procedure for deciding claims

Where any application is entertained, the authority to shall, leas the applicant and the

employer or give them an opportunity for being heard and after such further inquiry, if any, as it

may consider necessary, may without prejudice to any other penalty to which employer may be

liable under the Act, direct (i) in case off claims arising out of the payment, of less than the

minimum rates of wages payable to himenced the amount actively paid together with payment of

such compensation as the authority may think not exceeding ten times the amount of such

excess.

(ii) in any other case, the payment of the amount due to the employer together with the

payment of the amount due to the employer together with the payment of such compensation as

the authority may think fit not exceeding 10 Rs.

(iii) payment of such compensation in case where the unless or the amount due is paid by

the employer to the employee before the disposal of the application.

If the authority bearing any application under this section is satisfied that it was either

malicious or venations, it may direct that a penalty not exceeding 50 Rs. be paid to the employer

by the person presenting the application.

Who can be appointed as authority?

The following may be appointed as an authority to decide any claim:

(a) Any commissioner for workmen’ compensation.

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(b) Any office of the central govt. exercising functions as labour commissioner for any

regions;

(c) Any other officer with experience as Judge of a civil court or as a stipendiary

magistrate.

(d) Any office of the state govt. not below the rank of civil court under the civil

procedure. Code for the purposes of:

(a) taking evidence

(b) enforcing the attendance of witness and

(c) compelling the production of documents every direction the authority shall be final.

Recovery of Amount under order of Authority

Any amount directed to be paid be the authority may be recovery:

(a) If the authority is a magistrate, by the authority as if it case a fine imposed by

authority is a magistrate.

(b) If the authority is not a magistrates, by any magistrate to when the authority makes

application in this behalf as it new a fine imposed by sub magistrate.

Single Application in respect of a number of employees

Section 21 provides that a single application may be presented under section 20 on behalf

of any number of employers in the scheduled employment in respect of which minimum rates of

wages have less fixed. In such cases, the maximum compensation which may awarded under

section 20 (3) shall not on exceed, to times the aggregate amount of such increase of Rs. 10 per

head no the case may be.

Penalties for certain Office

Section 22 provides that any employee less than the minimum rate of wages fixed for the

employee’ class or work or less than the amount due to him under the provisions of this Act or.

(b) contravenes any rule or order made under section 13 shall be punishable with the

imprisonment for a term which may extend to 6 months or with fine which may extend to Rs.

500 or with both.

In imposing such fine for an offence under this section the court shall take into

consideration the amount of any compensation already amended against the accused in any

proceedings taken under section 20.

General Provision for Punishment of other offences.

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An employer who contravenes any provisions of this Act or of any rule or order made

there under shall, if no other penalty is provided for such contravention by this Act, be

punishable with fine which may 'extend to Rs. 500

Cognizance of offence

Section (22-B) lays down that no court shall take cognizance of complaint against any

person for an offence:

(a) Under clause (a) of section 22 unless an application in respect of the facts constituting

such offence has even, presented under section 20 and has been granted wholly or in part and the

appropriate government or an officer authorised by it in this behalf has sanctioned the making of

the complaint (b) Under clause (b) of section 22 (A) except on a complaint made by a with the

sanction of an inspector section 22 (b) provides that no court shall take cognizance of an offence

(c) under clause (a) or clause (b) of section 22 unless complaint thereof is made within one

month of the grant of section under this, section; (d) Under Section 22 (A) unless, complaint

thereof is made within 6 months of the date on which the offence is alleged to have been

committed.

Offences by companies

If a person committing any offence under this Act is a company every person who in

Charge of and ever responsible company to for the conduct of the business of the company as

well as the company shall be deemed to be guilty of offence and shall be liable to be proceeded

against an punched accordingly unless such person for once that (i) the offence was committed

without his knowledge or (ii) be exercised all the diligent to percent it.

Section 22 (i) provides that other on offence under this Act, been committed by a

company and it is provided that the offence has been committed with the concert or connivance

of or is attributable to any neglect in the part of any director, secretary or other officer to the

company, such director, manager, secretary or other officer of the company snail also be deemed

to be fully of that offence and shall be habit to be proceeded against and punished accordingly.

Payment of undisbursed amounts due to employees

Section 22 (d) provides that all amounts payable to an employee under this act which

could not be paid to the employee due to his death before payment or on A/c or his where about

not being known shall be deposited with the prescribed authority who shall be deposited with the

prescribed authority who shall deal with the money in the prescribed manner.

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Protection Against Attachment of Assets of Employer

Any amount deposited with the appropriate govt. by an employee to secure the due

performance of a contract with the govt. any other amount due to such employer from that govt.

on respect of such contract shall be liable to attachment under any decree or order of any court in

respect of any debit or liability incurred by the employer towards any employee employed in

concentration with the contract aforesaid.

Application of payment of wages Act. 1936 to scheduled employment

The appropriate govt. may be notification in the official gazette direct that ail or any of

the provisions of payment of wages Act, 1936 shall apply to wages payable to employees in such

scheduled employments. An inspector appointed under this Act shall be deemed to be inspector

for the purpose of enforcement of the provisions of payment of wages Act so applied.

Exemption of employer from liability in certain cases

When an employer is charged with an offence under this Act he is entitled to file a

complaint against the actual offender and on this complaint the actual offender shall be brought

before the court at the appointed for hearing the charge, if the commission of the offence is

proved, the employer shall be liable unless he proves to the satisfaction of the court that: (i) he

has used due diligence to enforce in question without his knowledge, consent or connivance.

It the employer succeeds in establishing that other person has responsible for the offence

the actual offender shall be committed of the offence and shall liable of punishment as if he was

the employer and the employer shall be discharged. The employer may be examined on with in

seeking to prove his innocence.

Bar of Suits

Section 24 bars the jurisdiction of any court to entertain any suit for the recovery of

wages in so far as the sum so claimed:

(a) forms the subject of any application under section 20, which has been presented by or

on behalf of the plaintiff or

(b) has forced the subject of direction under that section in favour of plaintiff or

(c) has been adjudged in any proceeding under that section not due to the plaintiff or

(d) could have been recovered by an application under that section.

Contracting out

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Section 25 lays down that any contract whether made before or after the commencement

of this Act, wholly on employee with relinquishes or reduces his right to a minimum rate of

wages or any privilege or concession accruing to him under this Act shall be will and void so far

as it per posts to reduce the minimum rate of wages paid under this Act.

Exemption and exception.

Section 26 provides for the full exemption

(1) The provisions of the Act shall not apply to disable employees of the appropriate

government so declares.

(2) The provisions of the Act shall not apply to all or any class of employees employed in

scheduled employment, according to the notification in the official gazette of appropriate govt.

(3) Nothing in this Act shall apply to wages payable by an employer to a member of his

family who is family who is living with him and is dependent on him.

Powers the appropriate government to add to schedule

Section 27 provides, that the appropriate government may, by notification in the official

gazette add to either part of the schedule any employment in respect of which if is of opinion that

minimum rate of wages should be fixed under this Act. But before doing so the government

concerned shall give 3 months notice by an official gazette notification of its intention to do so.

After notice and subsequent addition to any employment in the schedule, the schedule shall be

deemed to be amended accordingly in respect of that state.

ACTIVITY II

1 Distinguish in brief the penalties under the following sections

a) Section 22

__________________________________________________________________

__________________________________________________________________

b) Section 22-B

__________________________________________________________________

__________________________________________________________________

4.9 Power of the central govt. to make rules

Section 29 provides that central government may by notification in the official gazette

makes rules for carrying out the purpose of this Act in respect of the following:

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(a) Prescribe the term of office of the member

(b) the procedure to be followed in conduct of business

(c) the method of voting.

(d) the manner of filling up casual vacancies in the membership of the Central Advisor

Board and

(e) the quorum necessary for a transaction of business of the Central Advisory Board.

Power of the appropriate govt. to made rules.

Section 30(2) confers special powers for making rules for convey act the purpose of this

Act. Such rules may

(a) prescribe the term of officer of the members the procedure to be followed in the

conduct of business, the method of nothing, the manner of filling in casual vacancies in

membership and the quorum necessary for the transaction of business of the committees, sub-

committees and the Advisory Boards.

(b) prescribe the method of summoning witnesses, production of documents relevant to

the subject matter of the enquiry before the committees sub-committees and the Advisory

Boards.

(c) prescribe the mode of computation of the cash value of wage in kind and of

concessions in respect of supplies of essential commodities of concession rates.

(d) prescribe the time and conditions of payment of and the deductions permissible from

wages.

(e) provide for giving adequate publicity to the minimum rates of wages fixed under the

Act.

(f) provide for day of rest in every (period) of 7 days and for the payment of

remuneration in respect of such day.

(g) prescribe the member of houses of work which shall constitute a normal working day.

(h) prescribe the cases and circumstances in which an employee employed for a period of

less than the required number of houses constituting a normal working day shall not be entitled

to receive wages for a file normal working day.

(i) prescribe the form of registers and records to be maintained and the particular to be

entered in such registers and records:

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j) provide for the issued of wage books and wage slips and prescribe for the manner of

making and authenticating conferees in wages books ad wages slips.

(k) prescribe powers of in sectors for purpose of this Act

(l) regulate the scale of costs that may be allowed in proceeding under section 20.

(m) prescribe the amount of court fees payable in respect of proceedings under section 20

days and

(n) provide for any other matter which, is to be or may be prescribe.

Rule made by central government to be laid before parliament

Section 30A laid down that every rule made by the central government under the Act

shall be laid as soon as may be after it is made, before each house of parliament while it is in

session or a total period of the 30 days, which may be compassed in one session or in 2

successive sessions and if, before the expiry of the session in which it is so laid down or the

session immediately following both houses agree in making any modification in the rule or both

Houses agree that the rule should not be made, the rule shall thereafter have effect only in such

modified form or be or no effect, as the case may be, so however, that any such modification or

annulment shall be without prescribe to the validity of anything previously one under that rule.

CHECK YOUR PROGRESS B

Fill in the blanks:

(a) The Act requires that wages shall be paid in ___________

(b) The time period to revise the minimum rates of wages shall not exceed_________

(c) Wage period shall not exceed ____________

(d) The fact of the employer company having incurred losses during the previous

years is __________ in fixation of wages.

(e) Inspectors shall exercise their functions within _________ defined by the


4.10 SUMMARY

The Minimum Wages Act prescribes minimum wages for all employees in all

establishments in certain employments specified in the schedule of the Act. Central and state

government revise minimum wages specified in the schedule. For the purposes of coordinating

work between committees and sub-committees, advisory boards have been set up at the central

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and the state levels, who advise the government in the matter of fixing and revising minimum

wages. Law is enforced through an inspector appointed by a notification in the official gazette.

For the purpose of hearing and deciding claims, authorities are appointed by the appropriate

government. The government has the power to make appropriate rules.

4.11 GLOSSARY

1. Minimum Wages: Minimum Wages are determined on the cost of living and the

normal or reasonable needs of the worker and his family.

2. Scheduled Employment: It means an employment specified in the schedule or any

process or branch of work forming part of such employment.

4.12 ANSWERS TO CHECK YOUR PROGRESS

Check your progress A

(a) TRUE (b) TRUE (c) FALSE (d) FALSE (e) TRUE

Check your progress B

(a) Cash (b) Five years (c) One month (d) Irrelevant

(e) Local limits

4.13 SUGGESTED READING

1 A.M.Sharma, 1981. Aspects of Labour welfare and social security, Himalaya Publishing

House: Bombay.

2. Nayan Barua, 1995. Social Security and labour welfare in India, Ashish Publishing

House, New Delhi.

4.14 REVIEW QUESTIONS

1. Write the object of fixing minimum wages. Also state the procedure laid down

under the minimum wages Act for fixing and revising minimum wages.

2. Who is authorised to fix minimum wages and in what manner?

3. State the procedure provided under the Act for filing the claims. Who is the

authority to decide any claim and what is the procedure to decide the claims?

4. Write the powers of the inspectors.

5. Describe the powers of the govt. relating to various provisions given in the

minimum wages Act.

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LESSON – 5

The Payment of Bonus Act, 1965

Structure


5.1 Introduction

5.2 Objectives

5.3 Scope and Application

5.4 Definitions

5.5 Establishments and Provisions

5.6 Computation

5.7 Eligibility and disqualification

5.8 Payment of minimum & maximum bonus

5.9 Set on and off of allocable Surplus

5.10 Recovery of Bonus

5.11 Reference of disputes

5.12 Inspectors

5.13 Cognizance of offences

5.14 Act not to apply to certain classes of employees

5.15 Summary

5.16 Glossary


5.18 Suggested readings

5.19 References




Understand the object and meaning of bonus

To know the calculation and payment of bonus

To analyse the allocable and available surplus

To know the reference of disputes

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And cognizance of offences

5.1 INTRODUCTION

The ‘Bonus’ implies something paid as a gesture of goodwill. According to Encyclopedia

Britannica, “Bonus is an award in cash or its equivalent by an employer to an employee, for

accomplishment other than that paid for the regular wages, such accomplishment being

considered desirable and perhaps implied, though not required by the contract of employment. It

is usually intended as a stimulus but may also express a desire on the part of the employer to

share with the employees the fruits of their joint enterprise.” Thus the bonus is payment made to

the employees, out of the profits earned by the employers over and above the remuneration that

they get. It is not an ex-gratia payment but the statutory right of the employee. The question of

payment of bonus had been one of the main causes of industrial disputes during post-

independence days. In K.S. Balan and others v. State of Kerala and another,1 a public sector

employer was paying ex-gratia payment to its highly paid employees who were not entitled to

get bonus. On Government disapproving such payment, the Board of Directors passed a

resolution stopping payment in future and seeking to recover the amount, already paid. The

employees challenged the said resolution. The petitioners have no case that the claim was linked

with profit or production or connected with any festival. It was held that the claim of petitioners

that the payment has become an implied condition of service cannot be accepted. Therefore there

is no ground to interfere with the order of the Government stopping ex-gratia payment and

recovery of such payments already made. In Mill Owners Association v. Rastriya Mill Mazdoor

Sangh,2 a Full Bench of the Labour Appellate Tribunal observed that bonus could no longer be

considered as an ex-gratia payment and laid down a formula known as “Full Bench Formula”.

Since both labour and capital contributed to the earnings of industrial concerns, it was only fair

that labour should get some benefit if there was a surplus left after meeting prior and necessary

charges. Broadly speaking the formula provided that the following prior charges should be

deducted from the gross profits of an enterprise:

(i) return on paid up capital generally at the rate of six per cent;

(ii) return on working capital varying from two to four per cent;

(iii) depreciation worked out on a notional basis;

1. (1988) II L.L.J. III (Kerala).2. (1952) LAC 423.

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(iv) rehabilitation; and

(iv) income tax.

If after deduction of these prior charges, surplus was left over the workmen would be

entitled to a share in the said surplus on an equitable basis. In the absence of any surplus,

however, there would be no question of payment of bonus on general notions of social justice.

Labour unions did not feel satisfied with the Full Bench Formula. Their main grievance was

against the rehabilitation charge which, in their view, generally wiped out what was left of the

available surplus. Some employers were also not quite happy with this formula because it did not

provide an easy method for computation of bonus and often led to disputes year after year. The

Supreme Court, while approving this principle in Muir Mill Ltd. v. Suti MSI Mazdoor Union,3

laid down two conditions which had to be satisfied before a demand for bonus could be justified:

(1) the wages fell short of the living standard; and

(2) the industry makes huge profits part of which are due to the contribution made by

workmen in increasing production.

The demand for bonus would become an industrial claim when either or both of these

conditions were satisfied. The Government of India had been under a constant pressure to revise

the bonus formula. The present Act is the outcome of the recommendations made by a Tripartite

Commission, which was set up by the Government of India in 1961. The Commission was asked

to consider the question of payment of bonus based on profits to employees employed in

establishments. The recommendation of the Commission was received by .the Government on

January 24, 1964. On September 2, 1964 the Government implemented the recommendations,

subject to certain modifications. With a view to accept these recommendations, the Payment of

Bonus Ordinance, 1965 was promulgated on 26th May, 1965. The Ordinance later on was

adopted by the Parliament and enacted as Payment of Bonus Act, 1965. Under the Act the

payment of bonus has become a statutory obligation imposed upon the employers covered by the

Act.


The Payment of Bonus Act, 1965 was enforced on 25th Sept., 1965 to maintain peace and

harmony between labour and capital by allowing employees to share in the prosperity of the

establishment towards which they have also contributed. Its object is:

3. (1955) I L.L.J. 1.

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1. To impose a statutory obligation on an employer to pay bonus to his workers

2. To define the principle or formula for the calculation of bonus

3. To provide for payment of minimum and maximum bonus with scheme of ‘set on’

and set off’.

4. To provide for machinery for enforcement of the Act.

5.3 SCOPE AND APPLICATION

The Act extends to whole of India. Sec.1(3) provides that the Act shall be applicable to

those establishments employing 20 or more workers employed on any day during an accounting

year. However, subsequent reduction of strength in the number of employees would not make it

inapplicable to an establishment. The Act does not apply to public enterprises except those

operating in competition with similar other private undertakings. It is also not applicable to non-

profit making institutions like R.B.I., L.I.C. of India and departmentally managed undertakings.

However all banks are covered under the Act.

The appropriate government may by notification in the official gazette can make the

provisions of the Act applicable to any class of establishments specified therein, including

factories. However in case o factories, if the number of employees fall below ten, then the Act

cannot be enforced.

5.4 DEFINITIONS

A few important definitions in context of the Act are given below.

5.4.1 Accounting Year: “Accounting year” means:

(a) In relation to a corporation the year ending on the day on which account books of

the corporation are closed and balanced;

(b) In relation to a company, the period in respect of which any profit and loss

account of the company is laid before its annual general meeting.

(c) In any other cases,

(i) the year commencing from 1st April; or

(ii) if the accounts of an establishment maintained by the employer are closed

and balanced on any other day than the 31st March, then it is up to the

employer to fix any date on which its accounts are closed and balanced.

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5.4.2 Allocable Surplus: In relation to an employer being a company other than a banking

company which has not made the agreement prescribed under the Income Tax Act for

declaration of payment within India of the dividends payable out of its profit in accordance with

provisions of Section 194 of that Act 67% of the available surplus in an accounting year, and in

any other case 60% of such available surplus.

5.4.3 Available Surplus: It means the available surplus computed under Section 5 of the act.

5.4.4 Appropriate Government: It means:

(a) In relation to an establishment in respect of which the appropriate government

under the I.D. Act 1947 is the Central Government.

(b) In relation to any other establishment, the State Government of the state in which

the establishment is situated.

5.4.5 Award: “Award” means an interim or a final determination of any industrial dispute or

of any question relating thereto by any labour court, Industrial Tribunal or National Tribunal

under the Industrial Disputes Act 1947, or by any authority constituted by the government.

5.4.6 Employee: Employee means any person (other than apprentice) employed on a salary or

wage not exceeding Rs. 3500/- per month, in any industry to do any skilled, or unskilled,

manual, clerical, supervisory, managerial and technical work, for hire or reward whether the

terms of employment expressed or implied.

5.4.7 Employer: “Employer” includes:

(i) In relation to an establishment which is a factory the owner or occupier of the

factory including agent of such owner or the person working as manager under

clause (f) of Sub section (i) of Section 7 of the Factories Act, 1948.

(ii) In relation to any other establishment the person who or the authority which has

the ultimate control over the affairs of the establishment and where the said affairs

are entrusted to a manager, managing director or managing agent.

5.4.8 Wage or Salary: Wage or Salary means all remuneration (other than remuneration in

respect of overtime work) capable of being expressed in monetary terms which would be if the

terms of employment express or implied were fulfilled, be payable to an employee in respect of

his employment and Includes D.A. However, it does not include:

(a) Any other allowance for which an employee is entitled to for the time being;

(b) Any commission payable to the employee;

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(c) Any travelling concession;

(d) The value of house accommodation, H.R.A. or of supply of light, water, medical

allowance or other amenity or of any service or of any concessional supply of

food grain or articles;

(e) Any bonus; (including incentive, production and attendance bonus);

(f) Any contribution paid or payable by the employer to any pension or provident

fund or for the same fit of the employee under any law for the time being in force;

(g) Any retrenchment compensation or any gratuity or other retirement benefit

payable to the employee or any ex-gratia payment made to him.

(h) any commission payable to the employee.

Bonus payable to an employee is like a wage arid is not liable to attachment. In Gopalan

v. Angamali Chit fund it was observed by the court that the wages do not include bonus but for

the purpose of the Act it is necessary to distinguish between bonus and wages.

5.5 ESTABLISHMENTS AND PROVISIONS

With reference to bonus, the gross profit derived by an employer from an establishment

in respect of the accounting year shall:

(i) in the case of a banking company be calculated in the manner specified in the first

schedule.

(ii) in any other case it is required to be calculated in manner as mentioned in the

second schedule.

5.6 COMPUTATION

The available surplus in respect of any accounting year shall be gross profit for the year

question after deducting the amount stated in Section 6.

5.7 ELIGIBILITY AND DISQUALIFICATION

Every employee shall be entitled to receive any bonus in a given accounting year with the

provisions of Act, provided he has worked in the establishment for not less than thirty days in

that year notwithstanding anything contained in the Act. An employee shall not be entitled to any

bonus if his services are terminated on account of:

(i) Fraud; or

(ii) Riotous or violent behaviour within the establishment; or

(iii) Theft, misappropriation or sabotage of any property of the establishment.

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The employees of newly set up establishment are entitled to claim bonus under the Act

from the sixth accounting year following the accounting year in which employer sells goods

manufactured by the establishment or in the year in which profits are derived whichever is

earlier. It was held in Project Manager, Ahmedabad Project, O.N.C.C. Sabarrnati v. Sham Kutnar

Sahegal (Died) by his Legal Representatives4 that when an employee is suspended, it cannot be

said that such an employee did not work for the establishment. The word “worked” in Section 8

of the Act should mean “ready and willing to work”. Therefore when an employee is prevented

from working by an overt act on the part of the employer, which is ultimately set aside and the

employer is reinstated in service then the reasonable inference is that the employees’ statutory

eligibility for bonus within the meaning of Section 8 of the Act cannot be said to have been lost.

Nor can the employer refuse to accede to the demand for such bonus if it is otherwise payable

under the provisions of the Act. It was held in H.P. State Electricity Board and Another v.

Ranjeet Singh and Others,5 that the Labour Court under the Payment of Bonus Act, 1965 can

decide only matters specified in Second Schedule of the Act. Bonus appears as item 5 in the

Third Schedule. Therefore, the question of entitlement to bonus could not have been decided by

the Labour Court. It could only decide the quantum of bonus and not its pay ability. In Himalaya

Drug Co. Makali v. II Additional Labour Court, Bangalore6, some of the workmen who were

dismissed for misconduct in October 1980 claimed bonus for the accounting year ending 31st

March, 1980. The Management denied their claim on the ground that they were dismissed for

misconduct mentioned in Section 9 and, therefore, were disqualified from claiming bonus. It was

held that if a dispute regarding bonus for 3 consecutive accounting years is pending under

Section 22 of the Act, and the workman is dismissed for misconduct during the third accounting

year, it is not proper to extend the scope of Section 9 to the earlier two accounting years in which

the workmen had a clean record of service and during which period he did not incur any

disqualification as provided under Section 9 of the Act. Alternatively, if the workman commits

misconduct during the accounting year 1983-84 and if he continues to work during subsequent

accounting year 1984-85 and is dismissed at the end of subsequent year, he cannot lose the bonus

for accounting year 1984-85. Hence the omission of the words ‘accounting year’ in Section 9

does not mean that the legislature had the intention of disqualifying the workman from claiming

4. (1995) I L.L.J. 863 (Guj).5. 2008 II L.L.J. 629 (S.C.)6. (1986) II L.L.J. 45 (Karnataka).

Page 84 of 250

bonus for all the previous years or year preceding the accounting year in question or year/years

succeeding the accounting year. Section 9 should be construed harmoniously so that it should not

conflict with other beneficial provisions of the Act.

When Section 31-A was inserted in 1976 with effect from 25th September, 1975 the

Legislature must be deemed to have in view the non-obstante clause in Section 9 and therefore

the later non-obstante clause in Section 31-A overrides earlier clause in Section 9. Hence the

right of the management to forfeit bonus on the ground that the workman was dismissed from

service for misconduct, more particularly mentioned in Section 9 of the Act, would be only with

reference to the accounting year in which the said act of misconduct was committed and not with

reference to any year or years preceding or succeeding in the accounting year in question.7 In

M/s. Sriram Bearings Limited v. The Presiding Officer, Labour Court, Ranchi & others,8 a view

contrary to that expressed by Karnataka High Court in Himalaya Drug Co. Makali v. II

Additional Labour Court, Bangalore,9 has been expressed. It was held that the provisions of

Section 9 of the Payment of Bonus Act cannot be given a restricted meaning and the words “an

employee shall be disqualified from receiving bonus under the Act” cannot be read so as to mean

that the employee shall be disqualified from receiving the bonus of the accounting year only in

which he is dismissed because such disqualification is dependent only upon the order of

dismissal from service. No such restriction in Section 9 has been put by the Legislature.

Therefore, if an employee is dismissed from services, he stands disqualified from receiving any

bonus under the Act and not the bonus only of the accounting year.10 In K.L.J. Plastics Limited,

Jedimetla v. Labour Court III, Hyderabad and others11 the second respondent was the erstwhile

workman of the petitioner company and was employed as Supervisor. He was dismissed from

service for proved misconduct of riotious and disorderly behaviour of assaulting and gheraoing

Managers of the company. The Labour Court III, Hyderabad dismissed the claim of second

respondent in respect of back-wages, arrears etc. but granted the relief in respect of bonus

payable and subsistence allowance payable. The petitioner pleaded that the Labour Court’s order

was illegal being in violation of Section 9 of the Payment of Bonus Act. Allowing the petition

7. Ibid.8. (1986) II L.L.J. 459 (Patna).9 (1986) II L.L.J. 45 (Karnatka).10 M/s. Shri Ram Bearings Ltd. V. The Presiding Officer Labour Court, Ranchi & others, (1986) II L.L.J. 459

(Patna.)11. (2002) III L.L.J. 619 (A.P.)

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the High Court held that the disqualification imposed by Section 9 of the Act was clear and a

distinction could not be made between bonus payable subsequent to the order of termination and

that payable prior to it.



(a) The Act shall apply to every establishment in which (_______) persons are

employed on any day during on accounting year.

(b) An employee who has worked in an establishment for not less than (________) in

an accounting year is eligible to be paid bonus for that accounting year is eligible

to be paid bonus for that accounting year.

(c) (___________) of the salary or wages is the minimum bonus payable in the

accounting year.

(d) Maximum Bonus payable to an employee in an accounting year is (_______) of

the salary of wages.

(e) Bonus is paid within (________) from the close of the accounting year.

5.8 PAYMENT OF MINIMUM & MAXIMUM BONUS

The act requires that where an employer has any allocable surplus in any accounting year,

then he shall be bound to pay to every employee in respect of that accounting year, a minimum

bonus which shall be not less than 8.33% of the wages and salary earned by the employee during

the accounting year or rupees one hundred whichever is higher. However in case where the

allocable surplus during the accounting year shall be subjected to a maximum of 20% of such

salary or wage earned by the employee during the year.

Notwithstanding anything contained in sub-Section (1) every employer is bound to pay to

every employee in respect of the accounting year commencing from on any day a minimum

bonus as prescribed by the Act.

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For the purpose of bonus the allocable surplus shall be computed taking into account the

amount “set on” or “set off” in three immediately preceding accounting years and accounting

year in respect of which bonus is payable in the matter illustrated in the schedule.

The statutory bonus is required to be paid to all eligible employees as per provisions of

laws. However, employees are entitled to festival bonus only if there is an implied agreement in

this regard or it is paid as a customary bonus.

All employees excepting apprentice earning a wage or salary not exceeding Rs. 3500/-

per month in any establishment as specified in the schedule of the act, to do any skilled or

unskilled, manual, clerical, technical, managerial and administrative work, are entitled to bonus

under the act. However the amount of bonus payable under the act is required to be calculated on

a maximum salary of Rs. 3500/- per month.

For the purpose of calculating bonus the words salary or wages means all remuneration

including dearness allowance payable to employee. However it excludes remuneration for time

work and other allowances to which an employee is entitled.

Activity 1

State the features of the followings:

1. Powers of Inspector____________________________________________________________________

____________________________________________________________________

2. Cognizance of offence____________________________________________________________________

____________________________________________________________________

5.9 SET ON AND OFF OF ALLOCABLE SURPLUS

The amount of bonus is required to be paid to an employee within a period of eight

months from the close of accounting year. In case of any dispute regarding payment of bonus is

pending fare any authority it is required to be paid within a period of one month from which the

award becomes enforceable or the settlement becomes operational. However, the appropriate

government may grant extension to an employer in this context, if valid reasons are offered but

the total period of extension in no case shall exceed more than two years.

5.10 RECOVERY OF BONUS

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When in any accounting year an employee is found guilty of misconduct, causing

financial loss to the employer, under such circumstances, the employer is authorized to deduct

the amount of loss from the bonus payable to the guilty employee in that accounting year. Also

where an employee has not worked for all the days in accounting year, the amount of bonus

payable to him under Section 10 shall be proportionately reduced.

5.11 REFERENCE OF DISPUTES

Where any dispute crops up between the employer and employee, with respect to bonus

to be payable under this Act or with respect to the application of this Act to an establishment in

public sector then such dispute shall be deemed to be the industrial dispute within the purview of

the Industrial Disputes Act. In case of a reference of dispute under Section 22 of this Act the

machinery under the Payment of Wages Act cannot intervene. However, in case if there is no

dispute, the authority can proceed under Section 15 of the Payment of Wages Act.

The two types of disputes covered under Section 22 are as under:

(i) dispute with respect to the bonus payable under the Act and

(ii) with respect to application of the Bonus Act.

A dispute raised by an individual workman with regard to payment of bonus cannot be

considered as industrial dispute within purview of the Bonus Act. However the aggrieved

employee can get the dispute redressed by referring it to the labour court under Section 33C(2) of

the I.D. Act.

5.11.1 PENALTY FOR OFFENCES

If any person contravenes any of the provisions of this act or to whom a direction is given

or a requisition is made fails to comply with the direction, he is punishable with imprisonment

for a term which may extend to six months or with fine which may extend to one thousand

rupees or both.

5.11.2 MAINTENANCE OF RECORDS

It is statutory obligation on the part of employer to maintain register in the prescribed

forms showing respectively the computation of the allocable surplus and the disbursement of the

bonus to the employees and other accounts as prescribed under the Act. Any employer who

contravenes the provisions of the Act shall be liable for punishment.

5.12 INSPECTORS

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1. The appropriate Government may, by notification in the Official Gazette, appoint such

persons as it thinks fit to be Inspectors for the purposes of this Act and may define the limits

within which they shall exercise jurisdiction.

2. An Inspector appointed under sub-section (1) may, for the purpose of ascertaining

whether any of the provisions of this Act has been complied with:

a. require an employer to furnish such information as he may consider necessary;

b. at any reasonable time and with such assistance, if any, as he thinks fit, enter any

establishment or any premises connected therewith and require any one found in

charge thereof to produce before him for examination any accounts, books,

registers and other documents relating to the employment of persons or the

payment of salary or wage or bonus in the establishment;

c. examine with respect to any matter relevant to any of the purposes aforesaid, the

employer, his agent or servant or any other person found in charge of the

establishment or any premises connected therewith or any person whom the

Inspector has reasonable cause to believe to be or to have been an employee in the

establishment;

d. make copies of, or take extracts, from any book, register or other documents

maintained in relation to the establishment; and

e. exercises such other powers as maybe prescribed.

3. Every inspector shall be deemed to be public servant within the meaning of Indian

Penal Code (45 of 1860).

4. Any person required to produce any accounts, book, register or other document or to

give information by an Inspector under sub-section (1) shall be legally bound to do so.

5. Nothing contained in this section shall enable an inspector to require banking company

to furnish or disclose any statement or information or to produce, or give inspection of, any of its

books of account or other documents, which a banking company cannot be compelled to furnish,

disclose, produce or give inspection of, under the Provisions of Section 34A of the Banking

Regulation Act, 1949 (10 o 1949).

5.13 COGNIZANCE OF OFFENCES

1. No Court shall take cognizance of any offence punishable under this Act, save on

complaint made by or under the authority of appropriate Government or an officer of that

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Government (not below the rank of a Regional Labour Commissioner in the case of an officer of

the Central government, and not below the rank of a Labour Commissioner in the case of an

officer of the State Government) specially authorised in this behalf by that Government.

2. No Court inferior to that of a presidency magistrate or a magistrate of the first class

shall try any offence punishable under this Act.

5.13.1 Protection of action taken under the Act

No suit, prosecution or other legal proceeding shall lie against the Government or any

officer of the Government for anything which is in good faith done or intended to be done in

pursuance of this Act or any rule made there under.

5.13.2 Extension of the Liability of Employers

The obligation to pay the salary of the employees is co-extensive with obligation to settle

the dues of those employees who leave, retire or resign and long as a liability is outstanding

against the publication, it will have to be discharged by the management regardless of the point

of time when it assumed office, aspect of giving notice to the employees is irrelevant and of no

consequence because a statutory liability as one to pay taxes or to pay bonus under the Payment

of Bonus Act is legal duty from which one cannot be absolved merely by giving notice.

