Definition of social security

Social security is primarily a social insurance program

providing social protection, or protection against
socially recognized conditions, including poverty, old
age, disability, unemployment and others.

Social security may refer to basic security, a term

roughly equivalent to access to basic necessities—
things such as food, clothing, shelter, education and
medical care.
 According to I.L.O, Social security is a programme
of protection provided by society against the
contingencies of modern life-sickness,
unemployment, old age, dependency, industrial
accidents against which the individual cannot be
expected to protect himself and his family by his
own ability or foresight.
Social security is a concept enshrined in
Article 22 of the
Universal Declaration of Human Rights.

These programmes are now useful and

necessary instruments for the protection
and stability of workforce.It is a wise
investment which yields good dividends in
the long run.
Contd.
The problem of economic security in old
age was not as pressing in preindustrial
America because life expectancy was
short. A typical American male born in
1850 had a life expectancy at birth of only
38 years (a female, only 2 years longer).
But with the drawing of the twentieth
century, a revolution in public sanitation,
health care, and general living standards
produced a growing population of
Americans living into old age.
Schemes of Social Security
These include the Aam Admi Bima Yojana
having merger with Janashree bima Yojna in
2013. The premium to be charged initially under
the scheme will be Rs.200/- per annum per
member for a cover of Rs.30,000/-A provision
has been made for issuing smart card(Aadhar
Card) carrying a unique identification number to
each of these families.


Contd.
Aam Admi Bima Yojana', all the rural
landless households in the country will be
provided life and disability insurance cover
on death due to accident and permanent
disability due to accident.
Contd.
Jawaharlal Nehru Rozgar yojna: It is
named after India's first Prime Minister
Jawaharlal Nehru aimed at creating a
need-based rural infrastructure.
Sampoorna Grameen Rozgar Yojna: To
attain the objective of providing gainful
employment & food for the rural poor.
Integrated Rural Development Programme
for rural areas.
National Social Assistance programme:
a.Annapurna Scheme
b.Indira Gandhi Old Age Pension Scheme
c.Indira Gandhi National disability Pension
Scheme.
Swarna Jayanti Sahari rozgaar Yojna: To
give employment to unemployed in urban
and underemployed in rural by having their
own ventures.
Kishore Vaigyanik Protsahan Yojana:

An enduring National Program to draw extremely &

highly provoked students for practice basic science
classes & career in explore. The aims of this
agenda are to recognize the scholars with ability
and skill for research. The announcement for
Fellowship is made generally on May 11 the
Technology Day & every year 2nd Sunday of July.

Sarva Shikyan Abhiyan

Kasturba Gandhi Balika Vidyalaya:

This was a programme inaugurated in July 2004 to

construct and maintain schools and hostels for the girl
children and specifically for those in the SC/ST/OBC
and other similar minority groups. The prime focus is
seen in villages and states where the educational
levels are lesser and in particular, the literacy levels
among women are seen to be below the average seen
across the country. As per the programme, the
schools offer 75% reservations for the girls falling into
the SC / ST or OBC groups while the other 25% is for
the girls coming from families that are below the
poverty status.
Explore the Approach of Social
Security????????
 Compensation:

