AN ANALYTICAL STUDY OF THE JURISPRUDENTIAL

Transcription

AN ANALYTICAL STUDY OF THE JURISPRUDENTIAL
DEVELOPMENT OF ‘EMPLOYEE’ AND ‘EMPLOYMENT
INJURY’ UNDER THE EMPLOYEES STATE INSURANCE
ACT, 1948
THESIS SUBMITTED TO
THE GUJARAT NATIONAL LAW UNIVERSITY, GANDHINAGAR
IN PARTIAL FULFILMENT FOR THE AWARD OF THE DEGREE OF
DOCTOR OF PHILOSOPHY IN LAW
SUBMITTED BY
MR. FAKKIRESH S. SAKKARNAIKAR
UNDER THE GUIDANCE OF
GUIDE
DR. VIKRAM B. DESAI
PRINCIPAL
SIDDHARTH LAW COLLEGE,
KHOLWAD, KAMREJ,
SURAT
CO-GUIDE
DR. SHOBHALATA V. UDAPUDI
PROFESSOR IN LAW,
GUJARAT NATIONAL LAW UNIVERSITY
GANDHINAGAR
GUJARAT NATIONAL LAW UNIVERSITY, GANDHINAGAR
March-2015
DECLARATION
I hereby declare that this Ph.D. thesis entitled AN ANALYTICAL STUDY OF
THE JURISPRUDENTIAL DEVELOPMENT OF ‘EMPLOYEE’ AND
‘EMPLOYMENT
INJURY’
UNDER
THE
EMPLOYEES
STATE
INSURANCE ACT, 1948 was carried out by me in partial fulfillment of the
requirements for the award of the Degree of Doctor of Philosophy in (Subject/ if
interdisciplinary than subject of Master’s degree and Law (Interdisciplinary) is a
record of original and independent research work done by me during July-2010 to
March-2015 under the supervision and guidance of Guide, Dr. Vikram B. Desai,
Principal, Siddharth Law College, Kholwad, Kamrej, Surat and Co-Guide, Dr.
Shobhalata V. Udapudi, Professor In Law, Gujarat National Law University,
Gandhinagar.
The Thesis has not been submitted partially or wholly for the award or any degree
or diploma in any other university in India or abroad.
Date: 23-March-2015
Mr. Fakkiresh S. Sakkarnaikar
CERTIFICATE
This is to certify that the Thesis entitled, AN ANALYTICAL STUDY OF THE
JURISPRUDENTIAL
‘EMPLOYMENT
DEVELOPMENT
INJURY’
UNDER
OF
THE
‘EMPLOYEE’
EMPLOYEES
AND
STATE
INSURANCE ACT, 1948 submitted to the Gujarat National Law University, in
partial fulfillment of the requirements for the award of the Degree of Doctor of
Philosophy in Law is a record of original research work done by Mr. Fakkiresh S.
Sakkarnaikar during the period July-2010 to March-2015 of his study under our
supervision and guidance.
We recommend that the thesis be placed before the examiners for their consideration
for the award of Ph.D. Degree.
Dr. Vikram B. Desai
Former Dean of Law Faculty,
Department of Law,
Veer Narmad South Gujarat University,
Surat
Place: Gandhinagar
Dr. Shobhalata V. Udapudi
Professor in Law,
Gujarat National Law University
Gandhinagar
ACKNOWLEDGEMENT
I completed my Post Graduation in Karnatak University Dharwar with specialization in Labour
Laws. The concerns and the cares of the working class always touched me and I always felt
something more need be done for their betterment.
Little did I then know, I was treading on a land of quick sand, and would be simply dragged in.
When GNLU started with Ph.D the programme, I approached Dr. Vikram Desai, whom I had the
opportunity to interact with during one of his visit to the University, and requested him to guide
me for Ph.D and he accepted me as a Researcher, to guide me on the topic “An Analytical Study
of the Jurisprudential Development of ‘Employee’ and ‘Employment Injury’ under the
Employees State Insurance Act, 1948”. I stand indebted to him for his patient guidance, the
strong knowledge base and all the contributions made by him for this study. But for him, this
project would have been a non-starter.
I express my gratitude to Dr. Shobhalata V. Udapudi who accepted to be the co-guide for the
same. I have benefitted in my Endeavour, by her dedication and her experience and knowledge.
Any creative work is never a fructification of one person’s efforts. Contributions in different
forms are always rendered by many persons in their unique capacities.
My heartfelt thanks to Dr. Bimal N. Patel, Director, GNLU, for his support and guidance.
I thank Dr. Thomas Mathew, Registrar-in-Charge, GNLU, for all his assistance in completing
this work.
I thank Dr. Mamata Biswal, Dean Academic Affairs, GNLU, for all her help and understanding.
My thanks are due to Dr William Nunes, Co-ordinator for Doctoral studies, for all the friendly
advice and assistance given to me.
My Colleagues at the Law School, Dr.Parameswaran, Associate Professor of Law, GNLU for all
his advice and help.
iv
My gratitude to Mr. Girish R and Mr. Jagadeesh Chandra T.G. both Assistant Prof GNLU,
Gandhinagar, for help, motivation, encouragement and moral support.
Mr. Richard Panth, Exam Department, GNLU, for all the guidance and assistance in formatting
the text of the thesis.
All the library staff that helped me with the reading material, my special thanks go to Mr.
Kamlesh Parmar. All my office staff, for all their co-operation.
And how do I thank my family, my mother Mrs. Seeta, my father Mr. Shivabasappa, my sisters,
their families and all kids, who stood beside me in all odds with all my whims and fancies,
tolerating my tantrums. My special thanks go to my wife, Mrs. Varsha for helping me and typing
the text. A soft hug to all would be the only answer. My grandmother who always blessed me
which always motivated me in my work.
Lastly, Every person who directly or indirectly has helped me to successfully complete this
work, my gratitude to them.
v
TABLE OF CONTENTS
List of Abbreviations
List of Cases
List of Legislations
List of Reports
List of Conventions & Recommendations
xiii
xviii
xxix
xxxii
xxxiv
CHAPTER-1
1.
INTRODUCTION
1.1. Research Problem
28
1.2. Significance and Utility of the Study
29
1.3. Hypotheses of the Study
29
1.4. Research Questions for carrying on the study
30
1.5. Research Methodology of the Study
31
1.6. Scope and Limitation of the Study
32
1.7. Scheme of the study/chapterisation and its presentation
32
CHAPTER- 2
2.
HISTORICAL PERSPECTIVE OF THE SOCIAL SECURITY
2.1. Concept of Social Security
38
2.2. Organized system of state welfare provision
41
2.3. Origin of the term Social Security
43
2.4. Evolution of Social Security in India
45
vi
2.4.1. Labour Welfare Activities and Associations
47
2.4.2 Social Security in Modern India
53
2.5. The Rege Committee
60
2.6. The five year plans on Social Security
64
CHAPTER-3
3.
INTERNATIONAL APPROACH TO THE SOCIAL SECURITY
3.1. Human Dignity and Social Justice
67
3.2. International Labour Organization
68
3.3. The Social Security (Minimum Standards) Convention, 1952 (No.102)
78
3.4. Strategies for Providing Social Security
82
3.4.1. World Bank
82
3.4.2. International Labour Organisation (ILO)
83
3.4.3. Other Strategies
85
3.5. International labour standards related with the Occupational Safety
and Health
89
3.5.1. Persons Protected
92
3.5.2. Contingencies
93
3.5.3. Benefits
93
3.5.4. Medical Care
94
vii
3.5.5. Cash Benefit
94
3.5.6. Amount of cash benefits
95
3.5.7. Rehabilitation of the Disabled Workers
95
3.5.8. Summary of ILO conventions related to employment injury benefit
96
3.5.9 Schedule I. List of Occupational Diseases
98
3.6. International Standards of Social Security
101
CHAPTER-4
4.
EXISTING LEGAL FRAMEWORK OF THE SOCIAL SECURITY LAWS IN
INDIA
4.1. Social Security Universal Human Need
105
4.2. The Interim National Government of India
106
4.3. The Provisions of Constitution of India on Social Security
108
4.4. An Overview of Social Security Legislations
119
4.4.1. Social Security laws enacted by the Central Government,
where the Central Government has the sole responsibility for enforcement
119
4.4.2. Social Security laws enacted by Central Government and
enforced by both Central and State Governments
120
4.4.3. Social Security laws enacted by Central Government and
enforced by the State Governments
122
4.5. Organized and Unorganized Sectors in India
124
4.6. The Principal Social Security Legislations in India
124
viii
4.6.1. The Employees’ State Insurance Act, 1948 (ESI Act)
125
4.6.2. Workmen’s Compensation Act, 1923
136
4.6.3. Maternity Benefit Act, 1961
137
4.6.4. Payment of Gratuity Act, 1972
138
4.6.5. The Employees’ Provident Fund Act, 1952
139
4.7. Social Security Schemes in India
140
4.8. The Present Initiatives
141
4.8.1. 45th Session of the Indian Labour Conference
143
CHAPTRE-5
5.
AN ANALYISIS OF THE TERM ‘EMPLOYEE’ WITH THE DECISIONS OF
THE HIGH COURTS AND SUPREME COURT
5.1. Path of Transformation
145
5.2. Definition of the term ‘Employee’ under the Act
151
5.3. An analysis of the term ‘employee’.
152
5.4. Wages
155
5.4.1. Inam or incentive is wages
155
5.4.2. Overtime Remuneration
156
5.4.3. Incentive bonus is included in the definition of wages
156
5.5. Factory
157
ix
5.6. Seasonal factory
157
5.7. Manufacturing Process
159
5.8. Principal Employer
162
5.9. Immediate Employer
163
5.10. Insurable Employment and Insured Person
164
5.11. Casual Employee
164
5.12. Exempted Employee
165
5.13. Judicial Approach (Supreme Court Cases)
165
5.13.1. Judicial Approach (High Court cases)
169
5.14. Continuous Applicability of the Act
174
5.15. Contributions on Company Becoming Economically Sick
174
5.16. Continuation of Employment
174
5.17. Loaders and Unloaders-Whether Liable to be covered
175
5.18. Clubbing of Branches for Coverage
176
5.19. Coverage of Fabricator’s Workers for Exporter
176
5.20. Partner of a Firm -Not an ‘Employee’
177
5.21. Managing Director Liable to be covered
178
5.22. Apprentice-Is he an employee?
178
5.23. Work incidental or preliminary to the work of factory
180
x
5.24. Managing Partner of a firm may be an employee
181
5.25. Consumer Protection Act Application
182
5.26. Availability of Benefits
182
5.27. Non-Availability of Funds
182
5.28. Advantages of ESI to an Employer
182
5.29. Jurisdiction of Civil Courts and High Court
185
CHAPTER-6
6.
AN ANALYSIS OF THE TERM ‘EMPLOYMENT INJURY’ IN THE LIGHT OF
THE HIGH COURTS AND SUPREME COURT JUDGEMENTS
6.1. Foundations of Health and Safety
187
6.2. Fundamental conventions of occupational safety and health
189
6.2.1. Occupational Safety and Health Convention, 1981 (No. 155)
189
6.2.2. Occupational Health Services Convention, 1985 (No. 161)
189
6.2.3. Promotional Framework for Occupational Safety and
Health Convention, 2006 (No. 187)
189
6.3. Plan of action (2010-2016) to achieve widespread ratification
and effective implementation of the occupational safety and
health instruments (Convention No. 155) of 2002,
its 2002 Protocol and Convention No. 187 of 2006
190
6.4. Supreme Court’s Emphasis on Right to Health and Medical Care
as a Fundamental Right
192
xi
6.5. National Policy on Safety, Health and Environment at workplace
193
6.6. Definition of the term ‘Employment Injury’ under the Act
194
6.6.1. Meaning of Employment, Injury, Personal Injury and
Employment Injury
194
6.7. Accident
195
6.8. Notice of accident
195
6.9. Occupational Diseases
197
6.10. Regulation of Occupational Health in India
(Responses of Committees and Commissions)
201
6.11. Judicial Response
207
6.12. Liability in Hazardous and Dangerous Industries
211
6.13. Courts Direction of Closure of Highly Polluted and Hazardous Industries
212
6.14. Determination of Occupational Disease
212
6.14.1. Contracting of an occupational disease after discontinuance
of service
213
6.15. Presumption as to accident arising out of and in the course of employment
214
6.16. Arising out of and in the course of employment. (Judicial Approach)
216
CHAPTER-7
7.
CONCLUSION AND SUGGESTIONS
Annexure
o The Employees' State Insurance (Amendment) Act, 2010
xii
242 to 280
o Conventions ratified by India
Bibliography
Website
xiii
ABBREVIATIONS
AC-
Appeal Cases
ADHD-
Attention Deficit Hyperactivity Disorder
AIR-
All India Reporter
All ER-
All England Reporter
BIFR-
Board for Industrial and Financial Reconstruction
BMS-
BharatiyaMazadoorSangha
BOs-
Branch Offices
CAD-
Constituent Assembly Debates
CITU-
Centre of Indian Trade Unions
CLI-
Central Labour Institute
CLR-
Current Labour Reporter
CMM-
ChattisgarhMuktiMorcha
CMSS-
Chattisgarh Mines SramikSangha
DB-
Dependents’ Benefit
DGFASLI-
Director General of Factory Advisory Services & Labour Institutes
EDLI-
Employees’ Deposit Linked Insurance
EII-
Employment Injury Insurance
xiii
EPFO-
Employees’ Provident Fund Organization
ESB-
Extended Sickness Benefit
ESIC-
Employees State Insurance Corporation
ESIC-
FB-
Full Bench
FLR-
Factory Law Reporter
GDP-
Gross Domestic Product
GIC-
Guaranteed Investment Certificate
GJP-
Global Jobs Pact
HC-
High Court
HMS-
Hindu MazadoorSangha
HYV-
High Yielding Varieties
ICESCR-
International Covenant on Economic, Social and Cultural Rights
ICESCR-
International Covenant on Economic, Social and Cultural Rights
ICMR-
Indian Council of Medical Research
IGNDPS-
Indira Gandhi National Disability Pension Scheme
IGNOAPS-
Indira Gandhi National Old Age Pension Scheme
IGNWPS-
Indira Gandhi National Widow Pension Scheme
ILC-
International Labour Conference
xiv
ILO-
International Labour Organisation
INTUC-
Indian National Trade Union Congress
IP-
Insured person
Ire Rep-
Ireland Reporter
ITRC-
Industrial Toxicology Research Centre
KB-
King’s Bench
Lab I C-
Labour Industrial Cases
LLJ-
Labour Law Journal
LLR-
Labour Law Reporter
LMIS-
Labour Market Information System
LMIS-
Labour Market Information System
LPG-
Liberalization, Privatization and Globalization
LQP-
License, Quota and Permit
MB-
Medical Benefit
MDGs-
Millennium Development Goals
MGNREGS- Mahatma Gandhi National Rural Employment Guarantee Scheme
MSME-
Ministry of Micro and Medium Enterprises
MSPI-
Ministry of Statistics and Progreamme Implementation
NACO-
National AIDS Control Organization
xv
NFBS-
National Family Benefit Scheme
NGO-
Nongovernmental organizations
NIOH-
National Institute of Occupational Health
NMBS-
National Maternity Benefit Scheme
NPF-
National provident Funds
NPS-
National Pension System
NSAP-
National Social Assistance Programme
NSAP-
NSAP-
NSSO-
National Sample Survey Organisation
OECD-
Organisation for Economic Co-Operation and Development
OSH-
Occupational Safety and Health
PDB-
Permanent disablement benefit
PFRDA-
Pension Fund Regulatory and Development Authority
POs-
Pay Offices
PRAN-
Permanent Retirement Account Number
RCLI-
Royal Commission on Labour in India
ROHC-
Regional Occupational Health Centers
SB-
Sickness Benefit
xvi
SC-
Supreme Court
SCALE-
Supreme Court Almanac
SCC-
Supreme Court Cases
SPF-
Social Protection Floor Initiative
SSN-
Social Safety Net
SSN-
Social Security Number
TDB-
Temporary disablement benefit
TLA-
Textile Labour Association
TLV-
Threshold Limit Value
UDHR-
Universal Declaration of Human Rights (1948),
UNDP-
United Nations Development Programme
UNO-
United Nations Organization
UTUC-
United Trade Union Congress
VCTC-
Voluntary Counselling and Testing Centers
VR-
Vocational Rehabilitation
VRS-
Vocational Rehabilitation Scheme
WB-
World Bank
Web-
Website
xvii
TABLE OF CASES
1.
A.B.S.K. Sangh (Rly) v UOI AIR 1981 SC 298
2.
Air India Statutory Corporation v United Labour Union, AIR 1997 SC 645
3.
All India ITDC Employees Union v Hotel Asoka, (1984) I LLJ 99 (Karnataka)
4.
AP State Electricity Board v ESI Corpn 1977 Lab IC 316 (Andra Pradesh)
5.
Assistant Regional Director, Employees’ State Insurance Corporation v Kolhapur
Motor MalakSangh Ltd 2007 LLR 1242 (Bombay)
6.
B.E.S.T. undertaking v Mrs. Agnes AIR 1964 SC 193
7.
Bata India Limited v Employees’ State Insurance Corporation and others (2003) III
LLJ 716 (Calcutta)
8.
Beeyms Const. Co. v Govt. of Kerala, AIR 1978 Kerala 1
9.
Bender v Owners of S.S. Zent [1909] 2 KB 41
10.
Bharagath Engineering v R.Ranganayaki 2003 LLR 227 (SC): (2003) 2 SCC 138
11.
Bharat Commerce and Industries Ltd., BirlagramNagda v Regional Director,
Employees’ State Insurance Corporation, Indore and others (2005) I LLJ 482 (Madhya
Pradesh)
12.
Boehringer Knoll Ltd v Regl. Director, ESI Corporation 1977 Lab IC 116 (Bombay)
13.
Bombay Wires Manufacturing Company, Bombay v ESI Corporation (1986) II LLJ
121 (Bombay)
14.
Braitwaite& Co. v E.S.I. Corporation AIR 1968 SC 413
xviii
15.
Branch Manager, State Bank of Hyderabad v Abdul Raheem and another (2001) I LLJ
3 (SC)
16.
Brooke Bond India v Regl, Director, ESI Corporation., Trichur 1980 Lab IC 74
(Kerala)
17.
C.E.S.C. Ltd, etc. v Subhash Chandra Bose and others (1992) I LLJ 475 (SC)
18.
Calcutta Electricity Supply Corporation v Subhas Chandra Bose (1992) 1 SCC 441
19.
Central Glass Industries v Abdul Hussain, AIR 1948 Calcutta 12
20.
Chairman Madras port trust, Madras v kamala AIR 1970 Madras 386
21.
Chandra Bhavan Boarding v. State of Mysore AIR 1970 SC 2042
22.
Chintaman Rao v State of M.P AIR 1958 SC 388
23.
Christan Medical College v E.S.I. Corporation (2001) 1 SCC 256
24.
Cochin Shipping Corporation. v ESI Corporation., AIR 1993SC 252
25.
Consumer Education and Research Centre and others v Union of India and others
(1995) 3 SCC 42
26.
Cricket Club, India v E.S.I.Corporation 1992 Lab IC 2029 (Bombay)
27.
E.S.I. Corporation. v Scientfic Instrument Co 1995 Lab IC 651 (Allahabad)
28.
Darast Ltd v ESI Corporation 1980 Lab IC 72 (Kerala)
29.
Dattaram Advertising Pvt. Ltd. v Regl Director Maharastra E.S.I. Corporation., (1987)
I LLJ 9 (Bombay)
30.
Devshi Bhanji Khona v. Mary Burno(1985) II LLJ 70 (Kerala)
31.
Director (T and M) D.N.K. Project v Smt. Buchitalloi(1989) I LLJ 259 (Orissa)
32.
Director General ESI Corporation & another v The Scientific Instrument Co. Ltd
(1995) II LLJ 122 (Allahabad)
xix
33.
Divisional Manager, United India Insurance Co. Ltd. v. Shanmuga MudaliarT.and
others (2003) I LLJ 776 (Madras)
34.
Divnl. Personal Officer, Western Railway, Jaipur and another v Ashiya Begum (1994)
II LLJ 795 (Rajastan)
35.
Duvent Fans (P) Ltd. v Regional Director, E.S.I. Corporation, Bangalore 2001 LLR
783 (Karnataka)
36.
E.K. Haj Mohammadmeera Sahib and sons v Regional Director, Employees’ State
Insurance Corporation, 2003 LLR 308; 2003 (96) FLR 1174
37.
E.S.I. Corporation Hyderabad v A.P. Paper Mills AIR 1978 Andra Pradesh 18 (FB)
38.
E.S.I. Corporation v Tata Engg. & Co AIR 1976 SC 66
39.
E.S.I. Corporation Hyderabad v Maharaj Bombay and Restaurant, 1979 Lab IC 1147
(Andra Pradesh)
40.
E.S.I. Corporation Madras v Amalgamation Rep. Co. Ltd., Madras 1983 II LLJ 193
(Madras)
41.
E.S.I. Corporation v Apex Engineering (P) Ltd 1997 LLR 1097 (SC)
42.
East west Hotels v Regl. Director ESIC 1986 I L.L.J. 172 (Karnataka)
43.
Employee’s State Insurance Corporation v Arvind Mills Ltd. 2009 Lab IC 1885
(Gujarat)
44.
Employees State Insurance Corporation Calcutta v. Abdus Salam and others (2003) I
LLJ 765 (Calcutta)
45.
Employees, N.T. Corporation Bangalore v Regional Directors, ESI, Bangalore 1992
Lab IC 1825 (Karnataka)
xx
46.
Employees’ State Corporation Hyderabad and Others v Chirala Co-operative Spinning
Mills Ltd, ChiralaPrakasam(2005) I LLJ 910 (Andra Pradesh)
47.
Employees’ State Insurance Corporation Hyderabad v Prakash Paper Mart, Hyderabad
(2003) III LLJ 1117 (Andra Pradesh)
48.
Employees’ State Insurance Corporation v Hotel Corporation of Delhi 2008 LLR 640
(Delhi)
49.
Employees’ State Insurance Corporation v Jaladhar Gymkhana Club 1992 LLR 733:
1993 (10) CLR 220 (Panjab and Haryana)
50.
Employees’ State Insurance Corporation Hyderabad v A.P. Electrical Equipment
Corporation, Visakhapatnam (2005) II L.L.J. 181 (Andra Pradesh)
51.
ESI Corporation v Spencer &CO 1978 Lab IC 1759 (Madras)
52.
ESI Corporation Chandigarh v OswalWollen Mills 1980 Lab IC 1064 (Punjab and
Haryana)
53.
ESI Corporation Hyderabad v Maharaja Bar & Restaurant 1979 Lab IC (Andra
Pradesh)
54.
ESI Corporation Trichur v Ayurvedic Industrial Co 1980 Lab IC 557 (Kerala)
55.
ESI Corporation Trichur v Poopally Foods, Alleppy(1985) I LLJ 10 (Kerala)
56.
ESI Corporation v Raj kamal Transport & others (1995) I LLJ 94 (Andra Pradesh)
57.
ESI Corporation, Hyderabad v J.C. and Co. Products Ltd 1980 Lab IC 1078 (Andra
Pradesh)
58.
ESI Corporation, Sub-Regional Office, Hulbi v A.P.S. Star Industries Ltd. Dharwad
2003 LLR 972: 2003 (98) FLR 1207 (Karnataka)
59.
ESIC Trichur v Ramanuj Math Industries, (1985) I LLJ 69 (SC)
xxi
60.
ESIC v Ved Prakash Gupta 2008 LLR 881 (Dellhi)
61.
Fariyas Hotel v Maharastra, 1983, I LLJ 24 (Bombay)
62.
Gatton v Limerick Steamship Co [1910] 2 IR 561
63.
General Manager, South Eastern Railway and others v Abdul Wahid (2002) III LLJ
615 (Jharkand)
64.
George Mathew v. Regl. Director, E.S.I. Corporation AIR 1978 Kerala 660
65.
Heavy Engg. v ESI Corporation 1979 Lab IC 771 (Patna)
66.
Hindustan Motors Ltd. v E.S.I. Corporation 1979 Lab IC 852 (Calcutta)
67.
Hindustan Petroleum Corporation Ltd v Employee’s State Insurance Corporation 2008
LLR 490 (Andra Pradesh)
68.
Hindustan Petrolum Corporation Ltd v Employee’s State Insurance Corporation 2008
LLR 490 (Andra Pradesh)
69.
Hyderabad Asbestos v Employees Insurance Court AIR 1968 SC 356
70.
Hyderabad Asbetos Cement Products v Employees Insurance Corporation AIR 1978
SC 356
71.
I.T. Commr. A.P. v TajMahal Hotel, AIR 1972 SC 168
72.
Imperial Tobacco Co. (India) Ltd. v SalonaBibiAIR 1956 Calcutta 458
73.
Indian New Chronicle v Mrs. Lazarus AIR 1961 Punjab and Hariana 102
74.
Indian Rare Earths Ltd. v SubaidaBeedi(1981) II LLJ 293 (SC)
75.
Indian Rare Earths Ltd. v SubaidaBeedi(1981) II LLJ 293 (SC)
76.
JankiAmmal v Civil Engg. Highways, Kozhikode (1956) II LLJ 233 (SC)
77.
JankiAmmal v Divisional Engineer Highway, Kozhikode (1956) II LLJ 233
78.
Jaybharat Saw Mill v Babulal Ambalal SodhParmar (1992) II LLJ 186 (Gujarat)
xxii
79.
Jodhpur VidyutVitran Nigam Ltd. v KarmchariRajyaBeema Nigam and another
(2003) I LLJ 104 (Rajastan)
80.
JyothiAdemma v. Plant Engineer, Nellore 2006 III LLJ 324 (SC)
81.
K. Venkateswara Rao v State of A.P (1980) I LLJ 79 (Andra Pradesh)
82.
KamlaBai v. Divisional Superintendent Central Railway, Nagpur (1971) I LLJ 603
(Bombay)
83.
Kandaswami Weaving Factory v Regional Director E.S.I.C. Madras 1969 Lab IC 362
(Madras)
84.
KerrorLendrum v Ayr Steam Shipping Co. Ltd [1915] AC 217
85.
Kirloskar Brothers Ltd. v Employees’ State Insurance Corporation 1996 SCALE (2)1
86.
Kishore Lal v Chairman, Employee’s State Insurance Corporation 2007 LLR 740:
2007 (114) LR 220 (SC)
87.
Lakshmana Murthy v ESI Corp AIR 1974 SC 756
88.
Lancashire and Yorkshire Railway Co. v Highley[1917] AC 352
89.
Lancaster v Blackwell Colliery Co. Ltd 1918 WC Rep 345
90.
M.C. Mehta v Union of India AIR 1987 SC 1086
91.
M/s. Chowgule and Co. (pvt) Ltd. v. SmtFelicidade AIR 1970 Goa 127
92.
M/s. Dhanbad Cold Storage Pvt. Ltd. v Employees’ State Insurance Corporation 2009
LLR 404 (Jharkand)
93.
M/s. J.D. and Co. Mills. v E.S.I. Corporation AIR 1963 Andra Pradesh 210
94.
M/s. Sumangali v Regional Director, ESI Corporation 2008 LLR 941 (SC); AIR 2009
SC 1298
95.
Mackinnon Mackenzie and Co. Ltd. v Miss Velma William AIR 1964 Calcutta 94
xxiii
96.
Mackinnon Mackenzie and Co. Pvt. Ltd v Ibrahim Mohammed IssakAIR 1970 SC
1906
97.
MaherunishaAhemad Khan Pathan and other v Employees State Insurance
Corporation (1995) II LLJ 1 (Gujarat)
98.
