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The evolution of social security in India can be understood broadly in two time based segments. I. Pre-Independence Period II. Post-Independence Period There was large scale industrialization in Indian from 1850 especially in the Textile Industries where there was no welfare of workers as they were unorganized. Pre-Independence Period and Social Security of Workers 1. First labour unrest -In 1877 first labour unrest took place at “Empress Mills Nagpur” for improving their wages.
2. First labour union - In 1890 first Trade Union Bombay Mill Hands association was formed under the leadership of N.M. Lokhande. 3. In 1855 the first Fatal accident Act was passed.
4. In 1859, two legislation were enacted i.e. Indian Merchant Shipping Act 30 and Workmen’s Breach of Contract Act 31 accordingly in 1860, Employers and Workmen (Disputes) Act were enacted which act as a mechanism to settle disputes between employer and employee.
5. The workers of the plantation labour rights were protected through Island Emigration Act 1892 and Indian Mines Act, 1901were subsequently enacted keeping into consideration of the health and safety of the workers in mines. 6. In 1920 International Labour Organization gave a boost to labour welfare and social security schemes. In the convention of 1929 of ILO the workers social security schemes. In the convention of 1929 of ILO the workers social security was considered as of high importance.
Bombay Maternity Benefit Act was passed in 1929 7. Indian national movement – passing of various Acts-
After the first world war, due to Indian National movement. British Government started thinking about the employees and accordingly
(i) Workmen’s compensation Act, 1923
(ii) The payment of wages Act’ 1936
(iii) Minimum wages Payment Act
(iv) Mr.B.R. Ambedkar was appointed as a ‘labour member of the victory’s council” after second world war. 6. Introduction of Medical Schemes –
“The Whitley Commission” recommended that some suitable measures should be taken to restore health to the workers. On the recommendation of the commission and in the consultation with the “standing Advisory Committee of Labour and Industries” the government agreed for a contributory Medical scheme in which both employer and employee will contribute towards a common fund. 7. In 1937 a contributory Health Insurance scheme was formulated. At the same time , the Bombay Textile enquiry Committee also recommended the formulation of health Insurance Scheme 8. B.R Ambedkar Report –
In 1940 during the first Labour Minister’s conference the need for sickness Benefit fund was felt. In 1943 Indian Government appointed a commission under the chairmanship of B.R. Ambedkar and its report was submitted in 1944. B.R. Ambedkar commission strategy recommended the upper age limit of 60 years and employment was divided into three categories- permanent, temporary and casual. The employer was required to pay contribution towards insurance schemes for all the workers, whereas only permanent and temporary workers were required to pay their contribution. 9. In 1947, the Industrial dispute Act was enacted with the main objective was to make provisions for the investigation and settlement of industrial disputes. Most important contribution of employee’s State insurance Act 1923. Chhota Beveridge-
It is important to mention here that it blossomed as the first social security scheme in 1944, when the Govt. of the day was still British.The first document on social insurance was "Report on Health Insurance" submitted to the Tripartite Labour Conference, headed by Prof. B.P.Adarkar, an eminent scholar and visionary. The Report was acclaimed as a worthy document and forerunner of the social security scheme in India and Prof. Adarkar was acknowledged as "Chhota Beveridge" by none other than Sardar Vallabhbhai Patel. Sir, William Beveridge, as all know, was one of the high priests of social insurance. The report was accepted and Prof. Adarkar continued to be actively associated with it till 1946. On his disassociation he strongly advocated management of the Scheme by an expert from ILO. In 1948 Dr. C.L.Katial, an eminent Indian doctor from London took over as the 1st Director General of ESIC and he steered the affairs of the fledgling Scheme till 1953.
The challenge of closing the coverage gap in social security provisions has to be developed at two levels.
1. The first level involves the re-engineering of the institutional arrangements to increase efficiency.
2. The second level is to create an appropriate legislative and administrative framework for significant increase in the social security coverage especially in the unorganized sector.
The principal social security laws enacted in India are the following:
1. The Employees’ State Insurance Act, 1948 (ESI Act)-
The Act was originally applicable to non-seasonal factories using power and employing 20 or more persons; but it is now applicable to non-seasonal power using factories employing 10 or more persons and non-power using factories employing 20 or more persons.
Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, restaurants, cinemas including preview theatre, road motor transport undertakings and newspaper establishment employing 20 or more persons.
The existing wage-limit for coverage under the Act, is Rs.21,000/- per month. (Rs.25,000/- per month in the case of Persons with Disability). Broadly, the benefits under this scheme are categorized under two categories,
1) cash benefits (which includes sickness, maternity, disablement (temporary and permanent), funeral expenses, rehabilitation allowance, vocational rehabilitation and medical bonus) and,
2) non-cash benefits through medical care.
2. The Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 (EPF & MP Act) which applies to specific scheduled factories and establishments employing 20 or more employees and ensures terminal benefits to provident fund, superannuation pension, and family pension in case of death during service. Separate laws exist for similar benefits for the workers in the coal mines and tea plantations.
Once this act is applicable , it cannot be withdrawn.
3. The Employees' Compensation Act, 1923 (WC Act), which requires payment of compensation to the workman or his family in cases of employment related injuries resulting in death or disability.
4. The Maternity Benefit Act, 1961 (M.B. Act), which provides for 12 weeks wages during maternity as well as paid leave in certain other related contingencies.
5. The Payment of Gratuity Act, 1972 (P.G. Act), which provides 15 days wages for each year of service to employees who have worked for five years or more in establishments having a minimum of 10 workers.
Separate Provident fund legislation exists for workers employed in Coal Mines and Tea
Post–Independence period and Social Security 1. After Independence -In 1948 employees state Insurance was duly modified
2. In 1948 Indian government made certain important amendments in existing Indian factories act 1934 and came with an entirely new nomenclature “The factories act 1948” with a main purpose of regulating conditions of work in manufacturing establishment for ensuring adequate health, welfare measures, hours of work and leave with wages. 3. In 1948 the Government enacted Maximum wages Act for prevention of exploitation of labour due to payment of unduly low wages. 4. In 1952 Government enacted Employee’s Provident fund and miscellaneous provision act with a main objective of providing substantial measures of financial security and timely monetary assistance to industrial works and their families. 5. ‘Besides this’ (i) “The Assam tea plantations provident fund act 1995.” The personal injuries (Compensation Insurance) act, 1963. (ii) The seamen’s provident fund Act 1966 (iii) The plantation labour Act 1951 (iv) The(central) maternity benefit Act, 1961 Were enacted for providing social security to weaker section of the society where there were more chances of exploitation and victimization.
The preamble expresses the essential features of political and economic philosophy underlying the provisions of the Constitution.
¦ It declares that India would be a sovereign, socialist, secular democratic republic and to secure to all its people justice, liberty, equality and fraternity. It assures a democratic way of life and embraces the ideal of establishing social, political and economic justice in the country.
¦ The Preamble remained unchanged till 1976 when, after the 42nd Amendment, the words 'Socialist' and 'Secular* were added as also 'unity and integrity of the nation'.
The provisions relating to social security of labour lie in Part IV though the right to life and protection from discrimination and exploitation are laid down in Part III, the Fundamental Rights.
¦ The main preambular objective of Indian Constitution is to secure to all its citizens justice social, economic and political. The basis and origin of this concept was the ‘objective resolution’.
Fundamental Rights was also included in the Constitution which guaranteed Right to Equality (Article 14) and Right against Exploitation (Article 23 and 24).
• A separate chapter on Directive principles of State Policy incorporated in the Constitution has embodies the fundamental principles based on social justice concerning labor.
• Right to life (Article 21) includes all the rights that are essential to main human life in a civilized society, such as food, clothes, house, medicine and education.
• The Right to work means the citizen’s right on his society to have work according to his ability and skill with suitable minimum wages that enable him to maintain his life in a civilized society
¦ Article 38 is a mandate to the state to secure a social order for the promotion of welfare of the people.
¦ Article 39 provides for equal rights to adequate means of livelihood to all citizens and distribution of wealth and material resources to sub serve common good and prevention of concentration of wealth and means of production etc.,
¦ The 44th Amendment added clause (2) to Article 38 which directs the state to minimize the irregularities in income, and to endeavor to eliminate inequalities in status, facilities and opportunities not only amongst individuals but also groups of people residing in different areas or engaged in different vocations. This clause represents the group equality.
¦ Article 39A of the Constitution envisages that the State should provide free legal aid by legislation or schemes or in any other way to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities.