It goes to income security and is based

upon the idea that during risks, the
individual and his family should not be
subjected to a double calamity involving
loss of health or life and work.
 Restoration
It implies cure of the sick, re-employment
and rehabilitation. It aims at restoring the
previous social and economic status of the
employee.
 Prevention
It is designed to avoid the loss of
productive capacity due to sickness,
unemployment or invalidity and to render
the available resources which are used by
avoidable disease.
The World Development Report of 1997
states that social security is an essential
ingredient in the protection,development
and full utilization of human resources and
thus be looked upon as investment for
development of human resources and
human development.
Social Insurance
It is an government-sponsored insurance
program serves a defined population and
is funded through premiums or taxes paid
by or on behalf of participants.
 Participation is either compulsory or the
program is subsidized heavily enough that
most eligible individuals choose to
participate .
Features of Social Insurance
It is financed by small contributions made
by employees and major portion by the
employers.
In all schemes participation is compulsory
with only few exceptions.
Under the schemes, contribution are
accumulated in special funds out of which
benefits are paid.
Contd.
Contribution rates are related to what
person is or has been earning.
These schemes protect the employees
and reduce their suffering arising out of
contingencies.
Contd.
It helps the employees to maintain their
minimum standard when there is total or
partial loss of income.
Benefits are provided without an
examination of individual needs and
without affecting ones self respect.
Social Assistance
According to ILO, Social Assistance is a
service or scheme which provides benefits
to persons of small means as of right in
amount sufficient to meet minimum
standards of need and financed from
taxation.
Features of Social Assistance
It is a kind of help which depends upon certain
conditions and legalities between workers and
the state.
Social assistance is given as voluntary help
while social insurance is granted only persons
who pay a contribution.
Its objective is to cover poor sections of people
in society.
It is an expression of social responsibility of
state towards its needy person.
It is financed wholly or for a very large measures
from revenues of state.
Contd.
In social assistance there is no
relationship of any sort in risks and
premiums paid.
It is more applicable where workers are
too poor to contribute, too illiterate to
follow formalities of insurance.
It requires fulfillment of certain prescribed
conditions before benefit can be granted
under such scheme.
The National Social Assistance Scheme
(NSAS) or National Social Assistance
Programme (NSAP) is a flagship welfare
program of the Government of India
initiated on 15 August 1995. Article 41 of
the Indian Constitution directs the State to
provide public assistance to its citizens in
case of unemployment, old age, sickness
and disablement and in other cases of
undeserved want within the limit of its
economic capacity and development.
Components of Social Assistance
National Old Age Pension Scheme
(NOAPS):The amount of old age pension
is Rs. 300 per month for applicants aged
60–79. For applicants aged above 80
years, the amount has been revised in Rs.
500 a month according to the 2012
Budget.
National Family Benefit Scheme
(NFBS)
In case of the death of the "primary
breadwinner" of a household living below
poverty line conditions, a lump sum grant
of Rs. 20,000 (from fiscal 2012-13) is
provided to the household.
Indira Gandhi National Widow Pension
Scheme: A pension of Rs. 300 per month
(From fiscal 2012-13) to be granted to
widows aged 40–59 living below poverty-
line conditions. Pradhan of Gram
panchayat shall review the list of widows
and report in case of any re-marriage
Indira Gandhi National Disability Pension
Scheme: A pension of Rs. 300 per month (from
fiscal 2012-13)to be granted to
physically/mentally handicapped individuals
aged 18–59, living below poverty-line
conditions. The central govt has planned to
increase the amount from Rs.300 to Rs.1000
and reduced the disability percentage from 80%
to 40% ;this news was mentioned on
6/11/2012 in Dinakaran Publication.
Annapurna Scheme: On 1 April 2000 a new
Scheme was launched to provide food
security to meet the requirement of those
senior citizens who, though eligible, have
remained uncovered under the NOAPS.
Under the Annapurna Scheme 10 kg of food
grains per month are provided free of cost to
the beneficiary.
Scope of Social Security
Sickness Benefit: In this worker need to be
paid for the first three days of suspension of
earnings and the payment of benefits may be
limited to 26 weeks or 182 days in a year.
Unemployment Benefit: It cover loss of
earnings due to lack of suitable employment
which is limited to 13 weeks or 91 days in a
year.
 Employment Injury: Under this proper
medical care and periodical payment are
made to injured employee as per
Workmens Compensation Act.

 Old Age Benefit: It is applicable in few

states in India. It includes a certain amount
beyond a prescribed age and continues till
ones death.
 Family Benefit: In case of death of bread
earner this cover responsibility for
maintenance of children during the entire
period for a contingency.
 Survivors Benefit: It refers to benefits to the
affected family in form of periodical payments
to a family following the death of its bread
winner and should continue during entire
period of contingency.
Purpose
: of Social Security
• To give individuals and families the confidence that their level of
living and quality of life will not erode by social or economic
eventuality.

• To provide medical care and income security against the consequences

of defined contingencies.

• To facilitate the victims physical and vocational rehabilitation.

Vocational rehabilitation (VR) is a set of services offered to individuals
with mental or physical disabilities.


• To prevent or reduce ill health and accidents in the
occupations

• To protect against unemployment by maintenance

and promotion of job creation.

• To provide benefit for the maintenance of any

children.

 The Employees’
Compensation Act, 1923
Introduction

The workmen’s Compensation act, 1923 is one

of the earliest measures adopted to benefit the
workers. It was the first step towards social
security in India.