Manager Harrisons and Crosfield Ltd. Quilon v Manager AIR 1970 Kerala 194
99.
Marshall v Owners of S.S. Wild Rose [1909] 2 KB 46
100. Mnagement of Sri Sabari Mills Ltd. v M. Kulandai (1984) I LLJ 254 (Madras)
101. Mohd Ismail Ansari v ESI Corporation Bombay (1979) II LLJ 168 (Bombay)
102. N.C.E.F. Ltd v Deputy Regl Director, E.S.I. Corpn, Bangalore 1980 Lab IC 431
(Kerala)
103. Nagpur Eletric Light and Power Co. v Regl. Director ESI Corporation AIR 1967 SC
1364
104. National Iron and Steel Co. Ltd. v. ManooramaAIR 1953 Calcutta 143
105. National Textile Workers Union v Ramakrishnan AIR 1983 SC 75
106. Nawab Ali v Hanuman Jute Mills AIR 1933 Calcutta 513
107. New India Assurance Co. Ltd., v R. Shridhara and another (1992) I LLJ 558
(Karnataka)
108. New India Insurance Co. Ltd. v G. Krishna Rao and others (1995) II LLJ 1041
(Orissa)
109. Occupational Health and Safety Association v Union of India 2014 STPL (web) 68 SC
110. Olga Tellis v Bombay Muncipal Corporation AIR 1986 SC 180
111. Oriental Insurance Co. Ltd. v Nanguli Singh and another, (1995) I LLJ 298 (Orissa)
112. Oriental Insurance Company Ltd.v Sorumai Gagoi and others 2008 II LLJ 863 (SC)
xxiv
113. Osmania Uty v Regl, Director, ESI Corpn 1986 I LLJ 136 SC
114. P.E. Davis and Co. v KestoRouthAIR 1968 Calcutta 129
115. Pondicherry State Weavers Co-operative Society v Regional Director, ESI Corpn,
Madras (1983) I LLJ 17 (Madras)
116. Poona Indus. Hotel v I.C. Sarin 1980 Lab IC 100 (Bombay)
117. Poona Lakshman Rao & Son v Addl. Inspector of Factories AIR 1959 Andra Pradesh
142
118. P.U.D.R. v Union of India AIR 1982 SC1473
119. Public Works Department v KaunsaGokul(1967) I LLJ 344 (Madhya Pradesh)
120. QaziNoorulHasanHussian Petrol Pump v Dy. Director, Employee’s State Insurance
Corporation, Kanpur 2003 LLR 476 (Allahabad)
121. R B Moodra and Co.vMst. BhanwariAIR 1970 Rajastan 111
122. Raj Dulari v Superintendent Engineer P.S.E.B.and anther (1989) II LLJ 132 (Panjab
and Hariana)
123. Raj Mechanical Industries v Employee’s State Insurance Corporation 2009 (121) FLR
717 (Punjab and Haryana)
124. Rajappa v Employees’ State Insurance Corporation (1992) II LLJ 714 (Karnataka)
125. Ram Parshad v ESI Corporation FLR 139 (Delhi)
126. Reena Padhi and others v ESI Corporation(1994) II LLJ 1045 (SC)
127. Regional Director ESI Corpn. v L Rang Rao (1982) I LLJ 29 (Karnataka)
128. Regional Director ESI Corporation, Madras v South India Flour Mills (1986) II LLJ
304 (SC)
xxv
129. Regional Director, E.S.I.C. Ahmedabad v Batulbibi and another (1988) II LLJ 29
(Gujarat)
130. Regional Director, Employees’ State Insurance Corporation, Mumbai v Golden Gate
Restaurant (2002) I LLJ 972 (Bombay)
131. Regional Director, ESI Corporation. v Devanagri Cotton Mills 1977 Lab IC 747
132. Regional Director, ESI Corporation v Arun Granites 2007 LLR 1045 (Kerala)
133. Regional Director, ESI Corporation v Lakshmi 1979 Lab IC 167 (Kerala)
134. Regional Director, ESIC v Fact Engineering Works 2003 LLR 619 (Kerala)
135. Regional Director ESI Corporation. v Fibre Mangalore (1986) I LLJ 216 (Karnataka)
136. Regional Director, ESI Corporation v Andhar Paper Mills Ltd 1980 Lab IC 604
(Andra Pradesh)
137. Rice v Owner of Ship Swansea Vale [1912] AC 238
138. Riley v William Holland and Sons Ltd (1911) I KB 1029
139. Rourke v Mold & Co [1917] 2 Ire Rep 318
140. Royal Talkies, Hyderabad v. E.S.I. Corporation AIR 1978 SC 1478
141. Rural litigation and Entitlement Kendra v State of Uttar Pradesh AIR 1988 SC 2187
142. Salamabegum v District Branch manager Maharastra State Co-operative Land
Development Bank, Beed and another (1990) I LLJ 112 (Bombay)
143. Saraswath Films v Regional Director, ESI Corporation, Trichur(2002) III LLJ 169
(SC)
144. Sathybhama v E.S.I. Corporation (1992) I LLJ 831 (Kerala)
145. Saurashtra Salt Manufacturing Co. v Valu Raja AIR 1958 SC 881
xxvi
146. Seelan Raj and Others v P.O., I Addl. Labour Court and Others (1997) II LLJ 972
(Madras)
147. Sen Raleigh v ESI Corporation AIR 1977 Calcutta 165
148. Senior Divisional Personnel Officer, S. Rly Trichy v Smt. Kanagambal (1995) II LLJ
231 (Madras)
149. Shakuntala Chandrakant Shreshti v Prabhakar Maruti Garveli and another (2007) I
LLJ 474 (SC)
150. Sheela v E.S.I. Corpn (1991) II LLJ 247 (Panjab and Hariana)
151. Simpson v L.M. & S. Railway Co [1931] AC 351
152. Sir Jayaram Motor Service v Pitchammal(1982) II LLJ 149 (Madras)
153. Smt. Koduri v Palongi Atchamma 1969 Lab IC 1415 (Andra Pradesh)
154. Southern Agencies v Andhra Pradesh E.S.I. Corporation 2001 LLR 191 (SC)
155. Spinning Mills Ltd, ChiralaPrakasam (2005) I LLJ 910 (Andra Pradesh)
156. Sri Naraksaritrakshan Ltd., and others v ESI Corporation (1985) I LLJ (SC)
157. St Hellen’s Colliery Ltd. v Hewlston [1924] AC 59
158. State of Rajasthan v Ram Prasad and another (2001) I LLJ 177 (SC)
159. State of Rajasthan v Smt. Kanta (1989) II LLJ 135 (Rajastan)
160. Sunder Paper Co v State of Orissa 1977 Lab IC 1213 (Orissa)
161. Superintendent Engineer ParambilulamAliar Project, Pollachi v Andammal(1983) II
LLJ 326 (Madras)
162. Tara Chand Mohan Lal v ESI Corporation AIR 1971 Andaman and Nicobar 65
163. The Assistant Director, ESIC v M/S. Western Outdoor Interactive Pvt Ltd and Others
FA 143. 2012. Pronounced on 11th July 2012
xxvii
164. Tobacco Manufacturers (India) Ltd. v Mrs.Marain Stewart AIR 1950 Calcutta 164
165. Tremain v Pike, [1969] 3 All ER 1303
166. Trustees Port of Bombay v YamunabaiAIR 1952 Bombay 382
167. Varadarajulu v Masaya Boyan AIR 1954 Madras 1113
168. ZubedaBano and others v Maharastra S.R.T. Corpn, and others (1991) I LLJ 66
(Bombay)
xxviii
LIST OF LEGISLATIONS
•
Apprentices Act, 1961
•
Beedi and Cigar Workers (Conditions of Employment) Act, 1966
•
Beedi Workers Welfare Cess Act, 1976
•
Beedi Workers Welfare Fund Act, 1976
•
Bonded Labour System (Abolition) Act, 1976
•
Building and Other Construction Workers Cess Act, 1996
•
Building and Other Constructions Workers’ (Regulation of Employment and Conditions
of Service) Act, 1996.
•
Child Labour (Prohibition and Regulation) Act, 1986.
•
Children (Pledging of Labour) Act 1938
•
Cine Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981
•
Cine Workers Welfare (Cess) Act, 1981
•
Cine Workers Welfare Fund Act, 1981
•
Contract Labour (Regulation and Abolition) Act, 1970.
•
Dangerous Machines (Regulation) Act, 1983
•
Dock Workers (Regulation of Employment) (Inapplicability to Major Ports) Act, 1997
•
Dock Workers (Regulation of Employment) Act, 1948
•
Dock Workers (Safety, Health and Welfare) Act, 1986
•
Employees State Insurance Act 1948 and
•
Employees’ Provident Funds and Miscellaneous Provisions Act 1952
xxix
•
Employers’ Liability Act, 1938
•
Employment Exchange (Compulsory Notification of Vacancies) Act, 1959
•
Equal Remuneration Act, 1976.
•
Factories Act, 1948
•
Industrial Disputes Act, 1947.
•
Industrial Employment (Standing Orders) Act, 1946.
•
Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service)
Act, 1979.
•
Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare (Cess)
Act, 1976
•
Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare
Fund
Act, 1976
•
Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain
Establishments) Act, 1988
•
Limestone and Dolomite Mines Labour Welfare Fund Act, 1972
•
Maternity Benefit Act, 1961
•
Merchant Shipping Act, 1958
•
Mica Mines Labour Welfare Fund Act, 1946
•
Mines Act, 1952
•
Minimum Wages Act, 1948
•
Motor Transport Workers Act, 1961
•
Payment of Bonus Act, 1965
•
Payment of Gratuity Act 1972
xxx
•
Payment of Wages Act, 1936
•
Personal Injuries (Compensation Insurance) Act, 1963
•
Personal Injuries (Emergency Provisions) Act, 1962
•
Plantation Labour Act, 1951
•
Private Security Agencies (Regulation) Act, 2005
•
Sales Promotion Employees (Conditions of Service) Act, 1976
•
Sales Promotion Employees Act, 1976
•
Trade Unions Act, 1926
•
Unorganized Workers Social Security Act, 2008
•
Weekly Holidays Act, 1942
•
Working Journalists (Fixation of Rates of Wages) Act, 1958.
•
Working Journalists and Other Newspapers Employees (Conditions of Service) and
Miscellaneous Provisions Act, 1955
•
Workmen’s Compensation Act 1923
xxxi
LIST OF REPORTS
1.
Millennium Development Goal Report-2014
2.
ILO, World Social Security Report 2010/2011
3.
World Social Security Report 2010–2011
4.
World Labour Report 2000
5.
Beveridge Committee Report 1942
6.
Report of the Royal Commission on Labour in India (RCLl Report), Government of
India, Calcutta 1931
7.
Law Commission of India, sixty second report 1974
8.
Report of the First National Commission on Labour 1969
9.
Report of the Second National Commission on Labour 2002
10.
Labour Investigation Committee Report 1944
11.
Report of Working Group for 11th Five year Plan 2007-2012 under the Chairmanship
of Prof.B.L.Mungekar
12.
Report of the Working Group on Social Security for the Tenth Five Year Plan 20022007 Working Group Sr. No. 48/2001
13.
Govt. of India, Report of the Royal Commission on Labour 1931
14.
Government of India, Report on the Committee on Labour Welfare 1969
15.
National Institute of Occupational Health Report 2010
16.
Recommendation of Study Group on Social Security, Government of India, 1957
17.
The ESI Scheme Review Committee Report 1982
18.
N.S. Nankiker, ‘Working Conditions in Factories referred in Government of India’
the Conference of Chief Inspectors of Factories held at New Delhi 1968
xxxii
19.
Patricia Justino “Social Security from Developing Countries: Myth or Necessity
Evidence from India” PRUS (Poverty Research Unit at Sussex) University of Sussex
Working Paper NO.27 of 20 Sept 2003
xxxiii
LIST OF CONVENTIONS AND RECOMMENDATIONS
•
Convention No. 12: Workmen’s Compensation (Agriculture) 1921
•
Convention No. 17: Workmen’s Compensation (Accidents), 1925
•
Convention No. 18: Workmen’s Compensation (Occupational Diseases) 1925
•
Convention No. 19: Equality of Treatment (Accident Compensation) 1925
•
Convention No. 24: Sickness Insurance (Industry) 1927
•
Convention No. 25: Sickness Insurance (Agriculture) 1927
•
Convention No. 35: Old age Insurance (Industry etc.) 1933
•
Convention No. 36: Old age Insurance (Agriculture) 1933
•
Convention No. 37: Invalidity Insurance (Industry, etc.) 1933
•
Convention No. 38: Invalidity Insurance (Agriculture) 1933
•
Convention No.39: Survivors’ Insurance (Industry, etc.) 1933
•
Convention No. 40: Survivors’ Insurance (Agriculture) 1933
•
Convention No. 22 Unemployment Provision 1934
•
Convention No. 42: Workmen’s Compensation (Occupational Diseases) (Revised), 1934
•
Convention No. 67: Income Security, 1944
•
Convention No.102: Social Security (Minimum Standards) 1952
•
Convention No. 103 Maternity Protection (Revised) 1952
•
Convention No. 118: Equality of Treatment (Social Security) 1962
•
Convention No. 121: Employment Injury Benefits Convention, 1964
•
Convention No.128: Invalidity Old age and Survivors Benefits 1967
xxxiv
•
Convention No. 183: Maternity Protection 2000
•
Convention No. 187 : Occupational Safety and Health 2006
•
Recommendation No. 23 Workmen’s Compensation (Jurisdiction) 1925
•
Recommendation No. 25 Equality of Treatment (Accident Compensation) 1925
•
Recommendation No. 44 Unemployment Protection 1934
•
Recommendation No. 95 Maternity Protection 1952
•
Recommendation No. 67 Income Security 1964
•
Recommendation No. 121 Employment Injury Benefits 1964
•
Recommendation No. 131 Invalidity, Old age and Survivor’s Benefits 1967
•
Recommendation No 134: Medical Care and sickness Benefits 1969
•
Recommendation No. 167 Maintenance of Social Security Right 1983
•
•
•
Recommendation No. 194 List of Occupational Diseases 2002
•
Recommendation No. 202 Social Security Floors 2012
xxxv
CHAPTER-1
INTRODUCTION
In the words of Dr. B.R. Ambedkar, “Bread a house, adequate clothing, education, good
health and above all the right to work with dignity on the world’s boulevards”.
As rightly pointed out by Justice Ramaswamy:
“The poor, the workman and common man can secure and realize the
economic and social freedom only through the right to work and right to
adequate means of livelihood, to just and humane conditions of work, to a
living wage, a decent standard of life, education and leisure. To them these
are fundamental facets of life....1”
The provision of social security is an effective and important means of reducing poverty
and social exclusion as it prevents people from falling into poverty and enables the poor
to escape the poverty trap. In the absence of social protection, people, especially the most
vulnerable, are subjected to increased risks of sinking below the poverty line or
remaining caught in conditions of poverty.
In addition, there is strong evidence that social security fosters long-term economic
growth by raising labour productivity and enhancing social stability.
In the Beveridge Committee Report (1942)2, Social Security was defined as “Freedom
from Want”.
1
Air India Statutory Corporation v United Labour Union, AIR 1997 SC 645 at p. 648.
In 1941, William Beveridge one of the Britain’s leading economist, was asked by Winston Churchill’s
Government to look at the problems of building a post-war Britain and was also asked to consider how the
various Social Security schemes could be harmonized. His report covered the five threats to society: Want,
2
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Unexpected life circumstances, the loss or reduction of productive capacity, and
discrimination can hinder a person's or a family’s well-being. Everyone needs protection
from social risks and resulting insecurities. Social security benefits - or social transfers are powerful tools to combat poverty and inequality, and to invest in social and economic
development. As such, they are key to achieve the Millennium Development Goals3
(MDGs). Social protection, through social security policies that are aligned with
economic and labor policies, is an economic, social and political necessity that has been
recognized by several international declarations and agreements as a human right.
Social security is a human right and is enshrined as such in the Universal Declaration of
Human Rights (1948), the International Covenant on Economic, Social and Cultural
Rights (1966), and in other major United Nations Human Rights instruments.
The achievement of social security for all is at the core of the International Labour
Organisation’s (ILO) Constitution and mandate. The Declaration of Philadelphia (1944)4,
which is an integral part of the ILO Constitution, recognizes that the extension of social
security worldwide is one of the Organizations’ main objectives. More precisely, it
recognises the solemn obligation of the ILO to further among the nations of the world
programs that will achieve, inter alia, “the extension of social security measures to
Ignorance, Disease, Squalor and Idleness. Available at <www.bbc.co.uk/history/ww2peopleswar/timeline
/.../a1143578.shtml> accessed on 12 November 2012.
3
The Millennium Development Goals (MDGs) are eight international development goals that were
established following the Millennium Summit of the United Nations in 2000, following the adoption of the
United Nations Millennium Declaration. All 189 United Nations member states and at least 23 international
organizations committed to help achieve the Millennium Development Goals by 2015, the goals follow:
To eradicate extreme poverty and hunger, To achieve universal primary education, To promote gender
equality and empowering women, To reduce child mortality rates, To improve maternal health, To combat
HIV/AIDS, malaria, and other diseases, To ensure environmental sustainability, To develop a global
partnership for development. Available at <http://www.un.org/millenniumgoals/global.shtml> accessed on
20 January 2013.
4
The Philadelphia Declaration, which prefigured and served as a model for the United Nations Charter and
the Universal Declaration of Human Rights, remains the charter of ILO’s goals and principles. The
recommendations set out in the Declaration are to be considered from the broadest possible point of view:
they concern not only the world of labour but also human beings as a whole. The Declaration directly
addresses “all human beings, irrespective of race, creed or sex”. Available at <http://www.ilo.org/public/
english/support/lib/century/content/1944.htm> accessed on 24 April 2012.
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provide a basic income to all in need of such protection and comprehensive medical
care”, as well as “provision for child welfare and maternity protection”, thereby
extending the protection from workers to all those in need. To this end, the ILO has
adopted Conventions and Recommendations on social security that lay down obligations
and guidelines for States. These international standards have greatly contributed to the
development of international social security law and to the definition of the human right
to social security.
Two of the most influential programmes are the United States’ 1935 Social Security Act
and the Social Security Programme implemented in the UK, summarised in the 1942
Beveridge Report. These programmes established the basis for modern forms of social
security, defined by the International Labour Organisation (ILO) as “the protection
which society provides for its members through a series of public measures against the
economic and social distress that otherwise would be caused by the stoppage or
substantial reduction of earnings resulting from sickness, maternity, employment injury,
invalidity and death; the provision of medical care; and the provision of subsidies for
families with children”.
An essential means of action available to the ILO for the realization of its mandate of
extending social security to all is the setting of International Labour Standards.5 Since
1919, the ILO has adopted 31 Conventions and 23 Recommendations in this area, which
have greatly contributed to the development of social security as a Universal Human
Right notably by laying down specific obligations and guidelines for Member States6. In
2002, the ILO Governing Body confirmed 8 out of these 31 Conventions as up-to-date
5
Since 1919, the ILO has sought to define and guarantee labour rights and improve conditions for working
people by building a system of international labour standards expressed in the form of Conventions,
Recommendations and Codes of Practice. The ILO has since adopted more than 180 Conventions and 190
Recommendations covering all aspects of the world of work. In addition, dozens of Codes of Practice have
been developed. In areas as varied as maternity leave, occupational safety and health, and protection of
migrants, these standards play an important role in the drawing up of national legislation. Available at
<http://www.ilocarib.org.tt/index.php?option=com_content&id=1101&Itemid=962> accessed on 18
January 2014.
6
India is one of the founder members of the International Labour Organization. Available at
<http://www.ilo.org/public/english/support/lib/century/content/1944.htm> accessed on 24 April 2012.
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social security conventions. Most prominent among these is the Social Security
(Minimum Standards) Convention, 1952 (No. 102)7. It is the only International
Convention that defines the nine branches8 of social security, sets minimum standards for
each of these branches, and lays down principles for the sustainability and good
governance of those schemes. Another important feature of this Convention is that it
contains flexibility clauses, thereby allowing ratifying member States to accept as a
minimum three out of the nine branches of social security, with at least one of those three
branches covering a long-term contingency or unemployment, so as to allow as many
countries as possible to comply with the requirements laid down in the Convention.
The Income Security Recommendation, 1944 (No.67)9, together with the Medical Care
Recommendation, 1944 (No.69)10 has laid down for the first time in history the guiding
principles for the eight classical social security contingencies, as well as medical care and
benefits to be provided to all residents through social insurance and complemented by
social assistance. (The Governing Body decided to maintain the status quo of
Recommendation No.69, due to the strong link with Recommendation No.67). These two
instruments, which were adopted in 1944 in Philadelphia at the 26th Session of the
International Labour Conference, paved the way for the adoption of Convention No.102.
On top of these, ILO adopted OSH- Occupational Safety and Health related mandates
7
Social Security (Minimum Standards) Convention, 1952 is an International Labour Organization
Convention on social security and protection at the contingencies that include any morbid condition,
whatever its cause and pregnancy. It was established in 1952, with the preamble stating: Having decided
upon the adoption of certain proposals with regard to minimum standards of social security. Available at
<http://www.ssa.gov/policy/docs/ssb/v15n10/v15n10p3.pdf> accessed on 24 April 2012.
8
Medical care; sickness benefit; unemployment benefit; old-age benefit; employment injury benefit; family
benefit; maternity benefit; invalidity benefit; and survivors’
benefit. Available at
9
Recommendation concerning Income Security which was Adopted in Philadelphia, 26th International
Labour Conference session (12 May 1944), to provide by social insurance may be closely adapted to the
variety of needs, the contingencies covered as follows: (a) sickness; (b) maternity; (c) invalidity; (d) old
age; (e) death of breadwinner; (f) unemployment; (g) emergency expenses; and (h) employment injuries.
Available at <http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO:12100:P12100_
INSTRUMENT_ID:312405:NO> accessed on 15 May 2012.
10
Recommendation concerning Medical Care which was adopted in Philadelphia, 26th International
Labour Conference session (12 May 1944), to provide Medical Care Services. Available at
<http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO:12100:P12100_INSTRUMENT_I
D:312405:NO> accessed on 15 May 2012.
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such as Convention No.187 and Recommendation No.197 on “Promotional Framework
for Occupational Safety and Health” to lower the toll of work-related injuries and
diseases.
The ILO promotes a rights-based approach to social security with ILO standards as its
principal means of action for assisting member states towards the realisation of this right.
The ILO also adopts further initiatives to support international efforts aimed towards the
realization of social security for all. In 2003, it launched the “Global Campaign on Social
Security and Coverage for All” reflecting a global consensus on the part of governments
and employers’ and workers’ organizations to broaden social security coverage among
working people, particularly in the informal economy, and raising awareness about the
role of social security in economic and social development. The campaign also seeks to
develop a broad partnership involving international organizations, donor countries, social
security institutions and civil society organizations.
In 2008, “The Declaration on Social Justice for a Fair Globalization”11 established a new
foundation on which the ILO can effectively support the efforts of Member States to
promote and achieve progress and social justice through the four strategic objectives of
the ILO’s Decent Work Agenda: the promotion of fundamental rights, employment
creation, social protection and social dialogue.12
Through insurance, assistance programmes and social security together they help in
preventing people from falling into poverty and/or escape the poverty trap. As such, they
also avoid or lessen social tensions, violent conflicts and uncontrolled migration. The
2009 global financial and economic crisis stressed the role of social security schemes as
automatic social and economic stabilizers. Countries at all levels of development, which
have social security systems in place, are in a much better position to cope with the social
11
ILO Declaration on Social Justice for a Fair Globalization Adopted in 2008 by the representatives of
governments, employers and workers from all ILO member States, the Declaration expresses the
contemporary vision of the ILO’s mandate in the era of globalization. Available at
<http://www.ilo.org/global/about-the-ilo/WCMS_099766/lang--en/index.htm> accessed on 15 May 2012
12
ibid
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fall-out of the crisis. In response to this crisis, the UN Chief Executives Board for
Coordination (CEB) adopted the Social Protection Floor Initiative (SPFI) as one of the
nine joint crisis initiatives.
In 2009, the ILO designed a framework to guide national and international policies aimed
at stimulating economic recovery, generating jobs and extending social protection for all.
The Global Jobs Pact13 specifically calls on countries to give consideration to build
“adequate social protection for all, drawing on a basic social protection floor including:
access to health care, income security for the elderly and persons with disabilities, child
benefits and income security combined with public employment guarantee schemes for
the unemployed and working poor.”
The Social Protection Floor Initiative (SPFI), launched in 2009, is also grounded in a
rights-based framework. Its concept is based on shared principles of social justice and
reflects the call of the Declaration of Human rights for adequate life standards, access to
health, education, food, housing and social security. Moreover, the SPFI enables the
concrete realization of human rights. The results of ILO research shows that a social
protection floor can be afforded by virtually all countries and that it would constitute an
effective tool in the fight against poverty and in reaching the Millennium Development
Goals.
In 2011, the recurrent discussion on the strategic objective of social protection (social
security) at the 100th International Labour Conference came out with strong conclusions
regarding the extension of social security to all through national defined social protection
floors.
13
The Global Jobs Pact is a set of balanced and realistic policy measures that countries, with the support
of regional and multilateral institutions, can adopt to ease the impact of the global crisis and accelerate
recovery in employment. Adopted in June 2009 by the International Labour Organization, it calls on its
member States to put decent work opportunities at the core of their crisis responses. It addresses the social
impact of the global crisis on employment and proposes job-centered policies for countries to adapt
according to their national needs. Guided by the Decent Work Agenda and commitments made by the ILO
constituents in the 2008 Declaration on Social Justice for a Fair Globalization. It proposes a portfolio of
policies aimed at: Generating employment, Extending social protection, respecting labour standards,
Promoting social dialogue, shaping fair globalization. Available at <http://www.ilo.org/jobspact/about/
lang--en/index.htm> accessed on 12 January 2013.
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In June 2012, the International Labour Conference adopted the Social Protection Floors
Recommendation, 2012 (No. 202)14. This Recommendation provides guidance to Member
States, so as to ensure that all members of society enjoy at least a basic level of social
security throughout their lives.
Employment and social protection are indispensable avenues to socio-economic
development, poverty reduction and human dignity. Better and more productive jobs
raise incomes and help finance social protection, which not only contributes to stable and
better household incomes but also improves the productivity and employability of the
population. As it has been found that actions in these two areas are mutually reinforcing,
the linkages between social protection and employment have been placed in the centre
stage in current development policy debates in G20 Labour Ministerial Joint Statement
by OECD15 Secretary-General and ILO Director-General16
Employment Injury Insurance (EII), or Workers’ Compensation Insurance, is an
important part of the social security system and originated in Germany in 188417. It can
be said to be the most popular social insurance scheme and now exists in about 165
countries in the world. It has been proven that EII schemes have played a positive role in
14
(a) Access to a nationally defined set of goods and services, constituting essential health care, including
maternity care, that meets the criteria of availability, accessibility, acceptability and quality; (b) basic
income security for children, at least at a nationally defined minimum level, providing access to nutrition,
education, care and any other necessary goods and services; (c) basic income security, at least at a
nationally defined minimum level, for persons in active age who are unable to earn sufficient income, in
particular in cases of sickness, unemployment, maternity and disability; and (d) basic income security, at
least at a nationally defined minimum level, for older persons. Available at http://www.ilo.org/dyn/
normlex/en/f?p=1000:12100:0::NO::P12100_INSTRUMENT_ID:3065524 accessed on 12 January 2013.
15
Organisation for Economic Co-operation and Development.