Activity 2

Distinguish between the followings:

Payment of Minimum Bonus Payment of Maximum Bonus

5.13.3 Effect of Laws and Agreements Inconsistent with the Act

Subject to the provisions of Section 31A, (Special provision with respect to payment of

bonus linked with production or productivity), provisions of this apply notwithstanding anything

inconsistent contained in any other law for the being in force or in the terms of any award,

agreement, settlement or contract service.

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But nothing contained in this Act shall be deemed to affect the provisions of the Coal

Mines Provident Fund and Bonus Scheme Act, 1948 (46 of 1948) or of any schemes made

thereunder.

5.13.4 Power of Exemption: If the appropriate Government, having regard to the financial

position and other relevant circumstances of any establishment or class of establishments, is of

opinion that it will not be in public interest to apply all or any of the provisions of this Act

thereto, it may, by notification in the official Gazette, exempt for such period as may be specified

therein and subject to such conditions as it may think fit to impose, such establishment or class of

establishments from all or any of the provisions of this Act.

By Section 36, the appropriate Government is invested with power to exempt an

establishment or a class of establishment from the operation of the Act, provided the

Government is of opinion that having regard to the financial position and other relevant

circumstances of the establishment it would not be in public interest to apply all or any of the

provisions of the Act. Condition for exercise of the power is that the Government holds opinion

that it is not in the public interest to apply all or any of the provisions of the Act to an

establishment or class of establishments; and that opinion is founded on a consideration of the

financial position and other relevant circumstances. Parliament has clearly laid down principles

and has given adequate guidance to the appropriate Government in implementing the provisions

of Section 36. The power so conferred does not amount to delegation of legislative authority.

Section 36 amounts to a conditional legislation and is not void. Whether in a given case power

has been properly exercised by the appropriate Government would have to be considered when

that occasion arises.

But Section 37 which authorised the Central Government to provide by order for removal

of doubts or difficulties in giving effect to the provisions of the Act delegates legislative power

which is not permissible. Condition of the applicability of Section 37 is the arising of the doubt

or difficulty in giving effect to the provisions of the Act. By providing that the order made must

not be inconsistent with the provisions of the Act, Section 37 is not saved from the vice of

delegation of legislative authority. Consequently, the section was omitted by the Payment of

Bonus (Amendment) Act, 1976 w.e.f. 25.9.1975.

5.13.5 Application of Certain Laws not Barred

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Save as otherwise provided, the provisions of this Act are declared to be in addition to

and not in derogation of the Industrial Disputes Act 1947 or any corresponding law relating to

investigation and settlement of industrial disputes in force in a State. Section 39 of the Payment

of Bonus Act, expressly saves the application of the provisions of the Industrial Disputes Act to

such claims by declaring that the provision of the Payment of Bonus Act shall be in addition to

and not in derogation of the Industrial Disputes Act. Section 33-C(2) of the Industrial Disputes

Act must therefore be held applicable to such claims inasmuch as no provision of the Industrial

Disputes Act expressly provides otherwise. In other words, the provision contained in Section

33-C(2) cannot be deemed to be excluded by necessary implication or by any fiction of law.12

5.13.6 Rule-making Power of the Central Government

The Central Government may make rules for the purpose of carrying into effect the provisions of

this Act.

(1) In particular, and without prejudice to the generality of the foregoing power, such

rules may provide for:

(a) the authority for granting permission under the proviso to sub-clause (iii) of

clause (1) of Section 2;

(b) the preparation of registers, records and other documents and the form and

manner in which such registers, records and documents may be maintained

under Section 26;

(c) the powers which may be exercised by an Inspector under clause (e) of sub-

section (2) of Section 27; and

(d) any other matter which is to be, or may be, prescribed.

(2) Every rule made under this section shall be laid as soon as may be after it is made,

before each House of Parliament while it is in session for a total period of thirty

days, which may be comprised in one session or in two or more successive

sessions and if before the expiry of the session immediately following the session

or the successive sessions aforesaid both Houses agree in making any

modification in the rule or both Houses agree that the rule should not be made, the

rule shall thereafter have effect only in such modified form or be of no effect, as

12. Anand oil Industries v. Labour Court, Hyderabad, AIR 1979 AP 182.

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the case may be, so, however, that any such modification or annulment shall be

without prejudice to the validity of anything previously done under that rule.


II. True / False

(a) The claim for bonus can be made only after the close of the accounting year.

(b) Bonus is regarded as a gradations payment by an employer to his employee.

(c) Bonus motivates employees towards contributing their best efforts in the industry

employed in.

(d) Bonus payment is a statutory obligation.

(e) Wages include any bonus including incentive, production and attendance bonus.

5.15 SUMMARY

The payment of Bonus Act provides for the payment of bonus to persons employed in

certain establishment on the basis of profits or on the basis of production or productivity. The

Act is applicable to establishments employing 20 or more persons. The minimum bonus that an

employer is required to pay even if he suffers losses during the accounting year is 8.33% of the

salary. The law pays down clear provisions for the computation of bonus. The schedules of the

Act have details for the determination of bonus based on such computation. The labour

inspectors and commissioners enforce the law and award penalties as prescribed in the Act. The

Penalty involves both imprisonment upto 6 months and a fine of upto Rs. 1000.

5.16 GLOSSARY

1. Bonus: It is a cash payment made to employees in addition to wages.

2. Customary Bonus: Festival Bonus, Puja Bonus or other customary bonus paid by

employer to an employee.

3. Interim Bonus: The employer paid a part of the Bonus payable before the date on

which such bonus becomes payable.

4. Recovery of Bonus: Any money which is due to an employee by way of bonus

from his employer can be claimed.

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(a) 20 or more(b) 30 working days(c) 8.33%(d) 20%(e) 8 months


(a) True(b) False(c) True(d) True(e) False





Ltd., New Delhi.


4. Bare Acts, The Payment of Bonus Act, 1965

5.19 REFERENCES

1. Mill Owners’ Association, Bombay v. Rashtriya Mill Mazdoor Sangh, L.L.C.,

1952, 423.

2. 1970, 2, L.L.J. 91, Madras.

3. Gopalan v. Anagamali Chit Fund, A.I.R. 1977, Kerala, 120.

4. Gopalan v. Anagamali Chit Fund, A.I.R. 1977, Kerala, 120.

5. J.B.K. Panchayat v. J. E. Supply Co., A.I.R. 1972, S.C. 70.

6. Labour Inspector v. Authority, Payment of Wages Act, (1976), I. LLJ, 511, M.P.

7. Anand Oil Industries v. Labour Court, Hyderabad, A.I.R., 1973, A.P. 182.


Page 94 of 250

1. Explain the scope and application of payment of Bonus Act, 1965.

2. State the computation of Bonus provided under the Act alongwith the deductions

given under it.

3. Write the powers of the Inspectors in relation to the enforcement of law.

4. State the provisions relating to Bonus with ‘Set on’ or ‘set off’ scheme.

5. Explain the meaning and objectives of the payment of Bonus Act, 1965.

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LESSON – 6

The Workmen’s Compensation Act, 1923

Structure


6.1 Introduction


6.3 Applicability of the Act

6.4 Salient Features of the Act

6.5 Definitions

6.6 Employer’s Liability for Compensation

6.7 Amount of Compensation

6.8 Commissioners

6.9 Summary

6.10 Glossary






To know the object and application of the workmen’s Compensation Act, 1923

To know the employer’s liability for compensation

To know the Powers and Procedure of Commissioners

6.1 INTRODUCTION

The problem of labour management relations is so important that some sort of social

insurance is necessary to provide adequate protection from losses caused to the labouress by

accidents. This workmen’s Compensation Act was passed in 1923 to improve the conditions of

the workers. Since then a number of amendments have been made from time to time so as to suit

the changing needs and conditions of the workmen.


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The object of the Act was to make provisions for the payment of compensation by certain

class of employers to their workmen for injury by accident. The reasons were the growing

complexity of industry with the increasing use of machinery and consequent danger to workmen

along with the comparative poverty of workman. All this rendered it advisable to provide

protection as far as possible from hardships arising from accidents.

6.3 APPLICABILITY OF THE ACT

The Act extends to the whole of India except the State of J&K. It applies to workmen of

certain industries. It affords protection to a workman from loss or injury caused by accident

arising out of and in the course of his employment. Prior to the introduction of workmen’s

Compensation Act, 1923, the employer was liable to compensation for injury of workmen only if

the employer was proved guilty of negligence. But inspite of that the employer could get rid of

the liability by using any of the following defence:

The doctrine of assumed risks

The doctrine of common employment

The doctrine of contributory negligence


The salient features of the Act are:

1. The payment of compensation has been made obligatory on all employers whose

employees are entitled to claim benefit under the Act.

2. The workmen or his dependants may claim compensation if the injury has been caused

by accident arising out of and in the course of employment and in case of injury not resulting in

death if such accident cannot be attributed to the workman having been at the time of accident

under the influence of drink or drugs or if it is not caused due to willful disobedience of rule or

orders or disregard of safety devices.

3. The various classes of workmen have been specified in the definition of “Workman” in

section 2(i)(n) and in Schedule II.

4. The amount of compensation payable depends in case of death on the average monthly

wages of the decreased workman and in case of an injured workman both on the average

monthly wages and the nature of disablement.

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5. All cases of fatal accident are to be brought to the notice of the commissioner and if

the employer admits his liability the amount of compensation payable is to be deposited with the

commissioners.

6. The Act is administered by the commissioner for workmen’s compensation appointed

by the State Government.

6.5 DEFINITIONS

“Partial Disablement” means, where the disablement is of a temporary nature, such

disablement as reduces the earning capacity of a workman in any employment in which he was

engaged at the time of the accident resulting in the disablement, and where the disablement is of

a permanent, nature, such disablement as reduces his earning capacity in every employment

which he was capable of undertaking at that time provided that every injury specified in Part II

of schedule I shall be deemed to result in permanent partial disablement: [Section 2 (1-g)]

Total disablement and Partial Disablement: The partial or total disablement as defined in

the Act means disablement which reduces the earning capacity of workman, injury caused to

workman by an accident resulting in the loss of earning capacity is technically called

disablement. Disablement, whether permanent or temporary is said to be total when it

incapacitates a workman for all work he was capable of doing at the time of accident in such

disablement.

The test of such disablement is the reduction in the earning capacity, of a workman, if the

earning capacity of the workman is reduced in relation to the employment; he had been at the

time of the accident resulting in such disablement; it is temporary partial disablement, if the

injury caused by an accident results in the reduction of earning capacity in every employment

which such workman was capable of under the time of accident. It is permanent partial

disablement.

“Wages” includes any privilege or benefit which is capable of being estimated in money,

other than a travelling allowance or the value of any travelling concession or a contribution paid

by the employer of a workman towards any pension or provident fund or a sum paid to a

workman to cover any special expenses entailed on him by the nature of his employment

[Section 2-1, (m)].

6.5.1 Privilege or Benefit: The following privileges and benefits are included in the wages:

(i) Free Accommodation.

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(ii) Maternity benefit payable to a woman delivering a child.

(iii) Deamess allowance

(iv) Overtime pay

(v) Benefits in the form of food or clothing.

(vi) Value of any other concessions, benefits or privileges capable of being estimated

in money.

(vii) Gratuity payable to a workman on retirement

(viii) Bonus earned on the date of accident.

NOTE: The following are not wages:

(a) Travelling allowance:

(b) Contribution paid by the employer of a workman works:

(i) Any pension, or

(ii) Any provident Fund.

(c) Sums paid to a workman to cover any special expenses entailed on him by nature

of employment and

Activity 1

State the various provisions and benefits under the Act:

1.____________________________________________________________________

____________________________________________________________________

2.____________________________________________________________________

____________________________________________________________________

6.6 EMPLOYER'S LIABILITY FOR COMPENSATION

According to section 3, the liability of an employer to pay compensation is limited and is

subject to the provisions of the Act under Clause 1 of section 3, his liability to pay compensation

18 dependent upon the following conditions:

(1) Personal injury to the workman;

(2) Injury must have been caused by accident;

(3) The accident must have been arisen out of and in the course of employment; and

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(4) The injury must have been resulted in the workman's death or permanent or

temporary total or partial disablement.

The employer shall not be liable to pay compensation in the following:

(1) In respect of .any injury which does not result in the total or partial disablement of

the workman for a period exceeding 3 days. .

(2) In respect of any injury not resulting in death, caused by an accident which is

directly attributable to:

(a) That the workman having been at the time thereof under influence of

drinks or drugs:

(b) The willful disobedience of the workman, to an order expressly given or to

a rule expressly framed for the purpose of securing the safety of workman;

(c) The willful removal or disregard by the workman or any safety or other

device which he knows to have been provided for the purpose of security

the safety of workman.

The employer can succeed In his plea if he can prove that the injury was directly-

attributable to any one of the above factors. But if the workman dies on account of such injury,

the employer is liable to pay compensation in spite of the above exceptions.

6.6.1 ARISING OUT OF AND IN THE COURSE OF EMPLOYMENT

The expression “arising out of suggests the cause of accident and the expression in the

course of suggests the time as well as the place of employment”. A causal connection or

association between the injury by accident and employment is necessary. “Arising out of

employment” does not mean that personal injury must have been resulted from the mere nature

of employment and is not limited to cases where the personal injury is referable to the duties

which the workman has to discharge.

The words “arising out of employment are understood to mean during the course of

employment injury has resulted from some risk incidental to the duties, the services which unless

engaged in the duty owing to the master it is reasonable to believe that the workman would not

otherwise have suffered.

There must be some causal relationship between the accident and the employment. The

words “arising out of his employment” were wide enough so as to cover a case where there may

not necessarily be direct connection between the Injury caused as result of an accident and the

Page 100 of 250

employment of workman concerned. It was observed that there may be circumstances attending

the employment which would go to show that the workman received personal injuries as a result

of the accident arising out of his employment.

A bomb placed in the premises of workshop by some unknown person, exploded and

caused injury to a workman. It was held that the workman was not responsible for placing the

bomb and injury caused due to its explosion was at a time and place which he was employed.

In State of Rajasthan v. Ram Prasad and another,1 the workman died due to natural

lighting while working at the site. It was held by the Supreme Court that in order that a workman

may succeed in his claim for compensation it is no doubt true that the accident must have causal

connection with the employment and arise out of it but if the workman is injured as a result of

natural force of lightning though it in itself has no connection with employment of deceased Smt.

Gita, the employer can still be held liable if the claimant shows that the employment exposed the

deceased to such injury. In the present case the deceased was working on the site and would not

have been exposed to such hazard of lightning had she not been working so. Therefore the

appellant was held liable to pay compensation.

In R.B. Moondra and Co. v. Mst. Bhanwari,2 the deceased was employed as a driver on

the appellant’s truck used for the purpose of carrying petrol in a tank. On the previous day he had

reported to his employer that the tank was leaking and so water was put in it for detecting the

place from where it leaked. The next morning the deceased was asked by the appellant to enter

the tank to see from where it leaked. Accordingly, he entered the tank which had no petrol in it

and for the purpose of detecting the leakage he lighted a match stick. The tank caught fire and

the deceased received burn injuries and later on succumbed to death. In this case it was

contended that the workman has himself added to his peril by negligently and carelessly lighting

a match stick inside the petrol tank. It was held that the accident arose out of employment and

the act of lighting the match stick even if rash or negligent would not debar his widow from

claiming compensation. If the act leading to the accident was one within the sphere of

employment or incidental to it or in the interest of the employer, then the accident would be said

to arise out of and in the course of employment and the plea of added peril would fail. In this

case the deceased did something in furtherance of his employer’s work when the accident

1. (2001) I L.L.J. 177 (SC).2. A.I.R. 1970 Raj. III.

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occurred although he was careless or negligent inasmuch as he lighted the match stick instead of

using a torch to detect the leakage. But because the tank was empty and was partly filled with

water on the previous night, he could not have little reason to foresee the risk involved.

In National Iron and Steel Co. Ltd. v. Manorama,3 a boy was employed by the appellant

in a tea shop and it was part of his duty to take tea from the shop which was situated outside the

factor gate to various persons working in the factory. One day when the boy was coming out of

the factory after serving the tea to the workers he passed through a violent mob of factory

workers who were leaving the factory. This mob attached the police and the police had to fire

upon the mob in self-defence. Unfortunately, the boy was severely wounded by a bullet injury

and died the following day in the hospital. The mother of the boy claimed compensation. It was

held that the accident arose in the course of employment and death occurred because of the risk

to which he was exposed by the nature of his employment.

In Public Works Department v. Kaunsa4 Gokul, a gang Jamadar while going to collect

salary of the labourers from the office of the Public Works Department was murdered in the way

at a place on which he sat down to take his meals near a well. He was found dead at a

considerable distance from the place where other members of his gang were actually working on

the road. Applying the principle laid down in Trustees of the Port of Bombay case the court held

that the death of Gokul was an accident arising out of his employment because the accident

would not have happened if he had not been engaged in that employment. In this case the

accident arose because of the nature of employment that exposed him to some particular danger.

The employer's duty to his servants is to take reasonable care for their safely. Safety

means the safety of the premises and the plant and to the method and conduct of the work. Their

duty is to take reasonable steps to avoid exposing the servant to a reasonable risk of injury.5

Thus, where under the rules of the Company nobody was allowed to graze cattle inside the mill

premises but the wife of a worker of the Company attempted to graze her cattle inside the

premises. The watchman asked her not to graze inside the premises. This infuriated her husband

who assaulted the watchman, resulting in his disablement. It was held that the injury of the

watchman arose out of employment and in the course of enforcing the rules, therefore, he is

3. A.I.R. 1953 Cal. 143.4. (1967) I L.L.J. 344 (M.P.)5. Tremain v. Pike, (1970) I Kni. Ind. Rep. 318.

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entitled to get compensation.6 Chairman Madras Port Trust, Madras v. Kamala7 it was held that

fetching food is part of employee's duty. Therefore, accident to an employee while fetching food

is in the course of employment.

In Jyothi Ademma v. Plant Engineer, Nellore,8 the deceased workman was suffering from

heart disease. His job was only to switch on or off in the thermal station where he was employed.

The Supreme Court observed that there was no scope for any stress or strain in his duties. His

death due to heart attack was, therefore, rightly held as not caused by accident arising out of and

in the course of his employment. Therefore, the judgment of the High Court holding the

appellant not entitled to compensation for death of her husband was affirmed by the Supreme

Court though the amount already paid to the appellant was directed not to be recovered from her.

In Imperial Tobacco Co. (India) Ltd. v. Sal.ona Bibi,9 a workman who suffered from high

fever was recommended two days leave by the doctor. When he returned on the third day the

doctor found him suffering from malaria and Broncho pneumonia. He was again granted three

clay's leave. After expiry of the leave when he came in a riskshaw to report to the doctor, his

condition was so serious that he had to be taken upstairs to the dispensary in a stretcher. The

doctor found him in a almost dying condition and, therefore, hastened to administer injection but

he died after a few minutes. It was held that, “as the stress and strain of the journey was

responsible for causing or precipitating the workman’s death, there was an accident arising out of

and in the course of employment.”

In Kamla Bai v. Divisional Superintendent Central Railway, Nagpur,10 deceased, the

appellant’s husband was a goods train driver. While on duty he collapsed and died. He took rest

at intermediate stations. He died while talking to the guard at wayside station who gave red

signal to stop the train. It was held that the death of the driver was an accident in the sense that it

was unexpected without there being any design on the part of the workman. But in order to see

whether the accident was one arising out of and in the course of employment it has to be seen

whether there is unequivocal evidence that the workman died because of particular strain during

the course of his duties. The fact that the workman died a natural death because of a disease from

which he was suffering and that he died on account of normal wear and tear of his employment

6. Management of Sri Sabari Mills Ltd. v. M. Kulandai (1984) I L.L.J. 254 (Mad.).7. A.I.R. 1970 Mad. 3868. 2006 III L.L.J. 324 (S.C.)9. A.I.R. 1956 Cal. 458.10. (1971) I L.L.J. 603 (Bom).

Page 103 of 250

are not sufficient to entitle the claimant to the compensation. It must also be proved that the

deceased not only died because of the heart disease (as reported in this case) from which he was

suffering but also because of some contributing cause on account of his employment or his duties

which he was performing. In the present case it was held that there was no evidence to show any

causal connection between death of the workman and his employment. In Devshi Bhanji Khona

v. Mary Burno,11 it was held that where the death of a workman takes place due to heart attack

while carrying a load, the death shall be deemed to have arisen out of and in the course of

employment. There is causal connection between the death and employment.

In Shakuntala Chandrakant Shreshti v. Prabhakar Maruti Garveli and Another, 12 the

appellant was the mother of a workman (cleaner in motor vehicle). The workman died of cardiac

arrest while travelling in the vehicle. The Commissioner for Workmen's Compensation granted

compensation. On appeal, the High Court held the conclusion that workman died as a result of an

accident during course of employment was not sustainable. Hence this appeal was filed before

the Supreme Court.

The Supreme Court dismissing the appeal held that there must be causal connection

between injury and accident occurring in course of employment and the onus was on the

applicant to show strain resulted from work. It was further observed that unless evidence was

brought on record that death of workman by way of cardiac arrest had occurred because of stress

or strain (which was held not proved in this case) the Commissioner would not here jurisdiction

to grant damages.

In Divisional Manager, United India Insurance Co. Ltd. v. Shanmuga Mudaliar T. and

others,13 a person was employed as a driver of the bus belonging to Shanmuga Mudaliar T. He

died of heart failure at a bus stop where he stepped out to have refreshments. His widow claimed

compensation which was awarded by the Commissioner for Workmen’s Compensation against

the insured employer and not the Insurance Company. In appeal filed by the employer, the

learned Single Judge of the High Court held that the Insurance Company and employer both are

jointly and severally liable to pay compensation. And therefore, two appeals were filed, one by

the Insurance Company and the other by the employer. It was held by the Division Bench of the

High Court that the connection between accident and employment might be established if the

11. (1985) II L.L.J. 70 (Ker).12. 2007 I L.L.J. 474 (S.C.)13. (2003) I L.L.J. 776 (Mad.)

Page 104 of 250

strain had contributed to or accelerated the accident. If probabilities were in favour of the

applicant, then the Commissioner for Workmen’s Compensation was justified in inferring that

the accident arose out of and in the course of the employment. In this case there could be no

dispute that the driver died in the course of his employment since there was no occasion for him

to be at Tiruvannamalai bus stand (where he died) unless he had been driving the bus. The death

was capable of being attributed to the strain ordinarily inherent in the discharge of his duty.

In M/s. J.D. and Co. Mills, v. E.S.I. Corporation,14 the mechanic and fitter employed to

disconnect the crushing machine from the rest of the moving machinery was absent from the

premises. The crushing machine was running without any business. A workman who was an

unskilled worker and whose duty was to feed the oil mill by pouring groundnut seeds into

erasing machine, kicked of the moving pulley to stop the running of the crushing machine. His

leg got caught between the pulley and the belt. He was pulled up to a height of about six feet

from where he fell down and died instantaneously. The accident was held to have arisen out of

and in the course of employment because the employer was guilty of negligence in not

complying with safety rules and whatever the deceased workman did was in the interest of the

employer and in order to prevent the machine from getting damaged thereby resulting in loss to

the employer.

In Bai Shakri v. New Manekchowk Mills Company Ltd.,15 the deceased was employed in

the weaving department of a mill. His duty hours commenced from 3 p.m. Before starting his

work he had gone to see a friend in another department. There he suffered a heart attack at 3.20

p.m. and was admitted in a hospital as an indoor patient for about a month. Then he left his

employment and died after sometimes. It was held that “it could not be said that the workman

died as a result of the injury caused by accident arising out of and in the course of his

employment”. The following principles were laid down in this case:

(1) There must be a causal connection between the injury and the accident and the

work done in the course of employment.

(2) The onus is upon the applicant to show that it was the work and the resulting

strain which contributed to or aggravated the injury.

14. A.I.R. 1963 A.P. 210.15. (1961) 1. L.L.J. 585.

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(3) It is not necessary that the workman must be actually working at the time of his

death or that death must occur while he is working or had just ceased to work.

(4) 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.

On a perusal of the above cases the following test may be suggested to determine whether

the accident has arisen out of and in the course of employment:

(1) That the workman was in fact employed on or performing the duties of his

employment at the time of the accident.

(2) That the accident occurred at or about the place where he was performing his

duties.

(3) That the immediate act which led to or resulted in accident had some form of

casual relation with the performance of these duties.

Therefore, the injury was the result of an accident arising out of his employment.



(a) (_______________) is not the same as earning capacity.

(b) There is difference between a ‘contract of service’ and a ‘contract (____) service.’

(c) An employer is liable to pay compensation to his workman if he suffers (______).

(d) An accident using transport facility provided by employer is considered to be

(________) under the Act.

6.7 AMOUNT OF COMPENSATION

Section 4 states that in determining the amount of compensation regard, must be had to

the nature of injury, in order to ascertain the amount of compensation average monthly wages of

the workman are to be worked out and thereafter total sum pay blame is ascertained according to

the provisions of Section 4. The injury has been divided into four heads:

1. Death

2. Permanent total disablement

3. Permanent partial disablement.

4. Temporary disablement whether total or partial

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6.7.1 COMPENSATION IN CASE OF DEATH: In case injury resulting in death, the

amount of compensation is determined by making a reference to Schedule IV shall be an amount

equal to forty percent of monthly wages of deceased workman multiplied by the relevant factor.

6.7.2 COMPENSATION IN CASE OF PERMANENT TOTAL DISABLEMENT: Where

permanent total disable results from an injury, the amount of compensation shall be an amount

equal to fifty percent of the amount of wages of Injured workman multiplied by the relevant

factor.

6.7.3 TYPE OF DISABLEMENT: (A) Partial disablement: Disablement, In ordinary

language, means loss of capacity to work or move. Such incapacity may be partial or total and

accordingly there are two types of disablement, partial and total in the Act both types of

disablement are further subdivided in to two classed, temporary and permanent, By section 2 (g)

(b) Temporary Partial Disablement means such disablement as reduces the earning capacity in

every employment he was capable of undertaking at that time. The Act is not limited only to

physical capacity of disablement, but extends so the reduction of earning capacity as well.

In a case of Partial Disablement it is necessary that (a) there should be an accident; (b) as

a result of the accident the workman should suffer injury, (c) which should result in permanent

disablement and (d) as a result where of his earning capacity has been decreased permanently he

is entitled to compensation.

Examples: (From Schedule 1)

Description of injury Percentage loss of earning capacityLoss of both hands 100Severe facial disfigurement 100Absolute deafness 100Loss of thumb 30Loss of one eye 40Middle finger of left hand (whole) 14

The medical evident showing loss of physical capacity is a relevant factor but it is

certainly not the decisive factor as to the toss of earning capacity. It is the loss of earning

capacity that has to be determined.

The type of disablement suffered is to be determined from the facts of the case. But it is

provided that every injury specified in schedule-I to the Act shall be deemed to result in

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permanent partial disablement. The schedule also mentions the percentage loss of earning

capacity which is to be persumed in each such case.

6.7.4 Total Disablement: According to Section 2 (1) total disablement means such

disablement whether of a temporary or permanent nature, as incapacitates a workman for all

work which he was capable of performing at the time of the accident resulting in such

disablement, provide that permanent total disablement shall be deemed to result from the

permanent total loss of the sight of both eyes or from any combination of injuries specified in

schedule 1, where the aggregate percentage of the loss of earning capacity as specified in that

schedule against those injuries, amount to one hundred percent.

6.7.5 Occupational Diseases: Persons employed in certain occupations are liable to be

attacked by certain diseases. For example, a person engaged an employment involving exposure

to dust containing silica is liable to contract silicosis, telegraph opened liable to have what is

called Telegraphist’s Cramp, such diseases are known as Occupational Diseases. Schedule ill to

the workmen’s Compensation Act contains a list of occupational disease divided into three parts,

Part A, Part B and Part C. Part A included Anthrax Compressed Air Sickness. Poisoning by lead

Tetraenthyl and nitrous fumes. Part B includes poisoning by lead compounds, phosphorus,

mercury etc., cancer of the skin, telegraphist’s cramp etc. Part C includes Silicosis. Asbestosis

etc.

When is employer not liable to pay compensation: Section 3 of the Act provides that the

employer, is not liable to pay compensation in the following cases:

(a) in respect of any injury which does not result in the total or partial disablement of

the workman for a period exceeding three days;

(b) in respect of any injury not resulting in death. caused by an accident which is

directly attributable to:

(i) the workman having been at the time there of under the influence of drink

or drugs, or;

(ii) the willful disobedience of the workman to an order expressly given, or to

a rule expressly framed, for the purpose of securing the safety of workman

or;

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(iii) the willful removal or disregard by the workman of any safety guard of

other device which he knew to have provided for the purpose of securing

the safety of workmen.

Activity 2

Distinguish between the followings:

Permanent Total Disablement Permanent Partial Disablement

6.7.6 CALCULATION OF MONTHLY WAGES (Section-5): The amount payable to the

injured employee is to be determined from the amount of his average monthly wages. What

constitutes such wages is a question of fact that requires consideration to be given to numerous

circumstances; such as absence from work, duration and continuity of employment,

remuneration in addition, to regular wages; and the existences of concurrent employments.

Specific methods for ascertaining such average monthly wages are prescribed in Sec. 5, as

follows.

The expression “monthly wages” means the amount of wages deemed to be payable for a

month’s service (whether the wages are payable by whatever other period or at piece rates).

6.7.7 DISTRIBUTION OF COMPENSATION (Section B): Where an adult male worker

has been totally or partially disabled by an injury the employer may either pay the compensation

to the worker or deposit it with the commissioner, who will then pay to the worker.

On the deposit of the compensation money, the Commissioner shall distribute it among

the dependants of the deceased workman in any proportion as he thinks fit or may even allot it to

anyone dependant. If he is satisfied that no dependants exists, the commissioner shall repay the

money to the employer by whom it was deposited. Where the amount is payable to a woman or a

person under a legal disability, such sum may be invested otherwise death with for the benefit of

such woman or person under legal disability.

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6.7.8 FATAL OR SERIOUS ACCIDENTS: Section 10 A and 10 B provide that all cases of

fatal accidents of serious bodily injury should be brought to the notice of Commissioner within 7

days of the death or the serious injury and the circumstances attending the death. Default to give

notice x is punishable with fine up to Rs. 500.

6.7.9 MEDICAL EXAMINATION (Section 11): A workman who has given notice of

accident must, if the employer wishes submit, himself for medical examination by a duly

qualified medical man provided and paid for by the employer. If he refuses to do so, or obstructs

the examination, his right to receive compensation or to take proceedings la recover it are

suspended until he complies.

6.7.10 CONTRACTING OUT (Section 12): Any contract or agreement whether made before

or after the commencement of this Act, whereby a workman relinquishes any right of

compensation from the employer for personal injury arising out of and in the course or the

employment shall be null and void in so far as it purports to remove or reduce the liability of any

person to pay compensation under this Act.

Section 13 provides that where a third party was responsible for the accident the

employer may recover from that third party any compensation he has paid to his workman, in

addition to any other damages he may be able to claim.


II. True / False

(a) This Act extends to the whole of India except the State of Jammu and Kashmir.

(b) A causal connection between the injury and the accident is not essential.

(c) Accident means any unintended and unexpected occurrence, which produces hurt

on loss.

(d) Contributory negligence is a ground for reducing the amount of compensation

under the Act.

6.8 COMMISSIONER

The Act is administered on a State basis by the Commissioners for Workmen’s

“Compensation appointed by the State Governments, in Madras, West Bengal and Bihar the

duties of the Commissioners are being discharged by Labour Commissioners. The Government

of Maharashtra has appointed on Commissioner of the more important areas and for other areas

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it has declared sub-judges to be ex-officio Commissioners. In other States either the district

Magistrates or the District and Sessions Judges discharge the duties of the Commissioners under

the Act.

The duties of the Commissioner include the settlement of disputed claims, disposal of

compensation in cases where injury results in death, or where deposit is made because the

claimant is a woman or a person under legal disability, and the revision of periodical payments.

An appeal shall lie to the High Court from the orders of a Commissioner.

6.9 SUMMARY

India’s first social security legislation was passed in 1923. The workmen’s compensation

Act was to provide injury compensation to industrial workers. The Act imposes obligation on the

employer to pay compensation for accidents arising out of and in course of employment. The

compensation is related to the extent of the injury or circumstances of death. However, the

employee cannot claim compensation if he sustains injuries under the influence of drugs, alcohol

etc. The Act is administered by a commissioner appointed by the government. The employee is

required to pay compensation whenever if becomes due, if he does not pay within one month

from the date it fell due, the commissioner may order recovery of not only the amount of arrears

but also a simple interest at the rate of six percent per annum on the amount due.

6.10 GLOSSARY

1. Accident: It means an unexpected event happening without any design through

there may be negligence on the part of the person who causes it.

2. Workman: means any person other than a person whose employment is of a

casual nature and who is employed otherwise than for the purposes of the

employer’s trade or business.