¦ Article 41 Right to work, to education and to public assistance in certain cases such as unemployment, old age, sickness and disablement. State shall, within the limits of its economic capacity and development, make effective provision 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 undeserved want.
¦ Article 42 , Provision for just and humane conditions of work and maternity relief . State shall make provision for securing just and humane conditions of work and for maternity relief.
¦ Article 43 deals with living wage for workers and Article 43-A intend to secure workers participation in management of industries.
Social Security and labour welfare falls under Concurrent list, it means both union and state Government can make laws regarding these topics.
¦ (List III in the Seventh Schedule of the Constitution of India)
¦ Item No. 23 – Social Security and insurance,Employment and unemployment.
¦ Item No. 24 -Welfare of Labour including conditions of work, Provident funds, Employers’ liability, Workmen’s compensation, Invalidity and old age pension and maternity benefits.
It appears that in spite of all the legal mechanisms available both at international and national levels, very little efforts have been made so far on the question of providing social security to its vast majority of vulnerable population.
The National Commission for Enterprises in Unorganised Sector set up by the Government of India in 2004 estimated that roughly 92 percent of India’s total workforce is engaged in informal/unorganised sector and most of them remained poor with an average per capita consumption of less than Rs.20 a day. The commission also analysed the social security measures available to them in its Report on Social Security in India in great detail and found that the schemes and mechanisms currently available for providing social security to the unorganised workers are insufficient. The commission observed in the report in this regard, “Although a number of schemes and systems are in operation, the main problem in providing social security to the informal workers is one of limited coverage of both regions (States) as well as segments of workers within regions. Taken in isolation, these existing models cover a large numbers of workers but as a proportion of the country’s vast army of informal workers, they cover only a small share (around 5 to 6 per cent as per the estimates). Broadly speaking, four models of social security are currently functioning in the country. These are:
a) The Welfare Fund Model (partly or fully contributory for workers in the unorganised sector, which is based on a tripartite arrangement under the direct supervision of the state);
b) The Social Assistance Model (cash payment to defined beneficiaries {means-tested} through budgetary provision);
c) Social Security Scheme Model (schemes designed and implemented by gov-ernments or their agencies for defined categories of workers in the unorganised sector); and
d) The Mutual Help Model (mainly operating through the contribution of work-ers or the poorer sections for some social security through mutual assistance but promoted and mediated by NGOs)…”
In the context of this, the commission made a number of significant and viable recommendations for the welfare of the unorganised workers in the country. Further it came out with a proposal called National Minimum Social Security and to provide legislative backing to the proposed scheme and to make it truly a right based one it also came out with a draft bill called Unorganised Workers’ Social Security Bill, 2006. The Government of India is yet to consider the Bill. The National Minimum Social Security Scheme suggested security cover for
(a) sickness and maternity,
(b) disability and death, and
(c) old age security in the form of a National Pension for those belonging to below poverty line and a Contributory Provident Fund for those belonging to Above Poverty Line.
In addition to these, proposals like creation of a National Fund for social security and an empowered National and State level bodies for implementation of the scheme based on an Act of Parliament along the lines of the National Rural Employment Guarantee Act, 2005 (presently known as Mahatma Gandhi National Rural Employment Guarantee Act) were also made. It was felt and stressed by the commission that it was high time to initiate protective social security system that was inclusive of all the workers in the informal economy.
What we have analysed so far in the context of available evidences on the question of social security in this section very clearly reveals that as of now the development in India has not been able to address the social security of vulnerable and marginalised people rather it has made them more vulnerable thereby creating chances for the problem of, among others, human trafficking in the country.
Such social security provisions are considered to be the basic right of every hu-man being in almost all the international and national legal protocols and denial of such provisions to its vulnerable population by the State is basically a violation of human rights by the State itself. India despite having legal commitments in its Constitution and approving many International Instruments has done very little in terms providing social security to its vast majority of poor population thereby making them vulnerable to fall prey to the practice of human trafficking.
Generally, India’s social security schemes cover the following types of social insurances:
Ministry of Labour and employment
The Ministry of Labour & Employment is one of the oldest and important Ministries of the Government of India. The main responsibility of the Ministry is to protect and safeguard the interests of workers in general and those who constitute the poor, deprived and disadvantage sections of the society, in particular, with due regard to creating a healthy work environment for higher production and productivity and to develop and coordinate vocational skill training and employment services.