16
On 17/07/2013 - Joint statement by ILO Director-General Guy Ryder and OECD Secretary-General
Angel Gurría on the occasion of the G20 Labour and Employment Ministers’ Meeting, Moscow, 18-19 July
2013. “We, the Heads of the International Labour Organisation and the Organisation for Economic
Cooperation and Development, call upon the Ministers of Labour and Employment of the G20 countries to
reinforce their cooperation with a view to enhancing the design and scale of their employment, labour
market and social protection policies in order to achieve higher levels of productive and rewarding
employment and to contribute to a strengthening of the world economy”. Available at
<http://www.oecd.org/g20/topics/employment-and-social-policy/oecd-ilo-call-on-g20-labour-ministers-toreinforce-cooperation.htm> accessed on 15 October 2013
17
Otto Von Bismark’s Social Legislations. The 1st Chancellor of the German Empire-in office from 21st
March 1871 to 20th March 1890
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protecting workers’ safety and health, in maintaining sound industrial relations and in
pooling risks arising from occupational accidents and diseases among enterprises18.
EII is a form of mandatory social insurance to compensate employees who suffer from
industrial injury or disease. In principle, it is the most desirable mechanism to prevent
employees from accidents. When employees are inevitably involved in accidents or
diseases in and out of the workplace, EII aims to provide them with appropriate
compensation19.
EII has three theories. The first is the social compromise theory. Employees are
compensated by EII on the condition that they give up litigations whereas employers are
required to pay EII benefits to employees who suffer from industrial injuries or diseases
regardless of their negligence. The payment of EII benefits excludes employers from the
process of civil litigation. The second is the least social cost theory. The ‘no-fault
liability’ under EII is much more efficient in terms of time and cost than the judicial
system which focuses on who is responsible for the accidents. The third is the
occupational risk theory. In a broad sense, industrial accidents are inevitable under a
capitalist system and employees should be compensated regardless of who bears the
responsibility. Thus, the expenditure for industrial accidents should be considered as a
part of production cost20.
In addition, considering types of employment injury scheme by region, the predominance
of social insurance scheme type is found. The types might be categorized into social
insurance type. They are, employer liability system, mandatory private insurance, social
assistance and universal type.
18
Available at
<http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO:12100:P12100_INSTRUMENT_I
D:312405:NO> accessed on 15 May 2012.
19
ibid
20
ibid
8|P age
Article 7121 of Convention No. 102 states that “the costs of the benefits (…) and
administration (…) shall be borne collectively by way of insurance contributions or
taxation or both”. Therefore, direct employer liability for the cost of benefits would not
be in conformity with ILO Conventions. In this context, social insurance type scheme
such as EII has to be implemented.
Most countries in the world offer some coverage for work-related injuries. Many also
include occupational disease. In fact, in most countries employment injury was the first
contingency covered by social security; these schemes are often closely linked to
occupational health and safety regulations. Many schemes also include preventive
elements, aimed at improving workplace safety.
According to ILO Convention No. 102 (Article 32)22, the contingencies covered include
the following accident-at-work or employment-related diseases: (a) sickness (“morbid
condition”), (b) temporary incapacity for work resulting from such a condition, (c) total
or partial loss of earning capacity, likely to be permanent and (d) the loss of support
suffered by dependents as the result of the death of the breadwinner. In addition, the
21
1. The cost of the benefits provided in compliance with this Convention and the cost of the
administration of such benefits shall be borne collectively by way of insurance contributions or taxation or
both in a manner which avoids hardship to persons of small means and takes into account the economic
situation of the Member and of the classes of persons protected.
2. The total of the insurance contributions borne by the employees protected shall not exceed 50 per cent.
of the total of the financial resources allocated to the protection of employees and their wives and children.
For the purpose of ascertaining whether this condition is fulfilled, all the benefits provided by the Member
in compliance with this Convention, except family benefit and, if provided by a special branch,
employment injury benefit, may be taken together.
3. The Member shall accept general responsibility for the due provision of the benefits provided in
compliance with this Convention, and shall take all measures required for this purpose; it shall ensure,
where appropriate, that the necessary actuarial studies and calculations concerning financial equilibrium are
made periodically and, in any event, prior to any change in benefits, the rate of insurance contributions, or
the taxes allocated to covering the contingencies in question.
22
Article 32- The contingencies covered shall include the following where due to accident or a prescribed
disease resulting from employment: (a) a morbid condition; (b) incapacity for work resulting from such a
condition and involving suspension of earnings, as defined by national laws or regulations; (c) total loss of
earning capacity or partial loss thereof in excess of a prescribed degree, likely to be permanent, or
corresponding loss of faculty; and (d) the loss of support suffered by the widow or child as the result of the
death of the breadwinner; in the case of a widow, the right to benefit may be made conditional on her being
presumed, in accordance with national laws or regulations, to be incapable of self-support. Available at
<http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:55:0:::55:P55_TYPE,P55_LANG,P55_DOCUM
ENT,P55_NODE:CON,en,C102,/Document#A32> Accessed on 20 Dec 2012.
9|P age
range of benefits required by Convention No. 102 includes necessary medical care,
sickness benefit for the period of incapacity for work, disability pension in case of loss of
earning capacity, and survivors’ pension in case of death of a breadwinner. The
Employment Injury Benefit Convention (Convention No.121, Article 26)23 requires
member countries to provide rehabilitation services which are designed to prepare a
disabled person for the resumption of his/her previous activity, or, if this is not possible,
the most suitable alternative work, having regard to his/her aptitudes and capacity; and to
take measures to further the placement of disabled persons in suitable employment.
In addition, sustainability of EII scheme can be achieved by allowing implementation of
policies to minimize the side effects of the disability through prevention measures, earlystage medical treatments, and rehabilitation.
In employment injury scheme, compensation and prevention are not separable logically
and practically. It is obvious, of course, that the most desirable way to reduce the cost of
occupational injuries and disease is to reduce their incidence. For the effective setting of
preventive strategy, the collection and analysis of data on occupational accident and
disease is very important. In this regard, reporting system can be supplemented by
sharing the broader data on occupational accident & disease and compensation among
related institutions. Also certain portion of EII fund can be allocated for occupational
safety & health and economic incentive such as experience rating system from EII be
considered for facilitating employers to invest more on prevention. As a result,
Successful prevention programmes to reduce industrial accidents not only decrease the
number of beneficiaries naturally, but also reduce the expenditure of disability
23
1. Each Member shall, under prescribed conditions- (a) take measures to prevent industrial accidents and
occupational diseases; (b) provide rehabilitation services which are designed to prepare a disabled person
wherever possible for the resumption of his previous activity, or, if this is not possible, the most suitable
alternative gainful activity, having regard to his aptitudes and capacity; and (c) take measures to further the
placement of disabled persons in suitable employment. 2. Each Member shall as far as possible furnish in
its reports upon the application of this Convention submitted under Article 22 of the Constitution of the
International Labour Organisation information concerning the frequency and severity of industrial
accidents.
Available at <http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:55:0:::55:P55_TYPE,P55_LANG,
P55_DOCUMENT,P55_NODE:CON,en,C102,/Document#A32> Accessed on 20 Dec 2012.
10 | P a g e
compensations thus facilitating stable finance. The evidence can be observed if we
examine the experience of countries with long history of operating employment injury
insurance24.
Of the total number of international labour standards approved by the International
Labour Conference (ILC), nearly half deal with occupational safety and health, more than
any other subject. Among them, Convention No. 187(The Promotional Framework for
Occupational Safety and Health Convention, 2006) promotes the development of a
national policy, system and programme of occupational safety and health, in consultation
with employers’ and workers’ organizations25.
Men and women in modern societies depend mainly on income from work in order to
have access to the goods and services produced and provided by others. While
employment is the main and usual source of income, and decent work, the best form of
income security, the global deficit in quality jobs means that enough well-remunerated
work is not always available for everyone. A temporary or permanent drop in income
may result from a range of contingencies, of which unemployment is just one.
Contingencies include, for example, unemployment, sickness, disability or old age, and
they can affect individuals throughout their lifecycle. They may not only alter the ability
to work and earn but also create a burden of high levels of out-of-pocket expenditure,
such as health care costs in the case of sickness. The basic aim of social protection is to
protect people from uncertainty and poverty that may result from the vagaries of the
market and the contingencies and changing circumstances of life by compensating for
temporary or permanent shortfalls in income and redistributing risk. Social protection
is redistributive in nature, transferring income from the more to the less fortunate; it can
be argued that it is also redistributive across time. In addition, social protection ensures
24
Available at <http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:55:0:::55:P55_TYPE,P55_LANG,
P55_DOCUMENT,P55_NODE:CON,en,C102,/Document#A32> accessed on 20 December 2012.
25
Article 4 (f): The national system shall include, a mechanism for the collection and analysis of data on
occupational injuries and diseases, taking into account relevant ILO instruments; and (g) provisions for
collaboration with relevant insurance or social security schemes covering occupational injuries and
diseases.
11 | P a g e
access to health care (social health protection) and may facilitate access to social services,
such as education, which are crucial for creating an employable and productive
workforce and guaranteeing human development in the longer-run. In sum, together
social protection and employment may alleviate the problems of short- and long-term
poverty.
Increasingly, it is becoming well-understood that social protection contributes to the
dynamism of the whole economy, as well as the number and quality of jobs. Social
protection strengthens the multiple channels through which this happens: distribution,
protection, production and reproduction. Therefore, it is actually an investment that
enhances the productive potential of individuals, or “unlocks human potential”, for
instance by directly providing employment to those who lack it, improving employability
and encouraging entrepreneurship. It is argued that, historically, because poor people
seek to reduce their vulnerability to risk, they have chosen to engage in economic activity
that is of low productivity and low profitability. Investing in a risky activity can cause a
significant economic loss in case the risk materialises, and may well push a family into
deep poverty in the absence of an appropriate social protection mechanism. Reducing
risks and protecting families against possible losses through social protection measures
can thus stimulate innovation and growth. Social protection may also facilitate the
inclusion of the poor in the labour market, as it lessens the risk of, for instance,
undertaking an entrepreneurial activity, investing in a business or studying a new degree.
Finally, well-designed social protection policies may promote equal opportunities and
boost female employment as they allow people to balance family responsibilities with
work and other social roles. For instance, child care or long-term nursing services make it
easier for both parents, father and mother to work. Yet, it is clear that social measures for
boosting employability cannot be effective without employment opportunities with
decent remuneration and working conditions.
The social security schemes in India cover only a very small segment of the organised
work force, which may be defined as workers who are having a direct regular employeremployee relationship within an organization. Out of an estimated work force of about
12 | P a g e
397 million, only 28 million are having the benefit of formal social security protection26.
The Social Security Laws in India at present can be broadly divided into two categories,
namely, the contributory and the non-contributory. The contributory laws are those
which provide for financing of the social security programmes by contributions paid by
workers and employers and in some cases supplemented by contributions/grants from the
Government. The important contributory schemes include the Employees State Insurance
Act, 1948 and the Provident Fund, Pension and Deposit Linked Insurance Schemes
framed under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1948.
The three major non-contributory laws are the Workmen’s Compensation Act, 1923, the
Maternity Benefit Act, 1961 and the Payment of Gratuity Act, 197227.
India being a developing nation is faced with traditional public health problems like
communicable diseases, malnutrition, poor environmental sanitation and inadequate
medical care. However, globalization and rapid industrial growth in the last few years has
resulted in emergence of occupational health related issues. Agriculture (cultivators i.e.
land owners + agriculture labourers) is the main occupation in India giving employment
to about 58% of the people. The major occupational diseases/morbidity of concern in
India is silicosis, pesticide poisoning, musculo-skeletal injuries, coal workers
pneumoconiosis; chronic obstructive lung diseases, asbestosis, byssinosis, and noise
induced hearing loss. There are many agencies like Employees State Insurance
Corporation, National Institute of Occupational Health, Industrial Toxicology Research
Centre, Central Labour Institute, etc. working on issues like Asbestos and Asbestos
Related Diseases, Pesticide Poisoning, Silica Related Diseases other than Silicosis and
Musculoskeletal Disorders. Still much more is to be done for improving the occupational
health research. The measures such as creation of advanced research facilities, human
resources development, creation of environmental and occupational health cells and
development of database and information system should be taken. One such measure to
protect employees from losses due to occupational hazards is Employee’s State Insurance
26
As per the survey carried out by National Sample Survey Organisation ((NSSO) 2010-2011.
Patricia Justino “Social Security from Developing Countries: Myth or Necessity Evidence from India”
PRUS (Poverty Research Unit at Sussex) University of Sussex Working Paper NO.27 of 20 Sept 2003.
27
13 | P a g e
Act, 1948 which is legislation for social welfare and offers various benefits to the
employees during their time of need28.
The Act is designed in the interest of “employees” and its dependents to provide cash
benefit in the case of sickness, maternity, “employment injury”, payment in the form of
pension to the dependent of workers who died of employment injury and medical benefit
to workers. It introduces the contributory principle against such contingencies, provides
protection against sickness, replaces lump sum payments by pension in the case of
dependents benefit and places the liability for claims on a statutory organisation.
In March 1943 Government of India appointed a committee presided over by Professor B
P Adarkar29, an officer on special duty and an eminent scholar and visionary for the
purpose of formulating a scheme of Health Insurance for Industrial Workers. The first
document on social insurance was “Report on Health Insurance” submitted to the
Tripartite Labour Conference, headed by him. 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”30 by none other than Sardar Vallabhbhai Patel.31
An important pillar of India’s social protection policies is the food programme,
implemented in the late 1960s and integrated within a wider rural poverty alleviation
scheme. This combined a large programme for land reforms and the introduction of new
technologies and crops in the agriculture sector (the ‘Green revolution’), with an
extensive rural employment scheme, designed to address the unemployment problems of
the landless.
28
ibid
He is said to be the “Father” of Indian Social Security.
30
In 1941, William Beveridge one of the Britain’s leading economist, was asked by Winston Churchill’s
Government to look at the problems of building a post-war Britain and was also asked to consider how the
various Social Security schemes could be harmonized. His report covered the five threats to society: Want,
Ignorance, Disease, Squalor and Idleness. Available at <www.bbc.co.uk/history/ww2peopleswar/
timeline/.../a1143578.shtml> accessed on 12 November 2012.
31
Vallabhai Jhaverbhai Patel was an Indian barrister and statesman, one of the leaders of the Indian
National Congress and one of the founding fathers of the Republic of India
29
14 | P a g e
The labour policy followed in the successive five year plans since independence adopted
an approach which rested on considerations that the basic needs of workers for food,
clothing and shelter must be satisfied. The objective of achieving ‘socialistic pattern of
society’ was the avowed goal of early five year plans and provisions were made
accordingly for the welfare of workers. However, not much could be achieved by way of
all these efforts. Majority of the labour laws enacted sought to benefit only the organized
sector. The Employees State Insurance Act was enacted in 1948, and similarly the
Factories Act too was enacted in the same year. The Employees’ Provident Funds and
Miscellaneous Provisions Act came on the Statute Book in 1952. The unorganized
sector, however, was left almost out of all these efforts as far social security coverage
was concerned.
The Constitution of India has affirmed social and economic justice to all its citizens. The
fundamental rights and directive principles of state policy, enshrined in our Constitution,
need a special mention in view of their supreme importance and influencing the social
security legislations relating to the fundamental rights and directive principles of state
policy which provide sufficient guarantee against exploitation32.
The Constitution of India guarantees fundamental rights to every citizen. The most
significant among them is Article 2133 which guarantees Right to Life. The Supreme
Court has elaborately considered this Article many times and categorically held that right
to livelihood is inherent in right to life34. The ultimate aim of social security is to ensure
32
In National Textile Workers Union v Ramakrishnan AIR 1983 SC 75, The Supreme Court observed:
“The workers have a special place in a socialist pattern of society. They are the producers of wealth. They
produce labour without which capital would be impotent. Our Constitution has shown profound concern of
the workers and given them a pride of place in the new socioeconomic order envisaged in the Preamble and
Directive Principles of State Policy. The Preamble contains the profound declaration conceived with
meaning and hope of millions of peasants and workers that India shall be socialist democratic republic,
where, social and economic justice will inform all institutions of national life and every endure shall be
made to promote fraternity ensuring the dignity of the individual”.
33
No person shall be deprived of his life or personal liberty except according to procedure established by
law.
34
Olga Tellis v Bombay Muncipal Corporation AIR 1986 SC 180. The court held that the term ‘life’ in
Art. 21 is not restricted to the mear animal existence of a person. It means something more and the
inhibitions against the deprivation of life extents to all those limits and faculties by which life is enjoyed .
15 | P a g e
means of livelihood to everyone. In other words, right to social security is inherent in
right to life.
Chapter I of the part XI of the Constitution of India deals with legislative relations
between Union and State. The matters in respect of which have been ascribed in three
lists, a) Union List b) Concurrent List and c) State List. The part XXII, schedule VII,
mentions the above three lists.
The matters of workers interest35 - The Union List, entries 13,36 28,37 55,38 61,39 65,40 and
94.41 The State List, entry 9.42 The Concurrent List, entries 20,43 21,44 22,45 23,46 24,47
25,48 36,49 and 45.50
The Article 24. Prohibits employment of children in factories, etc. - No child below the
age of fourteen years shall be employed to work in any factory or mine or engaged in any
other hazardous employment.
35
Article 246- Subject-matter of laws made by Parliament and by the Legislatures of States.
Participation in international conferences, associations, and other bodies and implementing of decisions
made there.
37
Port quarantine, including hospitals connected therewith; seamen’s and marine hospitals.
38
Regulation of labour and safety in mines and oilfields.
39
Industrial disputes concerning union employees.
40
Union agencies and institutions for- a) professional, vocational or technical training, including the
training of police officers; or b) the promotion of special studies or research; or c) scientific or technical
assistance in the investigation or detection of crime.
41
Inquiries, surveys and statistics for the purpose of any of the matters in this list.
42
Relief for disabled and unemployable.
43
Economic and Social planning.
44
Commercial and industrial monopolies, combines and trusts.
45
Trade unions; industrial and labour disputes.
46
Social security and social insurance; employment and unemployment.
47
Welfare of labour including conditions of work, provident funds, employers’ liability, workmen’s
compensation, invalidity and old age pensions and maternity benefits.
48
Education, including technical education, medical education and universities, subject to the provisions of
entries 63,64,65,and 66 of List I; vocational and technical training of labour.
49
Factories.
50
Inquiries and statistics for the purpose of any of the matters specified in the list II or list III.
36
16 | P a g e
Article 38. State to secure a social order for the promotion of welfare of the people (1)
The State shall strive to promote the welfare of the people by securing and protecting as
effectively as it may a social order in which justice, social, economic and political, shall
inform all the institutions of the national life. (2) The State shall, in particular, strive to
minimize the inequalities in income, and endeavour to eliminate inequalities in status,
facilities and opportunities, not only amongst individuals but also amongst groups of
people residing in different areas or engaged in different vocations.
Article 39. Certain principles of policy to be followed by the State, the State shall, in
particular, direct its policy towards securing (a) that the citizens, men and women
equally, have the right to an adequate means to livelihood; (b) that the ownership and
control of the material resources of the community are so distributed as best to sub-serve
the common good; (c) that the operation of the economic system does not result in the
concentration of wealth and means of production to the common detriment; (d) that there
is equal pay for equal work for both men and women; (e) that the health and strength of
workers, men and women, and the tender age of children are not abused and that citizens
are not forced by economic necessity to enter avocations unsuited to their age or strength;
(f) that children are given opportunities and facilities to develop in a healthy manner and
in conditions of freedom and dignity and that childhood and youth are protected against
exploitation and against moral and material abandonment.
Article 41. Provides for Right to work, to education and to public assistance in certain
cases - The 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.
17 | P a g e
Article 42. Provision for just and humane conditions of work and maternity relief- The
State shall make provision for securing just and humane conditions of work and for
maternity relief.
Article 43. Living wage, etc., for workers- The State shall endeavour to secure, by
suitable legislation or economic organisation or in any other way, to all workers,
agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a
decent standard of life and full enjoyment of leisure and social and cultural opportunities
and, in particular, the State shall endeavour to promote cottage industries on an individual
or co operative basis in rural areas.
Article 43A.51 Participation of workers in management of industries - The state shall
take steps, by suitable legislation or in any other way, to secure the participation of
workers in the management of undertakings, establishments or other organisations
engaged in any industry.
The directives contained in Part IV are the common man’s pathway towards the
attainment of socio-economic justice.
Though not justifiable, these principles are fundamental in the governance of the Country
and State is duty bound to apply these principles in making laws. In a series of decisions
on the subject, the Supreme Court has categorically held that the State has responsibility
to protect the interests of workmen for establishing social and economic democracy in
51
Inserted by the Constitution 42nd Amendment Act, 1976 (with effect from 3-1-1977)
18 | P a g e
which every workman realize socio- economic justice assured in the Preamble52, Article
1453, 1554, 2155 and Directive Principles of the Constitution of India56.
Social Security legislations also
have been shaped and influenced by the
recommendations of the various National Committees and Commissions such as First
National Commission on Labour (1969) under the Chairmanship of Justice
Gajendragadkar, National Commission on Rural Labour (1991), Second National
Commission on Labour (2002) under the Chairmanship of Shri Ravindra Varma etc. and
judicial pronouncements on labour related matters specifically pertaining to minimum
wages, bonded labour, child labour, contract labour etc.
In 1995, the Government of India introduced for the first time an all-India protective type
social security scheme, the National Social Assistance Programme (NSAP). The NSAP
encompasses a national policy for social assistance benefits to poor households in the
52
WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute India into a SOVEREIGN,
SOCIALIST, SECULAR, DEMOCRATIC, REPUBLIC and to secure to all its citizens:- JUSTICE, social,
economic and political; LIBERTY of thought, expression, belief, faith and worship; EQUALITY of status
and of opportunity; and to promote among them all; FRATERNITY assuring the dignity of the individual
and the unity and integrity of the nation; IN OUR CONSTITUENT ASSEMBLY this twenty-sixth day of
November 1949, do HEREBY ADOPT, ENACT AND GIVE TO OURSELVES THIS CONSTITUTION.
53
The State shall not deny to any person equality before the law or the equal protection of the laws within
the territory of India. Prohibition of discrimination on grounds of religion, race, caste, sex or place of birth.
54
The State shall not discriminate against any citizen on grounds only of religion, race, caste, sex, and
place of birth or any of them. (2) No citizen shall, on grounds only of religion, race, caste, sex, place of
birth or any of them, be subject to any disability, liability, restriction or condition with regard to- (a) access
to shops, public restaurants, hotels and palaces of public entertainment; or (b) the use of wells, tanks,
bathing ghats, roads and places of public resort maintained wholly or partly out of State funds or dedicated
to the use of the general public. (3) Nothing in this article shall prevent the State from making any special
provision for women and children. (4) Nothing in this article or in clause (2) of Article 29 shall prevent the
State from making any special provision for the advancement of any socially and educationally backward
classes of citizens or for the Scheduled Castes and the Scheduled Tribes.
55
See Supra note, 33
56
In A.B.S.K. Sangh (Rly) v UOI AIR 1981 SC 298; it was held that, “Article 37 of the Constitution
emphatically state that Directive Principles are never the less fundamental in the governance of the country.
And it shall be the duty of the state to apply these principles in making laws. So we have to say that the
constitutional goal is the establishment of a Socialist Democracy in which justice, economic, social and
political is secured and all men are equal and have equal opportunity. The underprivileged, the deprived
and exploited are to be protected and nourished so as to take their place in an egalitarian society. State’s
action is to be towards these ends”. The decision in Chandra Bhavan Boarding v State of Mysore AIR 1970
SC 2042 also sounds the same. The Court held that: “The mandate of the Constitution is to build a welfare
society in which justice, social, economic and political shall inform all institutions of our national life. The
hopes and aspirations assured by the Constitution will be belied if the minimum needs of the lowest of our
citizens are not met the basic needs”
19 | P a g e
case of old age, death of breadwinner and maternity. The programme has, so far, three
main components: the National Old Age Pension Scheme, the National Family Benefit
Scheme, and the National Maternity Benefit Scheme. The provision of social security for
the poorest sections of society is included in the 2011-2012 budget as an area of priority
within India’s social sector, together with other areas such as the empowerment of
women, population policy and health, which extends the system of social security in
India beyond the objectives of standard programmes implemented in more advanced
economies. The apt examples for this are Mahatma Gandhi National Rural Employment
Guarantee Act, 2005 (MGNREA).57 National Pension System (NPS).58
India is a vast country with a surface area of about 3.3 million square km. Total
population of India (According to Census of 2010-11) is 1.226 billion. About 72% of the
population lives in rural area. India is a developing nation and presents the demographic
features similar to the other developing nations of the world. Growing population is the
major concern of the government and is considered as the principal obstacle to the
economic growth of the country. Emerging occupational health problems are to be
57
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) aims at enhancing the
livelihood security of the people in rural areas by guaranteeing hundred days of wage employment in a
financial year, to a rural household whose members volunteer to do unskilled manual work. The objective
of the Act is to create durable assets and strengthen the livelihood resource base of the rural poor. The
choice of works suggested in the Act address causes of chronic poverty like drought, deforestation, soil
erosion, so that the process of employment generation is on a sustainable basis works suggested in the Act
addresses causes of chronic poverty like drought, deforestation and soil erosion, so that the process of
employment generation is maintained on a sustainable basis. Available at <http://nrega.nic.in/
nregarpt_eng.pdf> accessed on 16 September 2013.
58
Government of India established Pension Fund Regulatory and Development Authority (PFRDA) External website that opens in a new window on 10th October, 2003 to develop and regulate pension sector
in the country. The National Pension System (NPS) was launched on 1st January, 2004 with the objective
of providing retirement income to all the citizens. NPS aims to institute pension reforms and to inculcate
the habit of saving for retirement amongst the citizens. Initially, NPS was introduced for the new
government recruits (except armed forces). With effect from 1st May, 2009, NPS has been provided for all
citizens of the country including the unorganised sector workers on voluntary basis. Additionally, to
encourage people from the unorganised sector to voluntarily save for their retirement the Central
Government launched a co-contributory pension scheme, ‘Swavalamban Scheme - External website that
opens in a new window’ in the Union Budget of 2010-11. Under Swavalamban Scheme - External website
that opens in a new window, the government will contribute a sum of Rs.1,000 to each eligible NPS
subscriber who contributes a minimum of Rs.1,000 and maximum Rs.12,000 per annum. This scheme is
presently applicable up to F.Y.2016-17. The subscriber will be allotted a unique Permanent Retirement
Account Number (PRAN). This unique account number will remain the same for the rest of subscriber's
life. This unique PRAN can be used from any location in India. Available at <http://india.gov.in/spotlight/
national-pension-system-retirement-plan-all> accessed on 2 November 2013
20 | P a g e
tackled along with the existing traditional public health problems like communicable
diseases, malnutrition, poor environmental sanitation and inadequate medical care.
Globalization and rapid industrial growth (about 7% annual economic growth) in the last
few years have further complicated the occupational health related issues. The public
expenditure on social security in India is 1.8% of the GDP59 against 4.7% in Sri Lanka
and 3.6% in China. This shows the disparity of human development that these countries
have achieved and that we are yet to achieve. In the light of the inadequate expenditure
on social security in India, it is necessary that plans and programmes be devised to
address the needs of diverse vulnerable sections of the people, comprising the total
population of India.
In the wake of globalization, rapid industrial growth and the international principles the
Government of India in order to improve the standard of medical care in the States, the
amount reimbursable to the State Governments for running the medical care scheme has
been increased from Rs.1200/- to Rs. 1500/- Per Insured person (IP) family unit per
annum with effect from 01.04.2012. The Employees State Insurance Corporation (ESIC)
has formulated action plans for improving medical services under the ESI Scheme with
focus on modernization of hospitals by upgrading their emergency and diagnostic
facilities, development of departments as per disease profiles, waste management,
provision of intensive care services, revamping of grievance handling services,
continuing education programme, computerization and up-gradation of laboratories etc.
