EMPLOYEE SECURITY

AND CURRENT TRENDS

IN HRM

UNIT 4
Employee Welfare and
Social Security
FACTORY ACT,
1948
 Factory

At any place wherein The number of persons

manufacturing process employed therein is
is carried on with or less than ten, if
without the aid of working with the aid of
power or is so power and less than
ordinarily carried on twenty if working
where: without the aid of
power
OBJECTIVE OF THE ACT

The Act has been enacted primarily with the object of

protecting workers employed in factories against industrial
and occupational hazards.

For that purpose, it seeks to impose upon the owner or the

occupier certain obligations to protect the workers and to
secure for them employment in conditions conductive to
their health and safety.
 HEALTH

Cleanliness
Disposal of wastes and effluents
Ventilation and temperature
Dust and fume
Artificial humidification
Overcrowding
Lighting
Drinking water
Latrines and urinals
Spittoons
 SAFETY
Fencing of machinery
Work on or near machinery in motion
Employment of young persons on dangerous machines.
Striking gear and devices for cutting off power
Self-acting machines
Casing of new machinery
Prohibition of employment of women and children near cotton-openers
Hoists and lifts
Lifting machines, chains, ropes and lifting tackles
Revolving machinery
Pressure plant
 Continue…..
Floors, stairs and means of access
Pits, sumps openings in floors, etc
Excessive weights
Protection of eyes.
Precautions against dangerous fumes, gases
Precautions regarding the use of portable electric light.
Explosive or inflammable dust, gas, etc
Precautions in case of fire
Power to require specifications of defective parts or tests of stability
Safety of buildings and machinery
Maintenance of buildings
Safety Officers
 WELFARE
Washing facilities

Power to make rules to

supplement this Chapter Facilities for storing
and drying clothing

Facilities for
Welfare officers
sitting

Creches
First-aid
appliances
Shelters, restrooms, and
lunchrooms
Canteens
 Supervisors' role in reducing
unsafe conditions and acts
Reminding an employee to wear safety goggles

Checking on the cleanliness of the work spot

Observing employees to see if any of them have

alcohol, drug, or emotional problems that may
affect their work behaviour

Suggesting equipment changes screening out

accident-prone persons before they are selected.

Safety training, propaganda through posters,

framing safety rules, and regular inspections.
SOCIAL SECURITY

An economic protection provided to the

employees and their dependents by the
government through a series of programs.
 Social Security in India

According to article 41 of the India constitution

lays down, “the state shall with in the limits of its
economic capacity and development make
effective provision securing the right to work, to
education and to public assistance in case of
unemployment, old age, sickness, and
disablement, And other cases of unserved
wants”.
 Classification

Medical and
Compensation Facilities Retirement Benefits

The Workmen’s The Employees’

Compensation Act, 1923 Provident Funds and
Miscellaneous
Provisions Act, 1952

The Employees’ State

Insurance Act, 1948 The Payment of Gratuity
Act, 1972

The Maternity Benefit

Act, 1961
 The Workmen's Compensation
Act, 1923

Applicable to whole of India.

In the event of death of the employee resulting from employment injury,

employer is obliged to pay an amount equal to 50% of the monthly wages
multiplied by the appropriate factors or an amount of 120k, whichever is more

In the event of permanent disability, employer is obliged to pay an amount equal

to 60% of the monthly wages multiplied by the appropriate factors or an
amount of 120k, whichever is more
 Employer’s liability to pay
compensation
As per Section 3(1) of the act, the following conditions must necessarily be
satisfied in order to qualify for compensation:
1. He must be a workmen within the meaning of this act.

2. Personal injury must have been caused by accident.

3. The injury must have been caused by accident.

4. The accident must have arisen out of and in the course of

employment.

5. The injury caused by the accident must have resulted in the

workman’s death or permanent total disablement or temporary

disablement.
 Calculation of Compensation
In the case of Death: Amount of compensation = 40% of monthly wages
×Relevant factor/Rs.20000 which ever is more..

Permanent Amount of compensation = 50% of monthly wages

Total ×Relevant factor/Rs.24000 which ever is more..
Disablement

Permanent Amount of compensation = Injury described in the Part

Partial II of Scheduled I of the Act – Page no. 28
Disablement

Temporary Amount of compensation = 25% of monthly wages.

Disablement
 Employee's state insurance
Act, 1948

Provide Medical It is compulsory and It is applicable to all

facilities and contributory in nature. factories that employ
Unemployment more than 10 workers.
Insurance to industrial
worker during their
sickness.
 Contributions
Benefits of this Act
▪ The employee's
contribution is 0.75% of Medical benefit
their wages Sickness benefit
▪ The employer's Maternity benefit
contribution is 3.25% of Disabled benefit
the employee's wages Funeral benefit
 The Maternity Benefit Act, 1961

The Maternity leave Benefit Act 1961. The Maternity (Amendment) Bill 2017
This Act ensured women employees has extended the earlier 12 weeks’
get a paid leave of 12 weeks post- leave to 26 weeks. The pregnant
delivery for taking care of the new- employee can bifurcate the leave as
born. This Act applied to post and pre-delivery. 8 weeks of
establishments with ten plus leave can opt before the delivery and
employees. The Act applies to women remaining post-childbirth. For
employees on a contract, permanent women expecting the third child, the
basis, or engaged with agencies. maternity leave allotted is 12 weeks.
The Employees’ Provident Funds &
Miscellaneous Provisions Act, 1952

The object of the Act is the institution of

compulsory contributory Provident Funds,
Pension and Insurance for employees.

Presently the following three Schemes are in

operation under the Act through the Employees'
Provident Fund Organization:
• Employees’ Provident Funds Scheme, 1952
• Employees’ Deposit Linked Insurance Scheme, 1976
• Employees' Pension Scheme, 1995
12% contribution by the employee is directly transferred
to his Provident Fund A/c

12% is contributed by the employer out of which 8.33%

is credited to Employee Pension Fund and the balance
3.67% is transferred to PF A/c of the employee

1.10% Administration charges on total wages are

payable by the employer
The Employees Deposit Linked
Insurance Scheme 1976
Application

EDLI scheme is compulsory for all the existing members who become members
of the PF Scheme
Life insurance benefit (death coverage) of the employee is available under this
scheme while in service
Calculation

EDLI is calculated on EDLI slab – Rs. 6500/-

0.50% EDLI calculated on total EDLI slab (Rs. 6500) wages and transferred to
EDLI fund
0.01% Administration charges calculated on total EDLI wages

EDLI / administration charges are payable by the employer

PAYMENT OF GRATUITY ACT,
1972

The Payment of
On February 1, 2019, Gratuity Act, 1972
India’s interim applies to factories
budget hiked the tax- and other
free gratuity limit establishments
from Rs 20 lakh to Rs employing ten or
30 lakh more persons.

On completion of five years

of continues service, the
employees are entitled to
payment of gratuity @15
days wages for every
completed year of service.
 Gratuity Calculation Formula
▪ Gratuity in India is calculated using the formula:
▪ Gratuity = Last Drawn Salary × 15/26 × No. of
Years of Service
▪ Notes:
▪ The ratio 15/26 represents 15 days out of 26 working
days in a month.
▪ Last drawn salary = Basic Salary + Dearness
Allowance.
▪ Years of Service are rounded down to the nearest
full year. For example, if the employee has a total
service of 20 years, 10 months and 25 days, 21 years
will be factored into the calculation.