The organizations covered under the Ministry-
The profiles of the Employees’ Provident Fund Organization and the Employees’ State Insurance Corporation are being changed towards greater accessibility and client satisfaction.
· EPFO is one of the World's largest Social Security Organisations in terms of clientele and the volume of financial transactions undertaken. At present it maintains 19.34 crore accounts (Annual Report 2016-17) pertaining to its members.
· Came into Existence- with the promulgation of the Employees' Provident Funds Ordinance on the 15th November, 1951.
· Replaced by - the Employees' Provident Funds Act, 1952. The Employees' Provident Funds Bill was introduced in the Parliament as Bill Number 15 of the year 1952 as a Bill to provide for the institution of provident funds for employees in factories and other establishments.
· The Act is now referred as the Employees' Provident Funds & Miscellaneous Provisions Act, 1952 which extends to the whole of India. The Act and Schemes framed there under are administered by a tri-partite Board known as the Central Board of Trustees, Employees' Provident Fund, consisting of representatives of Government (Both Central and State), Employers, and Employees.
· The Central Board of Trustees administers a contributory provident fund, pension scheme and an insurance scheme for the workforce engaged in the organized sector in India. The Board is assisted by the Employees’ PF Organization (EPFO), consisting of offices at 135 locations across the country.
The Board operates three schemes - EPF Scheme 1952, Pension Scheme 1995 (EPS) and Insurance Scheme 1976 (EDLI).
EPFO Schemes-
EPF Scheme 1952
o Accumulation plus interest upon retirement and death
o Partial withdrawals allowed for education, marriage, illness and house construction
o Housing Scheme for EPFO Members to achieve Hon'ble Prime Minister's Vision of housing to all Indians by 2022
· Pension Scheme 1995 (EPS)
o Monthly benefit for superannuation/retirement, disability, survivor, widow(er) and children
o Minimum pension on disablement
o Past service benefit to participants of erstwhile Family Pension Scheme, 1971
· Insurance Scheme 1976 (EDLI)
o Benefit provided in case of death of an employee who was a member of the scheme at the time of death
o Benefit amount 20 times of the wages. Maximum benefit of 6 lakh.
It is a 12 digit number allotted to an employee working in an organization. If a person has multiple member ID’s issued by multiple organizations, all the ID’s will come under one single UAN number which will be the same for a lifetime. This number will not change even when an employee changes his organization.
The various benefits are attained due to UAN.
The Employees State Insurance Act, 1948 applies to the factories and establishment viz. Road Motor Transport undertaking, Hotel, Restaurants, Cinemas, Newspaper establishment, Shop, Educational and Medical Institution.
The ESI Act, (1948) applies to following categories of factories and establishments in the implemented areas: * Non-seasonal factories using power and employing ten(10) or more persons * Non-seasonal and non power using factories and establishments employing twenty (20) or more persons.
The ESIC has its headquarters at New Delhi besides 23 regional offices, 26 sub-regional offices in the states and over 800 local offices throughout the country to support the implementation of ESI scheme.
The existing wage limit for coverage under the Act effective from 01.01.2017 is Rs.21,000/- per month (Rs.25,000/- per month in the case of Persons with Disability).
The Ministry of Labour & Employment is one of the oldest and important Ministries of the Government of India. At present, there are 44 labour related statutes enacted by the Central Government dealing with minimum wages, accidental and social security benefits, occupational safety and health, conditions of employment, disciplinary action, formation of trade unions, industrial relations, etc.
The Central Government(2019) introduced four bills on labour codes to consolidate 29 central laws. These are:
While the Wages Code was passed in 2019, the other three bills were referred to a Standing Committee on Labour. As per the recommendations of the Committee, the government replaced these bills with new ones in September 2020, and these were passed in the same month.
Applicability – whole of India
The Wages Code seeks to regulate wage and bonus payments in all employments where any industry, business, trade or manufacture is carried out.
This code on wages has replaced the following laws:
1.Wages-
"wages" means all remuneration- basic pay; dearness allowance; and retaining allowance, if any, but does not include–– bonus, HRA, Commission, overtime allowance, any commission payable to the employee; any gratuity payable on the termination of employment.