The ESIC has also taken new initiatives to promote and popularize AYUSH60 systems of
treatment in ESIC Hospitals and Dispensaries in a phased manner.
ESIC IT Project ‘Panchdeep,’ one of the largest e-governance projects is under
implementation at present. All ESI Institutions are being networked under this project for
enabling IPs and their family members to avail ESI benefits anywhere anytime. Two
smart cards christened as “Pehchan Cards”, one for insured person and other for the
59
AYUSH is an acronym that is used to refer to the non-allopathic medical systems in India. It includes the
Indian medical system of Ayurveda, Yoga, Unani, Siddha, and also Homeopathy. Available at
<http://indianmedicine.nic.in/> accessed on 22 December 2012.
60
21 | P a g e
family are being issued. Also, the ESI Act, 1948 has been amended with effect from
01.05.2010 for enhancing the Social Security coverage (Rs 15000)61, streamlining the
procedure for assessment of dues and for better services to the beneficiaries.
The following are some of the significant and recent judicial pronouncements from the
Supreme Court and High Courts on the research topic.
In the most recent case (2014) Occupational Health and Safety Association v Union of
India62 the Supreme Court directed the Ministry of Labour to ensure that the suggestions
made by the petitioner for the welfare of workers are properly implemented by the Centre
and the State governments. The suggestions included -
1. Comprehensive medical checkup of all workers by doctors appointed in consultation
with the trade unions. First medical check up to be completed within six months and
to be done on yearly basis.
2. Free and comprehensive medical treatment to be provided to all workers found to be
suffering from an occupational disease, ailment or accident, until cured or until death.
3. Services of the workmen not to be terminated during illness and to be treated as if on
duty.
4. Compensation to be paid to workmen suffering from any occupational disease,
aliment or accident in accordance with the provisions of the laws.
5. Modern protective equipment to be provided to workmen as recommended by an
expert body in consultation with the trade unions.
61
The decision to enhance the pay limit for ESI coverage was taken at ESIC’s 160th meeting held in
September 2013. And thereafter the Government’s recent decision to raise the pay limit from Rs
15,000/month to Rs 25,000/month, but yet to be officially introduced. Available at
<http://www.hrindya.com/esi-wage-limit-to-be-increased-to-rs-25000/> accessed on 14 November 2013
62
2014 STPL (web) 68 SC
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6. Strict control measures to be immediately adopted for the control of dust, heat, noise,
vibration and radiation as recommended by the National Institute of Occupational
Health (NIOH) Ahmadabad, Gujarat.
7. All employees to abide by the Code of Practice on Occupational Safety and Health
Audit as developed by the Bureau of Indian Standards.
8. Safe methods be followed for the handling, collection and disposal of hazardous
waste to be recommended by NIOH.
9. Appointment of a Committee of experts by NIOH including therein Trade Union
representatives and Health and Safety NGO’s to look into the issue of Health and
Safety of Workers and make recommendations.
Royal Talkies, Hyderabad v E.S.I. Corporation,63 is a landmark decision of the Supreme
Court explaining the meaning of the term “employee” under the Act. In this case a
cinema theatre manager, who had no statutory obligation to run a canteen or provide a
cycle stand but, for the better amenities of his customers and improvement of his
business, entered into an arrangement with another to maintain a canteen and a cycle
stand and that other employed, on his own, workers in connection with the canteen and
cycle stand. It was held the persons so employed are employees of the cinema theatre.
They were covered by the definition of employee because under Section 2(9) anyone who
is employed in “connection with the work of an establishment” is an employee provided
that such an employee works on the premises of establishment, or under the supervision
of the principal employer or his agent “on work which is ordinarily part of the work of
the establishment or which is preliminary to the work carried on or incidental to the
purpose of the establishment. However some nexus must exist between the establishment
and the work of the employee, although it may be a loose connection. Such work should
63
AIR 1978 SC 1478: (1978) II LLJ 390 (SC)
23 | P a g e
not be extraneous or contrary to the purpose of the establishment but need not be integral
to it either. Here the two operations namely, keeping a cycle-stand and running a canteen
are incidental or adjuncts to the primary purpose of the theatre. An establishment like a
cinema theatre is not bound to run a canteen or keep a cycle-stand nevertheless such
activities have connection with the cinema theatre and even further the revenue.
In this case the court has held that, the loaders and unloaders are engaged by the
contractors only to make a casual entry on the premises of the appellant-Corporation’s
depots for the purpose of loading and they are answerable only to the contractor for due
performance of the said work and not to the appellant-Corporation as held by Andhra
Pradesh High Court. The Court also held that the Petroleum Corporation is not to pay ESI
contributions for loaders and unloaders by transporters.64
In Employees’ State Insurance Corporation, Hyderabad v A.P. Electrical Equipment
Corporation, Visakhapatnam,65the Supreme Court held that the persons engaged in
building repairs through contractor were not employees of the respondent Corporation
within the meaning of Section 2(9) of the E.S.I. Act, 1948. In order to hold a person
employee the important factor is basic control over employee.
In Employees’ State Corporation, Hyderabad and Others v Chirala Co-operative
Spinning Mills Ltd, Chirala Prakasam,66certain persons who were sent by Polytechnic
Institute as trainees in the respondent spinning mill. The corporation sent demand notice
under the Act regarding these trainees. The respondent pleaded that these persons were
only trainees from polytechnic Institute sent for training under a scheme introduced by
the Ministry of Human Resources and Development and as such were not employees.
They were paid only conveyance charges and no wages of any kind was paid to them.
The appellant corporation treated the said amount of conveyance charges as wages and
on that basic sought of justify the levy of contribution. It was held by the High Court that
64
Hindustan Petroleum Corporation Ltd v Employee’s State Insurance Corporation, 2008 LLR 490 (Andra
Pradesh)
65
(2005) II LLJ 181 (Andra Pradesh)
66
(2005) I LLJ 910 (Andra Pradesh)
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basically the payment of wages was the important factor to decide whether a person was
an ‘employee’ or not. In this case it was not even alleged that the respondent paid any
wages to the persons concerned. Further traveling allowance paid to them could not be
treated as wages under the Act and the persons who were trainees were not employees of
the respondent. Hence spinning mills were not liable to contribute in respect of these
trainees. The appeal was dismissed.
In E.S.I. Corp v Tata Engg. & Co67 it was held that apprentices are not employees. They
are engaged by a Company merely as trainees for a particular period for a distinct
purpose and the Company is not bound to employ them in their work after the training
period is over. The object of apprenticeship is learning under certain agreed terms.
Simply because certain payment is made to him and he has to be under certain rules of
discipline do not convert him to a regular employee. They are not said to be employed in
or in connection with the work of the Company. They are also not given wages within the
meaning of that word in Section 2(2). Later the definition of “Employee” was amended
and as per that an Apprentice is within the definition at present.
In Maherunisha Ahemad Khan Pathan and other v Employees State Insurance
Corporation68, a workman while returning home was assaulted by a mob during
communal riots and died. It was held that the place of accident need not necessarily be
located within the limits of the factory premises so long as the accident falls within a
zone which can be notionally deemed to be the zone of the factory for the propose of the
Act by recourse to the theory of notional extension. Therefore death was employment
injury within the meaning of Section 2(8) of Act.
In Sathybhama v E.S.I. Corpn,69 a woman employee while returning home was hit by a
scooter on public road in front of the factory gate. It was held that theory of notional
extension cannot be reduced to a mathematical formula of distance and time. Decision
67
AIR 1976 SC 66: (1976) I LLJ 81 (SC); See also Regional Director, E.S.I. Corporation v M/s. Fire
Manglore (p) Ltd. (1986) I LLJ 216 (Karnataka)
68
(1995) II LLJ 1 (Gujarat)
69
(1992) I LLJ 831 (Kerala)
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would be depend on the facts and circumstances of each case. In the present case
considering both the point of time as that of distance the theory of notional extension
shall apply and the injury sustained is an employment injury.
In Sheela v E.S.I. Corpn,70 an employee of M/s. Electronic Product of India, Chandigarh
left his house at about 8.30 a.m. to join his duties at 9 a.m. He died at bus-stand while
waiting for the local bus. It was held that the employee died while he was going to his
place of work. The theory of notional extension will apply and the death occurred in the
course of employment.
In Indian Rare Earths Ltd. v Subaida Beedi71, a workman of the appellant was involved
in an accident while traveling by his cycle to the work spot. The employer has provided
for bus subsidy to its workmen but the concerned workman was not residing on any of
the bus routes and hence he used to go by bicycle. While on way to the work spot a car
dashed against him on public road and he died. It was held that although traveling by bus
was an implied condition of service but in view of the fact that the concerned workman
was not on any of the bus route, the exigencies of the employment and circumstances
obliged him and the company allowed him to ride a bicycle to the work place. In other
words it was an implied condition of his employment that he may travel to his work place
from his residence and back home by a bicycle. Therefore, the workman was in the
course of his employment from the moment he began to ride the bicycle for reaching his
work place.
In Regional Director E.S.I. Corpn. v L, Rung Rao72, an employee of M/s. Mysore
Breweries Ltd., working as Refrigerator operator was run over and killed on the spot by
unidentified motor vehicle when he was on his way to factory to join his duty. His father
claimed benefits under the Act by moving E.S.I. Court. The injury was held to be an
employment injury. It was held that if it is proved that the injury to the employee was
70
(1991) II LLJ 247 (Punjab &Haryana)
(1981) II LLJ 293 (SC)
72
(1982) I LLJ 29 (Karnataka)
71
26 | P a g e
caused by an accident arising out of and in the course of employment then it is immaterial
whether it occurred inside the factory or outside or whether t occurred during office hours
or after. However, the place or time of accident should not be totally unrelated to the
employment. There should be a nexus or causal connection between the accident and
employment.
In Employees State Insurance Corporation, Calcutta v Abdul Salam and others73, the
respondent No. 1 was an employee of respondent. 2. Respondent No. 1 came to resume
his duty after a gap of about 4 years but he was not allowed to join duty in spite of
producing medical certificate and at that point of time the respondent No. 1 being a
paralytic patient had an accidental fall resulting in injury for which he claimed benefit as
permissible under the Employee’s State Insurance Schemes. The claim was opposed by
respondent No. 2 as well as the present petitioner. It held that the relevant time
respondent No. 1 was not in employment and hence the injury was not out of and in the
course of employment. Therefore, no benefits could legally be claimed under the
Employee’s State Insurance Act, 1948.
In Employees State Insurance Corporation v Sasi,74 while the respondent was returning
to his house after the night shift, he was assaulted by some persons near the bus stop
adjacent to the factory. The investigation revealed that he was assaulted on account of
personal vengeance. He sustained injury on his left hand and claimed benefits admissible
for employment injury as defined under Section 2 (8) of the Employees State Insurance
Act. The appellant denied the injury to be an employment injury in as it was the result of
an assault by a stranger outside the premises of the factory and had not arisen out of
employment. Allowing the appeal the High Court held that the injury sustained by the
employee was due to an assault to him by strangers outside the premises of the factory
and while he was on his way to his house. This could not be said to have its origin in his
employment in the factory and as such was not employment injury under Section 2(8) of
the Employees State Insurance Act, 1948 and no benefits were payable under the Act.
73
74
(2003) I LLJ 765 (Calcutta)
27 | P a g e
It is submitted that this judgment of the Honorable Court is not in tune with the present
trend of welfare legislation. The injured employee had left for his house after night shift.
Although he was not at the place of accident in connection with his employment but he
was there because he happened to be in that employment.
In Regional Director, E.S.I.C., Ahmedabad v Batulbibi and another75, the workman of a
textile mill while on duty had gone to canteen during the short recess to take tea, where
he died of mio-cardiac infraction. His widow son claimed compensation. It was held that
the death arose out of and in the course of employment because the recess period is not so
long as to disrupt the continuity of the employment. If the recess was indeed short, the
liberty of an employee to go away does not in reality mean anything, since he could not
have gone so far as to snatch the continuity of his employment.
1.1.
Research Problem
The following research problems, which have encouraged and obliged the researcher to
chose the present topic. They are- the application of the ESI Act only to the non-seasonal,
power using factories or manufacturing units employing ten or more persons and nonpower using establishments employing twenty or more persons (At present, under Section
2(12) of the ESI Act, it is applicable to non-seasonal factories employing 10 or more
persons); the enabling provisions of the Act with regard to the notification for the
implementation of the ESI scheme; coverage of the
employees of the factories or
establishments; the manner in which wage ceiling for purpose of coverage is revised from
time to time; the appropriate government’s power to extend the provision of the ESI Act
to various classes of establishment- industrial, commercial, agricultural or otherwise in
nature; whether industry has the right to opt out of the ESI scheme; the scope of the term
‘Employee’; the scope of the term ‘Employment Injury’ and other relevant aspects.
75
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1.2.
Significance and Utility of the Study
Therefore, the study focuses on the present day World Scenario where labour concerns
are hilting the head lines and the clash is prominent with Developmental programmes,
with India as no exception, this study has good significance and utility. The argument that
insistence on occupational health and safety may adversely affect the industrial growth
and development is not always true. On the contrary, neglect of occupational health and
safety of the workers may result in invisible burden to the economy, which, in some
cases, may be substantial. Ill health of the workers results in reduced production due to
inefficiency of the workers and sickness absenteeism. Moreover, the workers have to be
paid sickness benefits and compensation. There is also increased expenditure either on
the part of the factory management or the Government to meet the medical expenses for
treatment. Further, it must be realized that most of the occupational diseases are incurable
and, therefore, the best course of action in dealing with them is their prevention. The
economic benefits and incurable nature of occupational diseases must be highlighted
while proposing for the investment in occupational health and safety programmes. In the
light of the above said, on the completion of the study, the researcher will be well
outfitted to strengthen the knowledge base with respect to Labour Issues, and Human
Rights.
1.3.
Hypotheses of the Study
The researcher has formulated the following hypotheses;
1. That, the Fundamental Right i.e. Right to Life under Article 21 of the Indian
Constitution, cannot be meaningfully enjoyed unless a clean, healthy and wholesome
environment is provided.
2. That, the ESI Act is ineffective in dealing with employee’s health issues due to the
lack of proper coverage of employees belonging to different segments.
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3. That, while the Country has adequate legal mandates to solve employee’s problems,
the gaps in policy implementation mechanism indicate that the enforcement policy is
rather weak, sometimes non-existent.
4. The Apex Court has through judicial activism struck a golden balance between
Development, Economics and employees health issues.
5. That, poverty, illiteracy and population explosion are the major hurdles for
ineffectiveness in dealing with employees’ health and safety issues.
1.4.
The Researcher in the process has formulated the following
research questions for carrying on the study
1. What are the constitutional provisions in India for the protection and improvement of
the employee’s interest?
2. What is the existing legal mechanism ensuring employee’s health and safety?
3. What is the impact of socio-economic problems such as poverty, illiteracy and
population in handling the health and safety issues of the employees?
4. Is the existing legal mechanism fool proof to ensure protection and quality of life for
all employees?
5. What are the International Social Security Standards for the safety and promotion of
employee’s interest?
1.5.
Research Methodology of the Study
This Research is purely a Doctrinal Study. The Research concerned is, at the
International level, the study of the International Conventions, International
30 | P a g e
Commissions, Declarations and Documents of International Institutions with their
Reports.
On the National scene the source material consists of the different Social Security
Legislations, the Constitutional Provisions, their interpretations and construction. Also
relevant for the study are the policy documents, their execution and implementation both
at the State and the National level.
The study also takes in its embrace the in-depth analysis of the role of the Judiciary. The
different High Courts and the Supreme Court have in the process of their adjudication
often been called to answer the critical and difficult question of Development and the
Employees interest.
As the study is a Doctrinal the analysis shall be based on the qualitative data, based on
the primary and secondary sources. Further, much of the sources of data to be used are
the secondary sources. Case Laws, Number of books, Legal Journals and articles written
by eminent authors relating to the subject matter of the research shall be used. Electronic
publications will also be referred. A uniform mode of citation will be adopted throughout
the thesis.
1.6.
Scope and Limitation of the Study
The concept, philosophy and law of ESI Act are multidimensional and multifaceted. Due
to the vastness of the subject, the researcher would restrain to limit the area of the study
and shall focus mainly on the achieving of effective implementation of the provisions of
the ESI Act with reference to the term ‘Employee’ and ‘Employment Injury’ along with
related Human Rights issues emphasizing on the legal aspects, substantiating the study
with the landmark judgments of the superior courts.
The scope of the study covers the international standards prescribed by the ILO through
conventions, conferences and recommendations for the social security concept and
legislations. The researcher focuses on important committees and commissions at
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international and national level. The study further emphasizes on information system in
occupational health recognition, evaluation and control of hazards, Evaluation of
effectiveness of the control strategy (periodic medical and environmental monitoring),
Management of cases of occupational diseases and Creation of awareness in workers,
trade unions and management.
1.7.
Scheme of the study/chapterisation and its presentation
The Thesis has been divided into seven chapters, which are as under:
Chapter. 1: Introduction
Chapter. 2: Historical Perspective of the Social Security
Chapter. 3: International approach to the Social Security
Chapter. 4: The Existing Legislative Frame work of the Social Security Laws in India
Chapter. 5: An analysis of the term ‘Employee’ with the decisions of the High Courts and
Supreme Court
Chapter. 6: An analysis of the term ‘Employment Injury’ in the light of the High Courts
and Supreme Court judgments
Chapter. 7: Conclusion and Suggestions
The First Chapter deals with the Introduction. The researcher in this chapter has given
a Bird’s Eye View of the topic, its importance in the present day, the Social Security,
Social Security Legislations, Social Security and Human Rights. It also includes the
research problem, scope, limitation, significance, utility, research questions and
hypothesis of the study. The methodology of the study is also dealt.
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Second Chapter is the Historical Perspective of Social Security. In this, there is an
endeavour to travel into the past, down the lanes of history and understand as to the
concern of humanity towards the Social Security.
All people throughout all of human history have faced the uncertainties brought on by
unemployment, illness, disability, death and old age. In the realm of economics, these
inevitable facets of life are said to be threats to one’s economic security. For the ancient
Greeks economic security took the form of amphorae of olive oil. Olive oil was very
nutritious and could be stored for relatively long periods. To provide for themselves in
times of need the Greeks stockpiled olive oil and this was their form of economic
security. In medieval period (in Europe), the feudal system was the basis of economic
security, with the feudal lord responsible for the economic survival of the serfs working
on the estate. The feudal lord had economic security as long as there was a steady supply
of serfs to work the estate, and the serfs had economic security only so long as they were
fit enough to provide their labor. During the middle Ages the idea of charity as a formal
economic arrangement also appeared for the first time. Family members and relatives
have always felt some degree of responsibility to one another, and to the extent that the
family had resources to draw upon, this was often a source of economic security,
especially for the aged or infirm. And land itself was an important forms of economic
security for those who owned it or who lived on farms.
India has enjoyed a joint family system that took care of the social security needs of all
the members even with minimal ownership of material assets like land. In keeping with
its cultural traditions, family members and relatives have discharged their shared
responsibility towards one another. To the extent that the family has resources to draw
upon, this is often the best relief for the special needs and care required by the aged and
those in poor health. However, with increasing migration, urbanization and demographic
changes there has been a decrease in large family units, and the need for a formal system
of social security gains importance.
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The Third Chapter discusses International approach to the Social Security:
International Scenario, draws a chronological list of the different conventions, charters,
conferences and recommendations with respect to Social Security at the international
scenario. International Labour Organization (ILO) is one of the 12 specialized agencies
of UNO. It has the most effective and well-developed mechanisms for human rights
protection in the international system. The preamble of ILO states the objective of
regulating the hours of work including the establishment of maximum working days and
weeks, the regulation of labour supply, the prevention of unemployment, the provision of
adequate living wage, the protection of workers against sickness, disease and injury
arising out of his employment, the protection of children, young persons and women,
provisions for old age and injury, recognition of the principle of equal remuneration for
work of equal value, recognition of the principle of freedom of association, the
organization of vocational and technical education and such other measures.
The declaration of ILO categorically states that ILO frames the international industrial
jurisprudence. It envisages measures for entering agreements on basic labour standards
and provides guiding principles of policy and administration throughout the world.
Further, the study emphasizes on how ILO is distinct from other international
institutions as its major concern is social justice? The aims and purposes of this
institution are explained and discussed. In 1946, ILO and United Nations made
agreement and ILO was recognized as a specialized agency of UN. In the era of UN,
there was more attainment of social justice as an aim of International co-operation and
cooperative actions.
The study also explains the Philadelphia Charter which sets the fundamental principles
upon which the ILO is based. They are: (a)Labour is not a commodity; (b)Freedom of
expression and the association are essential to sustained progress; (c)Poverty anywhere
constitutes a danger to prosperity everywhere; and (d)The war against want requires to
be carried on with unrelenting vigor within each nation and by continuous and corrected
international effort in which the representatives of workers and employers enjoy equal
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status with those of government joining in them in free discussion and democratic
decision making with a view to the promotion of common welfare.
From the International scenario the Fourth Chapter, i.e. the Existing Legal Frame work
of the Social Security Laws in India: National Scenario, moves to chronological list of
the different legislations and policy documents on the national scene. It provides the
Labour laws enacted by the Central Government, where the Central Government has the
sole responsibility for enforcement; Labour laws enacted by Central Government and
enforced both by Central and State Governments and Labour laws enacted by Central
Government and enforced by the State Governments. It also explains the programmes of
the Interim National Government during its power for the welfare of the working classes
in our country. The Interim National Government of India was formed on 2nd Sept 1946
from the newly elected Constituent Assembly of India and Pakistan from British rule to
Independence. It was in power until 15th August 1947.
Further, the study focuses on the labour policy followed in the successive five year plans
since independence, adopted an approach which rested on considerations that the basic
needs of workers for food, clothing and shelter must be satisfied. The objective of
achieving ‘socialistic pattern of society’ was the avowed goal of early five year plans and
provisions were made accordingly for the welfare of workers. It also discusses the chief
Social Security Legislations, The Employees’ State Insurance Act, 1948 (ESI Act)
Workmen’s Compensation Act, 1923 Maternity Benefit Act, 1961 Payment of Gratuity
Act, 1972 The Employees’ Provident Fund Act, 1952 and also the different Social
Security Schemes in India.
The Fifth Chapter, An analysis of the term ‘Employee’ with the decisions of the High
Courts and Supreme Court, makes a sincere effort to fathom the depths of the term
‘Employee’ in the light of the Section 2 (9) of the Employees State Insurance Act, 1948
which defines the term ‘Employee’ with reference to the decisions of High Courts and
Supreme Court. For example, coverage of seasonal and non-seasonal employees, casual
employee, exempted employee, over time remunerated employee, incentivised employee,
35 | P a g e
if the total number of employees, as prescribed for coverage, falls below the said limit, if
a company becomes sick what about the contribution of its share? How long an employee
as member of ESI Will remain covered when his wages increase above the coverable
ceiling? Will the loaders and unloaders (employees) engaged casually or by the
transporters, be covered under the ESI Act? Will different branches be taken into
consideration in calculating the number of employees for coverage under the ESI Act?
Will the employees engaged through the fabricators for an export house be covered under
the ESI Act? Whether a partner of a firm, being an establishment under the ESI Act,
would be covered under the Act? Whether a Managing Director of a Company, getting
wages below the prescribed limit, would be covered under the ESI Act? Apprentice-Is he
an employee? List goes on.
Further, it also discusses the Rules and Regulations relevant to the term ‘Employee’
framed under the ESI Act.
The Sixth Chapter, An analysis of the term ‘Employment Injury’ in the light of the High
Courts and Supreme Court, makes an honest effort to understand the depths of the term
“Employment Injury” in the light of the Section 2 (8) of the Employees State Insurance
Act, 1948 which defines the term “Employment Injury” with reference to the decisions of
High Courts and Supreme Court. The following ingredients of an Employment Injury are
discussed in depth: The injury must be personal to an employee. The injury must be
caused by an accident; or occupational disease. The accident must arise out of and in the
course of employment. The Employment must be insurable. Presumption as to, accident
arising in the course of employment. Notional Extension. Employers’ Liability in case of
occupational disease. Contracting of an occupational disease after discontinuance of
service.
Additionally, it also discusses the Rules and Regulations relevant to the term
‘Employment Injury’ framed under the ESI Act.
The Researcher proposes to conclude the study on hand in Chapter Seventh by
proposing conclusions and suggestions based upon the study of various Committee and
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Commission Reports (Law Commission of India and National Labour Law commissions
Reports)
International Conventions and Recommendations, Working Committee
Reports, Employees State Insurance Corporation, High Court and Supreme Court
Judgments and Legislations.
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CHAPTER- 2
HISTORICAL PERSPECTIVE OF THE SOCIAL
SECURITY
2.1.
Concept of Social Security
The concept of social security has evolved over a period of time (Earlier it was called,
Economic Security). In the primitive societies it was mankind’s prime need to protect
himself from the vagaries of nature like earthquakes, famines or even finding shelter
and food in his day to day life. Societal groups were formed to confront and brave
such hazards which turned into community living and formation of villages and
bringing in the concept of a family. These institutions provided whatever limited
social security those societies needed and served them adequately.1
All people throughout human history have faced the uncertainties brought on by
unemployment, illness, disability, death and old age. In the realm of economics, these
inevitable facets of life are said to be threats to one’s economic security. For the
ancient Greeks, economic security took the form of amphorae2 of olive oil. Olive oil
was very nutritious and could be stored for relatively long periods. To provide for
themselves in times of need the Greeks stockpiled olive oil and this was their form of
economic security. In medieval period (in Europe), the feudal system was the basis of
economic security, with the feudal lord responsible for the economic survival of the
serfs3 working on the estate. The feudal lord had economic security as long as there
was a steady supply of serfs to work on the estate, and the serfs had economic security
only so long as they were fit enough to provide their labor. During the middle Ages
the idea of charity as a formal economic arrangement also appeared for the first time.
Family members and relatives have always felt some degree of responsibility to one
1
Available at <http://www.Planningcommission.nic.in/aboutuc/committee/wrkgrp/wg_soclscty.pdf>
accessed on 15 September 2012
2
A two-handled jar with a narrow neck used by the ancient Greeks and Romans to carry wine or oil.
Available at <www.oxforddictionaries.com/definition/english/amphorae> accessed on 16 October
2012
3
An agricultural labourer bound by the feudal system who was tied to working on his lord’s estate.
Available at <www.oxforddictionaries.com/definition/english/serf> accessed on 16 October 2012
38 | P a g e
another, and to the extent that the family had resources to draw upon, this was often a
source of economic security, especially for the aged or the infirm. Land itself was an
important form of economic security for those who owned it or who lived on farms.4
These then were the traditional sources of economic security: assets; labor; family;
and charity.
In the Roman Empire, social welfare to help the poor was enlarged by the ‘Caesar
Trajan’5. His programmes brought acclaim from many, including Pliny the Younger6.
In the Jewish tradition, charity (represented by tzedakah) is a matter of religious
obligation rather than benevolence. Contemporary charity is regarded as a
continuation of the Biblical Masser Ani, or poor-tithe,7 as well as Biblical practices,
such as permitting the poor to glean the corners of a field and harvest during
the shmita (Sabbatical year). Voluntary charity, along with prayer and repentance, is
befriended to ameliorate the consequences of bad acts.
The concepts of welfare and pension were put into practice in the early Islamic law of
the Calipathe8 as forms of Zakat (charity), one of the five pillars of Islam, since the
time of the Rashidun Caliph Umar in the 7th century. The taxes (including Zakat and
Jizya) collected in the treasury of an Islamic government were used to provide income
for the needy, including the poor, elderly, orphans, widows, and the disabled.