(a) Earning(b) For(c) Personal Injury(d) An accident


(a) True

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(b) False(c) True(d) False






3. S.N. Misra, 1970, Labour & Industrial Laws, Central Law Publications,

Allahabad.

4. Bare Acts, The workmen’s Compensation Act, 1923.


1. Explain the main provisions of Workmen’s Compensation Act, 1923.

2. State the employer’s liability for compensation under the workmen’s

compensation Act. Are there any exceptions to the liability?

3. A person died while working on an electricity pole. The work was submitted by

the Electricity Department to a contractor. Who should pay the compensation to

the dependents of the dead?

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LESSON – 7

The Maternity Benefit Act, 1961

Structure


7.1 Introduction

7.2 Objectives

7.3 Application of the Act

7.4 Salient Features of the Act

7.5 Maternity Benefit and other Benefits

7.6 Inspector, his powers and Duties

7.7 Penalty

7.8 Cognizance of offences

7.9 Govt.’s power to make rules

7.10 Summary

7.11 Glossary






To know the objectives of this Act.

To know the maternity benefits

To know the penalty for contravention of the Act

7.1 INTRODUCTION

Motherhood is the most natural phenomena in the life of a woman. The Maternity

Benefits Act, 1961 aims to provide all the facilities to a working woman in a dignified manner,

so that she may overcome the state of motherhood honourably, peacefully and with undeterred

manner. The employer must realize the physical difficulties which a working woman would face

in performing her duties at the work while carrying a baby in the womb or while rearing up the

child after birth.

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7.2 OBJECTIVES

The objective of the Maternity Benefits Act, 1961 is:

1. to regulate the employment of women in certain establishments for certain period

before and after child-birth; and

2. to provide for maternity benefit and certain other benefits.

7.3 APPLICATION

It applies in the first instance:

(a) to every establishment which is a factory, mine or plantation, including any such

establishment belonging to government.

(b) To every shop or establishment within the meaning of any law for the time being

in force in relation to shops and establishments in a state, in which ten or more

persons are employed or were employed on any day of the preceding 12 months.

Save nothing contained in this Act shall apply to any factory or other establishment to

which the provisions of Employees’ State Insurance Act, 1948 apply.

Proviso to this section empowers the State Government to extend all or any of the

provisions of this Act to any other establishment or class of establishments whether the

establishment are industrial, commercial, agricultural or otherwise. The State Government can do

so after giving two months notice by notification in the official gazette and shall also take the

approval of the central government.


Important features of the Maternity Benefit Act, 1961:

1. The Act prohibits the employed woman to work during certain period of her

pregnancy and for six weeks immediately after the delivery of child.

2. The Act also provides for the maternity benefit in the form of leave with wages

for a maximum period of twelve weeks when the employed woman delivers a

child.

3. The Act also provides for leave with wages in case of;

(i) miscarriage,

(ii) medical termination of pregnancy,

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(iii) tubectomy operation of the employed woman.

4. The Act also prohibits the dismissal of an employed woman by her employer if

her absence is due to her pregnancy.

5. The Act also provides for the Inspector to ensure the implementation of the Act.

The Inspectors are also empowered to direct the employer to pay maternity

benefit and other amounts to the woman on the complaint of the woman to the

Inspector.

7.4.1 2(c)—“Delivery” means the birth of a child. Sec.

(i) in relation to an establishment which is under the control of the government a

person or authority appointed by the government for the supervision and control

of employees or where no person or authority is so appointed, the head of the

department;

(ii) in relation to an establishment under any local authority, the person appointed by

such authority for the supervision and control of employees or where no person is

so appointed, the chief executive officer of the local authority;

(iii) in any other case, the person who, or the authority which, has the ultimate control

over the affairs of the establishment and where the said affairs are entrusted to any

other person whether called a manager, managing director, managing agent, or by

any other name, such person;

7.4.2 Sec. 2(h)—“Medical Termination of Pregnancy” means the termination of pregnancy

permissible under the provisions of Medical Termination of Pregnancy Act, 1971.

7.4.3 Sec. 2(j)—“Miscarriage” means expulsion of the contents of a pregnant uterus at any

period prior to or during the twenty-six weeks of pregnancy but does not include any

miscarriage, the causing of which is punishable under the Indian Penal Code.

7.5 MATERNITY BENEFIT AND OTHER BENEFITS

Maternity Benefit Act, 1961 provides for the maternity and other benefits to the women

employees as follows:

1. Prohibition of work during certain periods (Sec. 4)

2. Payment of Maternity Benefit (Sec. 5)

(i) Notice of claim to the employer;

(ii) Payment of medical bonus;

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(iii) Breaks for nursing the child,

(iv) Maternity benefit in case of death of woman.

3. Leave with wages for miscarriage, etc. (Sec. 9)

4. Leave with wages for tubectomy operation (Sec. 9A)

5. Leave for illness arising out of pregnancy, etc. (Sec. 10)

6. No dismissal during absence due to pregnancy (Sec. 12)

7. No deduction of wages in certain cases (Sec. 13)

7.5.1. Prohibition of work during certain periods (Sec. 4): According to sub-section (1) of

Sec. 4, no employer shall knowingly employ a woman in any establishment during the six weeks

immediately following the day of her;

(i) delivery,

(ii) miscarriage, or

(iv) medical termination of pregnancy.

No woman shall work in any establishment during the six weeks immediately following

the day of her;

(i) delivery,

(ii) miscarriage, or

(iii) medical termination of pregnancy.

A woman may give a notice of her pregnancy in writing in the prescribed form to her

employer. But if she does not give notice, she may make a request to her employer. On request

being made by the employed woman the employer shall not require such woman to do any work:

(i) which involves long hours of standing; or ,

(ii) which is of an arduous nature; or

(iii) which in any way is likely to interfere with her pregnancy, or the normal

development of the foetus; or

(iv) which is likely to cause her miscarriage; or

(v) which otherwise adversely affects her health.

In Punjab National Bank by Chairman and Another v. Astamija Dash,1 it was held that as

per provisions of the Maternity Benefit Act, 1961, a woman can avail leave during the period of

six weeks from the day immediately following the day of her delivery, miscarriage or medical

1. 2008 III L.L.J. 584 (S.C.).

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termination of pregnancy. If request is made by herself she would not be asked to work for the

period specified as per section 4(4). She would be entitled to the benefits of Section 6 and 9 of

the Act. In Tata Tea Ltd. v. Inspector of Plantations,2 the question for consideration was whether

an employee entitled to the benefit of Maternity Benefit Act, 1961 is eligible to claim the benefit

under Section 5(1) of the Kerala Industrial Establishments (National and Festival Holidays) Act,

1958. Under Section 4-A of the National and Festival Holidays Act an employer could require

any employee to work on any such holidays and any such employee was under Section 5(2)

entitled to twice the wages for working on that day. Under Section 4 of the Maternity Benefit Act

an employee is entitled to certain benefits including maternity leave during the period mentioned

in that section. It was held that during the period mentioned in sub-sections (1) and (2) of Section

4 of the Maternity Benefit Act, the employer cannot in exercise of his right under Section 4-A of

the National and Festival Holidays Act call upon a woman employee to come and do the work on

the national and festival holidays allowed under Section 3 of the said Act. The said right of the

employer, as regards the period made mention of in Section 4 of the Maternity Benefit Act

however is subject to the restrictions imposed by sub-section (3) thereof. Considered in this

background the claim of the employees for the wages under the National and Festival Holidays

Act is not sustainable.

7.5.2 Payment of maternity benefit (Sec. 5): every woman is entitled to, and her employer is

liable for, the payment or maternity benefit. The maternity benefit is paid at the rate of the

average daily wage for the pence of her actual absence, that is to say,

(i) the period immediately preceding the day of her delivery,

(ii) the actual day of her delivery, and

(iv) any period immediately following the day of her delivery.

The maximum period for which any woman is entitled to maternity benefit in the form of

leave with wages as provided in Sec. 5(1) is twelve weeks. A woman may avail leave with wages

six weeks prior to her delivery and six weeks after the delivery. In B. Shah v. Labour Court,

Cohnbatore,3 the question was whether Sunday is to be counted in calculating the amount of

maternity benefit. It was held that in the context of sub-sections (1) and (3) of Section 5, the

terms week has to be taken to signify a cycle of seven days including Sundays. The Legislature

2. (1992) I L.L.J. 603 (Kerala).3. AIR 1978 SC 12: Malayalam Plantations v. Inspector of Plantations, AIR 1975 Ker 86 overruled.

Page 117 of 250

intended that computation of maternity benefit is to be made for the entire period of the woman

workers’ actual absence, i.e., for all the days, including Sundays, which may be wageless

holidays falling within that period and not only for intermittent periods of six days thereby

excluding Sundays falling within that period. Again the word “period” occurring in Section 5(1)

seems to emphasize the continuous running of time and recurrence of the cycle of seven days.

This computation ensures that the woman worker gets for the said period not only the amount

equalling 100 per cent of the wages which she was previously earning in terms of Section 3(n) of

the Act but also the benefit of the wages for all the Sundays and rest days falling within the

aforesaid two periods which would ultimately be conducive to the interest of both the woman

worker and her employer.4 In Ram Bahadur Thakur (P.) Ltd. v. Chief Inspector of Plantations5

the point for determination by the Court was whether in calculating 160 days period which will

entitle a woman employee to get maternity benefit, the work on half days can be included or not.

It was held that according to Explanation to Section 5(2) of the Maternity Benefit Act, the period

during which a woman worker was laid off should also be taken into consideration for

ascertaining the eligibility. During the lay-off period a woman worker cannot be expected to

have actually worked in the establishment. So, actual work for 160 days cannot be insisted as a

condition precedent for claiming the maternity benefit.

7.5.3 Eligibility for woman to claim maternity benefit [Sec. 5(2)]: A woman is entitled to

claim maternity benefit her employer, only if she has worked in his establishment for not less

than eighty days. She must have worked for not less than eighty days in the twelve months

immediately preceding the date of her expected delivery.

“For the purpose of calculating under the sub-section the days on which a woman has

actually worked in the establishment the days for which she;

(i) has been laid-off, or

(ii) was on leave, or

(iii) was on holiday declared under any law for the time being in force to be holiday

with wages during the twelve months shall be taken into account.”

The Maternity Benefit Act entitles net only the regular, but even the women employed on casual

basis or on muster; roll also to claim the benefits under the Maternity Benefit Act, 1961.

4. Ibid.5. (1989) II L.L.J. 20 (Kerala).

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(a) According to sub-section (1) of Sector 4, no women shall work immediately

before (____________) weeks of her delivery.

(b) Women shall not work of that nature, which involves long hours of (__________)

(c) Maternity benefits is paid of the rate of (_________________) wage.

(d) A woman is eligible for maternity benefit, if she works atleast (_________) days.

(e) Maximum period of Maternity leave is (_________) weeks

7.5.4 Payment of maternity Benefit: According to sub-section (5) of Sec. 6, the employer

shall pay in advance the amount of maternity benefit for the period preceding the date of her

expected delivery. Such advance is paid on production of such proof as may be prescribed that

the woman is pregnant. The amount due for the period subsequent to the delivery is paid by

employer to the woman within forty-eight hours of production of such proof as may be

prescribed that the woman has been delivered of a child.

7.5.5 Failure to give notice does not disentitle a woman to maternity benefit: According to

sub-section (6) of Sec. 6, failure to give notice under sub-section (1) of Sec. 6 does not disentitle

a woman to maternity benefit or any other amount under the Maternity Benefit Act if she is

otherwise entitled to such benefit or amount.

7.5.6 Forfeiture of maternity benefit (Sec. 18): A woman who has been permitted by her

employer to absent herself under the provisions of Section 6 forfeits her claim to the maternity

benefit for such period, if during such period of authorised absence, she works in any other

establishment.

7.5.7 Payment of medical bonus (Sec. 8): Every woman entitled to maternity benefit under

Sec. 5 of the Act is also entitled to receive from her employer a medical bonus. This medical

bonus is of two hundred fifty rupees and is given to the woman if no pre-natal confinement and

post-natal care is provided for by the employer free of charge.

7.5.8 Breaks for nursing the Child (Sec. 11): Every woman delivered of a child who returns

to duty after such delivery is allowed two breaks in the course of her daily work for nursing her

child. These breaks are of the prescribed duration and are in addition to the interval for rest

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allowed to her. Breaks for nursing the child are allowed to the woman under Sec. 11 until the

child attains the age of fifteen months. According to Sec. 13(b), employer shall not make any

deduction from the normal and usual daily wages of the woman for breaks for nursing the child.

7.5.9 Section 12: Dismissal during absence of pregnancy—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. 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, may within sixty days from the date on which the

order of such deprivation 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, shall be final.

Activity 1

State the various provisions under payment of Maternity Benefit (Sec 5):

1. Payment of Medical Bonus____________________________________________________________________

____________________________________________________________________

2. Break for nursing the child____________________________________________________________________

____________________________________________________________________

7.5.10 No deduction of wages in certain cases (Sec. 13): According to Sec. 13, deduction from

the wages of a woman shall not be made on account of lighter work given to her during certain

period of pregnancy or breaks given to her for nursing her child under the provisions of the Act?

7.5.11 Duties of the employer:

1. To maintain register (Sec. 20)

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2. To exhibit the abstract of the Act (Sec. 19)

7.5.11.1 To maintain register (Sec. 20): According to Sec. 20, every employer whom the

Maternity Benefit Act 1961, applies shall prepare and maintain such registers, records and

muster rolls in such manner as may be prescribed.

7.5.11.2 To exhibit the abstract of the Act (Sec. 19): According to Sec. 19, every employer to

whom Maternity Benefit Act, 1961 applies shall exhibit the abstract of the provisions of the

Maternity Benefit Act, 1961, and the rules made there under in his establishment. This abstract

shall be exhibited in a conspicuous place in every part of the establishment in which women are

employed. The abstract shall be in the English language or language of the locality.

7.6 INSPECTOR, HIS POWERS AND DUTIES

To ensure the implementation of the Maternity Benefit Act, 1961, the Act provides for

the Inspectors. The appropriate Government appoints such officers, as it thinks fit to be

inspectors by notification in the official Gazette. The appropriate Government may define the

local limits of the jurisdiction within which the Inspectors shall exercise their, functions under

the Act?

7.6.1 Powers and duties of Inspectors (Sees. 15, 22, 17): An Inspector may, subject to such

restrictions or conditions as may be prescribed, exercise all or any of following powers:

(a) To enter premises,

(b) To examine persons,

(c) To get information from employer,

(d) To take copies of registers, etc.

7.6.2 (Penalty for obstructing Inspector (Sec. 22): According to Sec. 22, a person is

punishable with: (i) imprisonment which may extend to one year, or (ii) with fine which may

extend to five' thousand rupees; or (iii) with both, if he,

(i) fails to produce on demand by the Inspector any register or document in his

custody kept in pursuance of the Maternity Benefit Act, 1961 or the rules made

there under, or

(ii) conceals or prevents any person from appearing before or being examined by the

Inspector.

7.6.3 Power of Inspector to direct payments to be made (Sec. 17): Sec. 17 empowers the

Inspector appointed under Sec. 14 of the Act to direct the employer to pay maternity benefit or

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any other amount to a woman who is entitled to it but from whom it has been withheld

improperly.

Activity 2

Highlight the Power / duties of Inspector

Powers of Inspector Duties of Inspector

7.7 PENALTY

An employer is punishable with;

(i) imprisonment which is not less than three months but which may extend to one

year; and

(ii) with fine which is not less than two thousand rupees but which may extend to five

thousand rupees, if

(a) the employer fails to pay any amount of maternity benefit to a woman entitled

under the Act; or

(b) dismisses or discharges such woman during or on account arrow of her

absence from work in accordance with the provision of the Maternity Benefit

Act, 1961.

7.8 COGNIZANCE OF OFFENCES

7.8.1 Cognizance of offences (Sec. 23): According to sub-section (2) of Sec. 23, no court

inferior to that of a Metropolitan Magistrate or a Magistrate of the first class shall try any offence

under the Maternity Benefit Act, 1961. According to sub-section (1) of Sec. 23, any of the

following persons may file a complaint regarding the commission of an offence under the

Maternity Benefit Act, 1961—

(i) any aggrieved woman,

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(ii) an office bearer of a trade union registered under the Trade Union Act, 1926 of

which the woman is a member, or

(iii) a voluntary organisation registered under the Societies Registration Act, 1860, or

(iv) an inspector.

The complaint is filed in the court of competent jurisdiction. But no such complaint can

be filed after the expiry of one year from the date on which the offence is alleged to have been

committed.

7.9 GOVT.’S POWER TO MAKE RULES

7.9.1 Section 28: Power to make rules.—(1) The appropriate Government may, subject to the

condition of previous publication and by notification in the Official Gazette, make rules for

carrying out the purposes of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such

rules may provide for:

(a) the preparation and maintenance of registers, records and muster rolls;

(b) the exercise of powers (including the inspection of establishments) and the

performance of duties by Inspectors for the purposes of this Act;

(c) the method of payment of maternity benefit and other benefits under this Act in so

far as provision has not been made therefor in this Act;

(d) the form of notice under Section 6;

(e) the nature of the proof required under the provisions of this Act;

(f) the duration of nursing breaks referred to in Section 11;

(g) acts which may constitute gross misconduct for purposes of Section 12;

(h) the authority to which an appeal under clause (b) of sub-section (2) of Section 12

shall lie; the form and manner in which such appeal may be made and the

procedure to be followed in disposal thereof; (i) the authority to which an appeal

shall lie against the decision of the Inspector under section 17; the form and

manner in which such appeal may be made and the procedure to be followed in

disposal thereof;

(j) the form and manner in which complaints be made to Inspectors under sub-

section (1) of section 17 and the procedure to be followed by them when making

inquiries or causing inquiries to be made under sub-section (5) of that section;

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(k) any other matter which is to be, or may be prescribed.

(3) Every rule made by the Central Government under this section shall be laid as

soon as may be after it is made, before each House of Parliament while it is in

session for a total period of thirty days which may be comprised in one session or

in two or more successive sessions, and if, before the expiry of the session

immediately following the session or the successive sessions aforesaid both

Houses agree in making any modification in the rule or both Houses agree that the

rule should not be made, the rule shall thereafter have effect only in such

modified form or be of no effect, as the case may be; so however that any such

modification or annulment shall be, without prejudice to the validity of anything

done previously under that rule.)

7.9.2 Section 25: Power of Central Government to give directions.—The Central

Government may give such directions as it may deem necessary to a State Government regarding

the carrying into execution of the provisions of this Act and the State Government shall comply

with such directions.

7.9.3 Section 26: Power to exempt establishments.—If the appropriate Government is

satisfied that having regard to an establishment or a class of establishments providing for grant of

benefits which are not less favourable than those provided in this Act, it is necessary so to do, it

may, by notification in the Official Gazette, exempt, subject to such conditions and restrictions,

if any, as may be specified in the notification, the establishment or class of establishments from

the operation of all or any of the provisions of this Act or any rule made thereunder.

[Insert Matter]


II. True / False


(a) The Maternity Benefits Act is intended to achieve the object of doing social

justice to women workers.

(b) A woman entitled to maternity benefit need not to give notice in writing to her

Page 124 of 250

employer to avail leave.

(c) A woman is entitled to leave with wages in case of miscarriage or medical

termination of pregnancy.

(d) A women entitled to maternity benefit under the Act shall not be entitled to

receive medical bonus.

7.10 SUMMARY

The Act is applicable to all establishments not covered under the ESI scheme. The Act

was amended in 1976 to extend the benefits to all women workers earning more than Rs. 1600

per month in establishments covered by the ESI Act.

Under the Act, a woman can get maternity leave upto 12 weeks of this, 6 weeks must be

taken prior to the delivery of the child and 6 weeks immediately following that date. During the

period of leave the employee is entitled to full wages / salary. The employee is also entitled to a

medical bonus of Rs. 250 if no pre-natal confinement and post-natal care has been provided by

the employer free of charge. To avail of the leave and benefits, the employee should have put in

so working days of service in the 12 months immediately preceding the date of expected

delivery.

7.11 GLOSSARY

1. Woman: ‘Woman’ means a woman employed, whether directly or through any

agency, for wages in any establishment.

2. Maternity Benefit: It means the payment that a woman shall be entitled for a

minimum period of twelve weeks, that is six weeks upto and including the day of

her delivery and six weeks immediately following that day.



(a) Six(b) Standing(c) Average daily(d) Eighty(e) Twelve


Page 125 of 250

1. True2. False3. True4. False


1. Compliances under Labour Laws, A User’s Guide to adhere with the provisions

under various employment related Acts, Universal Publications (2011).

2. http://Labour.nic.in.





5. S.N. Misra, 1970, Labour & Industrial Laws, Central Law Publications,

Allahabad.

6. Bare Acts, The Maternity Benefits Act,1961


1. State the salient features of the Maternity Benefits Act, 1961.

2. Explain the provisions relating to the powers and duties of inspectors and also the

provisions of penalty for contravention of the Act by employer.

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LESSON – 8

Introduction to laws related to Social Security

Structure


8.1 Introduction

8.2 Importance

8.3 Scope


8.5 Summary

8.6 Glossary





After studying this chapter, you should be able to:

Know about Social Security Laws

Examine the importance of various

Understand the features and implications of Social Security Laws.

8.1 INTRODUCTION

Social Security legislation, is a development of mainly post-independence period

although its birth may be traced back to the industrial revolution. It is a developing concept. It

derives its main strength from social justice which is dynamic and changing. The concept of

social justice itself changes with the social, economic and political changes in society.

According to the report of the National Commission on Labour, “Social Security has

became a fact of life and these measures have introduced an element of stability and protection in

the midst of the stresses and strains of modern life. It is a major aspect of public policy today and

the extent of its prevalence is a measure of the progress made by a country towards the idea of a

welfare state. It is an incentive for development, substituting as it does hope for fear in the

process improving the efficiency of the working force.”

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Freedom from want and security against economic fear is the minimum that has to be

secured to its people in the country.

In India, a number of social security legislations have been enacted from time to time.

The earliest of such legislation is the workmen’s Compensation Act which ensures payment of

compensation in case of a personal injury caused by an Accident during the course of

employment. Maternity Benefit Acts have also been passed by the parliament and also in

different states. The Employees’ provident fund and family pension fund and Deposit-linked

Insurance Fund Act, 1952 provides for retirement Benefits. The payment of Gratuity Act, 1972

provides for gratuity, an additional retirement benefit. The most importance of all legislations in

the Employees’ State Insurance Act, 1948 which provides for medical sickness, dependent,

disablement and maternity benefits.

8.2 IMPORTANCE OF SOCIAL SECURITY LEGISLATIONS

Social Security programmes are increasingly being accepted as useful and necessary tools

for the protection and stability of the labour force. Social Security legislations are of great

importance to all developed or developing countries of the world because it is concerned with the

study of problems relating to human relations arising out of a large scale development of factory

system. This factory system has emerged as a result of Industrial revolution. Proper regulation of

employer-employee or human relationships is essential for planned, progressive and purposeful

development of any society. These legislations play very important role and act as an instrument

for social progress and in the formulation of social policy.

Social security measures are significant from two view points: First, they constitute an

important step towards the goal of a welfare State. Secondly, they enable workers to become

more efficient and thus reduce wastage arising from industrial disputes. Lack of social security

impedes production and prevents formation of a stable and efficient labour force. Therefore,

social security measures are not a burden but a wise investment which yields good dividends.1

According to the report of the National Commission on labour “social security has become a fact

of life and these measures have introduced an element of stability and protection in the midst of

the stresses and strains of modern life. It is a major aspect of public policy today and the extent

of its prevalence is a measure of the progress made by a country towards the idea of a welfare

1. V.V. Giri, Labour Problems in Indian Industry, p. 248.

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State. It is an incentive for development, substituting as it does hope for fear in the process

improving the efficiency of the working force”.

Freedom from want and security against economic fear is the minimum that has to be

secured to its people in the country. Its importance has been expressed by the Universal

Declaration of Human Rights in the following words:

“Everyone as a member of the society has the right to social security and is entitled to

realisation through national efforts and international co-operation and in accordance with

the organisation and resources of each state of economic, social and cultural rights

indispensable for his dignity and the free development of his personality”.2

“Everyone has the right to a standard of living adequate for the health and well-being of

himself and of his family, including food, clothing, housing and medical care and

necessary social services and the right to security in the event of unemployment,

sickness, disability, widowhood, old age, or other lack of livelihood, or circumstances

beyond his control.”3

The role of International Labour Organisation in certain standards of social insurance has

been significant. The Social Security (Minimum Standards) Convention adopted in 1952

embodies universally accepted basic principles and common standards of social security. The

application of these principles has guarded developments of this field throughout the world.4

Activity 1

State the name and importance of Social Security legislations:

1.____________________________________________________________________

____________________________________________________________________

2.____________________________________________________________________

____________________________________________________________________

8.3 SCOPE

2. Art. 22 of the Universal Declaration of Human Rights.3. Art 25 of the Universal Declaration of Human Rights4. Report of the National Commission on Labour, (1969), p. 162.

Page 129 of 250

Labour legislation in India grew with the growth of industry. In the eighteenth century

India was not only a great agricultural country but a great manufacturing country too. Asian and

European markets were mainly fed by the looms supplied by India. But the British Government

in India as a matter of policy discouraged Indian manufacturers in order to encourage the rising

manufacturers of England. Their policy was to make India subservient to the industries of Great

Britain and to make Indian people grow only raw materials.5 The British oppression in India

continued for a considerable time which led to the growth of Indian nationalism and to a

vigorous renaissance. Nationalism has an obvious economic aspect which in our country was

reflected in the urge for economic reforms and for industrialisation.6 In the twentieth century the

national movement took a new turn and there was a common demand for the Indian goods. A

non-co-operation movement which is known as swadeshi movement was started which urged

upon the people to use goods made in India and to boycott foreign goods. The non-co-operation

movement synchronised with periods of economic crisis gave impetus to industrialisation. Not

only that, growth of Indian private sector owes much to these popular movements. No doubt, the

Indian Economists, drew their inspiration from British classical Economists but they outgrew

those ideas.7 Like British Economists, Indian Economists not only advocated that the trade and

commerce should be free but they laid emphasis on the free trade of local goods. An attempt was

made to put forward a theory of economic development and planning suited to conditions of our

country.

In India, the plantation industry in Assam was the first to attract legislative control. The

method of recruitment of workers in this industry was full of hardships. Workers were employed

through professional recruiters. Workers were not allowed by the planters to leave the tea

gardens. A number of Acts were passed from 1863 onwards to regulate the recruitments. These

legislations protected more the interests of the employers than safeguarding the interest of the

workers. The Factories Act was passed in 1881 and the Mines Act in 1901. But the most

important of such Acts as were passed to protect the interest of the workers was the Workmen’s

Compensation Act, 1923. Some other important social security legislations are: the Employees’

5. R. Dutt, Economic History of India under Early British Rule VIII-X, (1930).6. Indian Law Institute, Labour Law and Labour Relations, p. 5.7. lndian Law Institute, Labour Law and Labour Relations, at p. 6.

Page 130 of 250

State Insurance Act, 1948, the Employee's Provident Funds Act, 19528 and the Maternity Benefit

Act, 1961. Laws were also made to regulate the labour management relations. Some of them are:

the Industrial Disputes Act, 1947, the Trade Unions Act, 1926 and the Industrial Employment

(Standing Orders) Act, 1946. Labour legislations ensuring labour welfare and minimum

standards were also enacted. Some of them are: the Factories Act, 1948, the Minimum Wages

Act, 1948, the Payment of Wages Act, 1936 and the Payment of Bonus Act, 1965.

In India, a number of labour legislations have been enacted to promote the condition of the

labour keeping in view the development of industry and national economy. But for industrial

regeneration it is necessary that the partners of the industry must cure their respective defects.

Since independence both legislation and public opinion have done a lot to better the condition of

the workers but unfortunately the employers have not responded very appreciably. It is high time

that the employers must realise that it is their privilege as a citizen of a democratic country to

relinquish their acquisitive tendencies of the past and set a new ideal for the future of the

country. At the same time it is the duty of the workers and their organisations to improve the

work-efficiency and help in securing better production resulting in greater profits and prosperity

of the industry to be ultimately shared by the management, workers and the community at large.

The employers should concede to workers a representative voice in the control of the industrial

system. “Workers are the dominant partners in the industrial undertakings and without their co-

operation and good work, discipline, integrity and character, the industry will not be able to

produce effective results or profits. However efficient the machine touch in any industry may be,

if the human element refuses to co-operate, the industry will fail to run. Therefore, the profit of

the industry must be shared between employers, workers and the community; the workers having

a dominant share, being the producers of wealth”.9 The Government and the factory owners must

fully understand the labour psychology and a change in their outlook and attitude is desired to

secure the industrial peace. Nothing should be done under threat or coercion but on a clear

understanding that whatever is good and is due to the labour must be given. Industry owners

should treat the workers as co-partners. Similarly, “workers in the country must understand fully

that if they desire to secure their due place in the industrial economy of the country they must

8. This Act, as enacted in 1952, made provision for Provident Fund only but now this Act provides for familypension funds and deposit linked insurance fund also.

9. V.V. Giri, Industrial Relations, p. 27.

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think more in terms of responsibilities and duties and not interpret independence for

impertinence and liberty for licence. Sabotage and violence of all kinds and bitterness in thought,

word and deed must be eschewed. Then alone a Socialist Democracy is possible in this country

and industrial relations of a higher order can be maintained for the benefit of the country and the

community”.10)



(a) Social justice is different from (_______) justice.

(b) The concept of social justice is not (______) to a particular branch of legislation.

(c) Social justice implies (____________) distribution of profits and other benefits of

Industry between owner and workers.

(d) The employees’ State Insurance Act was enacted in (___________).

(e) The payment of Gratuity Act provides additional (_________).

8.4 FEATURES AND IMPLICATIONS

Labour problems constituted a serious menace to the society, and needed solution, if not

to eradicate then at least to mitigate them in the very beginning. Employers paid their sole

attention to the maintenance of machines and the improvement of the technical knowhow to the

utter neglect of the human hands employed to man the machines because they were readily

available and could be easily replaced. 11 Workers were illiterate and poor and therefore

unconscious of their rights. The socio-economic status of the workers was far below the status of

their employer. As such they could not exercise their free will in negotiating with the employer

for employment. The employer taking advantage of the poor condition of the workers dictated

their own terms and conditions with regard to wages, hours of work, leave, etc. The workers

were left with no choice but to accept such terms because service was the sole means of earning

their livelihood.

Neither the Government nor the law courts took special notice of these problems because

they laid too much emphasis on the policy of the non-interference and freedom of contract. Thus,

with the lapse of time the situation turned out to be so worse and the society became so much

10. V.V. Giri, Industrial Relations, p. 28.11. Ibid.

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adversely affected that the Government was compelled to take some action to remedy these

problems.

Ultimately some philanthropic agencies like Servants of India Society, Social Service

League and some industrial social workers raised their voice against these problems. They were

successful in mobilising the public opinion in support of their view point. Workers also started to

form their own organisation to fight against exploitation at the hands of industrialists. In the

beginning the effort of the workers was not very successful because of their weak bargaining

power and lack of resources on which they could rely for their livelihood in the absence of

wages.

Some employers also realised the seriousness of the problem and the necessity of

mitigating these evils for they affected the production of the industry, they felt that investment on

labour welfare was a policy worth pursuing because a contended worker would produce better

yields and would increase the efficiency.

The Government too later on realised the gravity of the problem and could not remain a

spectator for the workers constituted a large section of the society. Moreover, the government

had to intervene to settle the disputes in the interest of national economy and the welfare of the

society at large.12 If some key industry is thrown out of gear, the whole system is paralysed.

Frequent break downs of even a part of the economic system tend to impoverish-the community.

The prevention of industrial strife thus assumes an important role in national policy and the

State, therefore, cannot afford to remain indifferent to the problems leading to industrial conflict.

After independence the national government paid much attention to the improvement of the

conditions of labour in industry, for the prosperity of a country depends upon the development

and growth of industry. No industry can flourish unless there is industrial peace and co-

operation.13 Industrial peace is possible only with the co-operation of labour and capital. To

ensure better co-operation the wage earner who is a partner in the production should be allowed

to have his due share of the profit for increased production. Therefore, we have to shape our

economic policy in such a manner as to give labourer his due status by offering him reasonable

working conditions and due share in production. That means social justice and social security has

to be restored to the labourer. Our Constitution guarantees social justice to the people of India.

12. V.V. Giri, Labour Problems in India Industry, p. 119.13. G.M. Kothari, A Study of Industrial Law, p. 38.

Page 133 of 250

Social justice means achievement of socio-economic objectives. Labour legislation is one of the

most progressive and dynamic instruments for achieving socio-economic progress).

8.4.1 PRINCIPLES OF LABOUR LEGISLATION

Labour legislation in any country should be based on the principles of social justice,

social equity, international uniformity and national economy.