2.Coverage of the Code on Wages:
but does not include any such person–– (a) who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act, 1957; or (b) who is employed in the police service or as an officer or other employee of a prison; or(c) who is employed mainly in a managerial or administrative capacity; or (d) who is employed in a supervisory capacity drawing wage of exceeding fifteen thousand rupees per month or an amount as may be notified by the Central Government from time to time.
Major points covered-
Prohibition of discrimination on ground of gender.
There shall be no discrimination in an establishment or any unit thereof among employees on the ground of gender in matters relating to wages by the same employer, in respect of the same work or work of a similar nature done by any employee.
Floor wage:
According to the Code, the central government will fix a floor wage, taking into account living standards of workers. Further, it may set different floor wages for different geographical areas. Before fixing the floor wage, the central government may obtain the advice of the Central Advisory Board and may consult with state governments. The minimum rates of wages fixed by the appropriate Government under section 6 shall not be less than the floor wage and if the minimum rates of wages fixed by the appropriate Government earlier is more than the floor wage, then, the appropriate Government shall not reduce such minimum rates of wages fixed by it earlier.
Advisory Boards-
The central and state governments will constitute advisory boards. The Central Advisory Board will consist of: (i) employers, (ii) employees (in equal number as employers), (iii) independent persons, and (iv) five representatives of state governments. State Advisory Boards will consist of employers, employees, and independent persons. Further, one-third of the total members on both the central and state Boards will be women. The Boards will advise the respective governments on various issues including: (i) fixation of minimum wages, and (ii) increasing employment opportunities for women.
Overtime Payment-
Where an employee whose minimum rate of wages has been fixed under this Code by the hour, by the day or by such a 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 for part of an hour so worked in excess, at the overtime rate which shall not be less than twice the normal rate of wages.
Penalties-
The Code specifies penalties for offences committed by an employer -Contravention of any provision of the Code, Paying less than the minimum wage. The maximum punishment is three-month imprisonment along with a fine of Rs. 1 lakh.
Context - An Act to consolidate and amend the laws relating to Trade Unions, conditions of employment in industrial establishment or undertaking, investigation and settlement of industrial disputes and for matters connected therewith or incidental thereto.
Following laws will be rescinded and new code on “The Industrial Relations Code, 2020 has been introduced:
1. Trade Union Act
2. Industrial Dispute Act
3. Industrial Employment Act
Raising the threshold for requirement of standing orders from 100 to 300 –
Stirkes-
Training of workers
The Code on Social Security 2020 mandates social security to any establishment as notified by the central government.
Following laws will be rescinded and new code on Social security 2020 has been introduced:
1. The Employees’ Compensation Act, 1923
2. The Employees’ State Insurance Act, 1948
3. The Employees Provident Fund and Miscellaneous Provisions Act, 1952
4. The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
5. The Maternity Benefit Act, 1961
6. The Payment of Gratuity Act, 1972
7. The Cine Workers Welfare Fund Act, 1981
8. The Building and Other Construction Workers Welfare Cess Act, 1996
9. The Unorganised Workers’ Social Security Act, 2008
The other important points about the Code on Social Security 2020 are-
Central government to set up Social security funds for unorganised workers, gig workers and platform workers. Under this scheme, Also, aggregators employing gig workers will have to contribute 1-2% of their annual turnover for social security, with the total contribution not exceeding 5% of the amount payable by the aggregator to gig and platform workers.
Context - An Act to consolidate and amend the laws regulating the occupational safety, health and working conditions of the persons employed in an establishment and for matters connected therewith or incidental thereto.
Following laws will be rescinded and new code on The Occupational Safety, Health And Working Conditions Code, 2020 has been introduced:
1. Factories Act
2. Plantation Labour Act
3. Mine Act
4. Working Journalists and other Newspaper employees Act
5. Working journalist Act
6. Motor Transport Workers Act
7. Beedi and Cigar Workers Act
8. Contract Labour Act
9. Sales Promotion Employees Act
10. Inter State Migrant Workmen Act
11. Cine Workers and Cinema Theatre workers Act
12. Dock Workers Act
13. Building and Other construction Workers Act
Applicability-
Migrant worker-
Women empowerment through consent for night duties-
Allowance –
Access to prime resources
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