This act applies to workmen employed in

factories, mines, transport establishments
construction works, railways, plantations, ships
and other hazardous occupations specified in
Schedule II .
Objective
The Workmen’s Compensation Act, aims
to provide workmen and/or their
dependents some relief in case of
accidents arising out of and in the course
of employment and causing either death or
disablement of workmen.
It provides for payment by certain classes
of employers to their workmen
compensation for injury by accident
DEFINITIONS

1. Dependent [Section 2(1)(d)]

This clause defines the expression
dependent by dividing it into three classes
of persons.
(i) a widow, a adopted son, a adopted
daughter or a widowed mother.
(ii) if wholly dependent on earnings of
workmen at time of death, son or daughter
who has attained the age of 18 years.
iii) In third category it includes following
members provided they are dependent on
earning of deceased workman would be
included:
a minor brother, an unmarried sister, a
paternal grandparent if no parent of
workman is alive.
2. Employer [Section 2(1)(e)]:Any body of
persons whether incorporated; any
managing agent of an employer;.
Employer is liable for the payment of
compensation for personal injury caused
to a workmen by accident.
Total disablement [SECTION 2(1)
(L)]
 Two main features of total disablement-
i) the workmen becomes incompetent for all
work which he was capable of performing
at the time of the accident resulting in such
disablement.
ii) the loss of earning capacity of such
workmen is 100%.
Example of Total Disablement

 An accident left a worker- with a complete

defect in his leg and as a result unfit to
perform the work. Legally he can be
considered 100% disabled. In this case
the court stated that the incapacity to earn
is to be determined with reference to the
work, the worker was doing at the time of
accident.
Types of disablement

Partial Disablement: Under section 2(1)(g) it is of

two types:

 Temporary Partial Disablement: It reduces the

earning capacity of the worker in relation to the
employment he had been at the time of accident
resulting in such disablement.

 Permanent partial disablement: Disablement that

reduces the permanent earning capacity of workmen
which he was capable of performing at the time of the
accident.
Example of Permanent Partial
disablement
Velu, who worked in a printing business,
got his fingers cut off by accident. This is
“Partial Disablement” as it reduces his
capacity to work in any such employment
of similar nature.
Example of temporary partial
disablement
Ramamurthy, a Road sweeper employed
on contract basis for Bangalore City
Corporation slipped and fell from a
garbage truck and fractured his hand. He
could not work for one month. This is
temporary disablement.
5. Wages [Section 2(1)(m)]

It means remuneration capable of being

expressed in terms of money, which
would, if the terms of employment were
fulfilled, be payable to a workmen. It also
includes any benefit which is capable of
being estimated in money. It includes
bonus, dearness allowance and amenities
of free water & quarters.
6. Workman [Section 2(1)(n)]

It Includes a railway servant, seaman &

other members of the crew of ship, a
captain, a person recruited as driver,
helper, mechanic, cleaner and a person
recruited for work abroad by a company.
Ramlal works as a gardener at the
employer’s house. He is not considered a
‘workman’ under this law because his job
is not in the list of scheduled employments
The worker should be employed in an
activity, which has to be either listed in
schedule II 2 of the Act OR any duty
having connection with the specified
activity mentioned in the schedule.
WHEN EMPLOYER IS LIABLE TO PAY
COMPENSATION
As per Section 3 of the Act, the employer
is liable to pay compensation if the worker
is injured by accident that:
arises out of while engaged in work.
in the course of his employment during
work hours).
such an injury results in disablement of
the worker.
HOWEVER THE EMPLOYER SHALL
NOT BE LIABLE
1. In respect of any injury which does not result in
the total or partial disablement of the workmen
for a period exceeding three days.

2. In respect of any injury not resulting in death,

caused by an accident which is directly
attributable to-

a) the workmen having been at the time thereof

under the influence or drugs.
Contd.
b) The willful removal or disregard by the
workmen of any safeguard or other device
which he knew to have been provided for
the purpose of securing the safety of
workmen.
c) When the employee has contacted a
disease which is not directly attributable to
a specific injury caused by the accident or
to the occupation
Contd.
If the injury suffered by the worker produces a disease,
which aggravates a pre-existing disease thereby causing
a death or disability, it is still compensable .The
employer cannot defend himself by saying that the
worker already had an existing disease.

Example: A worker has a pre existing heart

condition, which due to the strain or over exertion of
work causes his death, the employer will is still
liable to pay compensation. All that is required is
that the accident suffered during the course of and
arising out of the work immediately led to his death.
Case I
Q1. If after the injury, the workman does not lose his old
post and receives the same salary, does the employer
still have to pay compensation?
Ans Yes. This was held in a Madras High Court judgement
where the employee suffered from injury on the right side
of the neck, shoulder and head and there was 100%
hearing loss in the right ear and partial loss of hearing in
the left ear. The court held the fact that he was holding
the old post and getting the old wage would not dis-
entitle him from compensation under the Act. This is
because, the injury suffered would affect him getting
another job of a similar nature, with a different employer.
What is the basis of calculation of the
amount of compensation?