Social justice.—Social justice implies two things. First equitable distribution of profits

and other benefits of industry between industry owner and workers. Secondly, providing

protection to the workers against harmful effects to their health, safety and morality. In the

beginning, the position of a worker was that of a daily wage-earner, which means he was paid

only for the days he actually worked. A workman was expected to accept all the hazards

connected with his work as incidental to his employment. Until the passing of Workmen's

Compensation Act, 1923 no compensation was paid in case of an accident taking place in the

course of employment. But the Workmen's Compensation Act, 1923 guarantees to workmen

compensation for any injury caused by an accident arising out of and in the course of

employment. The Minimum Wages Act, the Factories Act and the Payment of Wages Act are a

few other legislations based on the principle of social justice. These legislations fix the hours of

work, make provision for payment of over-time, leave rules, safety, health and welfare of labour

in industry. Labour welfare in our country has a special significance for our Constitution

provides for the promotion of welfare of people, for humane conditions of work and securing to

all workers full employment of leisure and social and cultural opportunities.14 The word ‘social

justice’ is neither defined in any of the labour legislations nor does it occur in any of them except

the Industrial Disputes Act, 1947.15

The concept of social justice, according to Bhagwati, J., does not emanate from the

fanciful notions of any particular adjudication but must be founded on a more solid foundation.16

In the opinion of Justice Gajendragadkar : “The concept of social and economic justice is a living

concept of revolutionary import, it gives sustenance to the rule of law and meaning and

significance to the idea of welfare State”.17 The Indian Constitution enshrines the concept of

14. V.V. Giri, Industrial Relations.15. When the Industrial Disputes Act, 1947 was amended in 1956, Section 17-A(1) uses the words ‘social justice’.16. Muir Mills Ltd. v. Suti Mill Mazdoor Union, (1955) I LLJ 1 (SC).

17. State of Mysore v. Workers of Gold Mines, AIR 1958 SC 923.

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social justice as one of the objectives of the State. Article 38 of the Constitution provides that

“the State shall strive to promote the welfare of the people by securing and protecting as

effectively as it may, social order in which justice, social, economic and political, shall inform all

the institutions of the national life”. Article 39 ordains that it shall be the duty of the State to

apply certain principles of social justice in making laws.

Social justice is justice according to social interest. So far as the application of the

doctrine of social justice in the sphere of adjudication is concerned, it is subordinate to the

fundamental rights and law contained in the Constitution. Secondly, it is also subservient to the

statutory Industrial law. Thirdly, social justice cannot be done in disregard of law laid down by

the Supreme Court. Social justice does not mean doing everything for the welfare of labour to

the utter disregard of the employer. The balance of social justice leans neither side.18 The labour

policy of a country should, in the national interest, prevail over the rival economic policies in

cases of conflicts.19

“Social justice” is designed to undo the injustice of unequal birth and opportunity, to

make it possible that wealth should be distributed as equally as possible and to provide that men

shall have the material things of life should be guaranteed to each man. President Roosevelt has

rightly said that “there are some whose adverse circumstances made them unable to obtain the

mere necessities of existence without the aid of others. To these less fortunate men and women,

aid must be given by government not as a measure of charity but as social duty”. This duty is to

be performed by the society through the State. Social justice, therefore, is dealing equitably and

fairly not between individuals but between classes of society; the rich and the poor.

The concept of social justice has become an integral part of industrial law. It is founded

on the basic idea of socio-economic equality and its aim is to assist the removal of socio-

economic disparities and inequalities. The Constitution of India has also affirmed social and

economic justice to all its citizens. Although a number of legislation have been passed with that

end in view but still some more important measures need to be taken. Provisions relating to

fundamental rights and directive principles of State policy provide sufficient guarantee against

exploitation. Social justice has thus been made object of State policy and governmental action.

18. Punjab National Bank Ltd. v. P.N.B. Employees Federation, AIR 1960 SC 160.19. G.L. Kothari, Labour Law and Practice in India, p. 15.

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Social justice though not defined in our Constitution, means attainment of the socio-economic

objectives by removing existing evils and enacting new legislation to achieve these objectives.

The concept of social justice is not narrow or limited to a particular branch of legislation

or adjudication although it is more prominent and conspicuous in industrial legislation and

adjudication. Its sweep is comprehensive and is founded on the basic ideal of socio-economic

equality and it aims at assisting the removal of socio-economic disparities and inequalities of

birth and status and endeavours to resolve the competing claims especially between employers

and workers by finding a just, fair and equitable solution to their human relations problem so that

peace, harmony and co-operation of the highest order prevails amongst them which may further

the growth and progress of nations.20

Social justice is different from legal justice. The difference is not of objective but aim at

dispensing justice. The difference is due to two reasons: (i) Social justice aims at doing justice

between classes of society, and not between individual, (ii) the method which it adopts is

unorthodox compared to the methods of municipal law. Justice dispensed according to the law of

Master and Servant, based upon the principle of absolute freedom of contract and the doctrine of

laissez faire, is legal justice. Social justice is something more than mere justice, it is a philosophy

super-imposed upon the legal systems.21

Social equity: Any legislation which is based on social justice prescribes a definite

standard for adoption in future. Such standard is fixed after taking into account the past and

present circumstances. Once a standard is so fixed by legislation it remains in force until it is

changed or modified by another legislation passed in conformity with the legislative procedure.

No discretion is given to change such law to the authority administering such law. However,

where it is felt that the law should be flexible and should be changed as the circumstances and

conditions change, the law empowers the Government to make such changes. This is generally

done by giving the Government rule making power under the provisions of the Act. When power

under the Act is given to the Government the rules may be modified 10 suit the changed

conditions. Such legislation is said to be based on social equity.

Social Security: The mutual conflict between the employer and the employees over the question

of adequacy of their respective shares in social produce constitutes the crux of the labour

20. Mahesh Chandra, Industrial Jurisprudence (1976), p. 47.21. Industrial Labour in India, p. IX., V.B. Singh ED., 1963, Quoted in Labour Law and Labour Relations ILI p. 9.

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problem, of which collective bargaining and industrial conflict are the two most important

aspects. As industrialisation advances the worker is increasingly alienated from his previous

socio-cultural world and thus faces various insecurities with regard to the income and

employment in addition to the natural ones (i.e., sickness, maternity and old age) for which the

new order does not have structural provision. This is how the problem of social security arises

and revolution has meant urbanisation. In ancient times if a person was unable to work on a

particular day, he was cared for by the village community or by the members of his family. But

now urbanisation has so deeply uprooted these values that in times of sickness, unemployment,

old age and other similar contingencies a worker has nothing to fall back upon. In modern times

social security is influencing both social and economic policy. Social security is the security that

the State furnishes against the risks which an individual of small means cannot, today, stand up

to by himself even in private combination with his fellows.22

The quest for social security and freedom from want and distress has been the consistent

urge of man through the ages. This urge has assumed several forms according to the needs of the

people and their level of social consciousness, the advancement of technology and the peace of

economic development.23 “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”.24 “These risks are such that

an individual of small means cannot effectively provide for them by his own ability or foresight

alone or even in private combination with his colleagues”.25

The concept of social security is based on ideals 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 country’s welfare should be given protection against certain hazards.26

Social security means a guarantee provided by the State through its appropriate agencies,

against certain risks to which the members of the society may be exposed. Social assistance

22. V.V. Giri, Labour Problems in India Industry, p. 247.23. Report of the National Commission on Labour, 1969, p. 162.24. Ibid.25. I.L.O., Approaches to Social Security, 1942, p. 80, quoted in Report of the National Commission on Labour

(1969), p. 162.26. Ibid.

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scheme provides benefit for persons of small means granted as of right in amount sufficient to

meet a minimum standard of need and financed from taxation, and social insurance scheme

provides benefits for persons of small earnings granted as of right in amounts which combine the

contributory effort of the insured with subsidies from the employer and the State.27


II. True / False

(1) Labour legislation in India grew with the growth of industry.

(2) Social Security legislation is a dynamic concept.

(3) Industrial relations can be maintained without proper regulation.

(4) Social Security legislation provide various benefits to the employees.

(5) The team social security became popular after US legislation on Social Security.

8.4.2 THE EMPLOYEES' STATE INSURANCE ACT, 1948

This is a pioneering attempt to provide medical facilities and unemployment insurance

during illness to industrial workers. The subject of health insurance for industrial workers was

first discussed in 1927 by the Indian Legislature when the applicability of the convention

adopted by the international Conference was considered by the Government of India. The Royal

Commission on Labour in its Report (1931) stressed the need for health insurance for workers in

India.

The Act covers smaller factories using power and employing 10 or more persons and

those not using power but employing 20 or more people. The Act has also been extended to the

new classes of establishments, shops hotels, restaurants, cinemas, theatres, motor transport,

building construction, and newspaper establishments employing 20 or more persons. It covers all

employees, manual, clerical and supervisory and employees engaged by or through contractors,

whose remuneration does not exceed Rs. 1600 per month. The definition of “employee” includes

administrative staff and persons engaged in connection with purchase of raw materials or sale or

distribution of products and related functions. The State Government is empowered to extend the

Act to cover other establishments or class of establishments.

The scheme is administered by an autonomous corporation with the Minister of Labour at

the Centre as its Chairman, the Union Health Minister as the Vice-Chairman, and representatives

27. Approaches to Social Security, I.L.O. Montreal, pp. 80-81.

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of State Governments, employers and the medical profession nominated by the Central

Government. The scheme is financed by contribution from employers and employees, with the

State Governments sharing one-eighth of the cost of medical care. The employer pays 4.7% of

the/wage bill, a maximum of Rs. 7.50 per week on the highest wage scale, and the insured person

pays about 2.3% of his wage, around Rs. 4 per week. The maximum corresponding daily benefit

rate for the insured person is Rs. 15. The State Government which implements the scheme is

reimbursed to the extent of 7/8 of the expenses incurred on workers' families and 3/4 of the

expenses incurred in the case of workers. In order to qualify for the benefit the worker should

have contributed to the scheme for a minimum period of 12 weeks.

The benefits provided under the scheme include: (i) Sickness and extended sickness

benefit; (ii) Maternity benefit; (iii) Disablement benefit; (iv) Dependent's benefit, (v) Funeral

benefit; and (vi) Medical benefit.

Sickness and extended sickness benefit: For sickness occurring during any benefit

period, an insured person is entitled to receive sickness cash benefits at the standard benefit rate

for a period of 91 days in any two consecutive benefit periods. Cash benefits are subject to

contributory conditions. An insured person suffering from long term ailments like tuberculosis,

leprosy, mental diseases, is eligible for extended sickness benefit at a rate of 25 per cent more

than the sickness benefit rate rounded to the next higher multiple of 5 paise, for a period of

124/309 days. Contributions are calculated with reference to average daily wages, and wages

have been classified into 9 groups for the purpose of fixing the contribution.

Maternity benefit: An insured woman is entitled to maternity benefit at double the

standard benefit rate. This is practically equal to full wages for a period of 12 weeks.

Disablement benefit: If a member of the scheme suffers an injury in the course of his

employment, he will receive free medical treatment and temporary disablement benefit in cash.

The temporary disablement benefit is about 70 per cent of the wages as long as the temporary

disablement lasts, provided that it lasted for not less than 3 days, excluding the day of accident.

In case of permanent disablement, the insured person will be given life pension at full rate, i.e.

about 70 per cent of his wages.

Dependants’ benefits: This provides timely help to the eligible dependants of an insured

person who dies as a result of an accident or an occupational disease arising out of and in the

course of employment. Pension at the rate of 40 per cent more than the standard rate will be paid

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periodically to widows and children in accordance with the prescribed share. The benefit also

accrues to parents and grandparents and any other dependant up to the age of 18 where the

deceased has no surviving widow or child.

Funeral benefit: This benefit was introduced in 1968. An amount of not exceeding Rs.

100 is payable as funeral benefit to the eldest surviving member of the family of the deceased

insured person. If the insured person did not have a family or was not living with his family at

the time of death, it is payable to the person who actually incurs the expenditure on the funeral of

the deceased insured person.

Medical benefit: The major attraction of the ESI scheme is medical benefit. Medical

benefit has been divided into three parts:

(a) Restricted Medical Care: It consists of out-patient medical care at dispensaries

or panel clinics. Facilities of consultation with medical officers, supply of drugs,

pre-natal and post-natal care, family planning and immunisation services are

available in these institutions. The beneficiaries are also entitled to call a doctor to

their house to see a serious case.

(b) Expanded Medical Care: This consists of consultation with specialists and

supply of special medicines and drugs as may be prescribed by them. Facilities for

special laboratory tests and X-ray examinations are also available under this

scheme.

(c) Full Medical Care: Hospitalisation facilities, services of specialists and drugs

and diet as are required for in-patients are available under this scheme.

When a person is entitled to any of the benefits provided by the ESI Act, he shall not be

entitled to receive any similar benefit under any other enactment. An insured person will not be

entitled to receive for the same period (a) both sickness benefit and maternity benefit; or (b) both

sickness benefit and disablement benefit for temporary disablement; or (c) both maternity benefit

and disablement benefit for temporary disablement. When a person is entitled to more than one

benefit, he has an option to select any one of them.

A dispute arising under the provisions of the ESI Act has to be settled by the Employees'

Insurance Court, not by a civil Court.

8.4.3 EMPLOYEES' PROVIDENT FUND AND MISCELLANEOUS PROVISIONS

ACT, 1952

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The Act was passed in 1952 with the objective of making some provisions for the future

of the industrial worker after he retires, for the dependants in case of his early death, and to

cultivate a spirit of saving among the workers.

The Act applies to all factories and other establishments falling under any notified

industry and employing 20 or more workers. Once the Act is applied, it does not cease to be

applicable even if the number of employees falls below 20. The Act extends to the whole of

India except Jammu and Kashmir and the Assam Tea Plantations both of which had a separate

Act and Scheme.

The Central Government is empowered to apply the provisions of the Act to any

establishment employing less than 20 persons after giving not less than two months' notice of its

intention to do so by a notification in the Official Gazette. However, please note that the Act

does not apply to cooperative societies employing less than 50 persons and units working

without the aid of power.

Workers in establishments employing 20-50 persons pay 6.25 per cent of their earnings

and those with a larger strength pay 8 per cent. Employers make an equal contribution. The

Provident Fund is refunded with interest in the event of death, permanent disability,

superannuation, retrenchment, migration or on leaving service. On retirement, or after 15 years

of service a worker receives his own share and the employer's contribution. For shorter periods

of membership, the proportion of employer's contribution varies according to the length of

service.

8.4.4 EMPLOYEES' FAMILY PENSION SCHEME, 1971

A Scheme of Family Pension-cum-Life Assurance was instituted in 1971 with the

objective of providing long-term recurring financial benefit to the family of the member in the

event of his premature death while in service. Under the Act, the word “family” means (i) wife in

the case of a male member of the family pension fund; (ii) husband in the case of a female

member of the family pension fund; (iii) minor sons and unmarried daughters of a member of the

family pension fund. Under the scheme a family pension fund is created by diverting 11/6 per

cent of pay and an equal amount each from the employer and the State Government. The Central

Government pays the administrative cost of the scheme.

8.4.5 THE EMPLOYEES' DEPOSIT-LINKED INSURANCE SCHEME, 1976

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The Act is applicable to all factories / establishments to which the Employees’ Provident

Funds Act applies. Where the monthly pay of an employee exceeds Rs.1600 per month the

contribution payable in respect of him by the employer and the State Government will be limited

to the amount payable on a monthly pay of Rs.1600. The special feature of the scheme is that

only the employer and the government make contributions to the scheme and not the employee

himself. The employer is required to contribute to the Insurance Fund at the rate of 0.5 per cent

of the pay of the employees who are provident fund subscribers. The Central Government also

contributes to the Insurance Fund an amount representing one half of the amount contributed by

the employer.

The above three schemes, namely, the Employees’ Provident Funds Scheme, the

Employees’ Family Pension Scheme, and the Employees’ Deposit-linked Insurance Scheme are

administered by the Employees’ Provident Fund Organisation. The administration of these

schemes is in the hands of the Central Board of Trustees, a tripartite body consisting of a

Chairman, nominees of the Central and State Governments and employers' and employees'

organisations.

8.4.6 THE PAYMENT OF GRATUITY ACT, 1972

Gratuity is an additional retirement benefit. The Act is applicable to all factories, mines,

oil-fields, plantations, ports, railways, shops or establishments in which 10 or more workers are

employed. The Central Government can bring in any establishment by notification under the

provisions of the Act. According to the Act, an employee is entitled to 15 days wages for every

year’s continuance in service. Seasonal workers should be paid gratuity at the rate of 7 days

wages per season. The total gratuity payable shall not exceed more than 20 months wages. The

Act applies to workers who do not have any managerial or administrative capacity or are

employed under the government and do not draw wages of more than Rs. 1600 per month.

Gratuity is payable on termination of employment after the completion of at least five years of

continuous service. This is relaxable in the case of death or disablement.

Activity 2

Examine the legislative measures that ensure social security benefits to the workers.

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8.5 SUMMARY

This chapter has underlined the importance of social security benefits available to the

workers and familiarized with the important laves governing employee benefit schemes. This has

also highlighted the need, scope and features of these laws.

8.6 GLOSSARY

Social Security Measures: Measures that will ensure protection by society to its

members against economic and social distress.

Employee’s State Insurance Act: Which provides for medical, sickness, dependent,

disablement and maternity benefits.


Answers to Check your Progress A(a) Legal(b) Limited(c) Equitable(d) 1948(e) Retirement Benefit

Check your Progress B1. True2. True3. False4. True5. True




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3. S.N. Misra, 1970, Labour & Industrial Laws, Central Law Publications, Allahabad


1. Explain the meaning and growth of social security legislation in India.

2. Examine the objective and important provisions of employees’ State Insurance

Act, 1948.

3. State the importance and scope of gratuity under the payment of Gratuity Act,

1972.

4. Briefly explain the provisions relating to Provident Fund and employee’s family

pension scheme.

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LESSON – 9

Employees’ State Insurance Act, 1948, Employees’ Provident Fund & Miscellaneous

Provisions Act, 1951 and Gratuity Act, 1972

Structure


9.1 Employees’ State Insurance Act, 1948

9.1.1 Object of the Act

9.1.2 Scope and Application

9.1.3 Important Features

9.1.4 Employee State Insurance Fund

9.1.5 Benefits

9.2 Employees’ Provident Fund & Miscellaneous Provisions Act, 1951

9.2.1 Introduction


9.2.3 Scope & Application

9.2.4 Schemes under the act

9.2.5 Employees’ Deposit – linked Insurance Scheme

9.3 Gratuity Act, 1972


9.3.2 Scope

9.3.3 Employees’ Right to Payment of Gratuity

9.3.4 Determination and payment of Gratuity by Employer

9.4 Summary

9.5 Glossary





After studying this chapter, you will be able to:

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to know the objectives of ESI Act, 1948, EPF & Miscellaneous Provisions Act, 1951 and

Gratuity Act, 1972

to know the social security schemes of employees’ given under ESI, EPF and Gratuity

Act.

to know the authorities to decide the claims under these Acts.

9.1 EMPLOYEES’ STATE INSURANCE ACT, 1948

The Act is the introduction of the scheme of social insurance in India. Social insurance

can be described as a system under which specified groups of people are compulsorily insured

against certain specified risks such as sickness, maternity and employment injury. The insured

worker is given certain benefits out of a fund created by contributions from the insured person,

his employer and the state whenever any of these contingencies happen. The Act contains

provisions regarding the grant of benefits in the event of these contingencies and provides for the

establishment of a corporation for the administration of the scheme.


The ESI Act is a beneficial piece of registration mainly meant for the benefit of the

employees to provide an insurance coverage when in distress during sickness, maternity,

employment injury etc. To provide social security to the employees in factories and other

establishments is the main objective of ESI Act, 1948.

9.1.2 Scope and Application

The Employee’s State Insurance Act, 1948, applies in the first instance to all factories

including government factories in the whole of India including the State of Jammu and Kashmir,

However the Central Corporation, and State Governments, with approval of the Central

Government, extent the Act to any industrial, Commercial or agricultural establishment.

9.13 Important Features:

The Employees’ State Insurance Corporation: The Scheme of the Employees’. State

Insurance as embodied the Act is administered by corporation named as Employee’s State

Insurance Corporation. The provisions regarding the constitution, administration and power etc.

of the corporation are as follows:

Constitution of the corporation: The corporation consists of the following members:

(a) A chairman to be nominated by the Central government.

(b) A Vice-chairman to be nominated by the central government.

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(c) Not more than five persons to be nominated by the Central Government.

(d) One person each representing each of the States in which this Act is in force to be

nominated by the State Government.

(e) One person to be nominated by the central government to represent the union

territories.

(f) Five persons representing employees to be nominated by the Central Government in

consultation with the organisations of employees.

(g) Two persons representing the medical profession to be nominated by the Central

Government in consultation with the organisations of medical practitioners.

(h) Three members of Parliament of whom two shall be elected from Lok Sabha and one

from Rajya Sabha.

(i) The Director-General of the Corporation-ex-officio.

The members of the corporation referred in clauses (a), (b). (c), (d) shall hold office

during the pleasure of the Government nominating them, the term of other members (excluding

Director-General will be for a period of four years.

PRINCIPAL OFFICERS: Section 16 provides for the appointment of the following

principal officers of the corporation by the Central Government in consultation with the

corporation:

(a) A Director, General, who shall be the Chief Executive officer of the Corporation.

(b) An Insurance Commissioner.

(c) A Medical Commissioner.

(d) A Chief Accounts Officer.

(e) An Actuary.

These principal officers shall be whole time officers of the corporation and shall not

undertake any work unconnected with their officer without the consent of the Central

Government and the Corporation.

STAFF: The corporation may employ such other staff or officers and servants as may be

necessary for the efficient transaction of its business. However, the consent of the central

Government must be taken for creation of any post the maximum salary of which exceeds such

salary as may be prescribed by the central government.

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POWER, ACOUNTS, AUDIT ETC: The corporation can purchase, hold and transfer

property subject to the prescribed rules. it can take funds and discharge them. it shall maintain

correct accounts of its income and expenditure. Its' accounts shall be audited by the auditors

appointed by the Central Government. it shall be also submit to the Central Government an

annual report on its work and activities.

The corporation can, in addition to the scheme of benefits specified in this Act, promote

measures for improvement of health and welfare of the insured persons. The expenditure on such

measures can be met out of the funds of the corporation within such limits as may be prescribed

by the Central Government.

MEDICAL BENEFITS COUNCIL: Section 10 provides for the creation of a Medical

Benefit Council constituted as follows: Director General Health Services, as exp-officio

Chairman, Medical Commissioner or the Corporation as ex-officio member. Deputy Director-

General Health Services, nominated by the Central Government one members nominated by

each State in which this Act is in force; three members representing employers; three

representing the medical profession. These representatives shall hold office for a period of four

year. Representatives of Govt. shall hold office during the pleasure of the central govt. or the

state government as the case may be members.

Sector 22 lays down the powers and duties of the Medical Benefits Council, the Council

may

(a) advice the corporation and the Standing committee on matters relating to the

administration of medical benefits. The certification for the purpose of the grant of benefits and

other connected matters;

(b) have such powers and duties of investigations may be prescribed in relation to

complaints against medical practitioners in connection with medical treatment and attendance;

and (c) perform such other duties in connection with medical treatment and attendance as may be

specified in the regulations.

9.1.4 Employees State Insurance Fund: All contributions paid and all other money

received by the Employee State Insurance Corporation are to be paid into a fund called the

Employee State Insurance fund. The Corporation received (i) contributions from employers (ii)

contributions from employees, and (iii) donations, gifts or grants from the Central Government,

the State Government and the local authorities etc.

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The fund can be used for payment of benefits and provision of medical treatment to

insured persons, payment of salaries of the Corporation staff and the principal officers payment

of expenses regarding establishment and maintenance of hospitals, dispensaries’, and defraying

the cost and other expenses of administration of the Corporation (Sec 28).

9.1.5 Benefits: The Act provides the following benefits to the insured person:

1. Sickness Benefit: it is in the form of periodical payment to any insured person,

provided his sickness is certified by a duly appointed medical practitioner, or any person having

such qualifications & experience as may be specified by regulations of the corporation where

provision is made for sick leave by standing order, the employer cannot require the employee to

seek sickness benefit provided under this section. The qualification of a person to claim sickness

benefit, the conditions subject to which such benefit may be given, the rates and period thereof

shall be such as may be prescribed by the central government.

2. Maternity Benefit: This benefit in the form of periodical payment available to an

insured woman. it is payable in case of:

(i) Confinement; or

(ii) Miscarriage; or

(iii) Sickness arising out of pregnancy; or

(iv) Premature birth of a child.

The grounds of eligibility of an insured woman to such payments must be certified by an

Insurance Medical Officer as provided by the regulations.

3. Disablement Benefit: Any insured person shall be entitled to periodical payments if:

(i) he suffers from disablement;

(ii) the disablement results from an employment injury;

(iii) and he sustained the employment injury as an employee under condition

mentioned in the Act.

The disablement benefit is payable only when the injury is duly certified by an Insurance

Medial Officer. The insured person shall be entitled to such payments at such rates, for such

period and subject to such conditions as may be prescribed by the central government.

4. Dependents Benefit: This benefit is available to such dependents, of an insured person

who dies as a result of an employment injury sustained as an employee, as are entitled to

compensation under this Act.

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5. Medical Benefit: Medical benefit is available to an injured person or to a member of

his family, if such benefit is extended to the members of his family. This benefit is in the

following forms:

(i) Out-patient treatment and attachment in the hospital or dispensary; or

(ii) by visits of the home of the insured; or

(iii) as an in-patient in a hospital or other institution.

6. Funeral Expenses: Funeral expenses are payable to the eldest surviving member of

the family or to such person who actually incurs funeral expenses. The amount of such payment

shall not exceed such amounts as may be prescribed by the central government.

7. Employees’ Insurance Court: The Act authorizes the state government to constitute

an employees’ insurance court and thereafter appoint an officer as judge to discharge the

functions thereof. Any question or dispute subject to the provisions of the Act shall be decided

by the Employees’ Insurance Court.

Check Your Progress - A


(a) The ESI Act has much wider scope to provide social security to the employees.

(b) The corporation may accept grants, donations & gifts from the central or any state

government, or any individual or anybody whether corporate or not.

(c) The eligibility of insured woman to receive maternity benefit does not require

certification.

(d) The material benefit cannot be extended to the family of the insured person by the

corporation.

(e) The benefits under the Act can be transferred or assigned to any other person.

2. Fill in the blanks:

(a) The object of the ESI Act is to provide for certain benefits to employees in case of

________ ______________.

(b) The corporation consists of representatives of Government, ______ and _______.

(c) The Employees’ State Insurance Fund provided under the ESI Act, 1948 is a

_____________.

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(d) ‘Principal Employer’ means by person responsible for the __________ and _____

of the establishment.

(e) An insured person is entitled to disablement benefit if the suffers _____________

9.2 EMPLOYEES PROVIDENT FUND & MISCELLANEOUS PROVISIONS ACT,

1951

9.2.1 Introduction

Statutory provident funds governed by provident funds Act 1952 are recognised by the

commissioner of Income tax. The provident funds Act 1952 as amended by amendment Act,

1971, now provides also for family pension and life assurance benefits. The Act was renamed as

employees Provident funds and family Pension Funds Act. 1952.

9.2.2 Object of the Act: The Object of the Act is to make some provision for and

industrial worker for the future so that he may utilise this, after retirement and his dependents

may not suffer an account of his retirement or premature death. The Act extents to the whole of

India except the state of Jammu and Kashmir.

9.2.3 Scope & Application: The Act does not apply to factory or establishment

registered under the co-operative societies Act, 1912 of any other law relating to cooperative

societies and employing less than 50 persons and working without aid of power. Even

establishment (1) employing 50 or more persons (2) employing so or more but less than 50, will

not attract the provisions of the Act until the expiry of three years in case of former and 5 year in

case of latter from the date on which establishment is or has been set up, An establishment shall

not be deemed to tie newly set up simply by mason of a change in its location.

9.2.4: Schemes under the Act: (a) the Employees Provident Funds Schemes, 1952: The

central govt., may by notification in the official gazette, frame a scheme to be called the

employees provident fund scheme for the establishment of provident funds under this Act for

employees or any class of employees and specify the establishment to which the said scheme

shall apply and they shall be established as soon as may be after the funding of scheme, a fund in

accordance with the provisions of this Act and the scheme.

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Administration of the funds: The Central Govt. may by notification in the official

Gazette constitute with effect from, such date as may be specified therein, a Board of Trustee for

territories to which the Act extends consisting of the full person.

(a) a chairman to be appointed by the central government:

(b) the central provident fund commissioner ex-officio.

(c) not more than 15 persons appointed by the central government from among its

officials.

(d) not more than 15 persons representing govt. of such states as the central government

may specify in this behalf appointed by central govt.

(e) ten persons representing employer of the establishment to which the scheme applies,

appointed by the central govt. after consultation with such organization of employees as may be

recognised be the central govt. in this behalf.

The Board of Trustees constituted under section 5-A shall be a body corporate under the

name specified in the notification constituting it, having perpetual succession and a common seal

and shall by the said name sue and be sued.

State Board: (1) The central government may, after consultation with the government of

any state by notification in the official gazette, constitute for that state, a Board of trustees insure

manner as may be specified in the scheme.

(2) The state Board shall exercise such power and perform such duties as the central

government may assign to it from time to time.

(3) The terms and condition subject to which a member of a State Board may be

appointed and the time, place and procedure of the meetings of a State Board may be such as

provided for in the scheme.

(4) Every Board of Trustees Constituted under section 5-B, shall be body corporate under

the name specified in the notification constituting it having perpetual succession and common

seal and shall by the said name sue and be sued.

Appointment of officers: The Central Govt. shall appoint a central P.F. Commissioner

who shall be the chief executive officer of the Central Board and shall be subject to the general

control and superintendent of the Board. The appointment to the post of the central PF.

Commissioner or an additional central P.F. Commissioner or financial advisor and chief A/c

officer or any other.post under the Central Board. The method of recruitment salary and

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allowances, discipline and-other condition of service of the Central P.F. Commissioner and the

Financial Advisor and chief A/c officer shall be such as may be specified by the central govt. and

such salary and allowances shall be paid out of the P.F.

When the central Board is of the opinion that it is necessary to make a departure from the

said rules or orders in respect of any of the matters aforesaid, it shall obtain the prior approval of

the central govt.

Delegation of Powers: The Central Board may delegate to the executive committee or to

its chairman or to any of its officers such of its powers and functions under the Act as it may

deem necessary for the efficient administration of the employees P.F. schemes the family

pension scheme and the employees deposit linked insurance scheme.

Class of employees entitled and required to join Provident Fund : Every employee

employed in or in connection with the work of a factory or other establishment, other than on

excluded employee shall be entitled and required to become a member of the P.F.

Excluded Employee: means (i) an employee who having been a member of the fund,

withdrew, the full amount of his accumulation in the fund (ii) and employee where pay in the

time be is otherwise entitled to become a member of the fund, exceeds Rs. 2,500 per month, and

as apprentice.

An apprentice means a person who according to the certified standing order applicable to

the factory or establishment is an apprentice by the oath or they specified this behalf by the

appropriate govt.

“Pay” includes basic wages with dearness allowance retaining allowance and value of

food concession admissible thereon.

Contributions and matter which may be provided for in the scheme. The contribution

which shall be paid by the employer to the fund shall; be 10% of the basis wages, dearness

allowance and retaining allowance for the time being payable to each of the employee and the

employee’s contribution payable by the employer in respect of him.

Recovery of member’s share of contribution the amount of member's contribution paid

by the employer shall not withstanding the provisions in the employee’s provident fund scheme

or any law for the time being in force or any contract to the contrary, be recoverable by means of

deduction from any wages of the member and otherwise.

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Employee’s Family Pension scheme and fund: By the Labour Provident Fund laws

ordinance, 1971, Promulgated by; the president of India on 13 Feb. 1971, provision has been

made for the creation of an employee's family pension fund and family pension scheme. By the

Amending Act, the employee’s Provident Fund Act 1952 was renamed as the employees

Provident Fund and family pension Act, 1952.

Retention of membership: A member of the family pension fund shall continue to be a

member till he attains the age of 60 yrs. or be retires or quits the service and withdraws or

becomes entitled to with draw the benefit to which he is entitled under this scheme.

Benefits under the Scheme:

(1) Family Pension: if a member of the family Pension scheme dies during reasonable

service before attaining the age of 60 years. Family pension will be paid immediately following

the death of the member.

(2) Life assurance fund: where a member who has contributed to the E.P.F. for a period

not less than one year dies while reasonable service a lump sum of Rs. 2000 is payable to his/her

family as life assurance benefit.

(3) Retirement-cum-withdrawal Benefit: The benefit becomes payable to the members

either on attaining the age of 60 years or on cessation of membership from the E.P.F. before

attending the age of 60 years for reasons other than death provided that the member has

contributed to the fund for a period of not less than one year.

6-B special grant by central govt. The central govt. shall after due appropriation made by

parliament by law in this behalf pay such further sums as may be determined by it into the family

pension fund to meet all the expenses in connection with the administration scheme.

9.2.5: Employees Deposit-linked Insurance scheme: The Act as amended in 1976 and a

new scheme 6c was inserted empowering the central government to frame a scheme for the

purpose of providing life insurance benefit to the employees of any establishment to which the

act applies.