According to the Islamic jurist Al-Ghazali (Algazel, 1058–1111), the government was
also
expected
to
store
up
food
supplies
in
every
region
in
case
a disaster or famine occurred (See Bayt al-mal9 for further information).
4
Available at <http://www.ssa.gov/history/briefhistory3.html> the official website of the US Social
Security Administration accessed on 16 May 2012.
5
One of the five good Roman Emperors of the Antonine Dynasty (96-192 AD) and founder of the
Ulpain library at Rome. Available at <http://www.history-world.org/trajan.htm> accessed on 6 June
2012.
6
The Roman great senator (62-115 AD) and the author of famous Collection of Letters. Available at
<http:// www.history-world.org/trajan.htm> accessed on 6 June 2012.
7
Offering one-tenth portion of your earnings to God out of obedience and thanks. Available at
<http://www.webweevers.com/tithing.htm> accessed on 29 May 2012.
8
It is derived from the Arabic term ‘Khilafa’ was a muslim spiritual community led by the supreme
religious/political leader known as Caliph (successor to the prophet mohammad) Available at <http://
www.al-islam.org.htm/http> accessed on 5 June 2012.
9
It is an Arabic term that is translated as “House of Money” it was a financial institution responsible
for the administration of taxes in the early Islamic states.
Available at <http://www.alislam.org.htm/http> accessed on 5 June 2012.
39 | P a g e
The Song dynasty (c.1000AD) government supported multiple forms of social
assistance programs, including the establishment of retirement homes, public clinics,
and pauper's graveyards.
As societies grew in economic and social complexity, and as isolated farms gave
way to cities and villages, Europe witnessed the development of formal
organizations of various types that sought to protect the economic security of their
members. Probably the earliest of these organizations were the guilds10 formed
during the middle ages by merchants or craftsmen. Individuals who had a common
trade or business banded together into mutual aid societies, or guilds. These guilds
regulated production and employment and they also provided a range of benefits to
their members including financial help in times of poverty or illness and
contributions to help defray the expenses when a member died. Out of the tradition
of the guilds emerged the friendly societies. These organizations began appearing in
England in the 16th century. Again, organized around a common trade or business,
the friendly societies would evolve into what we now call fraternal organizations
and were the forerunners of modern trade unions.11
In addition to the types of economic security provided by the guilds, the fraternal
organizations and some trade unions would begin the practice of providing
actuarially-based life insurance to their members. The friendly societies and the
fraternal organizations would grow dramatically following the Industrial
Revolution. By the beginning of the 19th century one of out every nine Englishmen
belonged to one of these organizations. Among early U.S. fraternal organizations
that we were, familiar with even into the present day are: the Freemasons (which
came to America in 1730);12 the Odd Fellows (1819); Benevolent and Protective
10
An association of persons of the same trade or pursuits, formed to protect mutual interests and
maintain standards. Available at <http:// www.thefreedictionary.com/Guilds> accessed on 16 May
2012.
11
Available at <http://www.ssa.gov/history/briefhistory3.html> the official website of the US Social
Security Administration accessed on 16 May 2012.
12
The Freemasons are a secret fraternal society. Their exact origins are much debated by historians but
they've been around for at least a few hundred years. Prominent theories are that they derive from
stonemason guilds or that they evolved from the remnants of the Knights Templar after the order was
destroyed. Basically, these days they engage in a lot of strange but harmless rituals and do a lot of
(mostly anonymous) charity work. Offshoot organizations, like the Shriners, are often more visible
than the Freemasons themselves. Much of their mythology revolves around the character of Hiram
Abiff whom the Freemasons identify as the architect of Solomon's Temple. Available at
<http://www.ssa.gov/history/briefhistory3.html> accessed on 16 May 2012.
40 | P a g e
Order of Elks (1868); Loyal Order of Moose (1888); and the Fraternal Order of
Eagles (1898).13
2.2.
Organized system of state welfare provision
Early welfare programs in Europe included the English Poor Law of 1601, which
gave parishes (civil division) the responsibility for providing poverty relief assistance
to the poor. This system was substantially modified by the 19th-century Poor Law
Amendment, which introduced the system of workhouses.
It was predominantly in the late 19th and early 20th centuries that an organized
system of state welfare provision was introduced in many countries. Otto von
Bismarck, Chancellor of Germany, introduced one of the first welfare systems for
the working classes. In Great Britain the Liberal government of Henry CambellBannerman and David Lloyd George introduced the National Insurance system in
1911, a system later expanded by Clement Atlee. The United States did not have an
organized welfare system until the Great Depression,14 when emergency relief
measures
were
introduced
under Franklin
D.
Roosevelt.15
Even
then,
Roosevelt’s New Deal focused predominantly on a program of providing work and
stimulating the economy through public spending on projects, rather than on cash
payment.
Germany has the world’s oldest universal health care system, dating back to Otto von
Bismarck’s16 social legislation, which included the Health Insurance Law of
1883, Accident Insurance Law of 1884, and Old age and Disability Insurance Law of
1889.
The first general Social Insurance Scheme was introduced in Germany in 1883. The
scheme drew upon three types of precedent. The first was the ancient system of
13
Available at <http:// http://www.ssa.gov/history/briefhistory3.html> the official website of the US
Social Security administration accessed on 16 May 2012.
14
The Great Depression, an immense tragedy that placed millions of Americans out of work, was the
beginning of government involvement in the economy and in society as a whole (1929 - early 1940s).
15
The 32nd President of the United States in office from 1933 to 1945.
16
The 1st Chancellor of the German Empire-in office from 21st March 1871 to 20th March 1890.
41 | P a g e
guild17 collection boxes, funds to which each member of a particular trade was
required to contribute at regular intervals; such funds were originally used for hospital
and funeral expenses and for food and lodging for aged and disabled members. By the
middle of the 14th century these arrangements were covered by statutes and
regulations. Relief funds were later established by associations of miners. The second
precedent was a Prussian ordinance of 1810 that placed on masters a duty to ensure
that their servants were given medical attention in case of illness. From 1849
communities could make bye-laws requiring both employers and employees to
contribute to relief funds, and the law of 1854 introduced compulsory health and
accident insurance for miners. The third precedent was the employer’s legal liability
to pay damages for accidents caused by negligence. As a result of this liability, which
was widened in 1871, many employers took out private insurance. The system did not
work well because the burden of proof lay with the worker, who normally had to incur
high legal costs and delay before he could hope to obtain lump-sum compensation.
In the United Kingdom, the National Insurance Act, 1911 marked the first steps
towards universal health care, covering most employed persons and their financial
dependents and all persons who had been continuous contributors to the scheme for at
least five years whether they were working or not. This system of health insurance
continued in force until the creation of the National Health Insurance in 1948 which
extended health care security to all legal residents. Most current universal health care
systems were implemented in the period following the World War II as a process
of health care reform, intended to make health care available to all, in the spirit of
Article 2518 of the Universal Declaration of Human Rights 1948, signed by every
country doing so. The US did not ratify the social and economic rights sections,
including Article 2519 Right to Health.
17
An association of persons of the same trade or pursuits, formed to protect mutual interests and
maintain standards. Available at <http:// www.thefreedictionary.com/Guilds> accessed on 16 May
2012.
18
Article 25. Right to an adequate standard of living:
(1) Everyone has the right to a standard of living adequate for the health and well-being of himself and
of his family, including food, clothing, and housing and medical care and necessary social services, and
the right to security in the event of unemployment, sickness, disability, widowhood, old age or other
lack of livelihood in circumstances beyond his control. (2) Motherhood and childhood are entitled to
special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social
protection.
19
ibid.
42 | P a g e
2.3.
Origin of the term Social Security20
From 1918 to 1927 Abraham Epstein served as research director of the Pennsylvania
Commission on Old Age Pensions. In that capacity, he was instrumental in having the
State to adopt an old-age assistance law in 1923. The law, however, was declared
unconstitutional by the State Supreme Court. When it became evident to Epstein that
the Commission would not be continued, he decided to set up a national organization
to boost public support for State old-age assistance (or “pension”) programs and other
social legislation. In 1927 he founded the American Association for Old Age Security.
At the beginning of the 1930’s. “economic security” was the term used: it was used by
those who worked on the early legislation; it was used by President Roosevelt in June
1934 when he formed the Committee on Economic Security; and it was again used by
Roosevelt in his January 17 1935, message to Congress urging enactment of the
Committee’s recommendations, which were incorporated in the “Economic Security
Act.” So how the phrase “Social Security” did come to be the title of the 1935
benchmark legislation and the phrase everyone uses today? In 1941 Arthur Altmeyer
(then Chairman of the Social Security Board-and later the first Commissioner for
Social Security) and Wilbur Cohen (then a technical advisor to the Board-and later
Secretary of the Department of Health, Education, and Welfare) wrote to Epstein
asking about the origin of the term. Both Altmeyer and Cohen were familiar with
Epstein’s organization-and they both knew that Epstein changed the name of his
organization in 1933 to the American Association for ‘Social Security’.21
In his response, Epstein first acknowledged that his friend and colleague Emil Frankel
was the person who coined the term “security”. When Association was first organized
in 1927 its name was the American Association for Old Age Security.22
“We hit upon the word ‘security’ during a walk in Harrisburg with my friend, Emil
Frankel . . . . I believe the credit for the term ‘security’ really goes to Frankel”. In
1949 in a note to Cohen, Frankel wrote about this incident. In the process of
“establishing a national organization to spread the gospel of old age assistance
20
Social Security Bulletin Vol. 55, No. 1 spring 1992, pp. 63-64.
ibid
22
ibid
21
43 | P a g e
throughout the United States, the American Old Age Pension Association was
formed. When I heard the word pension it did not fit so well with me, knowing that at
that moment the word had a connotation of politically radical action which challenged
the established order. I told Epstein I would not use the word pension. He naturally
asked me what word I would suggest. I thought for a moment and simply said
security” Frankel’s note ended with a prescient as well as a reflective statement. “It is
somewhat breathtaking to me as I ponder this inconspicuous incident in Harrisburg
that the word ‘security’ has been incorporated in all social legislation in this country
has become a household word in the United States and spells assurance to millions of
American citizens in meeting life’s untoward economic problems.” Epstein’s letter to
Cohen continued, detailing how he chose the phrase “social security” the change in
the organization’s name early in 1933 to the American Association for Social Security
was entirely my own idea and I had definite reasons for using the words ‘social
security’ rather than ‘economic security’ or ‘social insurance’.23
“I insisted on the term ‘social security’ because by that time I had a clear conception
of the differences which lay between the concept of social insurance as worked out by
Bismarck in Germany and the conception of social protection as elaborated in
England. I definitely did not want ‘social insurance’ because this would give it the
German twist of the actuarial insurance concept in terms of compulsory savings which
do not justify governmental contributions. I did not want ‘economic security’ because
what I hoped for was not only a form of security for the workers as such but that type
of security which would, at the same time, promote the welfare of society as a whole
as I was convinced that no improvement in the conditions of labour can come except
as the security of the people as a whole is advanced.” In the letter, Epstein also told
Cohen that he was convinced that the Committee developing the social security
program was named economic security as a deliberate attempt to get away from our
name, probably because it was thought wiser to disassociate the governmental
committee from a private propaganda organization. He concluded by saying he was
“quite happy” that in writing the final legislation the “Congress restored our name.
That legislation, of course, became known as the Social Security Act of 1935, it
23
Social Security Bulletin Vol. 55, No. 1 spring 1992, pp. 63-64.
44 | P a g e
established the Federal Old Age Benefits program, the Unemployment Compensation
program, and the Federal-State Assistance program (among others).24
2.4.
Evolution of Social Security in India
In vedic period, there were four varnas, viz., Brahmnas, Kshatriyas, Vaisyas and
Sudras. These were based on their profession and status. The Brahmans were
concerned with study, teaching and officiating as priests. But serving in army was the
hereditary profession of Kshatriyas. Cultivation of soil, tending cattle, trading and
money lending were the professions of the Vaisyas. Those who had to serve the
higher classes were called the Sudras. Buddha had raised a voice against the
Brahminical supremacy with his dictum of universal equality and brotherhood among
human beings.25
The old rule that particular caste should follow only particular profession was
rejected. Buddha said that right knowledge and right conduct of man alone determine
his status in the society.26
According to Kautilya’s Arthashastra, during the period of Ashoka, the labourers
were treated very kindly with their wages and benefits, regularly with fairly high
esteem. But the conditions of this class got deteriorated during the muslim regime.
The payment of wages and of providing other benefits was with Amirs’ who were
selfish and manipulators having vested interests.27
Generally the poor people were called Sudras, who were maltreated like animals in
ancient India. The labour policy and administration during that time was punitive and
feudalistic in structure and character. However, the slave labour enjoyed better
economic conditions and status as compared with free labour because the former
could share the homes of their masters.28
24
ibid
B. Singh, Labour Policy and Administration (MD Publications Pvt Ltd, New Delhi 1996) 1-2
26
P.C. Jain, Labour in Ancient India (UK publications, 1971) 9
27
ibid
28
B. Singh, Labour Policy and Administration (MD Publications Pvt Ltd, New Delhi 1996) 1-2
25
45 | P a g e
India has enjoyed a joint family system that took care of the social security needs of
all the members even with minimal ownership of material assets like land. In keeping
with its cultural traditions, family members and relatives have discharged their shared
responsibility towards one another. To the extent that the family has resources to draw
upon, this is often the best relief for the special needs and care required by the aged
and those in poor health. However, with increasing migration, urbanization and
demographic changes there has been a decrease in large family units, and the need for
a formal system of social security gains importance.
The British colonial rule in the Indian subcontinent witnessed the formation and
growth, though to a limited extent, of a wage-earning industrial labour force. This
labour was employed in the manufacturing enterprises, mines, transport and
communications, and plantations. At the time of independence in 1947 barely 10 per
cent of the workforce in India and Pakistan was employed in the manufacturing
sector, 0.5 per cent in the mines, 1.5 per cent in transport and communications, and
2.4 per cent in plantations and allied activities, In spite of its relative smallness, in
absolute terms the industrial labour force was fairly large. Thus, manufacturing
employment in the Indian union totalled 126 million. However, the number of factory
workers in the subcontinent stood at just 2.9 million in 1951.29
Thousands of workers belonging to this labour force faced various and widespread
uncertainties and hazards and their consequences were severe. In their everyday life
they were threatened with uncertainties with respect to livelihood and life arising from
sickness, accident, pregnancy, death, unemployment and underemployment due to
business decline and depression and strikes or lock-outs. The problems were
compounded by the absence of any government-operated or -supported programmes
for compensation for disability or death due to accident, facilities for health care and
support during sickness, benefits for maternity, old age pensions, unemployment
benefit, and education. Even thereafter, government support for social security of
29
Ranajit Das Gupta, A Labour History of Social Security and Mutual Assistance in India, Economic
and Political Weekly vol. XXIX No.11 March 12, 1994, 612 cited in J Krishnamurty, “The
Occupational Structure” in Dharma Kumar (ed), The Cambridge Economic History of India. Vol 2,
Cambridge, 1982, Indian reprint, 1984, pp. 5-15.
46 | P a g e
labour remained non-existent or negligible and haphazard. Welfare provisions by the
capitalist employers too were virtually absent or of extremely limited coverage.30
2.4.1. Labour Welfare Activities and Associations
To our knowledge, the only organisation which may in a sense be considered to have
been formed in the Calcutta area at the initiative of some working people was the
Mohammedan Association. Kazi Zahir-ud-din Ahmed, a non-Bengali Muslim clerk of
a jute mill in Kankinara (a mill area a few miles to the north of Calcutta) and
president of the association, told the Indian Factory Labour Commission of 1908 that
the association, formed in 1895, was composed solely of mill operative and was doing
its utmost to popularise mill work amongst the masses of the population in general
and Musalmans in particular. With reference to the religious community wise
composition of the association, Ahmed stated, “It was started... with the object of
attracting more Mahomedans to jute mills but since then Hindus have been admitted
to membership, and now the association looked after the interests of the operatives
generally”.31
With regard to the membership, organisation and activities of the association, Ahmed
informed the commission that they did not keep a list of members, but their
membership numbered some thousands. Neither had they a fixed place of assembly.
One Sunday in December (1907) about 1,000 operatives assembled to discuss
questions in connection with the present enquiry (which was concerned with the
length of working hours and holidays). All agreed as to the necessity for more
holidays (on religious occasions). The Mahomedans wanted two days each for the
Idul Fitr, Bakri Id, Mohurrum and the Hindus wanted a week for the Durga Puja. The
meeting also approved of daylight working, the weavers stating that with shorter
hours they would make tip their earnings to the same amount by more constant
30
Ranajit Das Gupta, a Labour History of Social Security and Mutual Assistance in India, Economic
and Political Weekly vol. XXIX No.11 March 12, 1994. 612 cited in for the slate of government and
legislative measures for social security and of welfare schemes undertaken by the employers in the late
colonial period, see, among others, Radhakamal Mukherjee, The Indian Harking Class. Bombay. 1945;
and Government of India, Labour Investigation Committee, Main Report, Delhi, 1946 (hereafter LIC:
Report), The Committee reported: “The government of India till recently did not undertake any
activities to promote the welfare of industrial labour” (p 347). The committee also found that the vast
majority of industrialists in India viewed “welfare work as a barren liability” (p 149).
31
and Political Weekly vol. XXIX No.11 March 12, 1994. P 612 cited in Indian Factory Labour
Commission Evidence volume, 264.
47 | P a g e
application to their work. At present the hours are too long. The majority of those
present at the meeting “preferred enjoying better health to earning big wages.”
Continuing he said, they had a president, vice-president, treasurer and honorary
secretary of the association. The cash balance at present would be under Rs 100. Their
last expenditure was incurred on the improvement of a mosque, and before that they
disbursed alms on the occasion of the coronation (of Edward VII in 1903]. The
association raised subscription for purposes of charity, and assisted in cases of
sickness, or if an operative had to be sent home.32
In fact, the first known instance of any labour welfare attempt anywhere in India was
the role played by the Brahmo social reformer Sasipada Banerji. In Baranagore, an
industrial suburb of Calcutta where the Baranagore Jute Mills was located, in late
1860s and 70s Sasipada Banerji combined his energy for the education of women
with efforts for welfare of mill workers. The years 1869 to 1874 were full of activities
for improvement of condition of the workers in Baranagore and its adjoining areas.
He started several night schools for working people, the first of them in 1869, a
Temperance Society converted into a Workingmen’s Club in 1870, a savings bank in
1871 and an ‘anna’ bank (modelled on penny banks in England) in 1871, a Bengali
monthly journal Bharat Sramajibi (Indian Toilers) in 1874, and an institute for
workers in Barangore.33 Banerji's aim was to develop among the labouring poor the
habits of thrift, industry, and temperance, the virtues of which were constantly
propagated in the Bharat Sramajibi, which itself was seen by him as a means of
improving the moral and material conditions of the working classes. He was moved
by a deep concern for the plight of the workers. But his entire endeavour was marked
by several limitations. As pointed out by Dipesh Chakrabarty in his study on Banerji,
To Banerji, or his mentor, Mary Carpenter of Bristol, the workers’ poverty, ill health,
or inadequate housing always pointed to the weakness of the workers’ moral fibre”.34
Evidently enough, Sasipada’s activities had nothing to do with workers’ initiatives or
redress of their grievances. Not only that. His concern for the working people did not
32
ibid 268
ibid 613
(For a detailed account and discussion of Banerji’s activities, see, Chakrabarty, Sasipada Banerjei; A
Study in the Nature of the First Contact of the Bengali Bhadralok, with the Working Classes of Bengal,
Indian Historical Review, January 1976).
34
ibid
33
48 | P a g e
have any indigenous origin. It was largely inspired by Mary Carpenter, and the values
propagated by him were largely imported from Victorian England. Moreover, his
connections with some official and non-official Europeans were important for the
progress of his work. Furthermore, his labour-welfare activities received full and
active support from the management of the Baranagore Jute Mills. They viewed
Sasipada’s efforts as effective means of disciplining labour. He tried to inculcate
among the workers loyalty to the British raj as well as to the company. But his
activities, lacking any social base among the workers and broader indigenous society,
virtually came to a stop in the late 1870s. It is noteworthy that Sasipada’s efforts
distinctly differed from those of S S Bengalee or N M Lokhande, his contemporary
labour reformers in Bombay to them reference is made below.35
The years of ‘swadeshi’ movement in Bengal (1905-08) witnessed significant
manifestations of labour protests of relatively autonomous nature, autonomous in
relation to the world of organised politics, generally followed by efforts to form
labour organisations and trade unions by middle class philanthropists. Some of the
organisations made attempts to cope with the difficulties faced by workers and
employees arising from conflicts with their capitalist employers, particularly and
relatively long-drawn strikes. Redress of grievances arising out of dismissals and
retrenchments, unjust fines and police prosecution needed legal aid for fighting the
cases at law courts and other forums. Such aid was extended to victimised workers,
and with regard to the provision of legal aid the names of Aswinicoomar Banerji,
Prabhat Kusum Roychaudhuri, Athanasius Apurbakumar Ghosh and Premtosh Bose
stand out in particular. Of the four, the first three were barristers and from the
available evidence it appears that they rendered legal aid free. However, court cases
involved expenses other than lawyers’ fees such as court fee. But little is known about
how these expenses were met. It is possible that the workers raised subscriptions from
among themselves.36
In Bombay S S Bengalee, a parsi journalist, and N M Lokhande, a philanthropist and
a member of one social reform group, came to be involved in labour affairs, both of
them were concerned with ventilation grievances of labour and agitation for
35
and Political Weekly vol. XXIX No.11 March 12, 1994. p. 613
36
ibid 614
49 | P a g e
legislation to regulate factory hours. Their approach differed from that of Sasipada
Banerji.
The earliest known instance of a welfare organisation in the Bombay area was the
Bombay Millhand’s Association, which functioned irregularly between 1884 and
1893. The association was formed at the initiative of Lokhande to give expression to
workers’ feelings for reduced working hours and a weekly holiday. The association
did not have any formal membership, any funds and any rules depended on jobbers,
‘mukaddams’ or labour recruiters and shop floor foremen (termed as labour lords) for
mobilising an audience for its meetings. Jobbers and caste groupings provided
continuity in periods when the association was ‘moribund’ and raised funds for
contributions to village amenities or religious festivals. The early history of the
millhands has several examples of links between caste-uplift movements and
campaigns against bad working conditions. Another organisation, Maratha Aikyechoo
Sabha, was involved for a few years in educational and temperance work among
Bombay millhands in 1880s.37
The first organisation in Bombay that is conventionally considered to have trade
union characteristics was the Kamgar Hitwardhak Sabha founded in 1909, a body that
emerged out of caste-oriented welfare work. The sabha started as a broad-based
welfare organisation. S K Bole, one of the chief organisers, appeared as a spokesman
of the untouchables and non-brahmans as well as the industrial workers. It had a wide
range of aims: education, provision for support in sickness and unemployment,
assistance in resolving industrial disputes, and encouragement to do away with
harmful customs. It ran three night schools and conducted evening classes in the
‘chawls’, organised lectures and sporting competitions ran campaigns for temperance
and proper observance of religious festivals, secured free legal aid, petitioned the
municipality on public issues such as health, and submitted complaints to the
employers.38
The other welfare organisation at work among the Bombay mill workers was the
Social Service League which started its work in 1913. Trained, full-time social
workers organised the league’s activities and theoretically speaking it was not
37
38
C Revri, The lndian Trade Union Movement, (Orient Publications pvt ltd New Delhi, 1972) 21 -23.
Richard Newman, Workers and Unions in Bombay 1918-1929 (Canberra, 1981) 1-11
50 | P a g e
dependent on the co-operation of jobbers and similar intermediaries. N M Joshi, a
social worker and labour organiser, was the leading figure.39
The league was modest about the scope of its work, seeing itself as the pioneer of
limited practical reforms, which would improve conditions mill by mill. It was
particularly concerned about low wages and long hours. Apart from these, it
considered that the most pronounced drawback of the labouring classes was their
almost universal illiteracy, and proceeding from this understanding the league ran
several night schools. The league viewed poor housing and in-sanitary conditions as
another major problem. It sent its members to live among the workers and to spread
ideas of domestic hygiene and thrift through example and persuasion. It also set up
credit societies and co-operative stores, organised recreations like wrestling to draw
away the workers from liquor and gambling, and embarked on schemes like evening
classes, sewing group for women and dispensaries. Impressed with the league’s
activities, mill managements gave cash contributions to the league and provided rentfree rooms in the companies’ ‘chawls’.40
Within a few years the scope of league’s activities broadened from individual mills to
groups of mills or mill districts. For example, in 1918 the league worked out a plan to
convert its branch in Parel, a mill district, into a workmen’s institute. With lavish
donations from the mill owners, the plan materialised into a well-equipped meeting
hall, a dispensary and staff accommodation. The entire complex was opened in 1922
and soon afterwards an elementary and technical school was added.41
Around the same time, two important mill management the Currimbhoys42 and Tatas
asked the league to plan and supervise the operation of welfare schemes that they
wished to introduce into their own mills. Interestingly enough, the new
responsibilities involved the league in conflicts between capital and labour. While the
league hoped to encourage the growth of trade unions and to represent the workmen’
interests in this process, the managements viewed welfare schemes ‘as a double
insurance against strikes’. It was expected by the employers that philanthropy would
help to contain discontent, which the league office-bearers would act as intermediaries
39
ibid 112
C Revri, The lndian Trade Union Movement, (Orient Publications pvt ltd New Delhi, 1972) 21 -23.
41
Richard Newman, Workers and Unions in Bombay 1918-1929. Canberra, 1981, p 117.
42
Retailers and wholesalers of Crockery, Glassware, Cutlery and Kitchenware. Established in 1889.
40
51 | P a g e
in resolving disputes and that factory committees were to be formed as instruments of
realising those aims. But these expectations were belied, for it was soon seen by the
workers that the committees were not allowed to discuss the major issues of wages
and hours. The other activities of the league like co-operative credit societies and cooperative shops also ran into considerable difficulties.
Possibly the only union with an elaborate range of welfare activities was the Majur
Mahajan or Textile Labour Association (TLA) of Ahmedabad with the establishment
of which Gandhiji was associated. The TLA’s approach to labour problems and
activities was substantially influenced by Gandhi’s views on capital-labour relations
and trade unions which were distinctly paternalistic. Trusteeship defined by Gandhi as
the voluntary use of the wealth and property of the wealthy and property-owners by
themselves for the benefit of labour emerged as the cornerstone of the TLA’s
ideology. Though class antagonism and the role of trade unions in safeguarding the
economic interests of its members in conflict with the employers were not entirely
ruled out, these came to have a secondary place in the TLA’s strategy and
programme. The TLA, however, became renowned for its involvement in the
provision of welfare facilities for its members and stress on constructive programmes
rather than conventional trade union activities.43
At the time of enquiry by the Royal Commission on Labour in India (RCLI) in 1929,
the TLA maintained two dispensaries and a hospital for accommodation for 30 indoor
patients. It ran 23 schools with 1,458 boys and 76 girls from its own resources and
also two boarding schools funded by other sources, The TLA had a social betterment
department which conducted evening classes in ‘chawls’ to teach workers reading and
writing, maintained a library and a reading room for its members and also ran
travelling or circulating libraries. Among the unions other welfare activities were four
physical cultural centres, a volunteer corps, cheap grain shop, eating shops, a savings
bank and a cheap loans Department.44 The significance of welfare work may be
gauged from the union’s budget [in 1925], 70 per cent of its income was spent on
education, medical aid and various other social betterment activities. These were all
carried on mainly from the members’ subscriptions which were collected by the mills.
43
Salim Lakha, Workers and Unions in Bombay pp. 125-27, particularly p 125.
Report of the Royal Commission on Labour in India (RCLl Report), Government of India, Calcutta,
1931, p 320.