Compensation under this Act is calculated

on the basis of the monthly wage received
by the worker. Where a worker received a
monthly wage less than what is prescribed
under the Minimum Wages Act, 1948,
he/she would deemed to be drawing the
monthly wages as prescribed by the Act
for the purposes of calculating
compensation. .
Determining wages in case of a worker
inflicted with an occupational disease
According to the Karnataka High Court,
compensation in the case of contracting of
occupational disease is to be calculated
on the basis of wages drawn at the time of
termination of employment and not on the
date of contracting the occupational
disease.
CALCULATION OF COMPENSATION

(a) In case of death. - 50% of the monthly

wages X Relevant Factor or Rs. 80,000
increased to 1,20,000 whichever is more.
The factor depends on the age of the
person deceased, i.e., the number of
years the person could have worked for, if
he did not die on the job.
Example:
Muniyappa, a worker aged 35 meets with an
accident and dies while at work (i.e. in the
course of employment). At the time he drew a
monthly wage of Rs.2,500/-. As per Schedule IV
of the Act the relevant factor applicable to his
case would be Rs.197.06. As such, the amount
of compensation payable to his dependants will
be arrived at in the following way:
50% of Rs. 2,500 = 1,250
1,250 x relevant factor (i.e.197.06) =
Rs.2,46,325.00/- (total compensation payable)
In case of total permanent disablement

Where there is total permanent disablement

resulting from the injury suffered, the worker
is entitled to be paid sixty percent of his
monthly salary, multiplied by the relevant
factor, or an amount of ninety thousand
rupees, whichever is more. The minimum
compensation in no circumstances can be
less than Rs. 90,000/-which has been
revised to 1,40,000.
In case of partial permanent disablement

(c) In case of partial permanent disablement specified

under Schedule I - Such percentage of the compensation

payable in such case is the percentage of the loss

in earning capacity (specified in Schedule I)

Calculation of compensation
for ‘non scheduled
injury’resulting in permanent
partial disablement.
 Calculation of compensation for ‘non
scheduled injury’ resulting in permanent
partial disablement.
The problem arises when the partial
disablement resulting from the injury is not
listed in the schedule. Then a reasonable
percentage is to be given, as decided by
the commissioner or by the certificate from
a medical practitioner who will certify the
percentage of disability suffered.
Girija, a child labourer employed in a silk
twisting and reeling unit suffered third
degree burns when a vessel of boiling
water used for boiling silkworm cocoons,
overturned on her during the course of
work. The injury sustained is not
mentioned in the schedule. The loss of
earning capacity will be ascertained
through the certificates from a medical
practioner who has treated that child.
 Contd.
If employer is in default in paying compensation
within one month from date it fell due, the
commissioner may direct for recovery of not only
amount of arrears but also simple interest at 6%
rate of interest p.a. on amount due.

If no justification is given by employer ,he is

liable to pay an additional amount not exceeding
50% of such amount by way of penalty or
interest.
THE COMMISSIONER
The state government notification in the official
gazette, appoint any person to be a
commissioner for the workmen’s compensation.
The section 20(3) empowers the commissioner
to appoint or choose any person possessing
special knowledge of any matter relevant to the
matter under inquiry, to assist him holding the
inquiry.
Powers of a Commissioner
Taking evidence or oath and enforcing the
attendance of witness.
Compelling the production of documents
and material objects.
These all powers consists in the civil
court under the code of civil
procedure,1908
Notice and claim(Sec 10)
To claim for compensations following
conditions should exist
A notice of accident must have been to
the employer as soon as possible.
Claim must be made within 2 yrs from
date of occurrence of the accident.
Notice be given in prescribed manner.
Sec 10(B):

Report of Total Accident Sec 10(B):

