LABOUR LAW - II

AMITY
LAW THE CONCEPT OF SOCIAL SECURITY
SCHOOL

PRIYESH MISHRA
A8108309072
B.A. LL.B (H) – VI Semester
 THE CONCEPT OF SOCIAL SECURITY LABOUR LAW - II

ACKNOWLEDGEMENT

Upon the successful completion of this assignment, I would wish to thank Dr. Sharma for imparting me
with crystal clear concepts regarding Social Security. Your insight helped me appreciate the concept of
social security in a better way, and helped this submission take its course.

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CONCEPT OF SOCIAL SECURITY -

The International Labour Organisation (ILO) defines Social Security as "the security that society furnishes
through appropriate organization against certain risks to which its members are perennially exposed.
These risks are essentially contingencies against which an individual of small means cannot effectively
provide by his own ability or foresight alone or even in private combination with his fellows. The
mechanics of social security therefore consists in counteracting the blind injustice of nature and
economic activities by rational planned justice with a touch of benevolence to temper it.”

Modernization and urbanization have resulted in radical socio-economic changes and give rise to new
conflicts and tensions consequent upon the erosion of age old family and fraternal security. The
transition from agricultural economy to an industrial economy brought in special accompanied problems
that called for social security.

INDIAN SOCIAL SECURITY SYSTEM -

In India, in the past, social security in a crude form of social protection was made available to the needy
and the unfortunate under the joint family and caste system. Though the joint family system suffered
from deficiencies and shortcomings, its members received some crude form of protection from the evil
effects of various contingencies. Unemployment or any other economic hardships, old age and other
contingencies were not suffered by individual members in isolation. In these circumstances, the joint
family discharged the responsibilities of the social security agency. Similarly, members of a particular
caste were offered safeguards and benefits, such as medical aid to the invalid, financial help to widows
and orphans and educational assistance in the form of scholarships and to needy students.

There was, of course, no definite principle or system of law governing these collections and
distributions. In this manner, the joint family and case system provided social security in the past. Both
these system lost their strong hold on society following the development of liberalism and individualism
which were fostered by western influence in India. Urbanization and industrialization made their own
contribution to the disintegration of these systems. The growth of the concept of the secular state in
India has further eroded the continuance of the caste system.

The social security system in India has evolved in obedience to the impact of Western influence and of
the modern urban industrial system. Though the non-industrial classes also are in urgent need of social
security, their needs have been more acutely felt after the advent of industrialization in the 19th
century. Social reformers, labor welfare organizations and many progressive employers persuaded the
government to undertake social security measures as a protection for the workers at least against a few
contingencies. “Social security 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”.

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Article 43 of the Indian Constitution speaks of state's responsibility to provide social security to the
citizens of this country.

The social security strategies in India include the following:

 Social insurance with the participation of the beneficiary pooling risks and resources.
 Social assistance financed from general revenues and granting benefits on the basis of means
test.
 Employers liability schemes where there is an identifiable employer and within the economic
capacity of the employer.
 National Provident Funds.
 Universal schemes for social security.

The following few legislative measures have been adopted by the Government of India to promote
social security schemes for industrial workers.

 Workmen’s Compensation Act, 1923: The Workmen’s Compensation Act was passed in March
1923, and was put into effect on 1st July 1924. This Act followed the British model, but was
adapted to suit Indian conditions. Was-time injuries were also covered by the Act. The 1962
Amendment raised the wage limit covered under the Act to Rs.500 per month. It also amended
the clauses bearing on industrial diseases, and revised the rates of compensation. With effect
from 1st October 1975, the wage limit coverage under this Act has been raised from Rs.500 to
Rs.1000 per month.

 Employees’ State Insurance Act, 1948: Two conventions on health of workers in industry,
commerce and agriculture were adopted in 1927 by International Labor Conference. The
question about health insurance was also discussed by the Royal Commission on Labor, and a
tentative scheme of health insurance was proposed in its comprehensive report in 1931. Its
recommendations on the adoption of a health insurance scheme were not accepted by the
Government of India because of financial difficulties. All these built up a lot of pressure on the
government.

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The one-man committee of Professor B.P. Adarkar, set up in March 1943, submitted its report on a
scheme of health insurance for industrial workers in August 1944. It recommended a compulsory and
contributory health insurance scheme for workers in perennial factories in three groups of industries,
namely textiles, engineering and minerals and metals. Bearing all these modifications and
recommendations in mind, the Government of India passed the Employee’s State Insurance Act in April
1943, which provides cash benefit in contingencies of sickness, maternity and employment injury, but
did not provide security in such contingencies as unemployment and old age. The dependents of
workers who died as a result of any employment injury were paid compensation in the form of a
pension.