This scheme is applicable to all factories establishments to which the employees P.F. and

miscellaneous provisions Act, 1952 applies. All the employees who are members of the P.F. in

both the exempted and the. unexampled establishments are covered under the scheme. The

scheme covers all employees drawing upto Rs. 3500 per month.

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(4) Priority of payment of contributions over other debits: Where any employer is

adjudicated insolvent or, being a company an order for winding up is made the following

payments due from the employee are to be made in priority to all other debits in the distribution

of the property of the insolvent or the assets of the company being wound up as the case may be.

(1) Any amount due from the employer in respect of

(a) any contribution payable to the provident fund or the deposit linked insurance fund.

(b) Damages recoverable u/s 14-B

(c) Accumulation required to be transferred under section 15 (2)

(d) Any charges payable by the employer under any other provision of the Act or of any

provision of the employees provident fund scheme or the employees deposit linked insurance

scheme.

Employer not to reduce wages: Section 12 prohibits an employer not to reduce direct or

indirectly the wages of an employee to whom the provident fund scheme or the insurance

scheme applies or the total quantum of benefits in the nature of old age pension, gratuity or

provident fund or life insurance to which the employee is entitled under the terms of

employment, express or implied, simply by reason of his liability for the payment of any

condition to the fund or the insurance fund or any charges under this Act or the scheme or the

insurance scheme.

Section 13 inspectors: (1) The appropriate government may by notification in the

official gazette appoint such persons as it thinks fit to be inspectors for the purpose of this Act or

the Family Pension Scheme or the insurance scheme as the case may be and may define their

Jurisdiction.

(2) Any Inspector appointed under sub-section (1) may for the purpose of inquiring into

the correctness of any information furnished in connection with this Act or with any scheme or

for the purpose of ascertaining whether any of the provisions or of any scheme have been

complied which in respect of an establishment to which the scheme applies or for the purpose of

ascertains whether the provisions of this Act or any scheme are applicable to any establishment

to which the scheme or the insurance scheme has not been applied.

Cancellation of exemption: An exemption granted under section 17 may be cancelled by

authority which granted it by order in writing, if an employer fails to comply with the conditions

subject to which it was granted.

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Transfer of Accounts: (1) Section 17-A Provides that where an employee in an

establishment to which this act' applies leaves his employment and obtained re-employment in

another establishment to which this Act does not apply the amount of accumulation to the credit

of such employee in the fund, or as the case may be, in the provident fund of the establishment

left less then shall be transferred to the credit of his account in the provident fund of the

establishment in which he is re-employed, of the employee so desires and the rules in relation on

that provident fund permit such transfer.

(2) Where an employer in establishment to which his Act does not apply leaves his

employment; and obtains re-employment in other establishment to which the Act applies the

amount of accumulation to the credit of such employee in the provident fund the establishment

left by him may, if the employee so desires and the rules in relation to such provident fund

permit, be transferred to the credit of his account in the fund or as the case may be in the

provident fund of the establishment in which be is re-employed.

Power to remove difficulties: If any difficulty arises in giving effect to the provisions of

this Act as amended by the employee provident fund and miscellaneous provisions Act, 1988,

the central govt. may by order published in the official gazette, make such provision, not in

consisting with the provision of this Act as appear to into be necessary or expedient for the

removal of the difficulty.

Constitutional validity of section 22: The power of the central govt. to adjudicate on

various statutory issues on which there is doubt or difficulty is hot arbitrary or uncanalised. The

central govt. has to act within the cover of the act. Its orders are the speaking orders with

reasons.

Delegation of power: Section 19 permits the delegation of any power or authority or

jurisdiction exercisable by the appropriate government under the act the E.P.F. scheme the C.P

scheme or the E.P.F. scheme.

Where the appropriate govt. is the central govt., it may delegate such power, authority or

Jurisdiction to such officer or authority subordinate to the central govt. or the state govt., or such

officer or authority subordinate to the state govt. as may be specified in the notification.

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CHECK YOUR PROGRESS B

1.State whether the following statements are true or false.

(a) Employment of 20 person in an establishment even for a single day will bring the

establishment within the purview of the statute.

(b) The central government may constitute an executive committee to assist the

central board in the performance of its functions.

(c) The employer may reduce the wages of any employee entitled to benefits under

this Act.

(d) The employer shall not be liable to pay damages if he fails to pay any contribution

to the fund.

(e) The appropriate government may exempt any establishment from the operation of

all or any of the provisions of the Act.

9.3 GRATUITY ACT, 1972

9.3.1 Introduction

The term “gratuity” has not been defined under the Payment of Gratuity Act, 1972. But

“gratuity” as the term itself suggests is a gratuitous payment given to an employee on retirement

or discharge. Gratuity is a benefit payable by the employer to his employee upon his retirement

or on the termination of his employment.

“Gratuity” is different from “pension”: “There is a distinction between pension payable on

retirement and the gratuity payable on retirement; while pension is payable periodically so long

as the pensioner is alive. Gratuity is ordinarily paid only once on retirement.” “Gratuity is a lamp

sum payment considered necessary for an orderly and humane elimination from industry.

9.3.2 Object of the Payment of Gratuity Act, 1972

“The Payment of Gratuity Act, 1972 aims to provide for a scheme for the payment of

gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway

companies, shops or other establishments and for matters connected therewith or incidental

thereto.”

Section 1: Short title, extent, application and commencement:

(1) This Act may be called the Payment of Gratuity Act, 1972.

(2) It extends to the whole of India:

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Provided that in so far as it relates to plantations or ports, it shall not extend to the State

of Jammu and Kashmir.

(3) It shall apply to:

(a) Every factory, mine, oilfield, plantation, port and railway company;

(b) Every shop or establishment within the meaning of any law for the time being

in force in relation to shops and establishments in a State, in which ten or

more persons are employed, or were employed, on ay day of the preceding

twelve months;

(c) Such other establishments or class of establishments, in which ten or more

employees are employed, or were employed, on any day of the preceding

twelve months, as the Central Government may, by notification, specify in

this behalf.

(3A) A shop or establishment to which this Act has become applicable shall

continue to be governed by this Act notwithstanding that the number of persons

employed therein at any time after it has become so applicable falls below ten.

(4) it shall come into force on such date, as the Central Government may, by

notification, appoint.

Establishments notified by the Central Government: the Payment of Gratuity Act also

applies to such other establishments which are notified by the Central Government. Such other

establishments in which ten or more employees are employed, or were employed on any day of

the preceding twelve months.

Exemption from the operation of the Payment of Gratuity Act, 1972 (Section 5):

Section 5 of the Payment of Gratuity Act, 1972 has conferred authority on the appropriate

Government to exempt any establishment from the operation of the provisions of this Act. The

exemption under Section 5 may be granted if the appropriate Government is of the opinion that

the employees of such establishment are in receipt of gratuity or pensionary benefits not less

favourable than the benefits conferred under the Payment of Gratuity Act, 1972.

9.3.3 EMPLOYEES’ RIGHT TO PAYMENT OF GRATUITY

Who is eligible (Section 4)

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According to sub-section (1) of Section 4, gratuity is payable to an employee on the

termination of his employment after he has rendered continuous service of not less than five

years.

Payment of gratuity: Section 4 provides for the employee’s right to payment of gratuity

as follows:

1. Gratuity shall be payable to an employee on the termination of his employment after he

has rendered continuous service for not less than five years-

(a) on his superannuation, or

(b) on his retirement or resignation, or

(c) on his death or disablement due to accident or disease:

Provide that the completion of continuous service of five year shall not be necessary

where the termination of the employment of any employee is due to death or disablement:

Provided further that in the case of death of the employee, gratuity payable to him shall

be paid to his nominee or, if no nomination has been made, to his heirs.

Payment of gratuity in case of death of employee: According to sub-section (1) of

Section 4, in case of death of the employee, gratuity payable to him shall be paid to;

(i) his nominee; or

(ii) to his heirs if no nomination has been made.

Where any such nominee or heir is a minor, the share of such minor shall be deposited

with the controlling authority. The controlling authority invests the same for the benefit of such

minor in such bank or other financial institutions, as may be prescribed, until such minor attains

majority.

Controlling authority (Section 3): The appropriate government may, by notification

appoint any officer to be a controlling authority, who shall be responsible for the administration

of this Act. Different controlling authorities may be appointed for different area.

Nomination by the employees (Section 6): According to sub-section (1) of Section 6,

each employee who has completed one year of service, shall make nomination of nominees for

the payment of gratuity in case of his death under Section 4(1).

6. Nomination—(1) Each employee, who has completed one year of service, shall make

within such time, in such form and in such manner, as may be prescribed, nomination for the

purpose of the second proviso to sub-section (1) of Section 4.

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(2) An employee may, in his nomination, distribute the amount of gratuity payable to him

under this Act amongst more than one nominee.

(3) If an employee has a family at the time of making a nomination, the nomination shall

be made in favour of one or more members of his family, and any nomination made by such

employee in favour of a person who is not a member of his family shall be void.

(4) If at the time of making a nomination the employee has no family, the nomination

may be made in favour of any persons, but if the employee subsequently acquires a family, such

nomination shall forthwith become invalid and the employee shall make, within such time as

may be prescribed, a fresh nomination in favour of one or more members of his family.

(5) A nomination may, subject to the provisions of sub-sections (3) and (4), be modified

by an employee at any time, after giving to his employer a written notice in such form and in

such manner as may be-prescribed, of his intention to do so.

(6) If a nominee predeceases the employee, the interest of the nominee shall revert to the

employee who shall make a fresh nomination, in the prescribed form, in respect of such interest.

(7) Every nomination, fresh nomination or alteration of nomination, as the case may be,

shall be sent by the employee to his employer, who shall keep the same in his safe custody.

Nomination must be in favour of the family member [Section 6(3), (4)]: According to

sub-section (3) of Section 6, if an employee has a family at the time of making a nomination, the

nomination shall be made in favour of one or more members of his family. Any nomination

made by such employee in favour of a person who is not a member of his family shall be void.

Modification of nomination Section 6(5), (6), (7): A nomination made by the employee

may be modified by him under sub-section (5) of Section 6. Such modification is made by the

employee after giving a written notice to the employer. Sub-section (5) of Section 6 reads.

Rate at which gratuity is paid [Section 4(2)] : Sub-section (2) of Section 4 provides as

follows :

For every completed year of service or part thereof in excess of six months, the employer

shall pay gratuity to an employee at the rate of fifteen days’ wages based on the rate of wages

last drawn by the employee concerned .

Forfeiture of gratuity [Section 4(6)] ): Sub-section (6) of Section 4 provides for the

forfeiture of gratuity to which the employee is entitled. The gratuity payable to an employee may

be wholly or partially forfeited—

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(i) 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

(ii) 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.

Section 7 enjoins upon the employer to determine the amount of gratuity payable to a

person under the Payment of Gratuity Act, 1972. According to sub-section (3) of Section 7, the

gratuity is to be paid to the eligible person by the employer within thirty days from the date on

which it becomes payable.

9.3.4 Determination and Payment of Gratuity by Employer

Section 7 provides for the procedure for the payment of gratuity. According to sub-

section (1) of Section 7, a person who is eligible for payment of gratuity under the Payment of

Gratuity Act, shall send a written application to the employer for payment of gratuity. An

application under Section 7(1) may be made by any other person who is authorised in this behalf.

Controlling authority to decide matter in dispute.

Appeal to the appellant authority against the decision of the Controlling Authority

[Section 7(7)]: According to sub-section (7) of Section 7, an appeal against the decision of the

controlling authority may be filed within sixty days from the date of receipt of the order to the

appropriate Government or to an appellate authority specified in this behalf by the appropriate

Government. Controlling authority to issue certificate to the collector for the recovery of

gratuity.

Recovery of gratuity: “If the amount of gratuity payable under this Act is not paid by

the employer, within the prescribed time, to the person entitled thereto, the controlling authority

shall, on an application made to it in this behalf by the aggrieved person, issue a certificate for

that amount to the Collector, who shall recover the same, together with compound interest

thereon, at such rate as the Central Government may, by notification, specify, from the date of

expiry of the prescribed time, as arrears of land revenue and pay the same to the person entitled

thereto.

Protection of gratuity: According to Section 13, gratuity is not liable to attachment in

execution of any decree or order of any civil, revenue or Criminal Court. Section 13 reads as

under :

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No gratuity payable under this Act and no gratuity payable to an employee employed in

any establishment, factory, mine, oilfield, plantation, port, railway company or shop, exempted

under Section 5 shall be liable to attachment in execution of any decree or order of any civil,

revenue or Criminal Court.

Compulsory Insurance [Section 4A]: Section 4A has been added to the Payment of

Gratuity Act, 1972 in the year 1987. According to Section 4A(1), an employer has to obtain an

insurance for his liability for payment towards the gratuity under the Act. This insurance is to be

obtained from the Life Insurance Corporation of India or any other prescribed insurer.

Inspectors: The appropriate government may, by notification, appoint as many

Inspectors, as it deems fit, for the purpose of this Act.

Cognizance of Offences and Penalties: According to sub-section (2) of Section 11, no

Court inferior to that of :

(i) Metropolitan Magistrate; or

(ii) a Judicial Magistrate of the first class, shall try any offence punishable under the

Payment of Gratuity Act, 1972.

Penalties (Section 9): According to sub-section (1) of Section 9, whoever, for the

purpose of avoiding any payment to be made by himself under Payment of Gratuity Act or of

enabling any other person to avoid such payment. An employer who:

(i) contravenes, or

(ii) makes default in complying with, any of the provisions of the Payment of

Gratuity Act, or order made there under shall be punishable.

(iii) with imprisonment for a term which shall not be less than three months, but which

may extend to one year, or

(iv) with fine which shall not be less than ten thousand rupees but which may extend to

twenty thousand rupees, or

(v) with both, imprisonment as well as fine.

Appropriate Government's Power to make rules (Section 15): According to sub-

section (1) of Section 15, the appropriate Government may, by notification, make rules for the

purpose of carrying out the provisions of the Payment of Gratuity Act, 1972. According to sub-

section (2) of Section 15, every rule made by the Central Government shall be laid before each

House of Parliament as soon as may be after it is made.

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CHECK YOUR PROGRESS C

State whether the following statements are true or false.

(a) The concept of gratuity is different from pension.

(b) This Act of payment of gratuity is wide enough to wide enough to bring within its

scope, the entire organized sector of industry and commerce.

(c) Gratuity shall be payable to an employee on his death or disablement due accident

or disease.

(d) The employee must have rendered continuous service for a period of 5 years to

claim gratuity.

(e) Nomination by an employee may be made in favour of a person who is not a

member of his family.

9.4 SUMMARY

This chapter familiarize you with the important Laws and Rules governing worker

welfare programmes and employee benefit schemes. It has highlighted the need of these benefits

and welfare measures from the viewpoint of the worker and the advantages that they may bring

to enhance worker efficiency, morale and productivity. ESI Act provides benefits in sickness,

maternity benefits and other similar cases. Its funding is one both through the financial

contributions by the employees as well as the employers. The provident fund legislation was yet

another step in the direction of social security whereby employees would be encouraged to save

for the safe of family. Gratuity is an addition retirement benefit. Gratuity is payable on

termination of employment after the completion of at least five years of continuous service.

9.5 GLOSSARY

1. Social Welfare Activities: Activities which will improve the living conditions of

people (especially of manual workers)

2. Social Security Measures: Measures that will ensure protection by society to its

members against economic and social distress.


Answers to check your progress-A:

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1. (a) True (b) True (c) False

(d) False (e) False

2. (a) Sickness, maternity and employment injury.

(b) employers and employees (c) Contributory fund

(d) Supervision and control (e) Employment injury.

Answers to check your progress-B:

1. (a) True (b) True (c) False (d) False

(e) True

Answers to check your progress-C:

1. (a) True (b) True (c) True (d) True

(e) False


1. T.N. Bhagliwal, Economics of Labour and Social Welfare

2. S.N. Misra, Labour Law

3. K.R. Bulchandani, Industrial Law.


1. Write about the Employees’ State Insurance Corporation.

2. Explain the man features of employees’ family pension scheme and funds.

3. Critically evaluate Employee’s Provident Funds Act.

4. State the general provisions concerning the payment of Gratuity Act, 1972.

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LESSON – 10

INTERNATIONAL LABOUR ORGANISATION (I.L.O) &

LABOUR WELFARE

Structure


10.1 Introduction

10.2 Objectives of the ILO

10.3 Procedure for Admission as a Member

10.4 Structure of the ILO

10.5 Functions of ILC (International Labour Conference)

10.6 The Governing Body

10.7 The International and Labour Office

10.8 Finance of the ILO

10.9 Impact of the ILO on the Indian Labour

10.10 The Concept of Labour Welfare Definition

10.11 Scope and Objectives of labour welfare

10.12 Summary

10.13 Glossary


10.15 Suggested Reading

10.16 Terminal and Model questions


After studying this chapter, you should be able to:

Know about International Labour Organization

Know the impact of ILO on Indian Labour

Understand Labour Welfare and its need.

10.1 INTRODUCTION

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The International Labour Organisation (ILO) was established on April 19, 1919 by

Versailles Peace Conference as an autonomous body associated with the League of Nations. It

was born as a result of the peace conference at the end of World War I at Versailles. India

became member of ILO in 1919, as an original signatory to the treaty of peace. The ILO was the

only international organisation that survived the second world war even after the dissolution of

its parent body the League of Nations. It became specialised agency of United Nations (UN) in

1946. The ILO is a new social institution trying to make the world conscious that world peace

may be affected by unjust conditions of its working population. It deals with international labour

problems. The unique feature of ILO is that it is a tripartite body consisting of representations of

employers, labour and government. There are three constituents namely the governments which

finance it, the workers, for whose benefit it is created and the employers who share responsibility

for the welfare of the workers.

10.2 OBJECTIVES OF THE ILO

The objectives of the I.L.O. are enumerated in the preamble to its constitution and in the

Declaration of Philadelphia (1944) supplemented by Article 427 of the Peace Treaty of

Versailles (1919). The preamble affirms (i) whereas universal and lasting peace can be

established only if it is based upon social justice, (ii) and whereas conditions of labour exist

involving such injustice, hardship and privation to large numbers of people as to produce unrest,

that the peace and harmony of the world is imperilled, (iii) whereas the failure of any nation in

bartering the conditions of labour would under the economic progress of this own country.

Thus, ILO has been “attempting to promote world-wide respect for the freedom and

dignity of the working men and to create conditions in which that freedom and dignity can be

more fully and effectively enjoyed”.

During the second world war a conference was convened at Philadelphia. During the

discussions at this conference the aims of ILO were redefined. This was termed as “Declaration

of Philadelphia”. This was incorporated in the constitution of ILO. The conference reaffirmed

the principles of ILO namely: (i) Labour is not a commodity; (ii) freedom of expression and of

association are essential to substantial progress; (iii) poverty constitutes a danger to prosperity

everywhere; (iv) the war against want requires to be carried on with unrelenting vigour within

each nation, and by continuous and concerted international effort in which the representatives of

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workers and employees enjoying equal status with those of governments in free discussion and

democratic decision with a view to the promotion of the common welfare.

The Declaration of Philadelphia enunciated 10 objectives which the ILO was to further

arc promote among the nations of the world. These are:

(a) Full employment and the raising of standards of living.

(b) The employment of workers in the occupation in which they can have the

satisfaction of giving the fullest measure of their skill and make their contribution

to the common well being.

(c) The provision, as a means to the attachment of this end and under adequate

guarantee for all concerned, of facilities for training and the transfer of labour

including migration for employment and settlement.

(d) Policies in regard to wages and earnings bonus and other conditions of work

calculated to ensure a just share of the fruits of progress to all and a minimum

living wage to al employed and in need of protection.

(e) The effective recognition for the right of collective bargaining, the co-operation of

management and labour in continuous improvement of productive efficiency and

the collaboration of workers and employers in social and economic measures.

(f) The extension of social security measures to provide a basic income to all in need

of such protection and comprehensive medical care.

(g) Adequate protection for the life and health of workers in all occupations.

(h) Provision for child welfare and maternity protection.

(i) The provision of adequate nutrition, housing, and facilities for recreation and

culture.

(j) The assurance of educational and vocational opportunity.

10.3 PROCEDURE FOR ADMISSION AS A MEMBER

The constitution of ILO provides that all the states, who were members of ILO or 1st

November, 1945 and any original member of UN can become member of ILO by accepting its

obligations of its constitution.

The constitution of ILO was amended in 1945, and the ILO entered into arrangement

with the UN. The new rules say that:

Page 167 of 250

(i) Membership of the UN does not mean membership of ILO, any original member

of the UN and any state subsequently admitted to the membership of UN may

become member of ILO by communicating to the Director General, its formal

acceptance of the rules and obligations of the ILO.

(ii) If a state is not a member of the UN, the ILO confess on the International Labour

Conference (ILC — Parliamentary wing of the ILO), the right to admit that state

to membership, which it had assumed defects during the period of the relationship

of the ILO with the league.

10.4 STRUCTURE OF THE ILO

The ILO consists of three principal organs namely (i) the International Labour

Conference; (ii) The Governing Body; (iii) The International Labour Office. The work of the

conference and the Governing Body is supplemented by that of Regional Conferences, Regional

Advisory Committee and Industrial Committees.

The conference is the supreme policy making and legislative body. The Governing Body

in the Executive Council and the International Labour Office are the secretarial, operational

headquarters and information centre.

The structure of the ILO and various functions are depicted below check no.

The ILC International Labour Conference: is the policy making organ of the ILO. It

comprises 4 groups representing governments, employers and workers in the ratio of 2:1:1. ILC

holds its sessions once in a year. Delegates to this session may be accompanied by advisors not

exceeding two for each item on the agenda. The government delegates are mostly ministers,

diplomats or government officials. As per the constitution, the employers’ and workers’













































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delegates to the conference are nominated by the government of that state in agreement with

respective organisations of employers and workers.

One of the primary powers of the conference is to appoint committees to deal with

different matters during each session. These committees except finance committee are tripartite

in nature.

These committees are: (i) The Selection Committees; (ii) The Credential Committed (iii)

The Resolution Committee; (iv) A committee for the application of Conventions and

Recommendations; (v) The Drafting Committee; (vi) The Committed on Standing Orders; (vii)

The Finance Committee.

10.5 FUNCTIONS OF ILC (INTERNATIONAL LABOUR CONFERENCE)

(1) To formulate International Labour Standards.

(2) To fix amount of contribution by the member states

(3) To decide the expenditure budgeted estimate proposed by the Director General

arc submitted to the Governing Body.

(4) To make amendments to the constitution subject to subsequent ratification of the

amendments by 2/3 member states including 5 of the 10 states of industrial

importance.

(5) To consider the report of the Director General giving labour problems and assist

in their solution.

(6) To appoint committees to deal with different matters during each session.

(7) To select once in 3 years members of the Governing Body.

(8) To elect its President.

(9) To seek advisory opinion from the International Committee of Justice.

(10) To confirm the powers, functions and procedure of Regional Conference.

10.6 THE GOVERNING BODY

It is another principal organ of the ILO. It is non-political, non-legislative partite body. It

implements decisions of the ILC with the help of the International Labour Office. Out or

members in it, 28 represent the governments, 14 employers and 14 labour. Out of 28 government

members, 10 are appointed by the member States of Industrial Importance and the balance as

delegates of the other governments. The criteria laid down for the selection of members of

industrial importance is the strength of its total industrial population. India is one of the ten states

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of Industrial Importance. The tenure of office of this body is 3 years. It meets several times a

year to take decisions on the programmes of the ILO. The functions of this body are:

(1) To co-ordinate work of the organisation.

(2) To prepare agenda for each session and subject to the decision of the ILC to

decide via subject should be included in the agenda of the ILC.

(3) To appoint the Director General.

(4) To secrutinise the budget.

(5) To follow up the implementation of the conventions and recommendations

adopted by the ILC by member states.

(6) To fix the date, duration and agenda of the Regional conference.

(7) To seek advisory opinion from the International Court of Justice with the consent

of ILC.

10.7 THE INTERNATIONAL AND LABOUR OFFICE

This is the third major and important organ of the ILO. It functions as the secretariat of

the ILO in Geneva. The Director of General of the ILO is the Chief Executive of the Secretarial.

He is appointed by the Governing Body. He also acts as the Secretary General of the ILO.

conference. His tenure is for 10 years and his term may be extended by the governing body. The

Director General is assisted by two Deputy Director Generals, six Assistant Director Generals

and by one Director of the International Institute of Labour Studies, one Director of the

International Centre of Advanced Technical and Vocational Training and of the Staff drawn

from 100 nations. The important functions for the International Labour office are:

(1) To prepare documents on the times of the agency for the conference.

(2) To assist governments in forming legislations on the basis of the decisions of the

ILC.

(3) To carry out its functions related to the observance of the conventions.

(4) To bring out publications dealing with industrial labour problems of international

interest.

(5) To collect and distribute information of international labour and social problems.

10.8 FINANCE OF THE ILO

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The budget is prepared and fixed on the recommendation of the Governing Body and

Member States make their contribution. Contributions are fixed on an ad hoc basis from year to

year. India contributes 2.77% of the annual budget of the ILO.

Activity 1

Highlight the structure and organization of ILO.

1.________________________________________________________________

__________________________________________________________________

2.__________________________________________________________________

___________________________________________________________________

10.9 IMPACT OF THE ILO ON THE INDIAN LABOUR

India is a member of the ILO since its inception and it gave great fillip to labour

legislation in India. India has adopted many of the conventions and recommendations on

international standards for improvement in labour conditions, under Article 3 of the constitution

of the ILO. India has been nominating non-government delegates and advisors to the ILC every

year.

One of the main functions of the ILC, the Legislative wing of the ILO is to formulate

International Labour standards. The ILC provides a forum for discussion and deliberation of

international Labour problems and then formulate the standard in the form of conventions and

recommendations.

A convention is a treaty, which when rectified by a member state, creates binding interna-

tional obligations on that state. A recommendation creates no such obligation. The ILO adopted a

series of conventions and recommendations covering hours of work, employment of women,

children and young persons, weekly rest, holidays, leave with wages, night work, industrial

safety, health, hygiene, social security, labour management relations, freedom of association

wages and wage fixation productivity. One of the fundamental obligations, imposed on

governments by the constitution of ILO is that they must submit the instruments before the

competent national or state authorities, within a maximum period of 18 months of their adoption

by the conference for such action as might be considered practicable.

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India has been one of the founder members of the ILO and has been taking advice part in

its deliberations. The ILO has so far adopted 173 Conventions and 180 Recommendations. India

has ratified 36 Conventions. The Conventions ratified by India have been incorporated in the

labour legislation. The ILO standards have a decisive impact on the factory, mines, social

security and wage legislation in India. The ILO has also greatly influenced the trade union

movement in our country. The AITUC owes its immediate origin to it. India’s commitment to

the ILO is reflected in its adherence to the institution of tripartism as a novel method of resolving

labour management conflicts.

The ILO standards have influenced Indian labour legislation. The ILO conventions have

formed the sheet anchor of Indian labour legislation especially after 1947 when the India--

National Government assumed office at the centre.

The Directive Principles of the State Policy in Articles 34, 41, 42, and 43 of the

constitution lay down policy objectives in the field of labour having close resemblance and

influence to the ILO constitution and the Philadelphia Charter of 1944.



(a) Lack of good working conditions gives size to (_______) in the organization.

(b) The working environment in a factory adversely affects the workers’ (______)

(c) Labour welfare is a very broad team includes (____________) also.

(d) Labour Welfare is a (___________) and elastic concept.

(e) Labour Welfare includes infra-mural as well as (_________) activities.

10.10 THE CONCEPT OF LABOUR WELFARE DEFINITION

It is indeed true that there is very little agreement as regards the definition and scope of

labour welfare. In the Encyclopaedia of Social Sciences, the term ‘welfare work – industrial’ has

been used to describe the voluntary efforts of an employer to establish within the existing

industrial system, working and sometimes living and cultural condition of his employees beyond

what is required by law, the customs of industry and the conditions of the market.

The Royal Commission on labour did not attempt to define the term ‘welfare’ as applied

to the industrial workers and contented itself by saying. “It is one which must necessarily be

elastic, bearing a somewhat different interpretation from one country to another, according to the

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different social customs, the degree of industrialisation and the educational development of the

workers”.

The Labour Investigation Committee on the other hand, while noting that defining the

term ‘Labour Welfare’ is somewhat ‘subjective’ and difficult, proceeded to include under labour

welfare activities “anything done for the intellectual, physical, moral and economic betterment

for the workers, whether by employers, government or by other agencies over and above what is

laid down by law or what is normally expected as a part of the contractual benefits for which the

workers may have bargained”.

In a publication of the International Labour Organisation, the term ‘Labour Welfare’ has

been defined to include such service, facilities and amenities as may be established in or in the

vicinity of undertakings to enable the persons employed therein to perform their work in healthy

and congenial surroundings.

Realising the difficulties in giving a precise and generally acceptable definition of ‘labour

welfare’ the National Commission on Labour pointed out in their report "the concept of welfare

is necessarily dynamic, bearing a different interpretation from country to country and from time

to time, and even in the same country, according to its value system, social institution, degree of

industrialisation and general level of social and economic development. Even within the country,

its content may be different from region to region”.

Activity 2

Highlight the meaning and scope of Labour Welfare

10.11 SCOPE AND OBJECTIVES

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Notwithstanding the differences in the definitions, there is a general agreement regarding

the specific issues to be included under the term “labour welfare”. The Labour Investigation

Committee included under its definition of “welfare work” the following activities.

“Housing, medical, educational facilities, nutrition (including provision of canteen),

facilities for rest and recreation, co-operative societies, day nurseries and creches, provisions of

sanitary accommodation, holidays with pay, social insurance measures undertaken voluntarily by

employers alone or jointly with workers, including sickness and maternity benefit scheme,

provident funds, gratuities and pensions, etc”.

The study team appointed by the Government of India in 1959 to examine the then

welfare facilities divided these activities into the following three groups:

(a) Welfare within the precincts of an establishment, medical aid, creches, canteens,

supply of drinking water, etc.

(b) Welfare outside the establishment, provision for indoor and outdoor recreation,

housing, adult education, visual instruction, etc., and

(c) Social security.

The Committee of Experts on welfare facilities for industrial workers constituted by the

I.L.O. in 1963 divided welfare services into the following two groups:

(a) Welfare amenities within the precincts of the establishment: latrines and urinals,

washing and bathing facilities; creches, rest, shelters and canteens; arrangement

for drinking water; arrangement for prevention of occupational hazards,

administrative arrangement within a plant to look after welfare; uniform and

protective clothing; and shift allowances.

(b) Welfare outside the establishment: maternity benefit, social insurance measures

including gratuity pension, provident fund and rehabilitation, benevolent funds;

medical facilities including programmes for physical fitness and efficiency,

family planning and child welfare; educational facilities including adult

education; housing facilities; recreation facilities including sports, cultural

activities, library and reading room; holiday homes and leave travel facilities;

workers co-operative including consumers’ co-operative stores, fair price shops

and co-operative thrift and credit societies; vocational training for dependents of

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workers; other programmes for welfare of women, youth and children and

transport to and from the place of work.

It should be noted that though the above-mentioned list was given at different intervals of

time, related to different environments, they are strikingly similar in essential details.

From the above definitions of labour welfare, it is apparent that none is complete or

comprehensive. There is no precise, definite outline or demarcation in this subject. More often

than not, they give rise to ambiguity and overlap in certain areas of action. However, what is

definite is that labour welfare promotes the well being of workers in a variety of ways.

10.11.1 IMPORTANCE

Industrial progress of a country depends on its committed labour force. In this regard the

importance of labour welfare was recognized as early as 1931, when the Royal Commission on

labour stated that the benefits which go under this nomenclature are of great importance to the

worker who is unable to secure by himself. The schemes of labour welfare may be regarded as “a

wise investment” which should and usually does bring a profitable return in the form of greater

efficiency. Twenty years later, the Planning Commission realised the importance of labour

welfare, when it observed that “In order to get the best out of a worker in the matter of

production, working conditions require to be improved to a large extent”. The worker should at

least have the means and facilities to keep himself in a state of health and efficiency. This is

primarily a question of adequate nutrition and suitable housing conditions. The working

condition should be such as to safeguard his health and protect him against occupational hazards.

The work place should provide reasonable amenities for his essential needs. The worker should

also be equipped with the necessary technical training and a certain level of general education.

10.11.2 CONCEPT OF LABOUR WELFARE

The concept of ‘labour welfare’ is flexible and elastic and differs widely with time,

region industry, social values and customs, degree of industrialisation, the general socio-

economic development of the people and the political ideologies prevailing at a particular time.

It is also moulded according to the age-group, sex, socio-cultural background, marital and

economic status and educational level of the workers in various industries. Accordingly, the

concept cannot be very precisely defined. However, efforts have been made by the expert bodies

to do so, each in his own way. A few of these definitions are given below:

The Labour Investigation Committee preferred to include under ‘Labour Welfare’:

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“Anything done for the intellectual, physical, moral and economic betterment of the

workers, whether by employers, by government or by other agencies, over and above what is laid

down by law or what is normally expected of the contractual benefits for which workers may

have bargained.”