It is obligatory on the employer side to send
a report of any fatal accident to the
commissioner giving the circumstances
attending or serious badly injury of the
workman.
Section (11)
Medical Examination Sec(11):
It is only applicable where notice of the
accident has been given by the workman
to the employer. If a workman who refuses
to submit himself for the examination by a
qualified medical practitioner has no right
to receive the compensation under The
Act.
Sec 25A
A new section has been added which
fixes 3 months time limit for disposal of
claims from the date of reference.
The practice in Karnataka is that 50% is
given to the widow, if any, of the deceased
and the rest is distributed equally among
the dependants mentioned in section 2(d)
PAYMENT OF WAGES ACT, 1936
employed person" includes the legal
representative of a deceased employed
person;

 employer" includes the legal

representative of a deceased employer
"factory" means a factory as defined in
clause (m) of section 2 of the Factories
Act, 1948 (63 of 1948), and includes any
place to which the provisions of that Act
have been applied under sub-section (1)
of section 85 thereof;]
An Act to regulate the payment of
wages to certain classes of
persons
Extends to the whole of India
Responsibility of payment wages rests
with the employer
Employer to fix Wage Period
No wage period shall exceed one month.
Time of Payment of wages

7th day of wage month where less

than 1000 are working
10th day where more than 1000 are
working
No payment in KIND
Permissible deduction from Wages
fines
for absence from duty
for damage caused to the property of the
employer
for the amenities provided, like house
accommodation
for recovery of advance or adjusting over
payment of wages
towards EPF, ESI, Labour Welfare Fund and
similar deductions permitted under any Act or
the Standing Orders of the establishment
for Life Insurance/ general insurance policies
and Housing loan.
Applies to factories and establishments
functioning in the notified area and
consisting of 10 or more employees.
* Provides for health care and cash benefits in
cases of sickness, maternity and
employment injury.
* The Act absolved the employers of their
obligations under the Maternity Benefit Act,
1961 and Workmen’s Compensation Act
1923.
EMPLOYEES STATE
INSURANCE ACT,1948
The Employees' State Insurance Act,
1948
In simple words, Out of the basic pay
wages received by workers some
deductions are made by the Employer for
PF, ESI etc. The deducted amount gets
accumulated. Here both employer &
employee contribute. When paid by
employer it’s an income & when paid by
employee it’s an expense.
DEFINITION

"An Act to provide for certain benefits to

employees in case of sickness, maternity
and employment injury and to make
provision for certain other matters in
relation thereto."
MEANING

Employees' State Insurance as the name

suggests, it is basically an ‘insurance’

scheme i.e. employee gets benefits if
he/she is sick or disabled.
This gives protection to employee when
he is in receipt of sickness benefit or
maternity benefit. Employer cannot take
disciplinary action against employee in
such cases.
IMPLEMENTATION OF ACT

The Scheme was first implemented at 1948 and

extends to the whole of India. All persons are
entitled for compensation who are engaged in
work of factory provided their salary does not
exceed 21,000 per month.
REGULATION OF ACT

The Central Govt. set up the ESI

Corporation to administer the Scheme.
The Corporation supervises and controls
the ESI scheme.
The ESIC has set up a network of regional
and local offices all over the country for
implementation of the scheme. Each
Regional office is under the charge of
Regional Director. The corporation has
about 23 regional offices,26 sub regional
offices and 800 local offices all over the
country for administration of the scheme.
OBJECTIVE
 The foundation of Employees’ State Insurance
Act, 1948 envisaged (focused) on integrated
need based social insurance scheme that would
protect the interest of workers in contingencies
such as sickness, maternity, temporary or
permanent physical disablement, death due to
employment injury resulting in loss of wages or
earning capacity. The Act also guarantees
reasonably good medical care to workers and
their immediate dependants.
EMPLOYEES COVERED UNDER ACT

An Employee* has been defined under Section

2(9) of the Act and means any person employed
for wages in or in connection with the work of a
factory or establishment to which this Act
applies. The existing ceiling effective from
01.05.2010 is Rs.15,000/- per month. Latest
salary ceiling is up to 21,000/-
Contd.
The Act does not apply to workers engaged in
mining operations, certain seasonal factories
operating for less than 7 months in a year.
Government can exempt a factory or
establishment or persons or class of persons
from provisions of ESI Act, if the employees are
getting better medical facilities/ [e.g. if
Government is convinced that the factory itself is
providing very good medical facilities e.g. like
TISCO].
Factory (Sec 2(12)
Where 10 or more persons are employed
or were employed for wages on any day of
preceding 12 months.
Contribution Sec 2(4)
Employees’ contribution . 1.75% of
wages
Employers’ contribution. 4.75 % of
wages
Employees receiving a daily average
wage upto Rs.70/-(w.e.f 1-8-07) are
exempted from payment of contribution.
Employers will however contribute their
own share in respect of these
employees.
LATEST REVISIONS
ESIC contribution rates (Reduced w.e.f.
01/07/2019)
Current Rate Reduced Rate
Employer Share 4.75% 3.25%

Employee Share1.75% 0.75%
Total6.50% 4.00%
Contribution
The state government contribute a
minimum of 12.5% of total expenditure on
medical care in their respective states.