The E.S.I. Scheme stated with coverage of about 1.20 lakh industrial workers in Kanpur and Delhi on
24th February 1952. It has continued to progress over all these years. By the end of March 1976, there
were 388 centers covering nearly 22 million beneficiaries under this scheme. The total number of
employees and insured persons under the scheme at the end of 1995-96 was respectively 66.13 and
73.03 lakh insured persons.

The ESI Scheme offer both direct and indirect medical care. The direct method is called the “Service
System” by which the ESI Corporation provides medical care, either through its own Employees’ State
Insurance Hospital or through reservation of beds in State Government hospitals. The indirect method is
known as the “Panel System”, under which medical care is provided through private doctors selected by
the State Government with the approval of the ESI Corporation.

The benefits provided by the Act are:

 Sickness Benefits;
 Maternity Benefits;
 Disablement Benefit;
 Dependents’ Benefit;
 Funeral Benefit; and
 Medical Benefit.

All workers, earning less than Rs.3000 per month and employed in power-run factories employing 20 or
more persons are covered by this scheme. However, it does not cover workers employed by seasonal
factories. An insured person under ESI Scheme is not eligible for similar benefits under the Workmen’s
Compensation Act and State Acts relating to maternity benefits.

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INTERNATIONAL LABOUR ORGANIZATION AND SOCIAL SECURITY

The International Labor Organization was founded in 1919 for the primary purpose of promoting social
justice and improving the living and working conditions of workers thought out the world. It made a
beginning in this field by emphasizing the importance of comprehensive social security measures in the
Preamble to its Constitution, in which it promised “protection of the worker against sickness, disease
and injury arising out of his employment, the protection of children, young persons and women,
provision for old age and injury”

In order to implement these measures, the ILO took certain steps:

 It formulated international standards by way of recommendations regarding the definition of

social security.
 It collected and spread the information about social security schemes in various countries.
 It’s provided technical assistance and guidance so that social security schemes might be properly
formulated by means of co-operation with other social organizations.

For this purpose, an International Social Security Association was established in 1927.

The 1952 ILO Convention on Social Security (Minimum Standard) divided social security into nine
components:

· Medical Care: This should cover pregnancy, confinement and its consequences and any disease which
may lead to a morbid condition. The need for pre-natal and post-natal care, in addition to
hospitalization was emphasized.

 Sickness Benefit: This should cover incapacity to work following morbid condition resulting in a
loss of earnings. This calls for periodical payments based on the convention specification.

 Unemployment Benefit: This should cover the loss of earning during a worker’s unemployment
period when he is capable and available for work, but remains unemployed because of lack of
suitable employment.

 Old age Benefit: This benefit provides for the payment – the quantum depending upon an
individual’s working capacity during the period before retirement.
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 Employment Injury Benefit : This should cover the following contingencies resulting from
accident or disease during employment :

(a) Morbid condition;

(b) Inability of work following a morbid condition, leading to suspension of earnings;

(c) Total or partial loss of earning capacity which may become permanent; and

(d) Death of the breadwinner in the family, as a result of which the family is deprived of financial
support.

 Family Benefit: This should cover responsibility for the maintenance of children during the entire
period of a contingency.

 Maternity Benefit: This benefit should cover pregnancy, confinement and their consequences
resulting in the suspension of earnings. Provision should be for medical care, including pre-natal
confinement, post-natal care and hospitalization if necessary.

 Invalidism Benefit: This benefit, in the form of periodical payments should cover the needs of
workers who suffer from any disability arising out of sickness or accident and who ware unable
to engage in any gainful activity.

 Survivors’ Benefit: This should cover periodical payments to a family following the death of its
breadwinner and should continue during the entire period of contingency.

The ILO has suggested various methods of organizing, establishing and financing various social security
schemes. For the benefit of the less developed countries, it has fixed the level of benefits fairly low, so
that the schemes may be practicable.

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CONCLUSION

Hence we see that social security is an indispensable factor for any labor scenario.

The purpose of any social security measure is to give individuals and families the confidence that their
level of living and quality of life will not erode by social or economic eventuality. A worker works not
only for the 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.

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