44
52 | P a g e
For many years the mill owners made an annual grant to the association for
educational purposes.45
It is of interest to note that in general leftwing trade unions have avoided welfare and
self-help or mutual aid activities to protect workers from adversities and misfortunes
resulting in loss of income. However, there have been efforts on the part of a few leftled unions to relate struggles against employers around the issue of conditions of
work and living, to welfare work such as education, medical care, anti-liquor
campaign and social, cultural and economic upliftment of workers belonging to
various tribal and low caste groups. The most prominent example of this type of trade
unionism is provided by Chattisgarh Mines Sramik Sangha (CMSS), a radical,
Marxist trade union formed in 1978 involving tribal mine, construction and small
factory workers of the steel region of Bhilai in Madhya Pradesh,46 These workers,
employed on contract, did not and still do not have any minimum wage protection and
security of employment. The CMSS and its broader platform Chattisgarh Mukti
Morcha (CMM, organised in 1979) not only built up a militant movement for wage
and employment security but also launched a vigorous and fairly successful antiliquor campaign, set up several schools with particular emphasis on women
education, promoted consciousness about health care and established a hospital
named Sahid or Martyr Hospital almost solely by mobilising fund and resources form
the labouring people, formed a cooperative garage workshop, and took initiative for
environmental protection.
2.4.2
Social Security in Modern India
Coming to modern India the history of Social Security can be divided into two phases(1) history of social security in colonial India and (2) history of social security in
independent India. During the period of colonial India, if we look back to the period
of pre 1919 i.e. pre-world war I period, the then Indian Government started sensing
45
ibid 328
Purnendu Basu and Sankar Sanyal (ed), Sangarsha and Nirman, (Conflict and Construction),
Calcutta, 1992. This is a collection of writings on activities of Sankar Guha Neogy, the main spirit
behind CMMS and CMM. The collection also contains several pieces of writing by Neogy himself.
Neogy was assassinated by assassins engaged by the employers (He was the founder of Chhattisgarh
Mukti Morcha, a labor union run in the town of Dalli Rajhara Mines in Chhattisgarh. Shankar Guha
Niyogi succeeded in sustaining the Mine Worker movement for 14 years from 1977 till his death in
1991
).
46
53 | P a g e
the necessity to have social security benefits to the working class or working
population when the factory system started growing with the establishment of Cotton
mills in Bombay in 1851 and Jute mills in Bengal in 1855. The conditions prevailing
in these factories were inhuman. The working hours were excessive, provisions for
safety were nil. Workers welfare, holidays, leave, medical care were taboos to talk
about by the working class of that period.47
When the Industrialists faced problems of their existence with the growing accidents
in the industries and factories and the resultant fear psychosis developed among the
workers leading to unrest among the working population, they felt that there should be
some sort of sops to be given to the working class. This ultimately resulted in the
enactment of Fatal Accidents Act 1855 on the model of English Fatal Accidents Act
1846. This act has its own limitations. Provisions of the Act were highly inadequate.
Moreover, the Act does not permit certain dependants viz. brothers, sisters to claim
compensation. The rate of compensation was also very much inadequate and
uncertain.48
The period between 1919 and 1941 is worth noting in the history of social security in
the colonial India. World War I had a tremendous impact on the attitude of
Government and society towards labour. With the cessation of hostilities the world
turned to peace and reconstruction, which gave birth to the establishment of
International Labour Organisation (ILO). ILO adopted as many as 17 Conventions
and which later increased to 28 social security Conventions. But of all the
Conventions the significant one is the Convention no.10249 concerning the minimum
standard of social security.
47
P. Madhava Rao Social Security Administration in India: A Study of Provident Funds and Pension
Scheme, (The Icfai University Press, 2007) 7
48
ibid
49
It is a comprehensive instrument covering almost every branch of social security provided in
minimum standard in respect of benefits payable in large number of contingencies like sickness,
unemployment, old age, death, employment injury, invalidity etc
54 | P a g e
The Social Security (Minimum Standards) Convention, 1952 (No.102).50
It is the flagship of all ILO51 Social Security Conventions, as it is the only
international instrument, based on basic social security principles, that establishes
worldwide-agreed minimum standards for all nine branches of social security. These
branches are:
1. medical care;
2. sickness benefit;
3. unemployment benefit;
4. old-age benefit;
5. employment injury benefit;
6. family benefit;
7. maternity benefit;
8. invalidity benefit; and
9. Survivors’ benefit.
While Convention No. 102 covers all branches, it requires that only three of these
branches be ratified by Member states, which allows for the step-by-step extension of
social security coverage by ratifying countries.
The minimum objectives of the Convention relate, for all the nine branches, to the
percentage of the population protected by social security schemes, the level of the
minimum benefit to be secured to protected persons, as well as to the conditions for
entitlement and period of entitlement to benefits.
The principles anchored in Convention No. 102 are:
1. Guarantee of defined benefits;
2. Participation of employers and workers in the administration of the schemes;
50
Till the date Forty Nine countries have ratified, Available at <http://www.ilo.org/global/lang-en/index.htm#a1> accessed on 2 May 2013.
51
The unique tripartite structure of the ILO gives an equal voice to workers, employers and
governments to ensure that the views of the social partners are closely reflected in labour standards and
in shaping policies and programmes.
55 | P a g e
3. General responsibility of the state for the due provision of the benefits and the
proper administration of the institutions;
4. Collective financing of the benefits by way of insurance contributions or
taxation.
Convention No. 102 does not prescribe how to reach these objectives but leaves
certain flexibility to the member state. They can be reached through:
1. Universal schemes
2. Social insurance schemes with earnings related or flat rate components or both
3. Social assistance schemes.
Convention No. 102 also requires regular actuarial valuations to be carried out, which
ensures the sustainability of the scheme. Furthermore, Convention No. 102 lays down
that social security schemes be administered on a tripartite basis, which guarantees
and strengthens social dialogue between Governments, employers and workers. Thus,
Convention No. 102 is considered to be a tool for the extension of social security
coverage and provides ratifying countries with an incentive for doing so by offering
flexibility in its application, depending on their socio-economic level.
India has however ratified the following conventions52 viz1) Workmen’s Compensation (Accident) Convention 1925 (No.17)
2) Workmen’s Compensation (Occupational Disease) Convention 1925 (No.18)
3) Workmen’s Compensation (Occupational Disease) Convention (revised) 1934
(No.42)
4) Equality of treatment (Accident) Convention 1925 (No.19)
5) Later in 1962 the Equality of treatment (social security) Convention was ratified.
The period from 1920 is very significant in the history of working class. This is the
beginning of Trade Unionism in India. Workers started organising themselves for
redressal of their grievances. In India as well as in several other countries the
agitations launched during 1920 have led India to the passing of Workmen’s
Compensation Act, 1923. Though this Act was passed on 5.3.1923 it came into force
52
Scheme, (The Icfai University Press, 2007) 7
56 | P a g e
from 1.7.1924. The object of the Act was to “eliminate the hardship experienced
under the common system, by providing prompt payment of benefits regardless of
fault and with a minimum of legal formality”53. After this Act, the Government of
India enacted the Provident Funds Act, 1925. It was made applicable to Railways and
Government Industrial establishments. During the same period i.e. in 1929 the
Government of Bombay adopted the Maternity Benefit Act followed by the Central
Provinces in 1930.54
On the recommendation of the Royal Commission on Labour,55 Ajmer Merwar in
1934, and Delhi in 1937, Madras and United Province in 1938 passed maternity
benefit legislation. In addition to these provincial legislations the Central legislation
passed was for the Miners with the enactments of Mines Maternity Benefits Act 1941.
These legislations provided for the payment of Maternity benefit to the women
employed in Mines. Another legislation aiming at abrogating the doctrine of common
employment and assumed risk was passed in 1938 by enacting Employers Liability
Act 1938. If we look at the recommendations of the Royal Commission on Labour
which enquired during 1929 into the working conditions on Industrial Labour the
concern for the welfare of the workers and provisions against old age can be
understood in its own words. Industrial life tends to break down the joint family
system. Those workers, who, at the beginning of their industrial career, own a plot of
land, are often unable to retain possession, and with the passage of the years the
connection with the village became loosened. Workers in the mines are unable to save
out of their low earning against old age. Those in intimate touch with the life of the
workers know something of their misery in which they pass their old age. The
necessity for making some provision against old age need to be emphasised. A few
employers, railway administration and government department have made provisions
for some of their workers, either by means of a Provident Fund or by instituting a
System of Pension. It is appreciated that in this report it is impossible to make
provision for meeting every contingency in the life of the worker, but the importance
of this matter being generally admitted, they feel it incumbent to recommend that until
53
Law Commission of India, sixty second report (1974) on the Workmen’s Compensation Act, p 6
ibid 8
55
The Royal Commission on Labour was appointed in 1929, under the Chairmanship of J.H. Whitely
to investigate and inquire the existing conditions of labour in industrial undertakings, plantations, etc.
This Commission submitted its monumental report on 14th March 1931. Most of the labour legislations
enacted subsequently were the result of the recommendations of this Commission.
54
57 | P a g e
such time as it is found practically to institute either general scheme of old age
pension or Provident Funds for industrial workers, Government should, wherever
possible, encourage employers by financial grants or other means to inaugurate
schemes of this nature for their employees.56
The Royal Commission on Labour also dealt with payment of gratuity to railway
employees. In its report, it observed:
The limitation now placed upon the grant of gratuity to a subordinate on
retirement or resignation after 15 years qualifying service should be modified
to permit his voluntary withdrawal from service, if so inclined, without any
qualification except that of adequate previous notice of his intention.
The third phase of development of Social Security moment in colonial India started
from 1942, with the Third Labour Ministers’ Conference. India could not afford to
ignore the development of Social Security plans in other countries. The Beveridge
Report of British Social Insurance and Allied Services in England, Wagmur-Murray,
Diongal Bill in USA57 and Marsh plan (Report on social security) in Canada, have
compelled colonial Indian Government to shake their stupor and come out with some
meaningful legislative measures for social security. In the Beveridge58 Committee
56
Scheme, (The Icfai University Press, 2007) 8-9
57
The Wagner Bill evolved and shifted from a proposal for federal grants-in- aid to a proposal for
national health insurance. First introduced in 1943, it became the very famous Wagner-Murray- Dingell
Bill. The bill called for compulsory national health insurance and a payroll tax. In 1944, the Committee
for the Nation’s Health, (which grew out of the earlier Social Security Charter Committee), was a
group of representatives of organized labor, progressive farmers, and liberal physicians who were the
foremost lobbying group for the Wagner-Murray-Dingell Bill. Prominent members of the committee
included Senators Murray and Dingell, the head of the Physician’s Forum, and Henry Sigerist.
Opposition to this bill was enormous and the antagonists launched a scathing red baiting attack on the
committee saying that one of its key policy analysts, I.S. Falk, was a conduit between the International
Labor Organization (ILO) in Switzerland and the United States government. The ILO was red-baited as
“an awesome political machine bent on world domination.” They even went so far was to suggest that
the United States Social Security board functioned as an ILO subsidiary. Although the WagnerMurray-Dingell Bill generated extensive national debates, with the intensified opposition, the bill never
passed by Congress despite its reintroduction every session for 14 years! Had it passed, the Act would
have established compulsory national health insurance funded by payroll taxes. Available at
<http://www.ssa.gov/history/briefhistory3.html> the official website of the US Social Security
Administration accessed on 16 May 2012.
58
In 1941, William Beveridge one of the Britain’s leading economist, was asked by Winston
Churchill’s government to look at the problems of building a post-war Britain and was also asked to
consider how the various social security schemes could be harmonized. His report covered the five
threats to society: Want, Ignorance, Disease, Squalor and Idleness. Available at
<http://www.ssa.gov/history/briefhistory3.html> the official website of the US Social Security
Administration accessed on 16 May 2012.
58 | P a g e
Report (1942), Social Security was defined as “Freedom from Want”. Though this
was the original, the actual emphasis was more in tune with the contingency oriented
approach. Social Security was a term that was used to denote the securing of income
in place of regular earnings when such earnings were disrupted due to contingencies
such as unemployment, sickness, death of the earning member of the family or
accident. It also included the provisions made for retirement through age, against loss
of support by the death of the breadwinner and meeting of exceptional expenditures
such as those connected with birth, marriage and death. However, in actual
implementation, social security provision was restricted to only three measures, viz.,
childrens’ allowances, comprehensive health and rehabilitation services, and
maintenance of employment, which implied avoidance of mass unemployment.59
Thus “the Third Labour Ministers’’ Conference 1942 placed the tentative scheme for
sickness insurance and decided to advance loan to run the scheme in cotton, jute
textiles and heavy engineering industries.60
Later in March 1943 Government of India appointed a committee presided over by
Professor B P Adarkar,61 an officer on special duty, for the purpose of formulating a
scheme of health insurance for Industrial workers. This was followed by the
appointment of a high powered committee with Sir Joseph Bose as its Chairman
Known as “Health Survey and Development Committee” to make a broad survey of
the present position in regard to health conditions and health organisation in British
India and to make recommendations for future development. This committee and its
findings were helpful in formulation of the scheme by Adarkar Committee, which
submitted its report on August 15, 1944. The highlights of both the committees were
the problems of national health. Prof. BP Adarkar’s scheme was later examined by
experts of ILO, Mistach and R. Rao in 1945 with a few modifications in respect of a
scheme of health insurance in three main areas viz1) Separation of administration of medical and cash benefits.
59
Beveridge Committee Report, 1942, p.120
61
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.
60
59 | P a g e
2) Integration of maternity benefits and workmen’s compensation in the health
insurance schemes and
3) Extension of the scheme in all perennial factories under the Factories Act as well
as to non-manual workers.
The scheme was endorsed by the ILO experts. After these colonial Indian legislations
on social security, the history of social security of free India started right from 1946
although India became independent only on 15th August, 1947. The interim
government formulated a five year programme for the welfare of the labour class. The
main features of the programmes were:
1) Organisation of Health Insurance Scheme, applicable to factory workers to start
with.
2) Review of workmen’s compensation Act.
3) A central law for maternity benefit.
4) Extension to other classes of workers of the right, within specific limits to leave
with allowances during the sickness62.
The year 1947 also witnessed the enactment of Industrial Disputes Act empowering
the industrial worker to raise an industrial dispute regarding the payment of gratuity.
Thus gratuity became a legal right. Adarkar Committee report with the endorsement
of ILO has given birth to the enactment of Employees’ State Insurance Act, 1948,
providing compulsory health insurance.63
2.5.
The Rege Committee64
The popularly known ‘Rege Committee’ of 1944 which was asked to investigate the
question of wages and earning, employment, housing and social conditions generally,
made a survey of labour problems in different industries. The committee covered
62
Report of the First National Commission on Labour, 1969, p 28
64
Labour Investigation Committee, 1944
63
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interalia, the question of relief in case of old age and death in relation to retired
benefits such as Provident Fund, gratuity and pension. The committee observed:
The whole problem of provision against old age or death of breadwinners
legitimately falls within the sphere of social security, and it is a matter for
consideration whether either the initiation of management of scheme of
provident fund, gratuities and pensions should be left to employers themselves.
Of course, so long as there are no schemes of social security introduced in a
particular industry or area, the existing private scheme of provident fund, etc.
should be allowed to continue under the management of the employer. The
existing schemes in this connection do not appear to be very liberal. The
absence of social security measures like provident funds, gratuities and
pension in most concerns has largely contributed to the migratory character
of Indian labour and is one of the most important causes of the larger labour
turnover in the factories. Though some of the larger employers have instituted
tolerably good schemes, the number of such cases and pensions are rather
rare. A few employers have instituted gratuity and pension schemes. The
amount of gratuity generally amounts to half a month’s wages for every
completed year of service put in. In almost all the cases the gratuity is payable
only to deserving workers of proven good behaviour, the sole judge of the
deservedness being the employer himself. Hence, there is always scope for
discrimination and the trade unions bitterly complain that their members are
discriminated against. The rate of gratuity is progressively reduced if the
period of service is less than 20 years. After examining the above facts, the
committee concluded:
Our investigation shows that only a few enlightened employers in the country
have made some provision for safeguarding the future of their operations
when they retire, and of their dependents when they die, by way of either
provident fund or gratuity scheme. The large bulk of industrial workers,
however, remain uncovered and it is distressing that a worker who has toiled
for 20 to 30 years in a factory should become destitute in his old age. We think
that just as employees of governments and of local bodies have something to
fall back upon during old age, so also industrial labourers should be protected
61 | P a g e
by a similar provision requiring employers to have pension schemes. The
incidence of death is probably much more serious in this country than the
incidence of old age in view of the low expectation of life. There is little or no
provision against the contingency of the premature death of the breadwinner.
As the average industrial worker is too poor to insure his life with commercial
companies and as such insurance is not always technically profitable, this
field may best be reserved for state insurance of some kind.
From the foregoing it is very clear that the Rege Committee not only recognised some
of the retirement benefits, but also highlighted the importance of retirement benefits
as one of the measures of social security. The Coal Mines Provident Fund and Bonus
Act, 1948 seeks to ensure the economic security of coal mine workers after they retire
from active service and of their dependants in case of premature death. The preceding
laws in the direction of miners’ welfare were coal mines Labour Welfare Fund
Ordinance, 1944 Coal Mines Labour Welfare Fund Act 1947, and Mica Mines Labour
Welfare Fund Act 1946.
After independence, the labour welfare movement acquired new dimensions. It was
realized that labour welfare had a positive role to play in increasing productivity and
creating harmonious relations between employers and workers. The emergence of
different central trade organisations, viz INTUC65 (1947), HMS66 (1948), UTUC67
(1949), BMS68 (1955), CITU69 (1970) etc., contributed to the growth of labour
welfare movement.
Another phase of Social Security started in India after it became a republic India on
26th January 1950. The Constitution of India has various provisions that stress
provision of socio economic security. A perusal of the contents indicates that several
constituents that facilitate the provision and effectiveness of the wider concept of
socioeconomic security are included as individual Fundamental Rights: equality
before the law, prohibition of discrimination on the grounds of religion, caste, sex,
place of birth, equality of opportunity in public employment and abolition of
65
Indian National Trade Union Congress
Hindu Mazadoor Sangha
67
United Trade Union Congress
68
Bharatiya Mazadoor Sangha
69
Centre of Indian Trade Unions
66
62 | P a g e
untouchables. The right against exploitation was stipulated through the prohibition of
traffic in human beings and forced labour and prohibition of children in factories. In
addition to Fundamental Rights, the Constitution includes Directive Principles of
State Policy referring to the state’s responsibility in ensuring a social order for the
promotion of welfare of the people and securing adequate means of livelihood. It is
stipulated in these Principles that the health and the strength of workers be
safeguarded and children protected from exploitation.70
Furthermore, the Directive Principles also includes the right to work, access to
elementary education, public health and nutrition, and to public assistance in certain
cases such as unemployment, old age, sickness and disablement. Provision of just and
humane conditions of work and maternity relief is also within the ambit of the
Directive Principles as is free and compulsory education. The Directive Principles
further state that the economic interests of scheduled castes and scheduled tribes be
promoted. It is evident that the Constitution and Directive Principles together set forth
a vision that is in consonance with socio-economic security in the sense of “Freedom
from Want” stressed by the Beveridge Committee Report. Thus, the Constitution of
India did provide the scaffolding for the provision of social security in the country.
However, the provision was not considered a fundamental right, presumably in view
of the practical difficulties in implementing them. Nonetheless, it is amply clear that
the provision of socio-economic security was considered an important obligation that
the government had to fulfil in ensuring equality and social justice for the deprived
sections of the population. The implementation of the vision enshrined in the
Constitution depended on the policies that the governments at the central and state
levels followed in subsequent years.71
The Directive Principles of State Policy contain directions aimed at physical, social
and moral improvements of Labour. Art 41 seeks to make effective provisions for
securing public assistance in case of unemployment, old age, sickness, disablement
and other cases of under served want. The Five year plans, that followed enactment of
Constitution, have emphasised the need for Social Security Schemes to achieve the
desired result.
70
Scheme, (The Icfai University Press, 2007) 12-13.
71
ibid
63 | P a g e
2.6.
The five year plans on Social Security
The First Five Year Plan72 in the following terms had two main objectives:
1) A better standard of life for the people and
2) Social justice.
The objectives of the Plan reflect the idealism of the community and are derived from
the Directive Principles of State Policy embodied in the Constitution. While the first
two plans73 outlined the schemes of social insurance to cover a limited number of
urban wage-earners, the Third Plan sought to break new ground of social assistance.
The Third Five Year Plan (1961-1966) states: It would be desirable to make a
modest beginning in respect of three groups of persons, the physically handicapped,
old persons unable to work, and women and children, where they are altogether
lacking in the means of livelihood and support. Assistance for them will have to come
from voluntary and charitable organisations, municipal bodies, panchayat samitis and
panchayats and voluntary organisations. With a view to enabling these organisations
to develop their activities with the help of local communities and giving them a little
support, it might be useful to constitute a small relief and assistance fund. Regarding
the welfare funds the Third Five Year Plan states that “special welfare funds have
been constituted for financing welfare measures for workers in the coal and mica
mining industries. They are meeting very real needs. Similar funds are proposed to be
created for workers in the manganese and iron ore mines”.
The Fifth Five Year Plan (1974-1979) found that “stray progress is being achieved
in social security measures”. It reiterated the suggestion of the Committee on
Perspective Planning appointed by the Employees’ State Insurance Corporation that
the Employees’ State Insurance Scheme should carry out a 5-year phased programme
of extension of additional categories of establishments, including smaller factories,
shops and commercial establishments, mines and other establishments. The Plan also
stated that the scope for integrating certain important social security measures is
being studied.
72
The Planning Commission was set up in March, 1950 by a Resolution of the Government of India,
the period of five years from April, 1951 to March, 1956.
73
Second Five Year plan, the period of five year from April, 1956 to March, 1960.
64 | P a g e
The Sixth Five Year Plan (1980-1985) report marked the progress made in the social
security scheme in India. It recommended that the provident fund scheme should be
gradually extended to smaller establishments and to rural areas. Similarly, effort
should be made to remove the difficulties of limitation of financial and physical
resources of the State Governments and to extend the coverage to new areas. The
planners also suggested that as “welfare and social security service overlap in areas of
medical care and income security during sickness and disability, it will be conducive
to efficiency and economy if services in such common areas can be integrated”.
In the Seventh Five Year Plan (1985-1990), the main thrust was on implementation
of the National Policy on Education (NPE), which was formulated in 1986 and
revised in 1992. The National Literacy Mission was launched in 1988 in pursuance of
this policy. A main feature of union government policy for education has been the
provision of free education, which implies exemption from fees in elementary schools
though other expenses amount to a considerable amount. Subsidies for school feeding
programmes and several centrally sponsored programmes such as Operation
Blackboard have been the main features, as far as elementary education is concerned.
In the case of health, the National policy on Health announced in 198374 set the tone
for various measures aimed at achieving Health for all by the year 2000.
The Eighth Five Year Plan (1992-1997) gave considerable importance to enhancing
social capabilities in pursuance of the objective of human development, which was
considered the ultimate goal of the Plan.
The Ninth Five Year Plan (1997-2002) spoke about the possibility of setting up of a
separate Department of Social Security within the Ministry of Labour with a strong
Research and Development wing to facilitate and accelerate the development process
and achieve extension of social protection to all sections of the working population
74
The first National Health Policy of 1983 was a response to the commitment to the Alma Ata
Declaration to achieve “Health for All by 2000”. It accepted that health was central to development and
had a focus on access to health services, reiterated the resolution of taking health services community
and ensuring cooperation of the community. It recognizes nutrition, prevention of food adulteration and
maintenance of the quality of drugs, water supply and sanitation, environmental protection;
immunization programme, maternal and child health services, school health programme, and
occupational health services as priority attention for inputs required for improved health care. Also
calls on for re-orientation of the existing health personnel and inclusion of various systems of medicine
and health care at the appropriate levels, within specified areas of responsibility and functioning, in the
over-all health care delivery system, specially in regard to the preventive, promotive and public health
objectives.
65 | P a g e
would be explored. The Ninth Five Year Plan recognizes that a large number of
people in India live in acute poverty The consumer expenditure data of the 55th
Round on a 30 day recall basis yields the poverty ratio for 1999-2000 of 27.09 percent
in rural areas, 23.62 in urban areas and 26 .1 percent for the country as a whole. The
corresponding figures from the seven day recall period was 24.02 percent in rural
areas, 21.59 percent in urban areas and 23.33 percent for the country as a whole.
The Tenth Five Year Plan (2002-2007) has extensively dealt with the social
security. It has emphasized the need to develop social security programs, particularly
pension programs for the unorganized sector in a phased manner during the plan
period itself.
The Eleventh Five Year Plan (2007-2012) considering the achievements made by
the ESIC75 and the EPFO76 in providing institutionalized social security cover to a
majority of the workers in the organized sector has recommended that an attempt
would be made to widen their coverage and strengthen them. To cover more number
of beneficiaries, measures should be taken to enhance the capability of these
institutions to cope with the workload. To reduce harassment and corruption in these
institutions, the government will strive to streamline the delivery system in these
institutions.
Twelfth Five Year Plan (2012-2017), for growth to be inclusive it must create
adequate livelihood opportunities and add to decent Employment commensurate with
the expectations of a growing labour force. India’s young age structure offers a
potential demographic dividend for growth, but this potential will be realized only if
the extent and quality of education and skill development among new entrants to the
workforce is greatly enhanced.
With the support of consecutive five year plans and with the help of the Directive
Principles of State Policy, in pursuit of objectives of Social Security and keeping in
view the recommendations of Rege Committee, the Government of India has
enacted/amended many legislations for the social security of working class in India.
75
76
Employees Provident Fund Organisation
66 | P a g e
CHAPTER-3
INTERNATIONAL APPROACH TO THE SOCIAL
SECURITY
3.1.
Human Dignity and Social Justice
The onslaught of globalization and privatization has pushed to the background the
concern for Social Security (welfare system) and the role of the State in promoting
Social Security. The apologists for the private sector and the market economy have
been ridiculing welfarism as outmoded and are advocating the dismantling of the
welfare system, indeed there is an ongoing debate all over the world about the crisis
of the welfare state which is said to be in liquidation or in retreat.
Sir Williams Beveridge1 aptly observed:
“The term social security is used to denote the security of an income to take the place
of earnings, when they are interrupted by unemployment, sickness or accident, or to
provide for retirement through age or to provide loss of support by the death of
another person, and to meet exceptional expenditure such as those connected with
birth, death and marriage”2
The concept of social security is based on the ideas of human dignity and social
justice. According to the First National Commission on Labour the underlying idea
behind social security measures is that a citizen who has contributed or is likely to
contribute to his country’s welfare, should be given protection against certain hazards.
As a part of society, every individual has some contribution to it. The collective
contribution indicates the welfare and progress of the society. When the positive
1
consider how the various social security schemes could be harmonized. His report covered the five
threats to society: Want, Ignorance, Disease, Squalor and Idleness. Available at <http://www.ssa.gov/
history/briefhistory3.html> the official website of the US Social Security Administration accessed on
16 May 2012.
2
Julian Fulbrook, Law at Work; Social Security, (Sweet and Maxwell, London 1980) 16
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contribution increases, society is said to be a developing society. The development of
the society indicates the welfare of the country.3
3.2.
International Labour Organization
International Labour Organization (ILO) is one of the 12 specialized agencies of
UNO.4 It has the most effective and well-developed mechanisms for human rights
protection in the international system. The preamble of ILO states the objective of
ILO is to regulate the hours of work including the establishment of maximum
working days and weeks, the regulation of labour supply, the prevention of
unemployment, the provision of adequate living wage, the protection of workers
against sickness, disease and injury arising out of his employment, the protection of
children, young persons and women, provisions for old age and injury, recognition of
the principle of equal remuneration for work of equal value, recognition of the
principle of freedom of association, the organization of vocational and technical
education and such other measures.
