Social Security Legislations In India
Keywords – Social Security, Legislations, Labour Laws, Employees
Introduction
Social Security is a natural right that is recognized as a basic human right by many international organizations. The concept of Social Security was first introduced in Germany in 1833. Social security was established as a basic human right in the ILO’s Declaration of Philadelphia(1944) and its Income Security Recommendation,1944. The right is upheld in the Universal Declaration of Human Rights, 1948, and the International Covenant on Economic, Social and Cultural Rights, 1966. The Social Security legislations aim at providing safety to the man from various possibilities or unseen risks and which are found in all ages and all nations.
The Preamble of the Indian Constitution states that India is a Socialist State after the 42nd Amendment to the Constitution. According to the Supreme Court of India, socialism aims to eliminate inequality in income, status and standard of living as well as a decent standard of life for the working class.
In India, the social security legislation derives its power and authority from the directive principles of the State Policy enumerated in Part III under Article 36-51 of the Constitution of India. These provisions compulsorily provide social security benefits either exclusively at the expense of their employers or based on the joint contribution of the employees and employers.
The Evolution Of The Structured Laws
The concept of social security for the employees has gained significant importance lately, especially in developed countries also referred to as industrialized countries. The social security legislation provides for the protection of the working class against incidents like retirement, dismissals due to no fault of the employee, abandoning the employee, parenthood, old age, unemployment, death, any disability, or other similar conditions.
The Indian Constitution puts liability on the State to provide social security to the citizens of India. The State, here, releases its obligation as an agent to the society to help the people who are in unfavorable circumstances or any case need security owing to the above-mentioned possibilities.
The Constitution of India provides for the enactment of Social Security Legislations by both the Parliament and the State. Following are the various legislation enacted by the Parliament for the social security of the workers:
The Employees Compensation Act, 1923
The Workmen’s Compensation Act was the first step toward the social protection of workmen, which is now renamed the Employees Compensation Act, 1923. The Workmen Compensation Act was renamed by the Workmen’s Compensation (Amendment) Act, 2009 which came into force on 18 January 2010. The change was made to maintain gender neutrality in respect of the act by changing the term ‘workman’ to ’employee’.
The act accommodates payment of compensation to the employees and their representatives on account of injury by industrial mishaps including certain work-related illnesses emerging in the course of employment which may result in death or disablement. The legislation imposes a liability on the party who can be held responsible for any occurrence of action or omission due to a specific law or statute upon an employer to discharge his moral and ethical obligation towards the employees when they suffer from any kind of physical disabilities and diseases during its employment who are working in hazardous conditions. The act also provides relief to the people who were dependent on the employee, if such employee meets with an accident.
The preamble of the act provides for the payment by the employers to their employees of compensation for injury by way of an accident. The Compensation Act is applied to certain railway servants and people employed in hazardous works such as factories, mining, plantations, construction work, etc.
The provisions in the act mention a quicker and cheaper mode of disposal of disputes relating to compression through special proceedings. The act extends to the whole of India.
Ball v. William Hunt& Sons Ltd.
In the case of Ball v. William Hunt& Sons Ltd.[1]The court observed that if due to any physical defect, an employer is unable to get any work which an employer of his class performs generally, and due to which has lost the power to earn he will be entitled to compensation for total disability.
One can say that Loss of physical capacity is coextensive with loss of earning capacity but the loss of earning is not coextensive with the loss of physical capacity as he may receive equal wage even if there is a loss of physical capacity.
In an injury, where the workman who was a carpenter had injured his left arm from the elbow. It was held by the Supreme Court in Pratap Narain Singh Deo v. Sriniwas Sabata[2], that it is a total disablement as the carpenter cannot carry his work with one hand and not a partial permanent disablement.
Employees State Insurance Act, 1948
The legislation was one of the first major acts on social protection of employees in independent India to provide benefits to employees in case of sickness, maternity, temporary or permanent physical disablement, death due to injury in course of employment resulting in loss of wages or earning capacity in the certain organized sectors. It guarantees good medical care to its workers as well as the dependents of the employee. The Act was amended by the Employees’ State Insurance (Amendment) Act, 2010to increase the Social Security Coverage, streamlining the procedure for assessment of dues and for giving better services to the beneficiaries.