According to the Committee on Labour Welfare, welfare services should mean:

“Such services, facilities, and amenities as adequate canteens, rest and recreation

facilities sanitary and medical facilities, arrangements for travel to and from place of work, and

for the accommodation of workers employed at a distance from their homes; and such other

services amenities and facilities, including social security measures, as contribute to the

conditions under which workers are employed.”

The ILO report refers to labour welfare as”

“Such services, facilities and amenities as may be established in or in the vicinity of

undertakings to enable the persons employed in them to perform their work in healthy, congenial

surroundings and provided with amenities conducive to good health and high morale.”

The Encyclopedia of Social Sciences has defined labour welfare work as:

“The voluntary efforts of the employers to establish, within the existing industrial system,

working and sometimes, living and cultural conditions of the employees beyond what is required

by law, the custom of the country and the conditions of the market.”

10.11.3 BASIC FEATURES OF LABOUR WELFARE

A perusal of the above definitions indicates that the term ‘labour welfare’ has been used

in a ‘wide’ as well as ‘narrow’ sense. In the ‘broader sense,’ it may include not only the

minimum standard of hygiene and safety laid down in general labour legislation, but also such

aspects of working life as social insurance schemes, measures for the protection of women and

young workers, limitation of hours of work, paid vacations, etc. In the ‘narrow sense’, welfare in

addition to general physical working conditions is mainly concerned with the day-to-day

problems of the workers and the social relationships at the place of work. In some countries, the

use of the welfare activities provided is confined to the workers employed in the undertakings

concerned, while in others, the workers' families are allowed to share in many of the benefits

which are made available.

On the basis of the various definitions, the basic characteristics of labour welfare work

may be noted thus:

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(i) It is the work which is usually undertaken within the premises or in the vicinity of

the undertakings for the benefit of the employees and the members of their

families.

(ii) The work generally includes those items of welfare which are over and above

what is provided by statutory provisions or required by the custom of the industry

or what the employees expect as a result of a contract of service from the

employers.

(iii) The purpose of providing welfare amenities is to bring about the development of

the whole personality of the worker – his social, psychological, economic, moral,

cultural and intellectual development to make him a good worker, a good citizen

and a good member of the family.

(iv) These facilities may be provided voluntarily by progressive and enlightened

entrepreneurs at their own accord out of their realisation of social responsibility

towards labour, or statutory provisions may compel them to make these facilities

available; or these may be undertaken by the government or trade unions, if they

have the necessary funds for the purpose.

(v) ‘Labour Welfare’ is a very broad term, covering social security and such other

activities as medical aid, creches, canteens, recreation, housing, adult education,

arrangements for the transport of labour to and from the work place.

(vi) It may be noted that not only intra-mural but also extra-mural, statutory as well as

non-statutory activities, undertaken by any of the three agencies – the employers,

trade unions or the government – for the physical and mental development of a

worker, both as a compensation for wear and tear that he undergoes as a part of

the production process and also to enable him to sustain and improve upon the

basic capacity of contribution to the processes of production, “which are all the

species of the longer family encompassed by the term ‘labour welfare’”.

10.11.4 NEED FOR WELFARE WORK

The need for the labour welfare arises from the very nature of the industrial system,

which is characterised by two basic factors; one, the conditions under which work is carried on

are not congenial for health; and second, when a labourer joins an industry, he has to work in an

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entirely strange atmosphere, which creates problems of adjustment. One author calls these two

factors “the long arm of the job”, and “the social invasion of the factory.”

The working environment in a factory/mine adversely affects the workers’ health because

of the excessive heat or cold, noise, odours, fumes, dust and lack of sanitation and pure air etc.

lead to occupational hazards. These have, therefore, to be held in check by providing

ameliorative services, protective devices and compensatory benefits following of accident or

injury or disablement. This has been referred to as “the long arm of the job which stretches out

its adverse effects on to the worker long after his normal 8-hour work.” Hence the need for

provision of welfare services within the premises of the factory, mine or plantation arises.

When a worker, who comes from rural areas to work in a factory, he has to work and live

in unhealthy, congested factories and slum areas, with no outdoor recreation facilities. To escape

from the trying conditions of his tedious and tiresome job, he absents himself, becomes irregular

and is often indisciplined. Hence the need for providing welfare services arises. For whatever

improvements in the conditions of work and life of the employees, whatever leads to increasing

adaptation of the worker to this hob, and whatever makes him fully contented lessen his desire or

need to leave the factory for a time and lighten for him the burden of this social invasion the

factory.

There is a social reason also as pointed out by the Labour Investigation Committee, “the

provision of canteens improves the physique, entertainment reduces the incidence of vices

medical aid and maternity and child welfare services improve the health of the workers and bring

down the rates of general, maternal and infantile morality; and education facilities increase the

mental efficiency and economic productivity”.

The need for labour welfare was strongly felt by the Royal Commission on Labour as far

back as in 1931, primarily because of lack of commitment to industrial work among factory

workers and the harsh treatment they received from their employers this need was emphasised in

free India, by the Constitution which contain the following Articles in this regard:

“Article 41: The state shall, within the limit of its economic capacity and development

make effective provisions for securing the right to work to education, and to public assistance in

cases of unemployment, old-age, sickness, and disablement and in other cases of underserved

want.”

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“Article 42: The state shall make provision for securing the just and humane condition of

work and for maternity relief.”

“Article 43: The state shall endeavour to secure, by suitable legislation or economic

organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, a

wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and

social and cultural opportunities; and in particular, the state shall endeavour to promote cottage

industries on an individual or co-operative basis in rural areas.”


II. True / False

(1) The ILO standards have influenced Indian labour legislation.

(2) India is one of the founder members of the ILO

(3) A convention is a treaty which creates binding international obligations.

(4) Governing Body consists of the representatives of the employers and workers.

(5) Any original member of UN can become member of ILO

10.11.5 AIMS OF LABOUR WELFARE WORK

The Labour Welfare Work aims at providing such service facilities and amenities as

would enable the workers employed in industries/factories to perform their work in healthy,

congenial surroundings conducive to good health and high morale.

(1) It is partly humanistic, for it enables the workers to enjoy a fuller and richer life.

(2) It is partly economic because it improves the efficiency of the worker, increases

its availability where it is scarce and keeps him contented. It, therefore, minimises

the desire of the workers to form or join unions and to resort to strikes.

(3) The aim is partly civic because it develops a sense of responsibility and dignity

among the workers and thus makes them worthy citizens of the nation.

10.11.6 APPROACHES TO LABOUR WELFARE

The issue of labour welfare may be studied from different angles, such as:

The location, where these amenities are provided, within and outside the

industrial undertakings;

The nature of amenities such as those concerned with “conditions of

employment,” and “living conditions of work people”.

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The welfare activities termed as ‘statutory’, ‘voluntary’ and ‘mutual’.

The agency which provides these amenities.

On the basis of the location of welfare activities, labour welfare work has been

classified in two specific categories, namely, (c) intramural (b) extra-rnural. On

the basis of the location of welfare activities, labour welfare work has been

classified in two specific categories, namely, (c) intramural (b) extra-rnural.

(a) Intra-mural Activities consist of such welfare schemes provided within the

factories as medical facilities, compensation for accidents, provision of creches

and canteens, supply of drinking water, washing and bathing facilities, provision

of safety measures such as fencing and covering of machines, good lay-out of the

machinery and plant, sufficient lighting, first aid appliances; fire extinguishers;

activities relating to improving conditions of employment, recruitment and

discipline and provision of provident fund, pension and gratuity, maternity

benefits etc.

(b) Extra-mural Activities cover the services and facilities provided outside the

factory such as, housing accommodation, indoor and outdoor recreation facilities,

amusement and sports, educational facilities for adults and children, provision of

libraries and reading rooms.

In the welfare activities concerned with conditions of employment are included activities

for the management of problems arising out of hours of work, wages, holidays with pay, rest

intervals, sanitation, and safety, continuity of employment, control over the recruitment of

female and juvenile labour, while all such schemes of benefits as co-operative societies, legal

and medical aid, and housing are included in the category of activities concerned with

“conditions of workers”.

Labour welfare work may be statutory, voluntary or mutual. It is statutory when such

activities have to be undertaken in furtherance of the legislation enacted by the government. It is

voluntary when the activities are undertaken at their own accord by the employers or some

philanthropic bodies or when a labour organisation undertakes such activities for the welfare of

their members. It is mutual, when all parties join hands to bring about the social and economic

uplift of the workers.

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The National Commission on Labour has classified various labour welfare measures

under two distinct classes: (i) those which have to be provided, irrespective of the size of the

establishment or the number of the persons employed therein such as facilities relating to

washing, storing, drying the clothing, first-aid, drinking water, latrines and urinals; and (ii) those

which are to be provided subject to the employment of a specified number of persons, such as

canteen, rest shelter, creche, ambulance etc.

According to the Encyclopedia of Social Science, “industrial welfare work” has taken

numerous forms, such as:

(a) those dealing with immediate working conditions are special provisions for

adequate light, heat, ventilation, toilet facilities, accident and occupational disease

prevention, lunch room, rest room, maximum hours, minimum wages, etc.;

(b) those concerned with less immediate working conditions and group interests, are

gymnasiums, club rooms, playgrounds, gardens, dancing, music, house organs,

mutual aid societies, vacation with pay, profit-sharing, stockownership, disability

and unemployment funds, pensions, savings banks, provisions for conciliation and

arbitrator of shop committees and workers’ councils;

(c) those designed to improve community conditions, such as housing, retail stores,

schools libraries, kindergartens, lectures on domestic sciences, day nurseries,

dispensary and dental service screening of motion pictures, arranging athletic

contests and picnics and summer camps.

10.11.7 SCOPE OF LABOUR WELFARE WORKS

It is somewhat difficult to accurately lay down the scope of labour welfare work,

especially because of the fact that labour class is composed of dynamic individuals with complex

needs.

In a world of changing values, where ideologies are rapidly undergoing transformation,

rigid statements about the field of labour welfare need to be revised. Labour welfare work is

increasing with changing opportunities and needs to meet varying situations. It is also increasing

with the growing knowledge and experience, of techniques. An able welfare officer would,

therefore, include in his welfare programme the activities that would be conducive to the well-

being of the worker and his family. The test of a welfare activity is that it removes, directly or

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indirectly, any, hindrance, physical or mental of the-worker and restores to him the peace and joy

of living the welfare work embraces the worker and his family.

The following list, which is by no means exhaustive, gives the items under which welfare

work should be conducted inside and outside the work place.

10.12 SUMMARY

The ILO is a social institution trying to make the world aware that world peace may be

affected by unjust conditions of workplace. It deals with international labour problems. It

promotes the freedom and dignity of workers. Labour welfare includes welfare within, outside

and social security related activities of the employer. It is a flexible and elastic concept that

differs widely with time, region, industry, social values and customs and other social, economic

changes of the country. Its purpose is the development of the whole personality of the worker.

10.13 GLOSSARY

International Labour Organisation: An autonomous International Organisation and

specialized agency of United Nations.

Welfare Programme: Includes those activities that would be conductive to the well-

being of the worker and his family.


Answers to Check your Progress A

(a) Indiscipline(b) Health(c) Social Security(d) Flexible(e) Extra-mural

Answers to Check your Progress B

1. True2. True3. True4. False5. True

10.15 SUGG ESTED READINGS:

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. 1. A.M. Sharma, 1981, Aspects of Labour Welfare and Social Security, Himalaya



Ltd., New Delhi.



1.Explain the structure and objective of International Labour Organisation.

2.Examine the impact of ILO on the Indian Labour

3.Explain the concept and scope of labour welfare.

Page 183 of 250

1

CHAPTER 11 Social Work and Welfare Work

True peace is not merely the absence of tension; it is the presence of justice. –

Martin Luther King

Structure

11.1 Objectives

11.2 Introduction

11.3 Social work as an art, science as well as profession

11.4 Characteristics of social work

11.5 Check Your Progress 1

11.6 Social work and Welfare work

11.7 Methods/Techniques and Theories of Social work

11.8 Fields of Social work


11.10 Summary

11.11 Glossary

11.12 Answer to Check Your Progress

11.13 Reference



11.1 Objectives

To understand the concept of social welfare and social work

To understand Social work as a profession

To understand social work and welfare work

To understand methods/ techniques and theories of social work

To understand fields of social work

11.2 Introduction

As people live collectively, various problems of relationship and interface materialize

on the horizon of everyday living. The most prominent of problems are drug abuse,

homelessness, delinquency, crime, depression, suicides, school dropouts, sexually transmitted

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2

diseases etc. There seems to be no end to the uncertainty prevailing in the world, personal,

family, and community problems. Emotional difficulties are rampant. There is a marked

increase in the teenage and senior citizen suicides. The meaningful human relationships in

which people are ready to help each other is receding at a fast pace. When serious difficulties

in human relationships arise, the question immediately becomes, “Can we get help?” The

professionals of social work are always geared up and eager to help.

Social work Vs. social welfare Social work and social welfare are fundamentally based on

three principles:

(1) That every individual is vital;

(2) That he or she has personal, family, and societal problems consequential from interface

with others; and

(3) That something can be done to lessen these problems and enrich the individual’s life.

Social welfare, in a broad sense, include the well-being and interests of large population,

which includes their physical, learning, psychological, emotional, religious, and economic

needs.

Social welfare, according to Friedlander, “is the organized system of social services and

institutions, designed to aid individuals and groups to attain satisfying standards of life and

health, and personal and social relationships that permit them to develop their full capacities

and to promote their well being in harmony with the needs of their families and the

community.”

According to Long and Holle, “Social welfare is a necessary thread in the fabric of social

structure, and society has a responsibility for the plight of its members.”

In 2014, the two bodies representing international social work ‐ the International Federation

of Social Workers (IFSW) and the International Association of Schools of Social Work

(IASSW) ‐ agreed the following global definition:

“Social work is a practice‐based profession and an academic discipline that promotes social

change and development, social cohesion, and the empowerment and liberation of

people. Principles of social justice, human rights, collective responsibility and respect for

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diversities are central to social work. Underpinned by theories of social work, social

sciences, humanities and indigenous knowledge, social work engages people and structures to

address life challenges and enhance wellbeing”.

“What is social work?” Social work is a profession that has been developed to manage the

huge and intricate human service system put in place by society. It is a scientific discipline

but still necessitates an inventive and craftily approaches to work with individuals, families,

groups, and societies that are under pressure with problems. Social work seeks to enhance the

social functioning of individuals, singly and in groups, by activities focused upon their social

relationships which constitute the interaction between man and his environment. These

activities can be assembled into three functions: restoration of impaired capacity, provision

of individual and social resources, and prevention of social dysfunction.”

The primary assumptions of social work are:

1. Social work like all other professions has problem-solving capabilities.

2. Social work is an art with a scientific and value base.

3. Social work as a profession came into being and continues to expand because it meets

human requirements and ambitions recognized by society.

4. Social work practice takes its values from those held by the society of which it is a part.

5. The understanding needed for social work is determined by its goals and purpose and the

problems it seeks to solve.

6. The internalization of professional knowledge and values is a important characteristic of

the professional social worker since he is himself the instrument of professional help.

7. Professional skill is expressed in terms of the activities of the social worker.

Evolution

The concept of social work and evolution in India can be properly interpreted by a detailed

and systematic scrutiny of its values, philosophy, and principles with special reference to

perceptions and viewpoints regarding its development. The primary objective of social work

is commitment of solidarity with deprived sections of society. The lack of economic,

physical, emotional resources leads to powerlessness and subsequently to violation of human

rights. The resourceful people are often involved in deprivation and exploitation of the

deprived people. Therefore, the social work profession recognizes that deprived and

marginalized people need to be empowered, which is defined as the process of gaining

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4

control over self as well as the resources, which determine power. The characteristic of social

work finds the indication in the folk tales in old age literary works, Smiritis. Further, the most

primitive mention to charity can be obtained from Rigveda which promote charity by

saying “May the one who gives shine most”. The Arthasastras, is one of the ancient works in

polity which refers to the building work for community by collective efforts of villagers.

Joint charity was admired form of social work, of which growth of education

or Vidyadana was an essential one as reflected by Jatakas. The practice of donations by every

householder find mention in other Upanashidas like Brihadarnayaka, Chhandogya

and Taittiriya. One of the famous religious methods of executing social work was Yagnas, the

main intend was the general welfare of all, irrespective of any personal gain. According

to Geeta resourceful sections must try hard towards the realization of its duty to serve the

marginalized, physically handicapped and underprivileged. The Social Reform in Medieval

Period (1206-1706) laid emphasis on contribution of rulers to modifications in social

institutions and structure which mainly focused on maintaining peace, protection from

external attack, levying of taxes. The provision of safe drinking water, construction of

mosques, sarais, and aids to poor was regarded as dutiful act. Humayun was the first to make

the efforts to forbid Sati system. Slavery was abolished in the year 1583 by Akbar who took

various initiatives in bringing modifications in Indian society by establishing equality among

people irrespective of class and religion and established comprehensive system of granting

relief to every needy person.

Gandhiji coupled political movement with the social movement and altered into a mass

movement with the involvement of all sections of society especially women, and peasants

and deprived castes. The critical moment in training and education in the field of social work

was the establishment of Sir Dorabji Tata Graduate School of Social Work, Bombay in 1936.

After independence, the government altered the welfare approach and took various areas of

social work under its purview. The popularity of ideas of social transformation, social

advancement, numerous family planning programmes, eradication of mass poverty and

lessening of income gaps among the population echo the direction of social orientation

towards striving to accomplish the goals.

11.3 Social work is an art, science as well as profession

Unlike in the olden days social work is not past-time activity or religious duty, it has

evolved as full fledged profession with attributes, ethical standards, techniques and methods .

Social work is art, science as well as profession. As social work is need based, relationship

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based, agency based enabling process has attributes of art. Social work is based on problem

solving techniques. Social action and social research thus has attributes of science

Profession:

Like other professions, Social work has its own tested organization of knowledge,

which includes principles, techniques, methods, procedures, tools and terminology of its own.

Social work has six methods of working with people (Social casework, Social group work,

community organization, social action, social welfare administration and social research).

These methods are the techniques of enabling the people for better social functioning. Social

work has distinguishing professional bodies: the NASW (The National Association of Social

Workers) NASW was established in 1955, brought several smaller professional social work

groups under one umbrella in the form of a unified and dynamic organization. Its

membership has increased speedily, and in the year 2004, it registered more than 150,000

social workers.

11.4 Characteristics of social work

Comprehensive Process

Relationship based Process

Need Based Process

Interdisciplinary Process

Agency Based System

Enabling Process

Fortification Process

Facilitating Process

Profession

Comprehensive Process: The spotlight is on the wholeness and entirety of

the person, environmental factors, and social behavior. Social work stresses

the total person in the total environment.

Relationship based Process: The stress is on the importance of the family in

molding and influencing the behavior of an individual. Social workers try to

recognize the principles governing family interaction and to coordinate with

the family as the basic unit for improving social functioning, realizing that the

majority of social problems are a result of inadequate or imbalanced family

relationships.

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Need Based Process: Deployment of community resources in helping people

solve problems is very vital aspect. Social workers have a complete

knowledge of community resources and are competent to tap them to meet the

requirements of their clients. They state that the process is fundamentally the

same whether working with individuals, groups, or societies.

Interdisciplinary Process:

Social work has a point of reference in psychiatric concepts and places

significant stress on understanding people. The social worker is mainly

interested in how clients feel about themselves and their interaction with

others. The social worker possesses sizeable understanding of the basic

knowledge and concepts of psychiatry and psychology that help him or her in

dealing with human conduct. Some important principles from sociology and

social psychology, as well as from group dynamics, are woven into the crafty

fabric of social work. The principles are further used in understanding

relationships of people and in helping them resolve their conflicts.

Agency Based System: Most social workers are working in agency settings.

There is a marked increase in the number of social workers indulging in

private practice, operating within the framework and policies of agencies. This

gives them structural support that strengthens their services in numerous ways.

Supervision, discussion, and collaboration, intrinsic in agency settings,

provide a lot of positive resources for the workers.

Enabling Process: The fundamental aim of social work is to support clients

help themselves or to help a society help itself. The social worker attempts to

help a person advance his or her understanding of oneself and relationships

with others and utilize his own and community resources in solving personal

problems.

Fortification Process: Conventionally, social workers have provided services

and therapy for individuals and families. For the past two decades, deterrence

has received substantial stress, and recently, a focus on fortification in living,

for all people, has emerged.

Facilitating Process: A social worker is principally effectual in developing

and using the team approach and in bringing about synchronization of services

and activities. Many professional workers regard the social worker as the

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medium who has the talent and conscientiousness to facilitate the professional

team work together and function in most advantageous manner. The social

worker often acts as synchronizer and facilitator for the team effort.


11.6 Social work and Welfare work

Social work is a full- fledged profession of helping a personality at individual, group

and at community level through need based agency system. There is a definite relationship

between personality and social worker. To resolve his problem, complete diagnosis of

problem of personality is done and applications of various techniques of social work are

used.Social work is means or process to do welfare of individuals at all the levels which

ultimately leads to social development and social welfare which leads to improvement in

quality of work life of individuals so that their productivity and efficiency can be improved.

But, welfare work unlike social work is not a profession, although ultimate goal is social

welfare and development but it may or may not be need based, agency based, and

participation based activity. Welfare work includes activities like statutory, non statutory,

Q.1. Which of the following statements is correct about social work?

a) It is an art

b) It is a Science

c) It is a profession

d) All of the above

Q.2. Which of the following statements is incorrect about social work?

a) Social work has a problem-solving function.

b) Social work is enabling process

c) Social worker work in agency settings

d) None of the above

Q.3 Expand ASHA

a) Accredited Social Health Activists

b) Arrogant Social Health Activists

c) Artificial Social Health Activists

d) Aristocrat Social Health Activists

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8

intramural, extra mural and voluntary welfare activities by social organizations and workers

organizations.

11.7 Methods /Techniques and theories of Social work

11.7. a. Methods/ Techniques used in Social work

Like other professions, in social work, we too have methods or techniques to achieve social

welfare. These methods can be divided into two parts viz primary methods and secondary

methods. Over the period of time, these methods have become areas of social work. Primary

methods directly help social work to achieve its ultimate aim of social welfare. Secondary

methods indirectly help the social work through its different techniques. In Primary methods,

issues at individual level are resolved and in social work terminology it is called Social case

work. Second techniques is at group level which is technically called Social Group work and

thirdly it try to resolve issues at community level, which is called community organization.

Under secondary methods, Social action, Social research and Social Administration are three

techniques as explained in Fig.1 (Techniques used in Social Work)

Social case work: As there are individual differences, so is the reaction of individuals

towards his social, economic and physical environments therefore each individual has

different problems because of their perception and reaction towards problems. Social Case

work provides individualized service to assist the client to get acclimatized to their social,

economic and physical environment.

“Social case work (which is both tool and area of work) consists of those processes which

develop personality through adjustment consciously affected, individual by individual

between man and his social environment.” Gordon Hamilton

Situations where case work is applicable:

Family maladjustments

Marriage counseling

Youth guidance

Medical and psychiatric social work

Juvenile Delinquency

Rehabilitation of patients of T.B. and V.D. etc.

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Fig.1: Techniques used in Social Work (Source: Author)

Social Group Wok: As human beings are social animals and they live together in

groups. So their behavior gets affected by the group as a whole. Social Group work is a

techniques or method social work whereby individuals and groups are helped and assisted by

social workers so that they can relate themselves with others and can grow and develop as it

is easier to develop and change individuals as group members rather on one to one basis.

Social Group work includes following activities:

School social work

Holiday Homes

Hospitals,

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Institutions etc.

Community Organization:

Community organization deals with efforts to channelize social resources efficiently towards

the definite or total welfare needs of any geographical area. It is both a

method/technique/process as well as field of social work. The word community can be used

in wider contexts as in, business community, religious community, and social status based

community but in social work it is used on the basis of geographical area.

Following activities are included in community organization

Surveys, Research, Discussions

Meetings, lectures, debates

Local festival celebration

Folk songs

Puppet shows

Kirtan bhajan mandalis

Social education classes

Broader areas in community organization are economic issues, educational, Health related,

recreation, cultural activities and social service etc.

Social Action

Social action is another method of professional social work practice, is an structured

endeavor to change or improve social and economic institutions through association and

mobilization of the community people which aim at long-term essential changes in

established social institutions.

Social action covers movements of social, religious and political reform, social legislation,

racial and social justice, human rights, freedom and civic liberty. Previously social action was

considered as a tool within the field of community organisation, but now it has been

considered as a separate technique of social work and as such a fourth process (Siddiqui,

1984).

Social Investigation/Research

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Social research is a field whereby social worker investigate or research the problems

systematically and carefully using different tools of research viz schedules, questionnaire,

interviews and records. It is a process through which we try to find answers to social

problems.

Social Work Administration

Social work administration is the process by which we apply professional competence skills

to certain goals and convert social policy into social action

According to D. Paul Chowdhary,

“Social welfare programmes could be compared to compared to a vehicle intended for the

treatment and prevention of social ills. Social work Administration xcan be compared with

wheels of this vehicle which provides power,speed and efficiency to these programmes. The

executive of the agency is comparable to the driver of this vehicle and bu virtue of his

efficiency, skills and resourcefulness, he moves the vehicle of social welfare towards

achievement of agency’s goal and it speeds up towards the fulfillment of certain welfare

programmes.”

Activity A

Make a list of social workers and their tasks that you have observed or met in your dailylife in any area at individual, group and community or social Research level.

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11.7.b. Theories of social work

System Theory

Interactionism Theory

Conflict Theory

Learning Theories

Psychodynamic theory.

System theory

System theory focuses on relationships among individuals, groups, organizations or

communities. This theory focuses on reciprocal relationship between the elements that

constitute the whole system. This theory states that why individuals behave differently is

because of formation of particular system and interconnections between all its components.

The role of social worker here is to help client in adapting to current situation and in concert

with others create evocative system.

Interactionism Theory

Interactionism theory focuses on social interaction. As individuals don’t act alone,

there is always interaction of an individual with others, be it with other individual, be it with

group or with community. An individual behaves particularly because interaction with other

parties make him illicit such behavior. The role of social worker is to describe the role of

client’s situation and to create harmony with other parties with whom he has

connections/links/interactions.

Learning theories:

This theory advocates that behavior is learned as individuals interact with their

environment. With the help of positive and negative reinforcement problem behavior is

mended. The role of social worker is to change dysfunctional thoughts and for this they use

cognitive behavioural therapy, cognitive restructuring imagery and systematic

desensitization.

Conflict Theory:

This theory proposes that due to inequality of resources, power is also unequally

divided and therefore there is conflict due to suppression and dominance Those groups have

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edge over other group members with the execution of power try to suppress others. The role

of social worker is to lays the floor for the suppressed to get better their situations

themselves. The goal for the client is to create more dignified milieu with others.

Psycho dynamic theory.

This theory advocates the role of conscious and sub conscious needs, desires and

emotions to be motivating force in human behavior. The life history of the person plays an

important role in describing his behavior. The role of social worker is to make the client more

liberated person by using techniques that arouse the unconscious material in the client,

developmental history which includes trauma, abuses.

11.8 Fields of Social work

Welfare of elderly and the frail

Welfare of the disables

Social defence

Child welfare

Youth welfare

Women welfare

Community welfare

Medical and psychiatric social work

Welfare of the elderly and the frail:

Needs of elderly people can be categorized as health, environmental, occupational, leisure,

economic, environmental and social and types of programmes for elderly and the frail are

Day care centre, Institutions for unattached, dependent and friendless persons, Infirmaries

and financial assistance.

Welfare services for Disabled

The various categories of the handicapped persons are the hearing impaired, the blind,

the orthopedically handicapped or the crippled, the mentally retarded or mentally ill and

among the services for the handicapped are education, institutions and hostels, sheltered

workshops, training and rehabilitation, recreation, and financial assistance

Social defence:

Social defence activities try to protect the society from problems like juvenile delinquency,

immoral traffic among women, unmarried mothers, beggary and adult offenders.

Child welfare:

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The services for the children in the context of child welfare programmes in the country, may

however be classified into institutional and non- institutional services relevant to both normal

and special children.

Youth welfare:

Under youth welfare various activities are covered according to the need of

youngsters e.g. Recreation and leisure-time activities which include hostels and holiday

homes, youth counseling, vocational guidance for becoming a mature and responsible adult,

for developing emotional independence, necessary adjustment with other gender groups and

achieving mature relationship with age-mates and to prepare for family life. To select and

prepare for career in order to achieve economic independence.

Women welfare:

Most of the problems of the women arise out of lack of education, monetary dependence and

limitations on social liberty, which do not ensure an equal status. The welfare extension

projects and social and moral hygiene programmes of the central social welfare board

developed in the fifties, and the general maternity and child welfare services take care of

most of the needs and problems of the women. The services which could be organized for

the women are:

i. Socio-economic programmes

ii. Courses of education for adult women

iii. Working women Hostels

iv. Mahila Mandals

v. Residential institutions

vi. Legal aid

vii. Educational centres for women

viii. Family welfare agencies e.g. Red cross society

ix. Prevention of Sexual Harassment cells.

Community Welfare

The term Community development came to be used with reference to rural development

projects under Five year plan of Government of India. But nowadays the term refers to

welfare and development work in any community-rural, urban, tribal, suburan and scheduled

castes community. Social work under this area includes establishments of Community

development blocks, welfare extension projects,Welfare work at tribal and slum areas.

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Medical social work

Medical social work includes following fields

Public Health programmes

Mental Hospitals

Psychiatric clinics

General Hospitals

Rural Health units

Infirmaries

T.B. SanitoriaV.D.clinics

Various programmes under National Rural Health Mission (NRHM)

Indian Prime Minister Manmohan Singh launched NRHM in April 2005. It was primarily

tasked to deal with the health needs of 18 states that had been identified as having weak

public health indicators. Some of the major programs under are as follows:

Accredited Social Health Activists (ASHAs) Community Health volunteers

called Accredited Social Health Activists (ASHAs) have been employed under the mission

for instituting a connection between the community and the health system. Health care

contractors NRHM has provided health care contractors to underserved areas, and has been

involved in training to expand the skill set of doctors at tactically located facilities identified

by the states. Janani Suraksha Yojana (JSY) JSY aims to reduce maternal mortality among

pregnant women by promoting them to deliver in government health facilities. National

Mobile Medical Units (NMMUs) Many un-served areas have been covered through

National Mobile Medical Units (NMMUs).Rogi Kalyan Samiti (Patient Welfare

Committee) / Hospital Management Society The Rogi Kalyan Samiti (Patient Welfare

Committee) / Hospital Management Society is a management structure that acts as a group of

trustees for the hospitals to manage the affairs of the hospital. Financial assistance is provided

to these Committees through untied fund to undertake activities for patient welfare.

District Hospital and Knowledge Center (DHKC) District Hospitals are being fortified to

offer Multi-specialty health care including dialysis care, intensive cardiac care, cancer

treatment, mental illness, emergency medical and trauma care etc. National Ambulance

Services Free ambulance services are made available in every nook and corner of the country

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connected with a toll free number and reaches within 30 minutes of the call.Janani Shishu

Suraksha Karyakram (JSSK) Janani Shishu Suraksha Karyakarm (JSSK) was initiated to

supply free to and fro transport, free drugs, free diagnostic, free blood, free diet to pregnant

women who come for delivery in public health institutions and sick infants up to one

year.Rashtriya Bal Swasthya Karyakram (RBSK) To screen diseases specific to

childhood, developmental delays, disabilities, birth defects and deficiencies A Child Health

Screening and Early Intervention Services have been launched. The initiative will cover

about 27 crore children between 0–18 years of age and also offer free treatment including

surgery for health problems diagnosed under this initiative.National Iron+ Initiative The

National Iron+ Initiative is an effort to target at Iron Deficiency Anaemia in which

beneficiaries will receive iron and folic acid supplementation irrespective of their Iron/Hb

status. Mother and Child Health Wings (MCH Wings) With a aim to diminish maternal

and child mortality, dedicated Mother and Child Health Wings with 100/50/30 bed capacity

have been authorized in high case load district hospitals and CHCs which would create

additional beds for mothers and children. Free Drugs and Free Diagnostic Service Another

initiative is launched under the National Health Mission to offer Free Drugs Service and Free

Diagnostic Service with an object to reduce the expenditure on health.