The declaration of ILO categorically states that ILO frames the international
industrial jurisprudence. It envisages measures for entering agreements on basic
labour standards and provides guiding principles of policy and administration
throughout the world. First World War caused a set back to industries. Failure of
some of the nations to adopt human conditions of labour was seen as an obstacle in
the way of other nations, which desired to improve the labour security conditions in
their own countries. In these circumstances it was realized that permanent world
peace could not be achieved by achievement of political and economic justice alone,
but that it required securement of social justice also. Workers’ well being, regulation
of labour supply, the prevention of unemployment, provision for adequate living
wage, protection of weaker sections, sickness, disease, injury, old age and of young
persons and women led to the creation of ILO in 1919 as a part of League of Nations
3
4
First National Commission on Labour (1969) under the Chairmanship of Justice Gajendragadkar,
United Nations Organization.
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by Part XIII of the Treaty of Versailles.5 The Treaty is “the first known to history for
containing a provision dealing with labour” and provide for establishing a standard
setting mechanism called ILO.
ILO is distinct from other international institutions as its major concern is social
justice. The aims and purposes of this institution were reaffirmed in 1944 through
Philadelphia Charter.6 In 1946, ILO and United Nations made agreement and ILO
was recognized as a specialized agency of UN. In the era of UN, there was more
attainment of social justice as an aim of International co-operation and cooperative
actions.
The Philadelphia Charter sets the fundamental principles upon which the ILO is
based. They are: (a)Labour is not a commodity; (b)Freedom of expression and the
association are essential to sustained progress; (c)Poverty anywhere constitutes a
danger to prosperity everywhere; and (d)The war against want requires to be carried
on with unrelenting vigor within each nation and by continuous and corrected
international effort in which the representatives of workers and employers enjoy
equal status with those of government joining in them in free discussion and
democratic decision making with a view to the promotion of common welfare.
The Charter affirms that ‘lasting peace can be established only if it is based on social
justice’ and the conference affirms that all human beings have right to pursue their
material well being and their spiritual development in conditions of freedom and
dignity, of economic security and equal opportunity. The International Labour
Conference recognizes the solemn obligation of ILO to further among the nations of
the world programmes which will achieve:-
5
The Treaty of Versailles was the peace settlement signed after World War One had ended in 1918
and in the shadow of the Russian Revolution and other events in Russia. The treaty was signed at the
vast Versailles Palace near Paris - hence its title - between Germany and the Allies. The three most
important politicians there were David Lloyd George, Georges Clemenceau and Woodrow Wilson.
Available at <http://www.ilo.org/public/english/support/lib/century/content/1944.htm> accessed on 24
April 2012.
6
The Philadelphia Declaration, which prefigured and served as a model for the United Nations Charter
and the Universal Declaration of Human Rights, remains the charter of ILO’s goals and principles. The
recommendations set out in the Declaration are to be considered from the broadest possible point of
view: they concern not only the world of labour but also human beings as a whole. The Declaration
directly addresses “all human beings, irrespective of race, creed or sex”. Available at
69 | P a g e
(i)
a full employment and raising of standard of living;
(ii)
the employment of workers in which they can have the satisfaction of
giving the fullest measure of their skills and attainments and make their
greatest contribution to the common well-being;
(iii)
facilities for training and transfer of labour for employment and
settlement;
(iv)
policies with regard to wages and earning hours and other conditions of
work calculated to ensure a just share of the fruits of progress to all and
minimum living wage to all employed and all in need of such protection;
(v)
official recognition of collective bargaining, co-operation of management
and labour;
(vi)
provision for child welfare and maternity protection;
(vii) assurance of equality of educational and vocational opportunity;
(viii) provision for adequate nutrition, housing and facilities for recreation and
culture;
(ix)
adequate protection of life and health of all workers in all occupations;
and
(x)
extension of social security measures to provide basic income to all in
need of such protection and comprehensive medical care.
In this declaration, ILO emphasizes states’ social commitment to the upliftment of
working class and affirms the right of workers for decent living. While recognizing
these rights, ILO actually assures a living with human dignity which is one of the
basic human rights.
Its (ILO) fundamental purpose is to give individuals and families the confidence that
their level of living and quality of life will not, insofar as is possible, be greatly
eroded by any social or economic eventuality. This involves not just meeting needs as
they arise but also preventing risks from arising in the first place, and helping
individuals and families to make the best possible adjustment when faced with
disabilities and disadvantages which have not been or could not be prevented.
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In the Beveridge Committee Report (1942)7, Social Security was defined as
“Freedom from Want”.
Unexpected life circumstances, the loss or reduction of productive capacity, and
discrimination can hinder a person’s or a family’s well-being. Everyone needs
protection from social risks and resulting insecurities. Social Security benefits are
powerful tools to combat poverty and inequality, and to invest in social and economic
development. As such, they are key to achieve the Millennium Development Goals8
(MDGs) targets. Under international human rights law, States are legally obligated to
establish social protection systems. This duty flows directly from the right to social
security, which is articulated in Article 229 of the Universal Declaration of Human
Rights and in Article 910 of the International Covenant on Economic, Social and
Cultural Rights (ICESCR). Social protection systems should protect individual
women, men and children against the risks of impoverishment in situations of
sickness, disability, maternity, employment injury, unemployment, old age, death of a
family member, high health care or child care costs, and general poverty and social
exclusion. Social protection measures can include e.g. cash transfer schemes, public
work programmes, school stipends and lunches, social care services, unemployment
or disability benefits, social pensions, food vouchers and food transfers, user fee
exemptions for health care or education, and subsidised services.
7
consider how the various Social Security schemes could be harmonized. His report covered the five
threats to society: Want, Ignorance, Disease, Squalor and Idleness. Available at <www.bbc.co.uk/
history/ww2peopleswar/timeline/.../a1143578.shtml> accessed on 12 Nov, 2012.
8
The Millennium Development Goals (MDGs) are eight international development goals that were
established following the Millennium Summit of the United Nations in 2000, following the adoption of
the United Nations Millennium Declaration. All 189 United Nations member states and at least 23
international organizations committed to help achieve the Millennium Development Goals by 2015, the
goals follow: To eradicate extreme poverty and hunger, To achieve universal primary education, To
promote gender equality and empowering women, To reduce child mortality rates, To improve
maternal health, To combat HIV/AIDS, malaria, and other diseases, To ensure environmental
sustainability, To develop a global partnership for development. Available at <http://www.un.org
/millenniumgoals/global.shtml> accessed on 20 Jan 2013.
9 Article 22 - Everyone, as a member of society, has the right to social security and is entitled to
realization, through national effort and international co-operation and in accordance with the
organization and resources of each State, of the economic, social and cultural rights indispensable for
his dignity and the free development of his personality.
10
Article 9- The States Parties to the present Covenant recognize the right of everyone to social
security, including social insurance.
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Under the ICESCR, States are prohibited from deliberately taking any retrogressive
measures, including in regard to the right to social security, unless they can prove that
they have only been introduced after the most careful consideration of all other
alternatives, and that they are duly justified by reference to the totality of the rights
stipulated in the Covenant. The significant financial implications of the right to social
security do not justify allowing the State to dispense with its obligation to give
appropriate priority in law and policy to social security. If necessary, developing
countries should seek international cooperation and technical assistance to realise
progressively the right to social security.11
One of the major contributions of General Comment No. 19 is the understanding that
all States have a minimum core obligation to provide some form of basic social
security. As noted by the ICESCR, States have the immediate duty:
“to ensure access to a social security scheme that provides a minimum
essential level of benefits to all individuals and families that will
enable them to acquire at least essential health care, basic shelter and
housing, water and sanitation, foodstuffs, and the most basic forms of
education. If a State party cannot provide this minimum level for all
risks and contingencies within its maximum available resources, the
Committee recommends that the State party, after a wide process of
consultation, select a core group of social risks and contingencies.”12
In other words, a State must immediately meet a minimum standard and then
progressively realise an adequate level of benefits over time. In order for a State party
to be able to attribute its failure to meet at least its minimum core obligations to a lack
of available resources, it must demonstrate that every effort has been made to use all
resources that are at its disposal in an effort to satisfy, as a matter of priority, these
minimum obligations.13
Two of the most influential programmes are the United States’ 1935 Social Security
Act and the Social Security Programme implemented in the UK, summarised in the
11
Covent on Economic, Social and Cultural Rights, General Comment No. 19, Para 52
ibid Para 59
13
ibid Para 60
12
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1942 Beveridge Report. These programmes established the basis for modern forms of
social security, defined by the International Labour Organisation (ILO) as “the
protection which society provides for its members through a series of public measures
against the economic and social distress that otherwise would be caused by the
stoppage or substantial reduction of earnings resulting from sickness, maternity,
employment injury, invalidity and death; the provision of medical care; and the
provision of subsidies for families with children”.
An essential means of action available to the ILO for the realization of its mandate of
extending social security to all is the setting of International Labour Standards. Since
1919, the ILO has adopted 31 Conventions and 23 Recommendations in this area,
which have greatly contributed to the development of social security as a Universal
Human Right notably by laying down specific obligations and guidelines for Member
States14.
In 2002, the ILO Governing Body confirmed eight out of these 31 Conventions as upto-date social security conventions. Most prominent among these is the Social
Security (Minimum Standards) Convention, 1952 (No. 102)15. It is the only
International Convention that defines the nine branches16 of social security, sets
minimum standards for each of these branches, and lays down principles for the
sustainability and good governance of those schemes. Another important feature of
this Convention is that it contains flexibility clauses, thereby allowing ratifying
member States to accept as a minimum three out of the nine branches of social
security, with at least one of those three branches covering a long-term contingency
or unemployment, so as to allow as many countries as possible to comply with the
requirements laid down in the Convention.
14
India is one of the founder members of the International Labour Organization. Available at
15
Convention on Social Security and protection at the contingencies that include any morbid condition,
whatever its cause and pregnancy. It was established in 1952, with the preamble stating: Having
decided upon the adoption of certain proposals with regard to minimum standards of Social Security.
Available at <http://www.ssa.gov/policy/docs/ssb/v15n10/v15n10p3.pdf> accessed on 24 April 2012.
16
Medical care; Sickness benefit; Unemployment benefit; Old-age benefit; Employment injury benefit;
Family benefit; Maternity benefit; Invalidity benefit; and Survivors’
benefit. Available at
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The Income Security Recommendation, 1944 (No.67)17, together with the Medical
Care Recommendation, 1944 (No.69)18, laid down for the first time in history the
guiding principles for the eight classical social security contingencies, as well as
medical care and benefits to be provided to all residents through social insurance and
complemented by social assistance. (The Governing Body decided to maintain the
status quo of Recommendation No.69, due to the strong link with Recommendation
No.67). These two instruments, which were adopted in 1944 in Philadelphia at the
26th Session of the International Labour Conference, paved the way for the adoption
of Convention No.102. On top of these, ILO adopted OSH (Occupational Safety and
Health) related mandates such as Convention No.187 and Recommendation No.197
on “Promotional Framework for Occupational Safety and Health” to lower the toll of
work-related injuries and diseases.
The ILO promotes a rights-based approach to social security with ILO standards as its
principal means of action for assisting member states towards the realization of this
right. The ILO also adopts further initiatives to support international efforts aimed
towards the realization of social security for all. In 2003, it launched the “Global
Campaign on Social Security and Coverage for All” reflecting a global consensus on
the part of governments and employers’ and workers’ organizations to broaden social
security coverage among working people, particularly in the informal economy, and
raising awareness about the role of social security in economic and social
development. The campaign also seeks to develop a broad partnership involving
international organizations, donor countries, social security institutions and civil
society organizations.
17
Recommendation concerning Income Security which was Adopted in Philadelphia, 26th
International Labour Conference Session (12 May 1944), to provide by social insurance may be
closely adapted to the variety of needs, the contingencies covered as follows: (a) Sickness; (b)
Maternity; (c) Invalidity; (d) Old age; (e) Death of breadwinner; (f) Unemployment; (g) Emergency
expenses; and (h) Employment injuries. Available at <http://www.ilo.org/dyn/normlex/
en/f?p=NORMLEXPUB:12100:0::NO:12100:P12100_INSTRUMENT_ID:312405:NO> accessed on
15 May 2012.
18
Recommendation concerning Medical Care which was adopted in Philadelphia, 26th International
Labour Conference session (12 May 1944), to provide Medical Care Services. Available at
<http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO:12100:P12100_INSTRUMEN
T_ID:312405:NO> accessed on 15 May 2012.
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In 2008, the “Declaration on Social Justice for a Fair Globalization”19 established a
new foundation on which the ILO can effectively support the efforts of Member
States to promote and achieve progress and social justice through the four strategic
objectives of the ILO’s Decent Work Agenda: the promotion of fundamental rights,
employment creation, social protection and social dialogue.
The 2009 global financial and economic crisis stressed the role of social security
schemes as automatic social and economic stabilizers. Countries at all levels of
development, which have social security systems in place, are in a much better
position to cope with the social fall-out of the crisis. In response to this crisis, the UN
Chief Executives Board for Coordination (CEB) adopted the Social Protection Floor
Initiative (SPF-I) as one of the nine joint crisis initiatives.
In 2009, in response to the Global financial crises, the ILO designed a framework to
guide national and international policies aimed at stimulating economic recovery,
generating jobs and extending social protection for all. The Global Jobs Pact20
specifically calls on countries to give consideration to build “adequate social
protection for all, drawing on a basic social protection floor including: access to
health care, income security for the elderly and persons with disabilities, child
benefits and income security combined with public employment guarantee schemes
for the unemployed and working poor.”
The Social Protection Floor Initiative (SPF-I), launched in 2009, is also grounded in a
rights-based framework. Its concept is based on shared principles of social justice and
reflects the call of the Declaration of Human rights for adequate life standards, access
to health, education, food, housing and social security. Moreover, the SPF-I enables
19
ILO Declaration on Social Justice for a Fair Globalization Adopted in 2008 by the representatives of
governments, employers and workers from all ILO member States, the Declaration expresses the
contemporary vision of the ILO’s mandate in the era of globalization. Available at
<http://www.ilo.org/global/about-the-ilo/WCMS_099766/lang--en/index.htm> accessed on 15 May
2012
20
The Global Jobs Pact is a set of balanced and realistic policy measures that countries, with the
support of regional and multilateral institutions, can adopt to ease the impact of the crisis and accelerate
recovery in employment. Adopted in June 2009 by the International Labour Organization, it calls on its
member States to put decent work opportunities at the core of their crisis responses. It addresses the
social impact of the global crisis on employment and proposes job-centered policies for countries to
adapt according to their national needs. Guided by the Decent Work Agenda and commitments made
by the ILO constituents in the 2008 Declaration on Social Justice for a Fair Globalization. It proposes a
portfolio of policies aimed at: Generating employment, Extending social protection, respecting labour
standards, Promoting social dialogue, shaping fair globalization. Available at <http://www.ilo.org/
jobspact/about/lang--en/index.htm> accessed on 12 Jan 2013.
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the concrete realization of human rights. The results of ILO research shows that a
social protection floor can be afforded by virtually all countries and that it would
constitute an effective tool in the fight against poverty and in reaching the Millennium
Development Goals.
Widespread political support for the idea of non-contributory minimum social
protection crystallized in 2009, when the heads of the United Nations (UN) agencies
launched the Social Protection Floor Initiative as one of the nine UN joint initiatives
to cope with the global economic and financial crises. The Social Protection Floor
Initiative builds on the ILO’s concept of a ‘social minimum,’ which comprises social
pensions, child benefits, access to health care, and unemployment provision.
In 2011, the recurrent discussion on the strategic objective of social protection (social
security) at the 100th International Labour Conference came out with strong
conclusions regarding the extension of social security to all through national defined
social protection floors.
In June 2012, the International Labour Conference adopted the Social Protection
Floors Recommendation, 2012 (No. 202)21. This Recommendation provides guidance
to Member States, so as to ensure that all members of society enjoy at least a basic
level of social security throughout their lives.
Employment and social protection are indispensable avenues to socio-economic
development, poverty reduction and human dignity. Better and more productive jobs
raise incomes and help finance social protection, which not only contributes to stable
and better household incomes but also improves the productivity and employability of
the population. As it has been found that actions in these two areas are mutually
reinforcing, the linkages between social protection and employment have been placed
21
(a) Access to a nationally defined set of goods and services, constituting essential health care,
including maternity care, that meets the criteria of availability, accessibility, acceptability and quality;
(b) basic income security for children, at least at a nationally defined minimum level, providing access
to nutrition, education, care and any other necessary goods and services; (c) basic income security, at
least at a nationally defined minimum level, for persons in active age who are unable to earn sufficient
income, in particular in cases of sickness, unemployment, maternity and disability; and (d) basic
income security, at least at a nationally defined minimum level, for older persons. Available at
<http://www.ilo.org/dyn/normlex/en/f?p=1000:12100:0::NO::P12100_INSTRUMENT_ID:3065524>
accessed on 12 Jan 2013.
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in the centre stage in current development policy debates in G20 Labour Ministerial
Joint Statement by OECD22 Secretary-General and ILO Director-General.23
Article 71 of Convention No. 102 states that “the costs of the benefits and
administration shall be borne collectively by way of insurance contributions or
taxation or both”. Therefore, direct employer liability for the cost of benefits would
not be in conformity with ILO Conventions.
According to ILO Convention No. 102 (Article 32)24, the contingencies covered
include the following accident-at-work or employment-related diseases: (a) sickness
(“morbid condition”), (b) temporary incapacity for work resulting from such a
condition, (c) total or partial loss of earning capacity, likely to be permanent and (d)
the loss of support suffered by dependents as the result of the death of the
breadwinner. In addition, the range of benefits required by Convention No. 102
includes necessary medical care, sickness benefit for the period of incapacity for
work, disability pension in case of loss of earning capacity, and survivors’ pension in
case of death of a breadwinner. The Employment Injury Benefit Convention
(Convention No.121, Article 26)25 requires member countries to provide rehabilitation
22
Organisation for Economic Co-operation and Development
On 17/07/2013 - Joint statement by ILO Director-General Guy Ryder and OECD Secretary-General
Angel Gurría on the occasion of the G20 Labour and Employment Ministers’ Meeting, Moscow, 18-19
July 2013. “We, the Heads of the International Labour Organisation and the Organisation for Economic
Cooperation and Development, call upon the Ministers of Labour and Employment of the G20
countries to reinforce their cooperation with a view to enhancing the design and scale of their
employment, labour market and social protection policies in order to achieve higher levels of
productive and rewarding employment and to contribute to a strengthening of the world economy”.
Available at <http://www.oecd.org/g20/topics/employment-and-social-policy/oecd-ilo-call-on-g20labour-ministers-to-reinforce-cooperation.htm> accessed on 15 October 2013.
24
Article 32- The contingencies covered shall include the following where due to accident or a
prescribed disease resulting from employment: (a) a morbid condition; (b) incapacity for work resulting
from such a condition and involving suspension of earnings, as defined by national laws or regulations;
(c) total loss of earning capacity or partial loss thereof in excess of a prescribed degree, likely to be
permanent, or corresponding loss of faculty; and (d) the loss of support suffered by the widow or child
as the result of the death of the breadwinner; in the case of a widow, the right to benefit may be made
conditional on her being presumed, in accordance with national laws or regulations, to be incapable of
self-support.
Available
at
<http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:55:0:::
55:P55_TYPE,P55_LANG,P55_DOCUMENT,P55_NODE:CON,en,C102,/Document#A32> accessed
on 20 December 2012.
25
1. Each Member shall, under prescribed conditions- (a) take measures to prevent industrial accidents
and occupational diseases; (b) provide rehabilitation services which are designed to prepare a disabled
person wherever possible for the resumption of his previous activity, or, if this is not possible, the most
suitable alternative gainful activity, having regard to his aptitudes and capacity; and (c) take measures
to further the placement of disabled persons in suitable employment. 2. Each Member shall as far as
possible furnish in its reports upon the application of this Convention submitted under Article 22 of the
Constitution of the International Labour Organisation information concerning the frequency and
severity of industrial accidents. Available at <http://www.ilo.org/dyn/normlex/en/f?p=
23
77 | P a g e
services which are designed to prepare a disabled person for the resumption of his/her
previous activity, or, if this is not possible, the most suitable alternative works, having
regard to his/her aptitudes and capacity; and to take measures to further the placement
of disabled persons in suitable employment.
Of the total number of international labour standards approved by the International
Labour Conference (ILC), nearly half deal with occupational safety and health, more
than any other subject. Among them, Convention No. 187(The Promotional
Framework for Occupational Safety and Health Convention, 2006) promotes the
development of a national policy, system and programme of occupational safety and
health, in consultation with employers’ and workers’ organizations26.
3.3.
The Social Security (Minimum Standards) Convention, 1952
(No.102).27
It is the flagship of all ILO28 social security Conventions, as it is the only international
instrument, based on basic social security principles, that establishes worldwideagreed minimum standards for all nine branches of social security. These branches
are:
1. medical care;
2. sickness benefit;
3. unemployment benefit;
4. old-age benefit;
5. employment injury benefit;
NORMLEXPUB:55:0:::55:P55_TYPE,P55_LANG,P55_DOCUMENT,P55_NODE:CON,en,C102,/Do
cument#A32> accessed on 20 Dec 2012.
26
Article 4 (f): The national system shall include, a mechanism for the collection and analysis of data
on occupational injuries and diseases, taking into account relevant ILO instruments; and (g) provisions
for collaboration with relevant insurance or social security schemes covering occupational injuries and
diseases.
27
Till the date Forty Nine countries have ratified, India has not yet ratified. Available at
<http://www.ilo.org/global/lang--en/index.htm#a1> accessed on 2 May 2013.
28
The unique tripartite structure of the ILO gives an equal voice to workers, employers and
governments to ensure that the views of the social partners are closely reflected in labour standards and
in shaping policies and programmes.
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6. family benefit;
7. maternity benefit;
8. invalidity benefit; and
9. Survivors’ benefit.
While Convention No. 102 covers all branches, it requires that only three of these
branches be ratified by Member states, which allows for the step-by-step extension of
social security coverage by ratifying countries.
The minimum objectives of the Convention relate, for all the nine branches, to the
percentage of the population protected by social security schemes, the level of the
minimum benefit to be secured to protected persons, as well as to the conditions for
entitlement and period of entitlement to benefits.
The Convention requires, as a rule, equality of treatment for nationals and nonnationals residents; it sets out the circumstances in which benefit may be suspended
and requires that claimants and beneficiaries should have a right of appeal against the
refusal of benefit. Other general provisions define the responsibility of the State and
limit the extent to which employees (in an insurance-based scheme) or persons of
small means should be obliged to finance their benefits by direct contributions or
special taxation. Ratifying Sate is not obliged to accept all parts of it and can confine
ratification to merely three of the nine branches, including at least one of the
following: unemployment, employment injury, old-age, invalidity or survivors’
benefit.29
The principles anchored in Convention No. 102 are:
1. Guarantee of defined benefits;
2. Participation of employers and workers in the administration of the schemes;
3. General responsibility of the state for the due provision of the benefits and the
proper administration of the institutions;
4. Collective financing of the benefits by way of insurance contributions or
taxation.
29
Available at <http://www.ilo.org/global/lang--en/index.htm#a1> accessed on 2 May 2013.
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Convention No. 102 does not prescribe how to reach these objectives but leaves
certain flexibility to the member state. They can be reached through:
1. Social insurance schemes with earnings related or flat rate components or both
2. Social assistance schemes.
Convention No. 102 also requires regular actuarial valuations to be carried out, which
ensures the sustainability of the scheme. Furthermore, Convention No. 102 lays down
that social security schemes be administered on a tripartite basis, which guarantees
and strengthens social dialogue between Governments, employers and workers. Thus,
Convention No. 102 is considered as a tool for the extension of social security
coverage and provides ratifying countries with an incentive for doing so by offering
flexibility in its application, depending on their socio-economic level.30
Employment Injury benefit is stipulated in Part VI of the convention No. 102. The
contingencies includes a morbid condition, incapacity for work, invalidity or a loss of
faculty due to an industrial accident or occupational disease as well as the loss of
support as a result of the death of the breadwinner following an employment injury.
Based on this convention, the persons protected shall comprise of not less than 50
percent of all employees, or, for countries who declared that their economy and
medical facilities are insufficiently developed, at least 50 percent of all employees in
industrial workplaces employing 20 persons or more.31
In respect of a morbid condition, the benefit shall cover medical care, the types of
which are specified in the convention. The institutions or Government departments
administering the medical care required to cooperate, wherever appropriate, with the
general vocational rehabilitation services, with a view to the re-establishment of
handicapped persons in suitable work. In light of this, national laws or regulations
may authorize such institutions or departments to ensure provision for the vocational
rehabilitation of handicapped persons.
In cases of incapacity for work or total permanent invalidity, the benefits shall be in
the form of periodical payment corresponding to at least 50 percent of the reference
30
31
ibid
ibid
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wage and in case of partial permanent invalidity the benefit shall be a periodical
payment representing a suitable proportion of that specified for total invalidity.
Survivors’ benefit in case of death of the breadwinner, the benefit is in periodical
payment corresponding to at least 40 percent of the reference wage. There can be
exceptions where such periodical payments are converted to a lump sum where: (a)
the degree of incapacity is slight; or (b) the competent authority is satisfied that the
lump sum will be properly utilized.
Industrial Accident
The following definition can be found in recommendation No. 12132:
(a) accidents, regardless of their cause, sustained during working hours at or near the
place of work or at any place where the worker would not have been except for his
employment;
(b) accidents sustained within reasonable periods before and after working hours in
connection with transporting, cleaning, preparing, securing, conserving, storing
and packing work tools or clothes;
(c) accidents sustained while on the direct way between the place and(i)
the employee’s principal or secondary residence; or
(ii)
the place where the employee usually takes his meals; or
(iii)
the place where he usually receives his remuneration.
Occupational Diseases
Convention No. 12133 offers the choice between three ways to define Occupational
Diseases:
(a) by prescribing a list of diseases comprising at least those enumerated in Schedule
I to the Convention (provided at the ending pages of this chapter);
32
The General Conference of the International Labour Organisation, having been convened at Geneva
by the Governing Body of the International Labour Office, and having met in its Forty-eighth Session
on 17 June 1964, decided upon the adoption of certain proposals with regard to benefits in the case of
industrial accidents and occupational diseases. Available at <http://www.ilo.org/dyn/normlex/en/f?p=
NORMLEXPUB:55:0:::55:P55_TYPE,P55_LANG,P55_DOCUMENT,P55_NODE:REC,en,R121,/Doc
ument> accessed on 15 March 2014
33
ibid
81 | P a g e
(b) by stipulating a general definition broad enough to cover at least the diseases
enumerated in Schedule I to the Convention ;
Unless proof to the contrary is brought, it is recommended that there is a presumption
of the occupation origin of diseases known to arise out of the exposure to substances
or dangerous conditions in processes, trades or occupations where the employee:
(a) was exposed for at least a specified period; and
(b) has developed symptoms of the disease within a specified period following
termination of the last employment involving exposure.
3.4.
Strategies for Providing Social Security34
The following different authorities have advocated different strategies for providing
social security or social protection
3.4.1. World Bank
According to the World Bank, Social Risk Management Arrangements fall into three
main categories: (a) informal arrangements, (b) market-based arrangements, and (c)
public arrangements on a large scale. Each has relative strengths and limitations.