The contribution in respect of all wage

period are to be deposited to the ESI Fund
A/C in the authorised bank by 21st of the
following month.
Penality
An employer who fails to pay contribution
within the specified periods shall be liable
to pay interest at the rate of six percent
per annum in respect of each day of the
delay of payment
Registration
Registration with ESI is a statutory
responsibility of employer under Sec 2-A.
The employer is liable to furnish
declaration form of employee within 10
days of his employment. The office will
examine the coverage of factory and
employee and will issue code number to
employer.
Registration
The employer is liable to furnish
declaration form of employee within 10
days of his employment. The office will
examine the coverage of factory and
employee and will issue code number to
employer.
The forms concerning registration of
employees are declaration form and return
of declaration forms(covering letter).
Every IP is provided with Temporary
Identification number which is valid for a
period of 3 months and can be extended
upto 6 months. Within this period he is
issued Permanent ID card which has to be
produced for claiming medical care at the
dispensary/clinic.
Benefits of ESI
The section 46 of the Act provides following social
security benefits :

1. Medical Benefit : The Employees’ State Insurance

Scheme provides full medical care in the form of medical
attendance, treatment, drugs and injections, specialist
consultation and hospitalization to insured persons and
also to members of their families where the facility for
Specialist consultation, hospitalization has been extended
to the families.
a) FULL. MEDICAL CARE: This consists of
hospitalization facilities and includes specialist
services, drugs and dressings and diets as
required for in-patients.
b) EXPANDED MEDICAL CARE: This
consists of consultation with the specialists and
supply of special medicines and drugs as may
be prescribed by them in addition to the out-
patient care. This also includes facilities for
special laboratory tests and X-Ray
examinations.
Benefits of ESI Contd..
2. Sickness Benefit(SB): It includes:
Extended Sickness Benefit (ESB): It
represents periodical payments made to
an insured person after completing nine
months in insurable employment. Max.
Duration for availing benefit is 91 days in
two consecutive benefit periods. The rate
of benefit vary just above 50% of daily
wages.
Benefits of ESI Contd..
4. Disablement Benefit :

It is paid to worker for a period for which insured

person and the rate of benefit which is not less
than 70% of daily average wages and is
payable after waiting period of 3 days.
Benefits of ESI Contd..
5. Dependants’ Benefit

Periodical payments are paid to dependants

of a deceased insured person at a rate of 3/5
th of disablement benefit to widow and 2/5 th
to child till he attains age of 18.
6. Funeral Expenses : In this case lump
sum payment not exceeding Rs.
10,000/- is made to the eldest member.
7. Rehabiliation Benefit: The corporation
allows this benefit to insured person for
each day at rate of double the standard
sickness benefit rate.
Penalties and damages
Failure to pay contribution is liable for
imprisonment for a term which is not less
than 3 months in case of failure to pay
employees contribution which he has
deducted.
Not less than 1 month in any other case
and fine of 2000/-.
PAYMENT OF
BONUS ACT,1965
 Accounting year2(1)
In relation to a corporation, the year ending
on the day on which the books and
accounts of the corporation are to be
closed and balanced.

(ii) In relation to a company, the period in

respect of which any profit and loss
account of the company laid before it in
annual general meeting is made up,
whether that period is a year or not;
Contd.
In any other case -
the year commencing on the 1st day of April; or
if the accounts of an establishment maintained
by the employer thereof are closed and
balanced on any day other than the 31st day of
March, then, at the option of the employer, the
year ending on the day on which its accounts
are so closed and balanced:
Allowable surplus Section 2(4)
It is an amount calculated out of available surplus.
 In relation to an employer, being a company (other than
a banking company)] which has not made the
arrangements prescribed under the Income-tax Act for
the declaration and payment within India of the dividends
payable out of its profits. As per the provisions of section
194 it is 67% per cent of the available surplus in an
accounting year;
 in any other case, sixty percent of such available
surplus.
Appropriate Government Section 2(5)

" It means--
(i) in relation to an establishment in respect of
which the appropriate Government under the
Industrial Disputes Act, 1947 (14 of 1947), is the
Central Government.
(ii) in relation to any other establishment, the
Government of the State in which that other
establishment is situated.
Banking company Section 2(8)
 It means a banking company as defined
in section 5 of the Banking Companies
Act, 1949 and includes the State Bank
of India, any subsidiary bank as defined
in the State Bank of India (Subsidiary
Banks) Act, nationalized banks and even
cooperative banks.
Employer Section 2(14)
(i) In relation to an establishment which is a
factory
 the owner or occupier of the factory, including
the agent of such owner or occupier,
the legal representative of a deceased owner or
occupier.
and where a person has been named as a
manager of the factory under section 7 of the
Factories Act, 1948
Contd.