The Employees state insurance corporation was established by the Central Government under the Employee State insurance act. The corporation is the premier social security organization in the country which oversees the working of the ESI Scheme under the act. Under the ESI Act, this corporation is the highest policy-making and decision-making authority. Further, the act created the ESI Fund which is held and managed by the corporation with the help of an executive committee called the Standing Committee through assistance, advice and expertise of Medical Council, Regional and Local Boards as well as the Committees. For the execution of the ESI Scheme, the standing committee and medical benefit council have been constituted.
The Applicability Of The Act
The act extends to the whole of India, the Central Government has the power to enforce provisions by notification in the official gazette on different dates and for different states or different parts. Applies to all factories (including factories belonging to the government) other than seasonal factories. The act empowered the appropriate government to extend any of the provisions of the Act to any other establishment or class of establishments after giving a month’s notification.
It shall be observed that even if the number of employees employed decreases at any time below the limit specified, the act will continue to be governed.
The accident may occur within or outside the territorial limits of India. However, there should be a nexus or casual connection between the accident and employment. The place or time of the accident should not be unrelated to the employment[3].
Employees’ Provident Funds & Miscellaneous Provisions Act, 1952
The act extends to the whole of India, which aims to provide social security and financial help to industrial employees and their families in times of distress. The scheme provides old age and survivorship benefits, long-term protection and security to the employees and their dependents and also advances for the purchase or construction of a dwelling house during the period of membership.
The government of India executes the act through the Employees’ Provident Fund Organisation (EPFO) which is one of the largest provident fund institutions in the world in terms of members and volume of financial transactions that take place.
The employees’ provident fund Appellate Tribunal was constituted by the Central Government to exercise the powers and discharge the functions conferred by the act. The tribunal consists of only one person appointed by the government.
Three schemes framed under the act framed by the Central Government provides social security benefits for the workers and their dependents:
- The Employees’ Provident Fund Schemes, 1952
- The Employees’ Pension Scheme, 1995
- The Employees’ Deposit-Linked Insurance Scheme, 1976.
The Act applies to every establishment i.e. a factory engaged in the industry mentioned in Schedule 1 wherein 20 or more persons are employed or to any other establishment where 20 or more person are employed which can be specified by the Central Government through a notification in the official gazette after giving a notice of not less than two months.
In the case of Delhi Cloth and General Mills v. R.P.F. Commissioner[4], the conditional validity of the act was challenged on the ground of discrimination and excessive delegation. The court held that the law sets out a standard that is pertinent to every factory or establishment placed similarly. It makes reasonable classification without making any discrimination between factories placed in a similar class or group.
Payment Of Gratuity, 1972
The term ‘gratuity’ is an amount paid by the employer to the employee as a recognition for the service rendered by the employee when he retires or leaves his service. Here the employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops, or other establishments are provided with gratuity under this act in which 10 or more people are employed or were employed on any day during the preceding 12 months. The act shall be applicable even if the number of people falls below 10 at any time.
The act has been amended from time to time to bring upon the required changes according to the situations prevailing. Recently the ceiling amount of gratuity was increased as well as the scope of ’employee’ under the act was widened.
Gratuity Schemes –
Gratuity is an old age retiral social security benefit. When the employment comes to end due to retirement or superannuation, it generally affects the employee resulting in a reduction of earnings or even a total stoppage of earnings. In case of the death of the employee, financial assistance to the surviving members of the family is provided. Gratuity schemes, therefore, serve as instruments of social security and their significance in a developing country like India where the general income level is low cannot be over-emphasized.
Gratuity must be paid to an employee on the termination of his employment after he has rendered continuous service for not less than 5 years:
(i) on his superannuation; or
(ii) on his retirement or resignation; or
(iii) on his death or disablement due to accident or disease,
However, it is not necessary to complete the service of five years where the termination of employment of any employee is due to death or disability. The employer shall pay gratuity to an employee at the rate of 15 days’ wages according to the rate of wages last drawn by the employee.
Maternity Benefit Act, 1961
Article 42 of the Constitution of India, provides provision for the state to secure just and humane conditions and to provide for maternity relief.
The Maternity Benefit Act, 1961 regulates the employment of women in factories, mines, the circus industry, plantations and shops or establishments employing 10 or more persons except for the employees who are covered under the ESI for certain periods before and after child-birth and provides for maternity and other benefits.