Q.4. -------------------- is the process of transforming social policy into social action

a) Social work Administrationb) Social case workc) Social Group workd) None of the above

Q.5. Expand (RBSK)

a) Rashtriya Bal Swasthya Karyakramb) Rashtrpati Bal Swasthya Karyakramc) Rashtrpati Bal Sukarmi Karyakramd) Rashtrpati Bal Swasthya Kender

Q.6. Expand NRHM.

a) National Rural Health Mission (NRHM).b) National Road Health Mission (NRHM).c) National Rural Help Mission (NRHM).e) National Rural Health Mantra (NRHM)

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11.10 Summary

Social problems or issues like drug abuse, homelessness, delinquency, crime,

depression, suicides, school dropouts, sexually transmitted diseases etc. are becoming

rampant these days. As the society is becoming technically advanced, although, we have

become very efficient in our day to day activities yet on the flip side somewhere we are

estranging social interaction and are becoming more and more work or gadget centric thus

creating a paradigm shifts in social values and social arrangements, thus creating problems of

suicides, depression, maladjustment, juvenile delinquency and other heinous crimes are

increasing day by day. There seems to be no end to the uncertainty prevailing in the world, at

personal, family, and community front. Emotional difficulties are rampant. There is a marked

increase in the teenage and senior citizen suicides. The meaningful human relationships in

which people are ready to help each other is receding at a fast pace. In such a situations,

thank God, at least we have a help in the form of social workers. The professionals of social

work are there to help you out. Although Social work and social welfare are used

interchangeably though a line of distinction can be drawn between the two as in social work

is a means or process while social welfare is the ultimate goal which leads to improvement in

quality of life of people at individual, group and community level. Social work is a need

based, agency based profession which seeks to enhance the social functioning of individuals,

singly and in groups, by activities focused upon their social relationships which constitute the

interaction between man and his environment. The major activities under social work are

concentrated on restoration of impaired capacity, provision of individual and social

resources, and prevention of social dysfunction.”

Social work is art, science as well as profession. As social work is need based, relationship

based, agency based enabling process, thus has attributes of art. Social work is based on

problem solving techniques. Social action and social research thus has attributes of science

and like other professions, social work has its own tested organization of knowledge, which

includes principles, techniques, methods, procedures, tools and terminology of its own. Social

work has six methods of working with people (Social casework, Social group work,

community organization, social action, social welfare administration and social research).

These methods are the techniques of enabling the people for better social functioning. Social

work has distinguishing professional bodies: the NASW (The National Association of Social

Workers) NASW was established in 1955, brought several smaller professional social work

groups under one umbrella in the form of a unified and dynamic organization. Its

membership has increased speedily, and in the year 2004, it registered more than 150,000

Page 200 of 250

18

social workers. Characteristics of social work are that it is comprehensive, relationship based,

need based, interdisciplinary, agency based system. It is an enabling, fortification and

facilitating profession. Difference between social work and welfare work is that welfare work

unlike social work is not a profession, although ultimate goal is social welfare and

development but it may or may not be need based, agency based, and participation based

activity. Welfare work includes activities like statutory, non statutory, intramural, extra mural

and voluntary welfare activities by social organizations and workers organizations.

Like other professions, in social work, we too have methods or techniques to achieve social

welfare. These methods can be divided into two parts viz primary methods and secondary

methods. Over the period of time, these methods have become areas of social work. Primary

methods directly help social work to achieve its ultimate aim of social welfare. Secondary

methods indirectly help the social work through its different techniques. In Primary methods,

issues at individual level are resolved and in social work terminology it is called Social case

work. Second techniques is at group level which is technically called Social Group work and

thirdly it try to resolve issues at community level, which is called community organization.

Under secondary methods, Social action, Social research and Social Administration are three

techniques. There are various theories underpinning social work and researchers have

categorized them as system theory, interactionism theory, conflict theory, learning theories

and psychodynamic theory .There are various fields of Social work e.g. Welfare of elderly

and the frail, disables, social defence, child welfare, youth welfare, women welfare and

community welfare. Government of India has formulated and implemented various schemes

under various programmes on above cited fields and areas of social work. Some of the recent

initiatives under National Rural Health Mission (NRHM) are Accredited Social Health

Activists (ASHAs), Community Health volunteers for facilitating health system. Health care

contractors, Janani Suraksha Yojana (JSY), National Mobile Medical Units (NMMUs),Rogi

Kalyan Samiti (Patient Welfare Committee) / Hospital Management Society,District Hospital

and Knowledge Center (DHKC), National Ambulance Services, Janani Shishu Suraksha

Karyakram (JSSK), Rashtriya Bal Swasthya Karyakram (RBSK), National Iron+ Initiative

Mother and Child Health Wings (MCH Wings).Free Drugs and Free Diagnostic Service etc.

Social work has evolved as a profession over the period of time. Social work is becoming

more and more consequential as lot many people at various levels viz individual, group, and

community level are getting benefitted.

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Activity B

Identify the various social work initiatives required to be carried out in your social

network at various levels viz. children, women, elderly, mentally challenged, physically

handicapped etc.

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11.11 Glossary

Social development

Planned comprehensive social change designed to improve people’s general welfare

integrating community development, remedial social services and a dynamic process of

economic development.

Social welfare

A nation’s system of programs, benefits and services that help people meet those social,

economic, educational, and health needs that are fundamental to the maintenance of society

Social case work:

Social case work help people increase their faculties for problem solving and coping at

individual level, and they help them obtain needed resources, facilitate interactions between

individuals and between people and their environments.

Social Group Wok: Social Group work is a techniques or method social work whereby

individuals and groups are helped and assisted by social workers so that they can relate

themselves with others and can grow and develop as it is easier to develop and change

individuals as group members rather on one to one basis.

Community Organization:

Community organization deals with efforts to channelize social resources efficiently towards

the definite or total welfare needs of any geographical area.

Social Action

Social action, is another method of professional social work practice, is an structured

endeavor to change or improve social and economic institutions through association and

mobilization of the community people which aim at long-term essential changes in

established social institutions.

Social Investigation/Research

Social research is a field whereby social worker investigate or research the problems

systematically and carefully using different tools of research viz schedules, questionnaire,

interviews and records. It is a process through which we try to find answers to social

problems.

Social Work Administration

Social work administration is the process by which we apply professional competence skills

to certain goals and convert social policy into social action

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21


Q.1. d

Q.2. d

Q.3. a

Q.4. a

Q.5. a

Q.6. a

11.13 REFERENCES

Sarma, A.M. (2003). Aspects of Labour welfare and social security: Himalya

Publishing House.

Chowdhary D.P. (1995). Introduction to social work: Atma Ram & Sons, Delhi

Hamilton, Gordon. (1959). Theory & Practice of Social Case Work: Columbia

University Press, New York.

Upadhyay, R.K. (1993). Indian philosophical concepts in clinical social work:

Kurukshetra press, Kurukshetra.


Bradford W. S and Charles W.R. H. (2006).Techniques and guidelines for social

practice: Allign and Bacon, London.

Clack, G. & Asquith, S. (1985). Social work and social philosophy: Routledge &

Kogan Paul, London.

Dasgupta, S. (1967): Towards a philosophy of social works in india: Popular Book

Service, New Delhi

Desai, M. (2006). Ideologies and social Work: Historical and contemporary analysis:

Rawat Publication, New Delhi.

Encyclopaedia of social work, Vol, 2 & 3. Ministry of Welfare, New Delhi.

Friedlander, W.A. (1958). Concepts and Methods of Social Work: Englewood Cliffs

Prentice-Hall.

Ganguli, B.N. (1973). Gandhi’s Social Philosophy: Vikas Publishing House, Delhi.

Gokhale, S.D. (1975). Social Welfare-Legend & Legacy: Popular Prakshan, Bombay.

Gore M.S. (1965). Social Work and Social Work Education: Asia Publishing House,

Bombay.

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Jobise C. J.(1989). Social Work Practice: Allign and Bacon, London.

Moorthy, M.V. (1966). Social Action: Asia Publishing House, Bombay.

Siddiqui, H.Y. (1984).Social Work and Social Action: Harnam Publications.

Stevan, S. (1985). The values of changes in Social work: Routledge, London.

University Grant Commission (1980). Review of Social Work Education in India,

New Delhi.

Woodroofe, K. (1962). Form Charity to Social Work: Routledge & Kegan Paul,

London.


“Social work is art, science as well as profession’, comment.

What are the characteristics of social work?

Explain the techniques and methods in Social work.

Explain different theories of social work.

Differentiate between welfare work and social work.

‘Ultimate goal of social work and welfare work is social welfare”, comment.

Differentiate between the terms social work and social welfare.

Explain psychodynamic theory of Social work.

Differentiate between social case work and Social group work.

Differentiate between Social action and Social research.

Elaborate different fields of social work.

Discuss various programmes under National Rural Health Mission (NRHM).

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CHAPTER 12 Evolution of Labour Welfare and Agencies for Labour welfare Work

“A great leader must serve the best interests of the people first, not those of multinational

corporations. Human life should never be sacrificed for monetary profit. There are no

exceptions.”― Suzy Kassem,

Structure

12.1 Objectives

12.2 Introduction

12.3 Evolution of Labour welfare Pre and Post Independence

12.4 Labour welfare under five year plans


12.6 Classification of Labour welfare work

12.7 Labour welfare agencies and labour welfare activities


12.9 Summary

12.10 Glossary


12.12 Reference



12.1 Objectives

To understand the evolution Labour Welfare in India.

To investigate the classification of Labour welfare work.

To know about various agencies involved in labour welfare.

To identify different welfare activities carried out by various agencies.

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12.2 Introduction

Labour Welfare includes “such services, facilities and amenities, which may be

established in or in the vicinity of undertakings to enable persons employed therein to perform

their work in healthy, congenial surroundings and to provide them with amenities conducive to

good health and good morale. The I.L.O. (SEA) session held at New Delhi in 1947

“Labour welfare covers all the efforts which employers make for the benefit or their employees

over and above the minimum standard of working conditions fixed by Factories Act and over and

above the provision of social legislation providing against accident, old age, unemployment and

sickness”. N.M. Joshi

“Labour welfare include such services, facilities and amenities as adequate canteens,

rest and recreational facilities, sanitary and medical facilities, arrangements for travel to and

from work and for the accommodation of workers employed at a distance from their homes and

such other services, amenities, and facilities including social security measures as contribute to

improve the conditions under which workers are employed”

The Committee on Labour Welfare (1969)

In nutshell, anything which reduces the frustration, worries, anxieties of a labour and which

promotes economic, social, personal wellbeing is called labour welfare. Further, it can also be

summarized that

(1) That any amenity or facility which is beyond the wages to the workers is called labour

welfare

(2) The agencies for labour welfare are the employer, Government, union(Workers’

organization) or any other voluntary body

(3) Labour welfare can be measures provided in the precincts of the company (intramural),

outside the premises of the company (extra mural), and social security measures.

12.3 Evolution of Labour Welfare pre and post independence:

Charitable principles and legislation are the basis of labour welfare activities in India. The labour

welfare activity in India was started much ahead of its independence.

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Labour welfare before independence:

The commencement of labour welfare activities had its origin in the year 1837 following the

obliteration of slavery in 1833. Some of the distinguished legislation passed during these years

has been delineated below. These laws created a platform for the development and

implementation of the concept of labour welfare. The Apprentices Act of 1850 was the first

legislative endeavor in this course. The aim of this Act was to facilitate the poor and orphaned

children to learn different trades and crafts. Similarly in 1853, Fatal Accident Act, 1853 and The

Merchant Shipping Act of 1859 pursued the track. The objective of the Fatal Accident Act was

to provide compensation to the families of workers who lost their lives as a result of 'actionable

wrong'. Similarly the Shipping Act provided for the wellbeing and lodging of seaman.

The Factories Act, 1881 is an additional imperative piece of legislation which endeavored to

ameliorate the working conditions of Indian labour. The Act was functional to factories

employing not less than 100 persons working more than 4 months in a year and using power.

(1) Indian Factories Act, 1881

The act was appropriate to those factories which were employing more than 100 workers and

was run by power. The act prohibited employment of children below 7 years of age. Daily rest

of one hour and 4 holidays in a month was established for children. Maximum 9 hours of work

for children between 7 to 12 years of age was prescribed. Provision for weekly holiday was

integrated due to the efforts of Mr. N.M. Lokhande and The Mulock Commission.

(2 ) The Factories (Amendment) Act, 1891

The Factories (Amendment) Act, 1891 was approved on the basis of recommendation of

Mulock Commission. The new act was applicable to factories employing 50 employees or

more. For the children employed in factories, upper and lower age limit was altered to 14 and 9

years respectively. Reduction of working hours was done to 7 hours from 9 hours in the Act of

1881. Working hour got restricted between 5.00 a.m to 8.00 p.m and for women workers from

5.00 am to 7.00 p.m. Women workers were permitted eleven hours of work.

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(3) The Indian Factories Act, 1917

The acts become relevant to seasonal factories working for less than 4 months in a year. for

children, hours of work were reduced to 6 hours per day. Working hours of adult male workers

was fixed for the first time as 12 hours per day. Provision for health and safety were made in the

above act.

(4) The Indian Factories (Amendment) Act, 1922.

Welfare work by Voluntary agencies like The Amalgamated Society of Railway Servants of

India and Burma (1897), Printers Union Calcutta (1905), Bombay Postal Union (1907)

Establishment of International Labour Organization (ILO) in 1919, Formation of All India

Trade Union Congress (AITUC) in 1920, the first central trade union organization prepared the

ground for The Indian Factories (Amendment) Act, 1922.

This amended act became applicable to all factories implying 20 or more persons. Children aged

below 12 were proscribed from working in factories. Children of 12 to 14 years of age were

restricted to work for 6 hours per day. Employment of women and children between 5.30 am to

7.00 pm was prohibited. Working hours for adults were limited to eleven hours a day and 60 hrs

a week.

(5) Factories Act, 1934

Under the chairmanship of J.H. Whitley, Royal commission on labour was appointed in

1929 to study the state of affairs of labour and it suggested enactment of a number of legislation

concerning to payment of wages, minimum wages, and health insurance, working conditions.

The proposal led to formulation of the Factories Act, 1934. The act had provision for crèches,

rest shed, working hours for children of the age group of 12 to 15 years was abridged to 5 hours

in a day.

The Factories Act, 1948 which came into effect from 1st April, 1949 was a result of diverse

recommendations by various committees’. Few of the committees were Bihar Labour Enquiry

Committee (1938), Central Provinces Textile Labour Enquiry Committee (1939) which directed

the precondition of proper housing facilities for industrial workers. Rege Committee / Labour

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Investigation Committee endeavored to make out problem related to wages, employment,

social and housing conditions. The committee emphasized the significance of welfare measures

for improving the social and economic life of workers. Soon in 1944, member nations of ILO

adopted Charters of labour/ declaration of Philadelphia. Thus all these scenarios build a pressure

to evaluate existing labour laws and to enact, very comprehensive piece of legislation which

covers, health, safety, welfare, working Hours of Adult workers and Children etc.,

Labour welfare after independence:

Labour welfare took a new turn after Independence as it was established that labour welfare is a

tool to augment labour productivity and to tumble industrial unrest. With the organization of

Workers’ unions, number of central trade union like Indian National Trade Union Congress-

(INTUC), 1947, Hind Mazdoor Sabha (HMS), 1948, United Trade Union Congress (UTUC),

1949, came into picture which gave fillip to growth of labour welfare movement. On the basis

Rege Committee recommendation, Factories Act, 1948 was formulated which come into effect from

1st April, 1949.

After independence, The Constitution of India by emphasizing the role of labour welfare stated

in its Directive Principles that “the state shall strive to promote the welfare of people by

securing and protecting as effectively as it may a social order in which, justice, social, economic

and political, shall inform all the institution of national life”.

Labour welfare provisions are provided under various acts viz. Indian Dock Labourers Act of

1934, Factories Act, 1948, Plantation Labour Act, 1951 and Mines Act, 1952 etc., the Merchant

Shipping Act of 1958, the Motor Transport Workers Act of 1961, Bidi and Cigar Workers

(Conditions of Employment) Act, 1966 and Contract Labour (Regulation and Abolition) Act,

1970.

Through the Employees Provident Fund Office and Employees State Insurance Corporation

within the legal framework, the Government has provided the social security cover to most of the

workers in the organized sector, nevertheless, no such social security cover has been provided to

the workers in the unorganized sector who constitute 94% of the entire working population.

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The concept of Labour Welfare Fund was, therefore, evolved in order to extend a measure of

social assistance to workers in the unorganized sector. Towards this end, following separate

legislations have been enacted by Parliament to set up five Welfare Funds to be administered by

Ministry of Labour to provide housing, medical care, educational and recreational facilities to

about 49 lakh beedi workers, 73,650 mine workers and 68,000 cine workers:-

1. The Mica Mines Labour Welfare Fund Act, 1946;

2. The Limestone and Dolomite Mines Labour Welfare Fund Act, 1972;

3. The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour

Welfare Fund Act, 1976;

4. The Beedi Workers Welfare Fund Act, 1976; and

5. The Cine Workers Welfare Fund Act, 1981.

(Source: Ministry of labour)

Despite these legislations, many other welfare activities and work was undertaken by the

Government of India during planning period (Five Year Plans)

12.4 Labour welfare under five years plan:

First Five Year Plan (1951-56)

Considerable attention was paid to the welfare of the working classes. Housing was given

utmost priority during this 5 year plan. During this period the Plantations Labour Act, 1951, the

Mines Act, 1952, the Employees Provident Fund Act, 1952 were made. In 1952, a subsidized

housing scheme for labour was prepared and implemented.

State governments also enacted various laws on housing for industrial labour, i.e., the Bombay

Housing Board Act, 1948, the Hyderabad Labour Housing Act, 1952, the Madhya Pradesh Board

Act, 1950, etc

Second Five Year Plan (1956-61):- Focus under this plan was better working conditions and

maintaining industrial democracy. ESIS (Employees’ State Insurance Scheme) coverage was

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extended for the benefit of more workers. Dock workers (safety, health and welfare) scheme was

drawn up in 1961. Assam Tea Plantation Labour Employee’s Welfare Fund Act was passed in

1959 by the government of Assam In April 1956; a New Plantation Labour Housing Scheme was

prepared which provided for a certain amount of loan for construction of houses for workers.

Third Five Year Plan (1961-66) :- Emphasis was on the successful execution of various

statutory welfare provision. Better working condition and efficiency of the workers and its

augmentation to amplify their productivity were the main counsels. Under this Plan formation for

cooperate credit societies and consumers stores for industrial workers and fortification of factory

inspectorate was ensured

Enactments like Apprentices Act, 1961; Maternity Benefit Act, 1961; Iron-Ore Mines Labour

Welfare Cess Act, 1961; Payment of Bonus Act,1965 were some of the major piece of legislation

of this five year plan.

Fourth Five Year Plan (1969-74):-

Legislation formulated during this the period included, The Contract Labour (Regulation and

Abolition) Act, 1970; the Payment of Gratuity Act, 1972 and the Employees’ Family Pension

Scheme 1971. Stress was given on strengthening labour administrative machinery for effective

implementation of labour laws. This plan testimonies the extension of the Employees’ State

Insurance Act to employees of shops and commercial establishments to provide medical

facilities.

Fifth Five Year Plan (1974-79) :- Encouragement of industrial safety, setting up of industrial

safety and training and employment service for various craftmen was major thrust in 5th Five

year plan. For the two year period 1977-79 a provision of Rs. 10.17 crores was made. This

covered the requirements of the major on-going training institutions such as the Central Staff

Training and Research Institute, the Foreman Training Institute, and the Central Training

Institutes for Instructors; (2) Extension and strengthening of the Advanced Training Institute; (3)

development of the Apprenticeship Training Programme;(4) starting of Vocational Training in

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Women’s Occupations; and (5) schemes relating to research, surveys and studies to be

commenced by various institutes.

Sixth Five Year Plan (1980-85) :-

An outlay of Rs. 161.9 crores was proposed for Labour and Labour Welfare programmes for the

period 1980—85. Of this, the central outlay was of the order of Rs. 78.5 crores and the

remaining Rs. 83.4 crores was apportioned for States and Union Territories.

The thrust of the programmes in the Sixth Plan was on implementing effectively the measures

contemplated in different legislative enactments and in extending the coverage of the employees

state insurance scheme, the employees provident fund and family pension scheme. Special

programmes were undertaken by the State Governments for the benefit of agricultural labour,

artisans, handloom weavers, fishermen, leather workers and other unorganized workers in the

rural and urban areas.

Seventh Five Year Plan (1985-90) :- Seventh Five year plan proposed an outlay Rs. 333.72 cr.

Of this, the central outlay was of the order of Rs. 95.44 crores and the remaining Rs. 219.75

crores was apportioned for States and Rs. 18.53 cr. for and Union Territories.

For labour welfare, Focus was on women labour, bonded labour and child labour and

improvement in working and living conditions of unorganized labour. Improvement in working

conditions of unorganised labour-not only in the rural areas, but also in the urban areas. During

this period the emphasis was on improvement in capacity utilisation, efficiency and productivity.

Eighth Five Year Plan (1992-97) :- Through the measures of labour welfare and social

security, improvement in the quality of labour, productivity, skills and working conditions of

those working in the organized as well as in unorganized sector was the motto of Eighth Five

Year plan. This aim was proposed to achieve by various labour welfare programmes viz. skill

formation and development, amplification and modernization of employment service,

endorsement of industrial and mines safety, workers' education, encouragement of self-

employment, rehabilitation of bonded labour, implementation of labour laws especially those

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relating to unorganised labour and women and child labour, endorsement of a healthy industrial

relations situation and promotion of workers' participation in management.

Ninth Five Year Plan (1997-2002) :- This five year plan endeavored towards creating

conditions for growth in labour productivity. Plan programmes towards skill formation and

development, exchange of information on employment opportunities, scrutinizing of working

conditions, establishment of industrial harmony through an infrastructure for healthy industrial

relations and cover against disease and unemployment for the workers and their families. There

was precedence towards agriculture and rural development with a view to generate adequate jobs

and poverty annihilation.

The Tenth Five Year Plan (2002– 2007)

It was for the first time that there was growing relevance of a State level perspective in national

planning. Exceptionally, separate State Plans was being included as a part of the Tenth Plan

document. Emphasis was on restructuring of many of the existing institutions, laws and

programmes to reach out to the entire labour force.

Importance was given on humanizing the working conditions, better industrial relations, proper

enforcement of Labour Legislations, and also launching the welfare activities for benefit of all

industrial workers and their families. Thrust areas were strengthening of adjudication machinery

for better conciliation and preventive mediation and more effective enforcement of laws.

Strengthening of child labour and women cells, welfare schemes for agricultural workers and

implementation of workers participation in management.

The Eleventh Five Year Plan (2007–2012) the major focus of this plan was on unemployment

and underemployment, Employment Targets and Unemployment Projections were made in

report on technical Note on Employment for the Eleventh Five Year Plan (2007 – 2012) with

Planning Commission (Labour, Employment & Manpower Division), the endorsement of regular

wage employment opportunities and to focus the continuing unfulfilled needs of workers

employed in unorganized sector enterprises

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The Twelevth Five Year Plan (2012–2017) (Faster, More Inclusive and

Sustainable Growth)

Twelvth Five year plan which is based on achieving sustainable development model emphasizedon achieving the competitiveness through changing obsolete labour laws. But the plan mainlyfocused to improve Industrial relations not only changing labor laws will work but it calls fornew developmental paradigms in improvement of Industrial relations by creating new socialcontracts between different Industrial sectors


12.6 Classification of Labour welfare work

Classification of labour welfare work

1. Statutory

2. Non-Statutory

Q.1. Full form of AITUC

(a) All India Trade Union Congress

(b) All India Traffic Union Congress

(c) All India Terminal Union Congress

(d) None of the above

Q.2. International Labour organization (ILO) was established in which year

(a) 1948

(b) 1919

(c) 1926

(d) 1930

Q.3. Royal commission on labour was appointed in ________under the chairmanship

of J.H.Whitley to study the conditions of labour.

(a) 1927

(b) 1940

(c) 1929

(d) 1930

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1. Statutory:

Those amenities or facilities which are provided to workers under a particular statute oflaw are called statutory labour welfare. These are bare minimum standards which everyorganizations are to be followed e.g. Health, safety and welfare provisions under FactoriesAct,1948, Welfare provisions under The Mines Act,1952; The Plantation labour act; The MotorTransport workers Act,1961 and The Contract Labour (Regulation And Abolition) Act, 1970

2. Non-Statutory:

Those amenities or facilities which are beyond any statute of law and which are left to the

discretion of the employer. Those facilities for which no minimum standard laid down e.g.

housing, medical facility, recreation, transport and educational facilities are called non-statutory

labour welfare measures.

Statutory Welfare Amenities

Provisions of Factories Act Regarding Labour Welfare:

Sections 42 to 49 of the Factories Act, 1948 contain specific provisions relating to welfare of

labour.

a. Washing Facility (Sec.42):

In every factory: adequate and suitable facilities for washing shall be provided and maintained

for the use of the workers separately for male and female workers: facilities shall be kept clean

and conveniently accessible.

b. Facilities for Storing and Drying Clothing (Sec.43):

The State Government may, in respect of any factory or class or description of factories, make

rules requiring the provisions therein of suitable places for keeping clothing not worn during

working hours and for the drying of wet cloths.

c. Facilities for Sitting (Sec.44):

In every factory, suitable arrangements for sitting shall be provided and maintained for all

workers obliged to work in a standing position, in order that they may take advantage of any

opportunities for rest which may occur in the course of their work.

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d. First-Aid Appliances (Sec.45):

There shall in every factory be provided and maintained so as to be readily accessible during all

working hours first-aid boxes or cupboards equipped with the prescribed contents, and the

number of such boxes or cupboards to be provided and maintained shall not be less than one for

every one hundred and fifty workers ordinarily employed at any one time in the factory.

In every factory wherein more than five hundred workers are ordinarily employed, there

shall be provided and maintained an ambulance room of the prescribed size, containing the

prescribed equipment and in the charge of such medical and nursing staff as may be prescribed

and those facilities shall always be made readily available during the working hours of the

factory.

e. Canteens (Sec.46):

The State Government may make rules requiring that in any specified factory wherein more than

two hundred and fifty workers are ordinarily employed, a canteen or canteens shall be provided

and maintained by the occupier for the use of the workers.

f. Shelters, Rest Rooms and Lunch Rooms (Sec.47):

In every factory wherein more than one hundred and fifty workers are ordinarily employed,

adequate and suitable shelters of rest rooms and a suitable lunch room, with provision for

drinking water, where workers can eat meals brought by them, shall be provided and maintained

for the use of the workers.

g. Creches (Sec.48):

In every factory wherein more than 30 women workers having children under the age of six

years are employed, it is required to have a crèche facility for such children

h. Welfare Officers (Sec.49):

In every factory wherein five hundred or more workers are ordinarily employed, the occupier

shall employ in the factory such number of welfare officers as may be prescribed.

The Mines Act, 1952

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The Welfare Provisions under the Act are

Creches, if there are 50 or more women are employed.

Shelter for taking food and rest if 150 or more workers are employed.

Canteen, if employing 250 or more workers

First-aid boxes and first-aid rooms in mines employing more than 150 workers.

Bathrooms with shower, sanitary latrines and lockers for men and women workers.

The Plantation Labour Act, 1951

The plantation workers are entitled for the following welfare amenities

Canteens, if 150 or more workers are employed.

Creches in plantation employing 50 or more women workers.

Recreational facilities for workers and their children.

Educational arrangement in the estate if there are 25 or more children of workers,

between the age of 6 and 12.

Housing facilities for every worker.

The Motor Transport Workers Act, 1961

The motor transport undertakings are required to provide the following welfare facilities to the

workers

Canteen, if employing 100 or more workers.

First-aid equipment in each transport vehicle.

Rest rooms should be cleaned, ventilated and properly lighted.

Uniforms, raincoats to drivers and conductors

Medical facilities.

First-aid boxes.

The Contract Labour (Regulation And Abolition) Act, 1970

The Act provides the following welfare measures to the contract labour.

Canteen, if employing 100 or more workers.

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Restrooms or other suitable alternative accomodation if contract labour is required to halt

at night.

Wholesome drinking water, sufficient number of latrines and urinals and washing

facilities.

First-aid boxes.

The Merchant Shipping Act, 1958

Welfare facilities provided by the Act are

Crew Accommodation

Supply of sufficient drinking water

Supply of medicines and medical stores and provisions of surgical and medical advice

etc.

Proper weights and measures on board and grant of relief to distressed seamen abroad a

ship

A qualified medical officer on board.

Establishment of hostels, clubs, canteens and libraries.

Appointment of a seamen’s welfare officer at such ports in or outside India as the

government may consider necessary.

Educational facilities.

Dock Workers (Safety, Health And Welfare) Scheme, 1961 as per Dock Workers (Regulation

of Employment) Act, 1948.

Amenities provided in the port premises include provision of urinals and latrines,

drinking water, washing facilities, bathing facilities, canteens, rest shelters and first-aid boxes. In

addition to these provisions, other welfare measures provided are – housing, schools, educational

facilities, grant of scholarship, libraries, sports and recreation and fair price shops.

Non-Statutory Amenities

a. Economic Services:

Loan facility

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Employee fund schemes

b. Recreational Services:

Management may provide arrangement for recreational facilities. More enjoyable informal

atmosphere is promoted through the recreational events. The management may provide for

Indoor games

Outdoor games

Clubs

c. Other services:

These are amenities which the employees usually require such as:

Housing Facilities

Medical Facilities

Washing Facilities

Educational Facilities

Leave Travel Concession

Sabbaticals

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Activity A

Take a case of an organization, find out welfare measures and categorized tem into

statutory and non- statutory measure and intra mural and extra mural welfare facilities.

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12.7 Labour welfare agencies and labour welfare activities

Labour Welfare Agencies in India

In India, the main agencies engaged in labour welfare include:

Central Government

State Governments

Employers

Trade Unions (Workers’ organizations )

Voluntary organizations.

(a) Central Government:

The Central Government has passed a number of Acts for the welfare of different types of

workers. It also administers the implementation of industrial and labour laws. The important

Acts which incorporate measures for the welfare of the workers are: Factories Act, Indian Mines

Act, Employment of Children Act, Maternity Benefits Act, Plantation Labour Act, etc. Under

these Acts, employers have to provide certain basic welfare facilities to the workers.

(b) State Government:

The implementation of many provisions of various labour laws rests with the State Governments.

The State Governments run health centres, educational centres, etc. for the welfare of the

workers. They also keep an eye on the employers about implementation of welfare schemes

made obligatory by the Central or State Government. The State Governments have been

empowered to prescribe rules for the welfare of workers and appoint appropriate authorities for

the enforcement of welfare provisions under various labour laws.

There are 44 labour legislations, which are categorized as follows: -

Labour laws enacted and enforced by Central Government

Labour laws enacted by Central and enforced by both the Central as well as the

State Governments

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Labour laws enacted by Central Government and enforced by the State

Governments

(a) Labour laws enacted and enforced by Central Government

1. The Employees’ State Insurance Act, 1948

2. The Employees’ Provident Fund and Miscellaneous Provisions

Act, 1952

3. The Dock Workers (Safety, Health and Welfare) Act, 1986

4. The Mines Act, 1952

5. The Iron Ore Mines, Manganese Ore Mines and Chrome Ore

Mines Labour Welfare (Cess) Act, 1976

6. The Iron Ore Mines, Manganese Ore Mines and Chrome Ore

Mines Labor Welfare Fund Act, 1976

7. The Mica Mines Labour Welfare Fund Act, 1946

8. The Beedi Workers Welfare Cess Act, 1976

9. The Limestone and Dolomite Mines Labour Welfare Fund Act, 1972

10. The Cine Workers Welfare (Cess) Act, 1981

11. The Beedi Workers Welfare Fund Act, 1976

12. The Cine Workers Welfare Fund Act, 1981

(b) Labour laws enacted by Central and enforced by both the Central as well as the State

Governments

13. The Child Labour (Prohibition and Regulation) Act, 1986.

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14. The Building and Other Constructions Workers’ (Regulation of Employment and Conditions

of Service) Act, 1996.

15. The Contract Labour (Regulation and Abolition) Act, 1970.

16. The Equal Remuneration Act, 1976.

17. The Industrial Disputes Act, 1947.

18. The Industrial Employment (Standing Orders) Act, 1946.

19. The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service)

Act, 1979.

20. The Labour Laws (Exemption from Furnishing Returns and

Maintaining Registers by Certain Establishments) Act, 1988

21. The Maternity Benefit Act, 1961

22. The Minimum Wages Act, 1948

23. The Payment of Bonus Act, 1965

24. The Payment of Gratuity Act, 1972

25. The Payment of Wages Act, 1936

26. The Cine Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981

27. The Building and Other Construction Workers Cess Act, 1996

28. The Apprentices Act, 1961

(c) Labour laws enacted by Central Government and enforced by the

State Governments

29. The Employers’ Liability Act, 1938

30. The Factories Act, 1948

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31. The Motor Transport Workers Act, 1961

32. The Personal Injuries (Compensation Insurance) Act, 1963

33. The Personal Injuries (Emergency Provisions) Act, 1962

34. The Plantation Labour Act, 1951

35. The Sales Promotion Employees (Conditions of Service) Act, 1976

36. The Trade Unions Act, 1926

37. The Weekly Holidays Act, 1942

38. The Working Journalists and Other Newspapers Employees (Conditions of Service) and

Miscellaneous Provisions Act, 1955

39. The Workmen’s Compensation Act, 1923

40. The Employment Exchange (Compulsory Notification of Vacancies) Act, 1959

41. The Children (Pledging of Labour) Act 1938

42. The Bonded Labour System (Abolition) Act, 1976

43. The Beedi and Cigar Workers (Conditions of Employment) Act, 1966

44. The Unorganized Workers’ Social Security Act, 2008

(c) Employers:

Many employers provide voluntarily welfare facilities in conjunction with the statutory welfare

facilities. These include housing facilities, medical and transport facilities, reading rooms,

scholarships to children of workers, support teams of employees for various games.Employers

can provide welfare facilities individually or collectively i.e., through their associations.