(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 or managing agent;
Salary or wage
“It means
 all remuneration (other than remuneration in
respect of over-time work)
capable of being expressed in terms of money
 payable to an employee in respect of his
employment or of work done
It does not include-
a. any other allowance which the employee is for the
time being entitled to

b. the value of any house accommodation

c. supply of light, water, medical attendance or other

amenity or of any service or of any concessional
supply of food grains or other articles

d. any traveling concession

e. any commission payable.

Contd.
3. Establishments to include departments,
undertakings and branches.--
Where an establishment consists of different
department or undertakings or has branches,
whether situated in the same place or in different
places all; such departments or undertakings or
branches shall be treated as parts of the same
establishment for the purpose of computation of
bonus under this Act:
Eligibility for bonus
Every employee shall be entitled to be
paid by his employer in an accounting
year, bonus, in accordance with the
provisions of this Act, provided he has
worked in the establishment for atleast
thirty working days in that accounting year.
An employee is deemed to have worked
in an establishment in the accounting year
also on the days on which:
He has been laid off
On leave with salary
Absent due to temporary disablement
Disqualification for bonus
Notwithstanding anything contained in this
Act, an employee shall be disqualified
from receiving bonus under this Act, if he
is dismissed from service for --
(a) fraud; or
(b) riotous or violent behavior while on
the premises of the establishment; or
(c) theft, misappropriation or sabotage of
any property of the establishment.
Payment of minimum bonus
Subject to the other provisions of this Act, every
employer shall be bound to pay to every
employee in respect of the accounting year, a
minimum bonus which shall be 8.33 per cent of
the salary or wage earned by the employee
during the accounting year or one hundred
rupees, whichever is higher, whether or not the
employer has any allocable surplus in the
accounting year:
Payment of maximum bonus
Where in respect of any accounting year referred to in
section 10, in lieu of such minimum bonus, be bound to
pay to every employee in respect of that accounting year
bonus subject to a maximum of twenty per cent of such
salary or wage.

In computing the allocable surplus under this section, the

amount set on or the amount set off under the provisions
of section 15 shall be taken into account in accordance
with the provisions of that section.
 Set on and set off of allocable surplus.—
Where for any accounting year, the allocable surplus
exceeds the amount of maximum bonus payable to the
employees in the establishment under section 11, then,
the excess shall, subject to a limit of twenty per cent of
the total salary or wage of the employees employed in
the establishment in that accounting year, be carried
forward for being set on in the succeeding accounting
year and so on up to and inclusive of the fourth
accounting year to be utilized for the purpose of payment
of bonus in the manner illustrated in the Fourth
Schedule.
 Where for any accounting year, there is no available
surplus or the allocable surplus in respect of that year
falls short of the amount of minimum bonus payable to
the employees in the establishment under section 10,
and there is no amount of sufficient amount carried
forward and set on under sub-section (1) which could be
utilized for the purpose of payment of the minimum
bonus, then, such minimum amount or the deficiency, as
the case may be, shall be carried forward for being set
off in the succeeding accounting year and so on up to
and inclusive of the fourth accounting year in the manner
illustrated in the Fourth Schedule
Adjustment of customary or interim bonus against bonus payable

 an employer has paid any puja bonus or other

customary bonus to an employee.
 an employer has paid a part of the bonus payable under
this Act to an employee before the date on which such
bonus becomes payable.