Under the act, women employees are entitled to maternity benefits for the period of their actual absence up to 26 weeks due to the delivery. In cases of illness arising due to pregnancy, etc., they are entitled to additional leave with wages for one month. They are also entitled to six weeks’ benefit in case of miscarriage.
Article 39(e) and (f) of the Constitution of India directs the state to secure the health and strength of the workers, being vigilant that men, women, and children at a tender age are not abused and that any citizen is not forced to work against the convention due to economic necessity. To give a healthy environment to the children giving them a sense of freedom and dignity, the provision of maternity benefits was established with the concept of a healthy mother leading to a healthy child.
The Unorganized Workers’ Social Security Act, 2008
The “unorganized worker” includes workers who are home-based, self-employed or wage-workers including workers in the organized sector who cannot avail of benefits of the six social security legislations given in Schedule II of the Act.
With the growth of the economy of the country, there have been different demands for the labours, one being the labourers from organised sectors and the other being the manual labourers who are seen as weak and are exploitedto a great extent. To curb this problem The Unorganised Workers’ Social Security Act, 2008 came into force.
The act provides for the formulation of welfare schemes by the Centre and State for the benefit of unorganized sector workers. The purpose and objective of the act are to provide social security and welfare to unorganized workers. The Act extends to the whole of Indian territories.
Role of the DPSPs
The directive principles mentioned in the constitution of the country provides the state to protect and promote the interests of weaker sections of our population, ensure social security to the human beings, in particular the workmen, secure just and humane conditions of work and a decent standard of life, guarantees the promotion of the welfare of the people and removing the inequalities and to direct its policy towards securing a livelihood, common hood, etc.
The Unorganized Sector Workers are the people who have not had the option to seek after their common interest because of imperatives like casual nature of work, nonappearance of the employer-employee relationship, illiteracy, ignorance, and so forth. The workers working in an unorganized sector are generally paid less and generally do not receive social security benefits like life and medical insurance, health care, maternity benefits, old-age pension, etc. which are available to the workers working in the organized sector under the Employees State Insurance Act, 1948; the Employees Provident Fund and Other Miscellaneous Provisions Act, 1952 and the Factories Act, 1948, etc.
Apprentices Act, 1961
The term ‘apprentice’ means a person who is undergoing apprenticeship training (a course of training in industry or establishment in pursuance of a contract of apprenticeship under prescribed terms and conditions which may differ for different categories). In other words, the program of training apprentices in the industry may mean imparting training while on the job.
The Apprentices Act, 1961 was enacted to regulate and control the program of training of apprentices making it obligatory on part of the employers both in public and private sector establishments having requisite training infrastructure as mentioned under the Act.
The Act was amended in 1973 and 1986 to include training of graduates, technicians and technician (vocational) apprentices respectively. The act was also amended in 2014 to widen the apprenticeship opportunities for the youth with the view of the growing economy, the performance of the Apprenticeship Training Scheme was not satisfactory and a large number of training facilities available in the industry were going unutilized. Non-engineering graduates and diploma holders have been made eligible for apprenticeships.
Employment Exchanges (Compulsory Notification Of Vacancies) Act, 1959
The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 provides for compulsory notification of any vacancies and submission of employment returns by the employers to the exchanges. The main activities of the employment exchanges are registration, placement of job seekers, career counselling, vocational guidance and collection of employment market information. The Act applies to all establishments in the public sector and such establishments in the private sector which are engaged in non-agricultural activities and employ 25 or more workers.
Conclusion
The purpose of any social security measure is to give individuals and families the confidence that their level of living and standard of life will not erode by social or economic eventuality. A worker works not only for economic motivation but also for the sense of belongingness and security within his workplace. Hence it is the duty of the employer to ensure as best as he can that his workers have this psychological satisfaction that their as well as their families’ lives are socially secure and cared for.
Indian legislations have gone a long way in strengthening this cause and because of this and many other factors, today in the world of labour and employment, the employee and employers’ interest is at par with each other and the principal focus is on the combined interest and satisfaction of both. If these conditions are fulfilled with a joint effort and contribution from both the employer and the employee then the workplace to a great extent will become a home of sorts.
Written By – Vrinda Agrawal
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Citations
[1] 1912 AC 496
[2] 1976 ILab.L.J.235
[3] Regional Director, E.S.I. Corpn. v. L. Ranga Rao, 1982 I-L.L.J. 29
[4] A.I.R. 1961 All. 309
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