Employers play a major role in providing welfare facilities to industrial workers.

(d) Trade Unions:

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Trade Unions always work to raise the standard of living of workers and in this direction they

are doing their bit by providing various welfare facilities to workers out of their own resources.

In the past even they had organized adult literacy programme, leadership training programmes.

Etc. Indian National Trade Union Congress (INTUC) and AITUC have set up trade union

colleges, established libraries and research activities and publications. Some trade unions

associations like the Rashtriya Mill Mazdoor Sangh (RMMS)) are doing commendable job in the

field of labour welfare. In addition, Textile Labour Association (Majdoor Mahajan) Ahmedabad;

Mill Mazdoor Union , Indore; Mill Mazdoor Sabha affiliated to Hind Mazdoor Sabha, Transport

and Dock Workers’ Union provides certain facilities like schools, social centres, libraries, legal

aid, etc

(e) Voluntary Organizations:

Some social-welfare and charitable organizations conduct social welfare activities which are

useful to all sections of the society including industrial workers. These agencies provide medical

aid, educational facilities, scholarships, etc. Naming a few, The Servants of India Society, the

Bombay Social Service League has conducted several welfare activities like promotion of

education, recreation and cultural activities. Not much of the information is available about

various voluntary organizations who are doing their bit to improve the wellbeing of workers.

This topic needs further investigation and research.


Q.4. Which of the following can be considered as Non-Statutory WelfareSchemes?

(a) Housing Facility(b) Employees club

(c) library(d) All of the above

Q.5. Welfare Officers are to be appointed, if a Factory is employing…………….or more workers

(a) 500(b) 650(c) 700(d) 2000

Q.6.The very First Factory Act was enacted in which year:(a) 1885(b) 1881(c) 1921(d) 1948

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12.9 Summary

As we know there are four factors of production land, labour, capital and entrepreneur. Out of

these four factors of production, labour is the one of the most important factors of production. As

they are the main pillars of any industry. Labor welfare is an important facade of industrial

relations and development of human resources in industries. It is a comprehensive term including

various services/benefits/facilities/amenities offered to the workers so that they can fare well.

Wellbeing of employees includes all facets including social, economic, emotional and personal

wellness. Although India has always been a welfare state. But the intensity of this welfare is

scattered unevenly. As some states are more welfare oriented than others, some industries are

more welfare oriented than other and moreover this depends upon the economic conditions of

states and Industries and the intention of the employer. With more and more industrialization in

the country, suppression and exploitation of labour became very rampant. With this there was a

dire need for protective legislation which at least could ensure minimum standards of health,

safety, welfare and humane working conditions of labour. The Apprentices Act of 1850 was the

first legislative endeavor in this course. Similarly in 1853, Fatal Accident Act, 1853 and The

Merchant Shipping Act of 1859 pursued the track. Similarly the Shipping Act provided for the

wellbeing and lodging of seaman. The Factories Act, 1881 is an additional imperative piece of

legislation which endeavored to ameliorate the working conditions of Indian labour.Presently

there are 44 labour laws in the country which can categorized as Labour laws enacted and

enforced by Central Government (12Acts); Labour laws enacted by Central and enforced by both

the Central as well as the State Governments (16 Acts); Labour laws enacted by Central

Government and enforced by the State Governments (16 Acts). Welfare provisions which are

covered under statute of act are called statutory welfare provisions and those facilities which are

beyond the discretion of the employer and other than provisions of Statute are called non-

statutory welfare facilities. Besides it, the other classification is intramural and extra mural

welfare amenities. There are various agencies which provide welfare facilities in India, these are

State (Central Government, State Government), Employees, Trade Unions and voluntary

organisations. But at the end, despite having a plethora of labour welfare legislations from time

to time., still the economy faces various labour issues which call for proper enforcement and

implementation of these laws.

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Activity B

12.10 Glossary

Labour welfare: anything which reduces the frustration, worries, anxieties of a labour and

which promotes economic, social, personal wellbeing is called labour welfare.

Intra mural Labour welfare facilities: Facilities /amenities relating to the welfare of Industrial

worker which are in the precincts of an organization.

Extra mural labour welfare facilities: Facilities /amenities relating to the welfare of Industrial

worker which are out the precincts of an organization.

Statutory Labour welfare provision: Labour welfare provisions which are provided under

statute of any legislation.e.g. Welfare provisions as given under The Factories Act, 1948.

Take a case of a Bank or any service Industry and compare Welfare measures in

Manufacturing and service sector Industry.

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Non –Statutory labour welfare programmes: Labour welfare programmes which are at the

discretion of an employer and which are beyond any statute of the legislation.

Agencies of Labour welfare work: There are Five agencies which provide labour welfare

services in India these are State (Central Govt. and State Govt.), Employer, Workers’

organizations(Trade Union and their organisation), Voluntary organizations


Q.1. a

Q.2. b

Q.3. c

Q.4. d

Q.5.a

Q.6.b

12.12 REFERENCES

Mamoria, C.B, Mamoria, S. Gankar, S.V (2004). Dynamics of industrial relations:

Himalaya Pulishing House, Mumbai.

Sharma D.C. and Sharma R.C. (1988). Personnel Management: Surjeet Prakashan,Meerut.

Sharma, A.M. (1988). Aspects of Labour Welfare and Social Security: HimalyaPublishing, Mumbai.

Singh B.D. (2009). Industrial Relations and Labour Laws: Excel Publication, New Delhi. Srivastava, S.C. Industrial Relations and Labour laws: Vikas publishing house, New

Delhi.


Bombay Textile Labour Enquiry Committee, Bombay, 1940, 304

Dale Yoder (1975). Personnel Management and Industrial Relations. Prentice Hall ofIndia, New Delhi.

Five Year plans, Planning Commission, Government of India,www.planningcommission.nic.in/plans/planrel/fiveyr/

Page 229 of 250

25

Flippo (1984). Principles of Personnel Management: MC Graw-Hill Book Company,

New Delhi

Government of India, Report of the Committee on labour Welfare, "Concept and scope of

labour welfare", Ministry of Labour, Employment and Rehabilitation, New Delhi, 1969

Gupta C.B. (2002). Human Resource Management: Sultan Chand and Sons, New Delhi.

Main Report of the Labour Investigation Committee, 1946, 345

Mamoria C.B. (1994). Personnel Management: Himalaya Publishing House, Bombay.

Mehrotra, S.N (1981). Labour problems in india: S.Chand & Company Ltd, New Delhi.

Moorthy, M.V. (1968), Principles of Labour Welfare: Gupta Brothers, Vishakhapatnam.

Moorthy, M.V. (1982). Principles of Labour Welfare: Oxford & IBH Publishing Co. NewDelhi :

N. K Joshi (1968). Labour welfare - concept, meaning and scope, Indian Labour Journal,

9 (10), 280.

Punekar, S.D. (1984). Labour welfare, trade unionism and industrial relations: HimalayaPublishing Company, Mumbai.

Puri, S.K. (1981). An Introduction to Labour and Industrial Laws: Allahabad LawAgency.

Rao V.S.P. (2005). Human Resource Management (Text and Cases): Excel Books, NewDelhi

Report of Committee on Labour Welfare, 1959, 23

Report of the Committee on Labour Welfare, 1963, 19

Report of the National Commission on labour, 1966.

Report of the Royal Commission on Labour, 1931, 261

Sahary, H.K. (1987). Industrial and Labour Laws of India, New Delhi: Prentice Hall. Sharma A.H. (1988). Aspects of Labour Welfare and Social Security: Himalaya

Publishing Company, Mumbai.

Vaid K.N. (1970). Labour Welfare in India: Shri Ram Centre for Industrial Relations,

New Delhi


Elaborate the evolution of Labour Welfare in pre and post independent India

Describe the status of labour welfare under different five year plans in India.

Elaborate various agencies involved in labour welfare.

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Explain different statutory labour welfare measures in India.

Elaborate various non statutory labour welfare measures in India.

What are intra –mural and extra-mural welfare measures.

Explain various welfare measures under Factories Act, 1948.

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1

CHAPTER 13 LABOUR ADMINISTRATION

“Administration is to determine action taken in pursuit of conscious purpose” -

John A Vieg

Structure

13.1 Objectives

13.2 Introduction

13.3 Scope of Labour Administration

13.4 Evolution of Machinery for Labour Administration


13.6 Ministry of Labour And Employment (Central)

13.7 Attached offices to the ministry of labour

13.8 Subordinate offices under the labour ministry

13.9 Autonomous organizations

13.10Adjudicating bodies

13.11 Arbitration body

13.12 Administration of social security acts

13.13Recent Government Initiatives

13.14Check Your Progress 2

13.15Summary

13.16Glossary

13.17Answer to Check Your Progress

13.18References

13.19Suggested Readings

13.20Terminal and Model Questions

13.1 Objectives

To understand evolution and scope of Labour Administration

To investigate the responsibilities of Offices and Organizations under the Ministry of

Labour and Employment, Government of India

To identify the organization structure of Ministry of Labour and Employment (Central)

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To know the working of attached and subordinate offices of Ministry of Labour and

Employment

To gather in depth knowledge of administration of social security acts

13.2 Introduction

The ‘labour administration’ is defined as “public administration activities in the field of

labour policy.”

[Convention of labour administration of International Labour Organization (ILO)]

An administration is “the direction, coordination and control of many persons to achieve

some purpose or objective.” -L.D.

White

“In its broadest sense, administration can be defined as the activities of groups cooperating to

accomplish common goals.” -Herbert A. Simon

Administration is concerned with ‘the what’ and ‘the how’ of the government. The ‘what’ is

the subject matter, the technical knowledge of a field which enable administrator to perform

his tasks. The ‘how’ is the technique of managements, the principles of success. Each is

indispensable; together they form the synthesis called administration.”

- Marshall E. Dimock

Labour administration involves “a coherent national labour policy; a co-ordinated system; a

organization integrating the active participation of management and labour and their

respective organizations, and appropriate human, financial and material resources for an

effective and efficient service.”

-ILO Department of Government and Labour Law and Administration

(GLLAD)

From the above definition of labour administration it is revealed that it involves groundwork,

administration, co-ordination, scrutiny and review of labour policies and programmes,

preparation and enforcement of labour laws and regulation.

“A vital feature of labour administration is the participation of employers’ and workers

organizations in a variety of areas and at various levels of labour administration”.

- (Sinha et al., 2009)

Labour Administration characterizes public administration activities to convert the national

labour policy into action. The labour policy in India draws inspiration and power partly from

the ideas and declarations of main national leaders during the independence struggle, to some

extent from the discussion in the Constituent Assembly, to a certain extent from the

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3

provisions of the Constitution, and partly from International. It has also been considerably

influenced by the deliberations of the a variety of sessions of the Indian Labour Conference

and the suggestions of various National committees and Commissions, such as, the Royal

Commission on Labour, the National Commission on Labour 1969, the National Commission

on Rural Labour 1991. India has endorsed a total of 39 Conventions adopted at various

sessions of ILO. These consist of conventions on night work, hours of work joblessness,

minimum wages, weekly rest, workers payments, forced labour, labour inspection, child

labour, work in hard conditions and identical remuneration for men and women for

employment of a comparable nature.

To run the social security and labour welfare schemes well-organized machinery is required

because without any efficient administrative set-up it is very difficult to run all these

schemes. Before independence, British Government was not greatly concerned to develop the

conditions of workers. But after independence, Indian Government did much for workers and

efficient and useful administrative machinery has been set-up at all levels viz. central, state

and district level.

With increase in the dimensions and diversity of industrial activity and modifications in the

agricultural sector, the duty of labour administration has become more and more difficult. It

calls for knowledge, sensitivity, touring and efficiency at every phase .To enable industries to

be competitive in the present environment and at the same time to guard the rights of

workers, labour administration has to present an industrial relations system, which brings the

adoption of a new state of mind.

13.3 Scope of Labour Administration

Ever since the formation of International Labour Organization, 97 years ago, Labour

administration has been its main agenda. The conception of the ILO in the year 1919 lead to

the development of ministries of labour in numerous countries, which subsequently went on

to play a critical role for promoting efficient governance, shaping government actions on a

variety of levels. In the last two decades labour ministries in various countries have reacted

to modern challenges by devising employment policies, providing employment services,

building consensus on rising labour issues, setting up effective labour inspection systems and

promoting effective labour–management relations. There is no suspicion that the

development of labour administration has been powerfully influenced by international labour

standards as embodied in the ILO Conventions and Recommendations.

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13.4 Evolution of Machinery for Labour Administration

In India, till the end of the First World War, labour problems had attained neither vastness

nor complexity to necessitate any serious attention on the part of central and state

governments. Prior to 1919, a small number of labour legislations administered by magistrate

were in force viz. Fatal Accident Act, 1885; Merchant Shipping Act, 1859; Factory Act, 1888

and 1911; Mines Act, 1901. The allocation of the powers was managed by the Regulating

Act, 1773, Pitt’s India Act, 1784 and a variety of Charter Acts. A special post of Labour

Commissioners were shaped in Madras and Bengal in the year 1920. The Government of

Bombay also made functional the Labour Commissioner’s office in 1921. In 1920, the

Central Government also set up the Labour Bureau with a vision to encourage certain

synchronization between the centre and provinces. But the Bureau could only function for a

short span of three years and was eventually close downed in 1923.

The labour problems were in authority of Central Government but it was dealt with by the

Industries and Labour Department. The administrative head of this Department was Secretary

of the Government and was functioning under the control of Governor General’s Executive

Council. Labour administration was not so powerful at Central level as well as at province

level. Its responsibility was on the provincial government. Royal Commission on Labour was

appointed in the year 1929, and its recommendations were accepted and implemented by

government and consequently the labour machinery became strong. Government of India

Act, 1935 played a significant role in labour administration and as a result Labour

Commissioners had been appointed in various provinces. India started five years programmes

in the year 1946, in which a large number of steps had been taken to reinforce the labour

administration. In today’s context, the central Labour Ministry is engaged in enactment of

labour legislations, whereas, the execution responsibility is on the shoulders of state level

Labour Departments and such departments has well equipped machinery to enforce the

labour laws at every level.

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13.5 Check your progress 1

13.6 Ministry of Labour and Employment (Central)

Q.1. ILO stands for

a) Indian Labour Organizationb) International Labour Organizationc) Indian Literary Organizationd) International Literary Organization

Q.2. ILO was founded in the year

a) 1920b) 1919c) 1930d) 1941

Q.3. Peace and Harmony in the organization are very important for the………….of any nation

a) GDPb) Economic developmentc) Manpowerd) None of above

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Fig. 13.1: Organizational Structure of the Ministry of Labour and Employment (Central)

Source: Ministry of Labour and Employment, Government of India

Under the Constitution of India, Labour is a subject in Concurrent list where both the Central

and State Governments are competent to enact legislations, subject to certain matters being

reserved for them. The Fig. 13.1 depicts the organizational set-up of the Ministry of Labour

and Employment. The Ministry presently has Secretariat as the main Ministry, four attached

offices, ten subordinate offices, four autonomous organizations, twenty two adjudicating

bodies and one arbitration body.

The main Ministry of Labour (Secretariat) is the central point for consideration and

subsequent decision of all the questions concerning to labour so far as the Government of

India is concerned. All the organizations and agencies involved in labour administration at

the centre or in the states are guided, controlled and co-ordinate by it. The chief labour

commissioner’s organization has the responsibility to enforce the

Industrial Disputes Act, 1948

The Payment of Wages Act, 1936

Rules in respect of Mines

Railways and Air Transport Services

The Minimum Wages act ,1948

The Contract Labour (Regulation and Abolition) Act, 1970

The Equal Remuneration Act , 1976

The Interstate Migrant Workmen (RE&CS) act,1979

payment of bonus act 1965

Child Labour (Prohibition and Regulation) Ac t , 1986

Payment of gratuity act,1972

Labour laws Act, 1988

Building and other construction workers (RE&CS) Act, 1996

Indian Railway Act and Hours of Employment Regulations for Railway employees

Industrial employment (Standing Orders) Act, 1946

Maternity Benefit Act, 1961

The Central Provident fund commissioner enforces the Employees Provident Fund Act.

The director general, employees state Insurance Corporation enforces the ESI Act

13.7 Attached offices to the Ministry Of Labour

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7

The details of the four offices attached to the Ministry of Labour are given as following:

Directorate General of Employment & Training

This organization is headquartered at New Delhi and is responsible for laying down the

policies, standards and rules for the vocational training in the country and also for

coordinating employment services.12 They are controlled through a nationwide network of

employment exchange and other dedicated institutions both at the central and states level. 58

Office of Chief Labour Commissioner (Central)

The office is based in New Delhi, headed by Chief Labour Commissioner and is assisted by

Joint Chief Labour Commissioner, a Chief Advisor, a Director (Training) and a few Deputy

Chief Labour Commissioners, Regional Labour Commissioners, Assistant Labour

Commissioners and Labour Enforcement Officers at the head office and scores of field staff.

The organization of Chief Labour Commissioner is also known as Central Industrial

Relations Machinery (CIRM).

This office is answerable for prevention and settlement of industrial disputes, execution of

labour laws in industries, authentication of membership of trade unions allied to central

organization, revision of remunerations, enforcement and settlement of awards and inquiry

into branches of code of discipline.

Institute of Directorate General of Factory Advice Service and Labour

The headquarter is located in Mumbai and it works as technical wing of the Labour Ministry.

The directorate is concerned with formulation of policy matters relating to the safety,

healthiness and welfare of workers in factories as well as docks. It also carry out the research

in industrial safety, occupational wellbeing, industrial psychology and industrial physiology.

It executes the provisions stated in the Factory Act 1948 and Dock Workers (Safety, Health

and Welfare) Act, 1986. Further, it is responsible for the conduct of a variety of diploma and

certificate courses about industrial safety, health and welfare.

Labour Bureau

The offices of Labour Bureau are situated at Shimla and Chandigarh. This bureau is

accountable for collection and subsequent publication of statistical and other information

concerned with employment, wages, income, industrial relation, working environment etc.

The bureau brings out monthly publication of Indian Labour Journal, Year Book of Indian

Labour and pocket book of Labour Statistics besides publishing the Consumer Price Index.

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Activity

A

Suppose you are the secretary, Ministry of labour and Employment (Central), what

changes you want to incorporate in the present organizational structure and

responsibilities of Ministry of Labour and Employment (Central) and why?

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13.8 Subordinate Offices under the Labour Ministry

Ten subordinate offices work under the Labour Ministry.

Directorate General of Mines Safety

This office is located in the city of Dhanbad (Jharkhand) and it confirms the provisions of

Mines Act, 1952 to know that these provisions are being implemented or not in mines.

Another provision of this Act, it also enforces the Indian Electricity Act, 1910 and Maternity

Benefit Act, 1961 in mines.

Welfare Commissioners

The remaining nine offices are associated to the welfare. These offices work under the

supervision of Welfare Commissioners and located in Hydrabad, Allahabad, Banglore,

Bhiwani, Bhubneshwar, Karma, Kolkata, , Jabalpur, and Nagpur. They are accountable for

the welfare facilities to the workers of mica, dolomite, limestone, beedi and cinema

industries. Welfare Commissioners devise and implement a range of schemes for the welfare

of coalmine workers viz. housing, medical facilities, water supply, sanitation etc on.13

13.9 Autonomous Organizations

Labour Ministry has four autonomous organizations in order to handle the various issues.

Employees’ State Insurance Corporation (ESIC)

The ESIC is a statutory body headquartered in New Delhi. It is headed by a person of

Director General Rank. The Corporation is solely responsible for the implementation of the

Employees’ State Insurance Act, 1948. This Act grants the medical benefit to insured

workers and their families and in addition gives maternity benefit, dependent benefit, illness

assistance and reimbursement for industrial injury. These benefits are administered by the

Corporation with the assistance of a Standing Committee as well as Medical Benefit Council.

Employees’ Provident Fund Organization (EPFO)

The Chief Executive Officer of the EPFO is Central Provident Fund Commissioner, the

headquarter of which is in New Delhi. The EPFO is liable for the administration of

Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. Further, it also

administers the Employees’ Deposit Linked Insurance Scheme, 1976 and Employees’

Pension Scheme, 1995. In order to handle the work at the local level, organization has various

regional and other offices.

V.V. Giri National Labour Institute (VVGNLI)

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The institute is registered society, which carry out result oriented research and conducts

training courses to the workers, with it’s headquarter at Noida (Uttar Pradesh). The ex-

officio Chairman of the institute is the Labour Minister and is fully governed by a General

Council. An Executive Council also exists which looks after day-to-day work of the institute.

Research occupies a crucial place in the activities of the institution. The topic of research

covers an extensive spectrum of labour related issues in both organized and unorganized

sectors.14

Central Board for Workers’ Education (CBWE)

The CBWE was set up as a tripartite society in the Ministry of Labour in 1958 and its

headquarter is located in Nagpur (Maharashtra). CBWE deals with various schemes for the

conduct of workers’ training and also carry out the work for the awareness of workers about

their rights, duties and responsibilities. The Board also take on the programmes for education

and upliftment of rural workers’. The majority of the programmes of the Board are

accomplished by centres at regional and sub-regional levels situated in various parts of the

country.

13.10 Adjudicating Bodies

Central Government Industrial Tribunals-cum-Labour Courts (CGITS)

There are about twenty two industrial Tribunal-cum-Labour Courts. These all have been set-

up under the jurisdiction of Industrial Dispute Act, 1947. These Tribunals and Courts work

under Central Government and resolve the problems and disputes of industries concerned.

13.11 Arbitration Body

Board of Arbitration (Joint Consultative Machinery)

This Board is set-up in 1968 under the Joint Consultative Machinery scheme. This Board is a

compulsory arbitration institution of disputes between employees and government. It has a

Chairman (full time) assisted by the other staff personnel to resolve the matters concerning to

working hours, wages and allowances, etc.

13.12 Administration of Social Security Acts

Social security is such a type of help which ensures a person that he will surely get assistance

at the time of his illness, injury, old age, invalidity and even after his death. But this social

security only covers the workers who are working in organized sector but a large proportion

Page 241 of 250

11

of workers of unorganized sector yet to be covered. However, a few schemes are working for

unorganized workers but they are not enough. The social security schemes are run by joint

efforts of employees, employers and government. There are a lot of social security laws

which are working in industries. The various Social Security Acts and their administrative

machinery is as follow:

Employees’ Provident Funds and Miscellaneous Provisions Act, 1952

The Employees’ Provident Fund Act, 1952 is administered by the Employees’ Provident

Fund Organization (EPFO). This organization looks after all the working, investment,

implementation of the Act in various establishments.

Employees’ State Insurance Act, 1948

This Act provides for health care and cash benefit payments in the case of sickness, maternity

and employment injury. The ESI scheme is administered by a statutory body, called the

Employees’ State Insurance Corporation (ESIC). All employers, employees, central and state

governments, and medical professional and parliament representatives are the members of the

ESIC. The Union Minister of Labour and Employment is the chairman of the body. There is a

Standing Committee of the Corporation. The Director General is a Chief Executive Officer of

the Corporation. Its headquarter is situated in New Delhi and it has a large number of field

offices.

Payment of Gratuity Act, 1972

The Payment of Gratuity Act provides the benefits to the employees after their retirement.

This Act is applicable to all workers engaged in factories, mines, plantations, ports, railways,

educational institutions and other establishments. This Act is enforced by the central and state

governments jointly. Both has right to appoint a controlling authority for the administration

of the Act. The government is enable to appoint the various area inspectors to find out, that

the provisions of the Act are being completed or not.

Maternity Benefit Act, 1961

This Act is specially made for the working women. It provides them benefits and medical

care at the time of their pregnancy. According to this Act, no employer can force any woman

worker for work when she is pregnant. The Maternity Benefit Act provides them leave with

pay. It enables them to get 12 weeks leave, 6 weeks before the birth of child and 6 weeks

after the birth of child.

Workmen’s Compensation Act, 1923

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This Act is mainly to provide the compensation to workers for industrial injury, accidents and

any mishappening at the time of work. All the workers, who are working in any hazardous

job are able to get the benefits of the Act. The state governments have power to extend the

scope of the Act to any class of workers’. The state government administer the provisions of

this Act through the Commissioners appointed for specified areas. The state government also

make rules for ensuring that the provisions for the Act are being implemented or not.

13.13 Recent Government Initiatives

Pt. Deendayal Upadhyay Shramev Jayate Karyakram

As good governance initiatives, in 2014, Pt. Deendayal Upadhyay Shramev Jayate

Karyakramwas was launched. To ensure its effective implementation Ministry's three major

initiatives on the 'Minimum Government, Maximum Governance' pledge via effective use

of technology is

(1) Shram Suvidha Portal

(2) Labour Inspection Scheme and

3) Portability of Provident Fund Account through Universal Account Number (UAN)

Apprentice Protsahan Yojana

'Apprentice Protsahan Yojana' was launched, providing 50% support towards payment of

stipend with a focus on MSME (Micro, Small and Medium Enterprises) in the manufacturing

sector. A compassionate approach to ensure that the 'Shram Yogi' becomes a 'Rashtra

Yogi' and 'Rashtra Nirmata'. Shramev Jayate initiatives will enhance confidence and build

the skills of youth, while making it easier to do business.

e-Kranti

The main objective of e-Kranti is to accelerate e-governance across India and achieve, in

order to achieve Minimum Government, Maximum Governance. Therefore, the mission of e-

Kranti is to: “Make all government services accessible to the people in their locality via

Common Service Delivery outlets. The Ministry of Labour & Employment has developed a

unified Web Portal –'Shram Suvidha'– catering to four major organizations under its

patronage:

a) Office of Chief Labour Commissioner (Central)

b) Directorate General of Mines Safety

c) Employees' Provident Fund Organization

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d) Employees' State Insurance Corporation.

e) e = EFFICIENT INSPECTIONS Transparent Central Labour Inspection

Scheme for random selection of units for inspection

f) e= EASIER SOCIAL SECURITY Portability through Universal Account

Number (UAN) for Employees' Provident Fund

g) e = EFFICIENT HEALTH AND INSURANCE Faster medical care and cash

benefits in contingencies for organized sector workers.

Project 'Panchdeep': To digitize internal and external processes and

ensure efficiency in operations, especially services to Employers and

Insured Persons, ESIC has launched its IT Project 'Panchdeep'.

Employer Portal under 'Panchdeep'

IP (Insured Persons) Portal under 'Panchdeep'

Pehchan Card for IP

e-Biz Platform

h) e = EXPERTISE IN TRAINING

i) National Council for Vocational Training-Management Information System

(NCVT-MIS) Portal

j) e = EXTRA REACH FOR UNORGANIZED WORKERS

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Activity B

Suppose you as worker had a dispute with the HR Manager of your Factory relating to

provident fund, what protocol you will follow to represent your case with the

Government and why?

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13.14 Check your progress 2

13.15 Summary

In India, till the end of the First World War, labour problems had attained neither vastness

nor complexity to necessitate any serious attention on the part of central and state

governments. But with passage of time, labour problems aggravated due to expansion of

industries and necessitated action from Government side. More and more labour laws came

into the picture but their enforcement and administration was a big issue. Labour

administration has also evolved over the period of time. Presently, a comprehensive structure

under the Ministry of Labour and Employment is constituted for labour administration which

comprises of attached offices, subordinate offices, autonomous organizations and

adjudicating bodies. Presently in the ministry, there are 04 No’s of attached offices, 10 No’s

of subordinate offices, 04 No’s of autonomous organizations, 22 adjudicating bodies, and one

arbitration body. Four attached offices are Directorate General of Employment & Training;

Office of Chief Labour Commissioner (Central); Institute of Directorate General of Factory

Q.4. The headquarter of Directorate General of Employment & Training (Centrallevel) is located at

a) Kolkatab) Chennaic) Mumbaid) New Delhi

Q.5. As per Factories Act, ‘Adult’ means a person who has completed…….years ofage

a) Fifteenthb) Sixteenthc) Seventeenthd) Eighteenth

Q.6. When the capital and …………goes hand in hand the industry can prosperand aid the nation for a good economic condition

a) Technologyb) Machinesc) Manpowerd) None of above

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Advice Service and Labour and Labour Bureau. Ten subordinate offices includes Directorate

General of Mines Safety and 09 Welfare Commissioners. Four autonomous organization are

Employees’ State Insurance Corporation (ESIC); Employees’ Provident Fund Organization

(EPFO); V.V. Giri National Labour Institute (VVGNLI); Central Board for Workers’

Education (CBWE). Besides it, there are about twenty two industrial Tribunal-cum-Labour

Courts which act as adjudicating bodies. Board of Arbitration (Joint Consultative Machinery)

acts as an arbitration body. Under administration of social security act, organizations like

EPFO, ESICs, and commissioners of various states and at central level play a major role.

Recently, our Hon’ble P.M. Narendra Modi has launched various initiatives to expedite the

process of labour administration in India. The main schemes under it are Pt. Deendayal

Upadhyay Shramev Jayate Karyakram and to ensure its effective implementation Ministry's

three major initiatives on the 'Minimum Government, Maximum Governance' pledge via

effective use of technology is Shram Suvidha Portal; Labour Inspection Scheme and

Portability of Provident Fund Account through Universal Account Number (UAN) . The

second major initiative is of e- kranti which includes various e programmes under its banner

e.g. e = Efficient Inspections; e= Easier Social Security, e = Efficient Health and Insurance

which consists of Project 'Panchdeep'; e = expertise in training (NCVT-MIS) Portal and ; e =

extra reach for unorganized workers. Surely these initiatives and government’s stringent

policy to take labour problems head on are going to bring positive changes in arena of labour

administration in India.

13.16 Glossary

Labour Administration: Labour administration is public administration activities in

the field of labour policy.

ILO: International Labour Organization was founded in 1919 works on the principle

that worldwide, eternal peace can be established only if it is based on social justice.

The ILO became the first specialized agency of the UN in 1946. It’s headquarter is

situated in Geneva, Switzerland.

Ministry Of Labour And Employment (Central): The Ministry (headquartered at

New Delhi) presently has Secretary as the main head, with four attached offices, ten

subordinate offices, four autonomous organizations, twenty two adjudicating bodies

and one arbitration body.

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Attached Offices To The Ministry Of Labour: The four offices are Directorate

General of Employment & Training, Office of Chief Labour Commissioner (Central),

Institute of Directorate General of Factory Advice Service and Labour, Labour

Bureau

Subordinate Offices: Directorate General of Mines Safety and Welfare

Commissioners come under the banner of Subordinate Offices to the ministry of

labour and employment.

Employees’ State Insurance Corporation (ESIC):

The ESIC is a statutory body headquartered in New Delhi. It is headed by a person of

Director General Rank. The Corporation is solely responsible for the implementation

of the Employees’ State Insurance Act, 1948.

Employees’ Provident Fund Organization (EPFO):

The Chief Executive Officer of the EPFO is Central Provident Fund Commissioner,

the headquarter of which is in New Delhi. The EPFO is liable for the administration

of Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

V.V. Giri National Labour Institute (VVGNLI)

The institute is registered society, which carry out result oriented research and

conducts training courses to the workers, with it’s headquarter at Noida (Uttar

Pradesh).

Central Board for Workers’ Education (CBWE):

The CBWE was set up as a tripartite society in the Ministry of Labour in 1958 and its

headquarter is located in Nagpur (Maharashtra). CBWE deals with various schemes

for the conduct of workers’ training and also carry out the work for the awareness of

workers about their rights, duties and responsibilities.

13.17 Answers to Check Your Progress

Q.1. b

Q.2. b

Q.3. b

Q.4.d

Q.5.d

Q.6.c

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13.18 REFERENCES

S.N. Mehrotra (1976). Labour Problems in India: S. Chand Company (Pvt. Co.), New

Delhi.

Marks, Fritz Morstein (1964). Elements of Public Administration: Prentice-Hall of

India, New Delhi, 1964

Gladden, E.N. An Introduction to Public Administration: London Steples Press

White, L.D. (1958). Introduction to the Study of Public Administration: Macmilan

Company, New York


Annual Report (2001-2002). Ministry of Labour, Government of India

Indian Labour Year Book (1999) .Government of India, Ministry of Labour,

Singh Balwant (1996). Labour Policy and Administration: M.D. Publication Pvt. Ltd,

New Delhi

Sinha, P.R.N. et al. (2009). Industrial Relations, Trade Union and Labour

Legislation: Pearson Education.


Explain in brief the evolution of Machinery for Labour Administration.

Discuss the scope of Machinery for Labour Administration.

Elaborate in detail the organizational structure of Ministry of Labour and employment

(Central).

Give a brief overview of Responsibilities of all the attached offices under the Ministry of

Labour and Employment, Government of India.

Give a brief overview of Responsibilities of all the subordinate offices under the

Ministry of Labour and Employment, Government of India.

State the welfare duties of Directorate General of Mines Safety and Welfare

Commissioners.

Write a short note on the following:

o Employees’ State Insurance Corporation (ESIC)

o Employees’ Provident Fund Organization (EPFO)

Differentiate between Adjudicating body and Arbitration body.

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Explain in detail the various Social Security Acts and their administrative machinery.

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social security & labour welfare

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