Employer shall be entitled to deduct the amount of bonus

so paid from the amount of bonus payable by him to the
employee under this Act in respect of that accounting
year and the employee shall be entitled to receive only
the balance.
Time-limit for payment of bonus.
where there is a dispute regarding
payment of bonus pending before any
authority under section 22, within a month
from the date on which the award
becomes enforceable or the settlement
comes into operation, in respect of such
dispute;
(b) in any other case, within a period of eight
months from the close of the accounting
year
Recovery of bonus due from an
employer
Where any money is due to an employee
by way of bonus, the employee can make
an application to the appropriate
Government or such authority. The
appropriate Government shall issue a
certificate for that amount due to the
Collector who shall proceed to recover the
same.
Provided that every such application shall be
made within one year from the date on which
the money became due to the employee
from the employer.
Provided further that any such application
may be entertained after the expiry of the
said period of one year, if the appropriate
Government is satisfied that the applicant
had sufficient cause for not making the
application within the said period.
Maintenance of register, records,
etc. –
Every employer shall prepare and
maintain such registers, records and other
documents in such form and in such
manner as may prescribed.
Penalty

Punishable with imprisonment upto 6

months

Fine upto Rs.1000

Both
LABOUR WELFARE
MEANING
As per I.L.O, “It means all services,
facilities, amenities which may be
established in an organisation to enable
the persons employed in them to perform
their work in healthy surroundings and
providing them amenities conducive to
good health and moral.
The Oxford Dictionary defines labour
welfare as “efforts to make life worth living
for worker”
Features of Labour Welfare
It aims at solving the problems related to
industry and labour.
It includes any type of voluntary and
statuory service provided by employer.
The concept is flexible, elastic and differs
in all aspects.
The scope of Labour Welfare depends on
perception of employer.
Contd.
The degree of industrstralization, level of
education affects scope of labour welfare.
Labour Welfare has futuristic approach
where feeling of secure & safe future is
given to workers.
Labour Welfare are voluntary acts on part
of employer to boost morale and
motivation of employees.
Contd.
Labor Welfare measures are introduced by
employer, govt. employees or any charitable
agencies.
Labour Welfare measures are in addition to
regular wages and other economic benefits
available to workers as per legal provisions &
collective bargaining.
The purpose of Labour Welfare is to bring about
the development of the whole personality of
workers.
Scope of Labour Welfare

It can be divided into two categories:

Statuory: It includes the laws enacted by
the govt. to enforce the minimum
standards of health & safety of workers.
Non-Statuory : It includes all those
activities which employers undertake for
the welfare of their workers on voluntary
basis.
It can also be sub-divided into :

Intra-mural amenities

Extra- mural amenities

Objectives of Labour Welfare
Labour Welfare is to provide to workers a
better life, health and mental make –up
Labour welfare by providing comfortable
working conditions help to relieve workers
from industrial fatigue.
In recent times welfare activities are to
save themselves from taxes.
The purpose is to enhance their image
and to create an atmosphere of goodwill
between management and public.
Contd:

1. Enabling workers to live richer and more

satisfactory lives;
2. Contributing to the productivity of labour
and efficiency of the enterprise;
3. Enhancing the standard of living of
workers by indirectly reducing the burden
They have been conducting the following
programmes:
 Rural Awareness Programme.

 Functional Adult Literacy Classes.

 Short-term programmes for the unorganised sector to educate them on

their rights, ethics and hygiene.

 Participative Management.

 Orientation Courses for Rural Educators.

 Leadership Development Programme for Rural Workers.

Constituents of labour welfare
 The constituents of labour welfare included working
hours, working conditions, safety, industrial health
insurance, workmen’s compensation, provident funds,
gratuity, pensions, protection against indebtedness,
industrial housing, rest rooms, canteens, crèches, wash
places, toilet facilities, lunches, cinemas, theatres,
music, reading rooms, holiday rooms, workers’
education, co-operative stores, excursions, playgrounds,
and scholarships and other help for education of
employees’ children.
Classification of labour Welfare
Activities
Intra-Mural Activities

1.Provision of good canteen & mess

2.Medical facilities
3.Recreational facilities like clubs
4.Educational facilities
5.Sanitary, safety & sufficient lighting
Contd.
Provision for Rest & change & lunch room
Fire fighting arrangement
Fresh Air & water
Sanitary,safety & sufficient lighting
Shift allowance
Extra-mural Activities
Gratuity, Pension, provident fund
Medical facilities for child welfare
Holiday homes & leave travel facilities
Workers cooperatives including
consumers co-operative stores,fair prices
shops
Contd.
Transport to & fro from place of work
Vocational training for dependants of
workers.
Stock ownership schemes through bonus
share.
Duties of labour officer
Welfare functions

Counseling functions

Advising management for different

functions
 Contd.
Labor Administrative functions
Liason functions
1.Workers
2.Management
3.Govt. Agencies
4.Labor Dept.
5.Non-Govt .organisations