The Bank says “Risk management can take place at different moments —both before
and after the risk occurs. The goal of ex ante measures is to prevent the risk from
occurring or, if this cannot be done, to mitigate its effects. They are called preventive
and mitigating strategies. If they do not succeed, there are strategies to cope with the
risks at face value; the best social risk management is to make sure that down-side
risks never occur. The next most effective action is risk mitigation, as this reduces the
negative effects of risks before they actually happen. Risk coping is essentially the
residual strategy, if everything else has failed. However, since each of these strategies
34
Report of Second National Labour commission (2002) Available at <http://indialabourarchives.org/
usr/local/gsdl/cgi-bin/library?e=d-000-00---0ncl-ncl-01-0-0-0prompt-14-Document---0-1l--1-en-50--20-preferences---001-001-1-0isoZz-8859Zz-11&a=d&cl=CL2.16&d=HASH445101261de83f8e1210bb.403> accessed on 15 November 2013
82 | P a g e
has both direct and opportunity costs, relying entirely on risk reduction or mitigation
may not be either efficient or feasible. The experience of the formerly centrally
planned economies has demonstrated that trying to eliminate all risks in advance
through quantity planning, official price setting, and public ownership of productive
means has serious costs in terms of lower economic growth.
At the other extreme, many of the current government interventions in developing
countries particularly for poor people, concentrate on risk coping. However, a system
that concentrates on helping poor people deal with a shock once it has occurred runs
the risk of keeping them in a poverty trap and perpetuating the vicious cycle of low
returns, low risk taking, and deep poverty. Moving towards a balance among coping,
reduction, and mitigation strategies has the potential to trigger a virtuous cycle in
which people can undertake activities with higher variability in returns, but also with
higher absolute returns.
3.4.2. International Labour Organisation (ILO)
ILO advocates mainly social insurance and social assistance
(i) Social Insurance
Initially, for a long time, protection against poverty and deprivation was provided in
the form of assistance - public or private. Those who had the resources took to savings
and private insurance. After the industrial revolution, a new class of workers emerged
who lived on their wages but did not earn enough to save for emergencies. In this
context social insurance was born.
Social insurance was first introduced in Germany about a hundred years ago. Credit
for innovating the scheme is given to Bismark. It has since spread all over the world.
Social insurance is contributory in character. The scheme is financed by contributions
usually made by employers and workers, in some cases, by the state as well.
Employment injury schemes are usually financed entirely by contributions from the
employers. Participation in the scheme is compulsory subject to grant of exemptions
in exceptional cases. The contributions and the income earned by their investment are
placed in a fund from which prescribed benefits are paid. The right to the benefits is
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acquired by virtue of the contributions one makes. Contributions and benefits are
mostly related to the earnings of the insured person. In countries where the schemes
have been extended to cover the whole population, the entire citizenry makes
contributions.
Under a social insurance scheme the right of the beneficiary to any benefit is acquired
by making a contribution. It is in one sense a contractual right, not a social right. It
follows that if social security has to be provided to all citizens as a basic human right
social insurance cannot be the appropriate vehicle for it. It calls for a different
approach.
(ii) Social Assistance
The social assistance schemes are generally tax based. Under this approach the social
security benefits are paid out of the general revenues of the State. The State may
however levy special taxes to augment the revenues to meet the liabilities arising
under the schemes, this approach originated in Scandinavia and the first groups to be
covered were the elderly, the sick, invalids, survivors and unemployed in that order.
The system was intended to replace the harsh and humiliating conditions under which
poor relief was being given. In some countries social assistance has been replaced by
contributory social insurance but in some other countries such as Australia and New
Zealand all the social assistance schemes have been merged into a national social
security system.
Even in those countries which rely mainly on social insurance, some groups of people
who are not able to make contributions to the social insurance schemes are covered by
social assistance.
The basic features of social assistance schemes are:
1. The entire cost is met from State funds
2. Benefits are paid as a legal right and
3. The quantum of the benefits is calculated with the object of raising the applicant’s
total income to a minimum level.
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In assessing the need for and the quantum of social assistance to be given to an
individual a means or an income test is usually applied so that those who are above
the prescribed income limit are excluded from the benefit/s. Some countries however
provide social assistance for certain specified purpose without any income test so that
all qualified residents would be entitled to the benefits. For example in some countries
every resident is entitled to a basic minimum pension on attaining the prescribed age
without regard to his resources and without any contribution. Some countries operate
a national health service providing medical care to all residents without any
contribution or means test meeting the cost wholly or mainly from the public funds
subject however to cost sharing for certain purposes.
3.4.3. Other Strategies
The following other strategies are currently in vogue in different countries
(i) Employer’s liability
Under employer’s liability schemes the employers are directly responsible for
providing social security benefits to their employees. These schemes originated
towards the end of the 19th century for payment of ‘workmen's compensation’ and
providing medical care for occupational injuries. The employers could meet their
liabilities under the schemes out of their own resources as and when the contingencies
arose or insure their liabilities under a private insurance scheme.
In India the benefits payable under the Workmen’s Compensation Act, the Maternity
Benefit Act, the Payment of Gratuity Act and the Industrial Disputes Act are the
exclusive liabilities of the employers.
The employers’ liability schemes have strengthened the position of workers vis-a-vis
their employers in certain respects. However, as social security measures they suffer
from several shortcomings. Of these, the most important shortcoming is the tendency
on the part of the employers to avoid the liability by resort to litigation. The current
trend is, therefore, to replace employers liability schemes by social insurance.
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(ii) National provident funds
National provident funds have been established in a number of English speaking
developing countries. These are essentially savings schemes. Workers and their
employers pay regular contributions into a central fund and those contributions are
credited to the individual account of the member to which interest is added
periodically. When a specified contingency occurs such as old age, invalidity or
death, the total amount standing to the credit of the account is paid out to the worker
or his survivor. Some funds permit earlier partial withdrawals.
While provident funds are playing a valuable part in promoting self help they are not
social security schemes in the conventional sense geared to provide periodical
payments when wages are interrupted. A provident fund benefit is in part a terminal
pay with little relevance to age or the circumstances in which the employment ends
and there is no pooling of risks. Further in an inflationary situation, contributions lose
much of their value. Despite these shortcomings provident funds remain as the only
sources of old age protection in approximately 20 developing countries throughout the
world. Some also pay additional benefits including sickness and maternity benefits.
Members of provident funds clearly prefer lump sum payments which they can utilize
to meet their capital needs.
(iii) Mutual Benefit Societies
A mutual benefit society is an association of persons who join together to help each
other in case of need and protect themselves against certain social risks such as
sickness, accidents etc. The members of the society pay contributions periodically and
meet the expenditure in providing the variety of benefits to the members from the
fund built up out of such contributions. A mutual benefit society acquires legal status
through registration as a society or as a cooperative under the normal laws governing
the registration of such organizations or as a body registered under a specific
legislation governing the formation of mutual benefit societies. In addition,
cooperative societies set up with common economic objectives or associations of
residents or employees of certain undertakings or persons belonging to particular
avocations may also undertake provision of social security protection to their
members without a fresh registration if their bye laws permit it.
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Mutual benefit societies are common in some of the industrial as well as developing
countries. The most common benefit granted by a mutual benefit society is assistance
in case of sickness. This assistance can take the form of payment of money in a lump
sum to the sick person, reimbursement of doctor’s bills and hospital and
pharmaceutical expenses.
Another traditional benefit is maternity assistance either in the form of a fixed grant or
in the form of reimbursement of expenses. Another common benefit is assistance in
case of death of the breadwinner. Apart from these benefits the mutual benefit
societies also provide a wide range of services depending on their resources.
In Japan there is number of Mutual Aid Associations such as the national Government
Employees’ Mutual Aid Association providing wide ranging benefits and services. In
India however mutual benefit societies have not made much progress.
(iv) Micro Insurance
Micro Insurance provides a complementary strategy to improve access to social
security to the excluded people. It is based on the premise that groups of the
population that are not covered, or are not adequately covered, by existing systems
can define their own set of priority needs, that these needs can be insured and that the
members of the groups are willing to pay for this insurance. The group may be based
on area of residence, on occupation, on ethnic affiliation or on gender. Micro
insurance is not merely another form of insurance or healthy case financing. It is a
form of social organization, based on the concepts of solidarity and risk pooling,
which involves the active participation of the group’s members. Typically, these
groups are already organised, for example, to provide micro credit facilities to their
members; micro insurance is often therefore an extension of their activities. The
organisation may use some of the surplus from their core activities to subsidize the
insurance schemes. They may also obtain subsidies from the public authorities, form
international aid agencies (in particular seed capital) and in certain cases from state
owned insurance companies.
The countries in which they operate include Bangladesh, Benin, Burkina Faso,
Cameroon, Cote d’ Ivore Ghana, Guinea, India, Lebanon Mali, Morocco, Nigeria,
87 | P a g e
Philippines, Senegal, the United Republic of Tanzania, Togo, Tunisia, Uganda, and
several countries in Latin America. Although they are grass root initiatives, they have
in some countries joined together in a federative structure, for example, in Argentina,
Mali, Senegal and Uruguay. Micro insurance schemes can function as a self help
activity since they require relatively little start up capital or infrastructure and can be
launched with a relatively small nucleus of members.
(v) Self-Financed Social Insurance
Self Financed Social insurance schemes represent yet another way in which the social
security needs of individuals are met through a community or group effort. The
mechanism used is one of providing mutual support through pooling of resources on
the principles of insurance help being extended to those in need within the overall
frame work of certain basic regulator, conditions. This, in a sense, is the most basic of
all social security systems, having its genesis in requirements that are common to all
members of a society and their own immediate collective response in fulfilling them.
In this system, it is the group itself that decides about the size and the source of
contributions that group’s members are meant to make. The collection and
management of contributions well as the disbursement of benefits are again matter for
the group to consider and arrange.
There is a wide variety of self financed social insurance schemes, ranging from the
totally informal and unwritten systems within a small group to the more formal ones
catering to the needs of larger numbers and based on many complex arrangements.
In addition, the initiative may originate from within the group or be motivated by
nongovernmental and voluntary agencies. In India there is a wide variety of ventures
promoted and successfully experimented with, in the areas of credit health care,
education, employment and overall development. For the poor and lower income
groups, the need for money exists universally and continuously almost by definition.
Hence, it is not surprising that most self help groups operate around credit
requirements. These in turn are integrally related to contingencies such as death
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disability and disease old age, unemployment and destitution, the very area with
which social security schemes are concerned.
3.5.
International labour standards related with the Occupational
Safety and Health
ILO adopted in 2006 new OSH35-related mandates such as Convention No.18736 and
Recommendation No.19737 on “Promotional Framework for Occupational Safety and
Health” aimed at placing OSH high on the national agenda and lowering the toll of
work-related injuries and diseases, which cause some 2.2 million deaths each year. In
accordance with R.197, the national profile on OSH should include information on the
provisions for collaboration with relevant insurance or social security schemes
occupational injuries and diseases.
A framework for the notification, analysis and production of statistics on occupational
accidents and diseases is an integral part of any national policy and system for
occupational safety and health (OSH). This is also emphasized in the ILO’s
35
C187 - Promotional Framework for Occupational Safety and Health Convention, 2006 (No. 187)
Convention concerning the promotional framework for occupational safety and health (Entry into
force: 20 Feb 2009) Adoption: Geneva, 95th ILC session (15 Jun 2006). Objectives of the Convention
Article 2. (1). Each Member which ratifies this Convention shall promote continuous improvement of
occupational safety and health to prevent occupational injuries, diseases and deaths, by the
development, in consultation with the most representative organizations of employers and workers, of a
national policy, national system and national programme.
(2). Each Member shall take active steps towards achieving progressively a safe and healthy working
environment through a national system and national programmes on occupational safety and health by
taking into account the principles set out in instruments of the International Labour Organization (ILO)
relevant to the promotional framework for occupational safety and health.
(3). Each Member, in consultation with the most representative organizations of employers and
workers, shall periodically consider what measures could be taken to ratify relevant occupational safety
and health Conventions of the ILO. Available at <https://www.ilo.org/dyn/normlex/en/f?p=
NORMLEXPUB:12100:0::NO::P12100_INSTRUMENT_ID:312332> accessed on 2 January 2014.
37
The General Conference of the International Labour Organization adopts this fifteenth day of June
of the year two thousand and six the Recommendation, which may be cited as the Promotional
Framework for Occupational Safety and Health Recommendation, 2006. Available at
http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:55:0:::55:P55_TYPE,P55_LANG,P55_DOC
UMENT,P55_NODE:REC,en,R197,/Document accessed on 2 January 2014.
36
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Promotional Framework for Occupational Safety and Health Convention, 2006
(C187) as well as in Occupational Safety and Health Convention, 1981 (C155)38.
The ILO Employment Injury Benefits Convention, 1964 (No. 121)39, provides for the
competent authority to define occupational accidents and disease for which certain
compensation benefits shall be provided. These benefits include payment for medical
care and rehabilitation services for workers, income maintenance for the injured
workers and their dependants during the period of temporary and permanent disability
or in the case of death.
Paragraph 6(2) of the Employment Injury Benefits Recommendation, 1964 (no. 121)
provides that “unless proof to the contrary is brought, there should be a presumption
of the occupational origin of such disease” (under prescribed conditions).
Schedule I40 (see last page of this chapter) of the ILO Convention No. 121 partly
addresses this by listing those diseases that are common and well recognized and the
risk factors usually involved. Schedule I of the ILO Convention No. 121 on
occupational diseases was updated in 1980 at the 66 Session of the International
Labour Conference.
It was considered that a more simple mechanism to update the ILO list of
occupational diseases would be necessary to keep pace with emerging trends to
occupational disease and research into their causes. More importantly, this simplified
mechanism should form the basis for the ILO to review and revise its list of
occupational diseases in a timelier manner. This mechanism should allow the ILO to
provide guidance to its member States and constituents on the adoption and revision
38
The General Conference of the International Labour Organization, adopts this twenty-second day of
June of the year one thousand nine hundred and eighty-one the following Convention, which may be
cited as the Occupational Safety and Health Convention, 1981. Available at
http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:55:0:::55:P55_TYPE,P55_LANG,P55_DOC
UMENT,P55_NODE:REC,en,R197,/Document accessed on 2 January 2014.
39
The General Conference of the International Labour Organization, adopts this eighth day of July of
the year one thousand nine hundred and sixty-four the Convention, which may be cited as the
Employment Injury Benefits Convention, 1964. Available at http://www.ilo.org/dyn/normlex/en/f?p=
ument accessed on 2 January 2014.
40
Available at http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO:12100:P12100_
INSTRUMENT_ID:312266:NO accessed on 5 January 2014.
90 | P a g e
of national lists of occupational disease for both compensation and recording and
notification purposes.
Consequently, at the 90th Session of the International Labour Conference in 2002, a
new Recommendation concerning the List of Occupational Diseases and the
Recording and Notification of Occupational Accidents and Diseases (No. 194)41 was
adopted. Paragraph 3 of this new Recommendation provides for a simplified
mechanism for the updating of the ILO List of Occupational Diseases in its annex.
The updating of the list will not be required to go through the International Labour
Conference. The mechanism implies that the Office has to gather in systematic
manner information from all member States on disease recognized for compensation,
recording and notification purposes and the convening of meetings of experts on a
more regular basis to examine the available information and propose revisions of the
list.
Recommendation No. 19442 encourages competent authority to establish its national
list of occupational diseases which could be for the purpose of prevention, recording,
notification and, if applicable, compensation, in consultation with the most
representative organizations of employers and workers, by methods appropriate
conditions and practice, and by stages as necessary. This list should:
a. For the purposes of prevention, recording, notification and compensation
comprise, the diseases enumerated in Schedule I43 of the Employment Injury
Benefits Convention, 1964, as amended in 1980;
41
Based on the work of two meetings of experts, the ILO Governing Body approved a new list of
occupational diseases on 25 March 2010 during its 307th Session. This new list replaces the preceding
one in the annex of Recommendation No. 194 which was adopted in 2002. This new list of
occupational diseases reflects the state-of-the-art development in the identification and recognition of
occupational diseases in the world of today. It indicates clearly where prevention and protection should
take place. This ILO list represents the latest worldwide consensus on diseases which are
internationally accepted as caused by work. This list can serve as a model for the establishment, review
and revision of national lists of occupational diseases. The world’s working population and their
families will benefit from this new list. Available at <http://www.ilo.org/safework/info/publications/
WCMS_125137/lang--en/index.htm> accessed on 19 January 2014.
42
43
ibid
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b. Comprise, to the extent possible, other diseases contained in the list of
occupational diseases as annexed to this Recommendation; and
c. Comprise, to the extent possible, a section entitled “Suspected occupational
disease”.
Convention 12144 provides more detailed principles of compensation for damages
sustained from employment accidents, occupational diseases as well as commuting
accidents. Ratification of convention 12145 substitutes the application of Part VI of
Convention 102 and its relevant provisions.
Similar to convention 10246, convention 12147 provides flexibility for countries whose
economic and medical facilities are insufficiently developed. To these countries,
temporary exceptions in regards to some articles in this convention may apply by
means of a declaration which states the reasons for such exception while ratifying this
convention.
3.5.1. Persons Protected
All workers including apprentices, throughout their working periods, shall be
protected regardless of their length of employment of duration of contribution
payment. Exclusion may apply to seafarers and public servants, so long as they are
protected by special schemes which benefits are at least equivalent to those required
by this Convention.
44
The General Conference of the International Labour Organization, adopts this eighth day of July of
the year one thousand nine hundred and sixty-four the Convention, which may be cited as the
Employment Injury Benefits Convention, 1964. Available at <http://www.ilo.org/dyn/normlex/en/f?p=
NORMLEXPUB:55:0:::55:P55_TYPE, P55_LANG, P55_DOCUMENT, P55_NODE: REC, en,
/Document> accessed on 2 January 2014.
45
ibid
46
Convention on social security and protection at the contingencies that include any morbid condition,
whatever its cause and pregnancy. It was established in 1952, with the preamble stating: Having
decided upon the adoption of certain proposals with regard to minimum standards of social security.
Available at <http://www.ssa.gov/policy/docs/ssb/v15n10/v15n10p3.pdf> accessed on 24 April 2012.
47
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In countries where temporary exceptions apply, the coverage of employment injury
benefits may be limited to at least 75 percent of all employees in industrial
undertakings.
3.5.2. Contingencies
The contingencies covered shall include: (a) a morbid condition; (b) incapacity for
work as defined by national legislation; (c) permanent total loss or partial loss of
earning capacity or corresponding loss of faculty; and (d) the death of the
breadwinner.
Member countries are required to prescribe a definition of “industrial accident”,
including the conditions under which a commuting accident is considered to be an
industrial accident.
Member countries shall also prescribe a list of diseases, comprising at least the
diseases enumerated in Schedule I to this Convention; or include in its legislation a
general definition of occupational diseases broad enough to cover at least the diseases
enumerated in Schedule I to this Convention. Compensation for occupational diseases
shall also cover diseases that emerge after the actual work engagement.
In addition to the convention, ILO Recommendation no. 194 on Occupational
diseases (R194) provides an up-to-date list of occupational diseases to be covered
under the employment injury benefit scheme that countries can use as a reference. The
list appended to R194 is being updated periodically in order to reflect the most up-todate information on occupational diseases.
3.5.3. Benefits
The employment injury benefits shall include medical care in case of a morbid
condition and cash benefits in case of incapacity for work, total or partial loss of
earning capacity and the death of the breadwinner. The benefits shall be granted
throughout the contingency, with an exception of the first three days of incapacity for
work.
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3.5.4. Medical Care
Medical care and related benefits in respect of a morbid condition shall comprise: (a)
general practitioner and specialist in-patient and out-patient care, including
domiciliary visiting; (b) dental care; (c) nursing care at home or in hospital or other
medical institutions; (d) maintenance in hospitals, convalescent homes, sanatoria or
other medical institutions; (e) dental, pharmaceutical and other medical or surgical
supplies, including prosthetic appliances kept in repair and renewed as necessary, and
eyeglasses; (f) the care furnished by members of such other professions as may at any
time be legally recognized as allied to the medical profession, under the supervision
of a medical or dental practitioner; and (g) emergency treatment and follow-up
treatment in the place of work.
For members whose economic and medical facilities are insufficiently developed
(where a declaration for temporary exception is in force), medical care and allied
benefits shall include at least: (a) general practitioner care, including domiciliary
visiting; (b) specialist care at hospitals for in-patients and out-patients, and such
specialist care as may be available outside hospitals; (c) the essential pharmaceutical
supplies on prescription by a medical or other qualified practitioner; (d)
hospitalization, where necessary; and (e) wherever possible, emergency treatment at
the place of work of persons sustaining an industrial accident.
3.5.5. Cash Benefit
The cash benefit in respect of temporary or initial incapacity for work shall be a
periodical payment. Cash benefits in case of permanent loss of earning capacity or
corresponding loss of faculty shall be paid in all cases in which such loss remains
after the end of the benefit period for temporary or initial incapacity for work.
Benefits for permanent total loss of earning capacity and permanent substantial loss of
earning capacity (based on a prescribed degree) shall take the form of periodical
payment. Increments in the benefits shall be provided for disabled persons requiring
the constant help or attendance of another person.
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The cash benefit in respect of death of the breadwinner shall be a periodical payment
to a widow as prescribed, dependent children of the deceased plus a funeral benefit.
Lump-sum payments may be considered instead of periodical payment only if: a)
partial loss of capacity is not substantial; b) lump-sum is considered particularly
advantageous for the injured person (in exceptional circumstances, with the
agreement of the injured person); c) the country lacks administrative facilities for
periodical payment (and have declare so). In these cases, the lump sum payment shall
correspond to the actuarial equivalent of periodical payment, as computed on the basis
of available data.
3.5.6. Amount of cash benefits
In cases of temporary or permanent loss of incapacity for work, the rate of the benefit
plus the amount of family allowances shall be at least 60% of the previous earnings.
The standard beneficiary is worker with wife and two children. In case of death of the
breadwinner, the rate of the benefit plus the amount of family allowances shall be at
least 50% of the previous earnings. A widow with two children is set as the standard
beneficiary
The previous earnings of the beneficiary or breadwinner shall be calculated according
to prescribed rules, or calculated from the basic earnings of the classes to which they
belonged. The rates of cash benefits shall be reviewed following substantial changes
in the cost of living.
A benefit could be suspended due to reasons such as being absent from the territory of
the country, fraudulent claim etc.
3.5.7. Rehabilitation of the Disabled Workers
The Employment Injury Benefit Convention- C121, Article 2648 requires member
countries to provide rehabilitation services which are designed to prepare a disabled
48
1. Each Member shall, under prescribed conditions- (a) take measures to prevent industrial accidents
and occupational diseases; (b) provide rehabilitation services which are designed to prepare a disabled
person wherever possible for the resumption of his previous activity, or, if this is not possible, the most
suitable alternative gainful activity, having regard to his aptitudes and capacity; and (c) take measures
to further the placement of disabled persons in suitable employment. 2. Each Member shall as far as
95 | P a g e
person for the resumption of his previous activity, or, if this is not possible, the most
suitable alternative works, having regard to his aptitudes and capacity; and to take
measures to further the placement of disabled persons in suitable employment.
3.5.8. Summary of ILO conventions related to employment injury benefit49
The following table shows the list of the employment injuries along with rate of
benefits under the Convention No. 102 and Convention No. 121.
Convention No. 102
Convention No. 121
Nature of
•
Medical care.
benefits
•
Periodical payments,
of care at the place of work.
corresponding to at least 50% •
Periodical payments,
of the reference wage in
corresponding to at least 60%
cases of incapacity for work
of the reference wage in cases
or invalidity.
of incapacity for work or
In case of death of the
invalidity.
•
breadwinner, benefits for the
•
•
•
Idem. In addition, certain types
In case of death of the
widow and dependent
breadwinner, benefits for the
children. Periodical
widow, the disabled and
payments corresponding to at
dependent widower, dependent
least 40% of the reference
children, as well as all other
wage.
persons, as recognized under
Except in the case of
national legislation. Periodical
incapacity for work,
payments corresponding to at
obligation to revise the rates
least 50% of the reference
of periodical payments
wage. In principle a funeral
following substantial changes
benefit must be provided.
in the cost of living.
•
Obligation to prescribe a
possible furnish in its reports upon the application of this Convention submitted under Article 22 of the
Constitution of the International Labour Organisation information concerning the frequency and
severity
of
industrial
accidents.
Available
at
http://www.ilo.org/dyn/normlex/en/f?p=
NORMLEXPUB:55:0:::55:P55_TYPE,P55_LANG,P55_DOCUMENT,P55_NODE:CON,en,C102,/Do
cument#A32. Accessed on 20 December 2012.
49
Available at <http://www.ilo.org/safework/info/publications/WCMS_125137/lang--en/index.htm>
accessed on 19 January 2014.
96 | P a g e
•
Possibility of converting
minimum amount for these
periodical payments into a
periodical payments.
lump sum where:
•
Idem.
•
Possibility of converting
1) The degree of incapacity
periodical payments into a lump
is slight; or
sum (1) in the case of loss of
2) The competent authority
earning capacity which is not
is satisfied that the lump
substantial and (2) in
sum will be properly
exceptional circumstances, and
utilized.
with the agreement of the
injured person, when the
competent authority has reason
to believe that such lump sum
will be utilized in a manner
which is particularly
advantageous for the injured
person.
•
Supplementary benefits for
disabled persons requiring the
constant help of a third person.
Condition
•
Prohibition to prescribing a
•
Idem. Possibility of prescribing
of
qualifying period.
a period of exposure for
entitlement •
In the case of a widow, the
occupational diseases.
to benefits
right to benefit may be made
Duration
of benefits
•
•
Possibility for the national
conditional on her being
authority to prescribe
presumed to be incapable of
conditions under which a
self-support.
widow can claim the benefits.
No waiting period except in
•
Possibility of fixing a waiting
the case of temporary
period in cases of incapacity to
incapacity to work(maximum
work if the delay was provided
3 days)
for under legislation at the time
the Convention entered into
97 | P a g e
•
The benefit has to be granted
force and the reasons for this
throughout the contingency.
still exist.
Facilitation
•
Idem.
•
Providing vocational
of return-
rehabilitation service for
to-work
disabled workers’ return-towork, replacement, etc.
3.5.9. Schedule I. List of Occupational Diseases50
The following table shows the list of Occupational Diseases along with the degree of
exposure in working place.
1. Pneumoconioses caused by sclerogenic
mineral dust (silicosis, anthraco-silicosis,
asbestosis)
and
Work involving exposure to risk *
All work involving exposure to
the risk concerned.
silico-tuberculosis,
provided that silicosis is an essential factor
in causing the resultant incapacity or
death.
2. Bronchopulmonary diseases caused by
"
hard-metal dust.
3. Bronchopulmonary diseases caused by
"
cotton dust (byssinosis), or flax, hemp or
sisal dust.
4. Occupational asthma caused by sensitising
"
agents or irritants both recognised in this
50
Available
at
<http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:55:0:::55:P55_TYPE,
P55_LANG,P55_DOCUMENT,P55_NODE:REC,en,R121,/Document> accessed on 15 March 2014
98 | P a g e
regard and inherent in the work process.
5. Extrinsic
allergic
alveolitis
and
its
"
sequelae caused by the inhalation of
organic dusts, as prescribed by national
legislation.
6. Diseases caused by beryllium or its toxic
"
compounds.
7. Diseases caused by cadmium or its toxic
"
compounds.
8. Diseases caused by phosphorus or its toxic
"
compounds.
9. Diseases caused by chromium or its toxic
"
compounds.
10. Diseases caused by manganese or its toxic
"
compounds.
11. Diseases caused by arsenic or its toxic
"
compounds.
12. Diseases caused by mercury or its toxic
"
compounds.
13. Diseases caused by lead or its toxic
"
compounds.
14. Diseases caused by fluorine or its toxic
"
compounds.
15. Diseases caused by carbon disulfide.
"
16. Diseases caused by the toxic halogen
"
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derivatives
of
aliphatic
or
aromatic
hydrocarbons.
17. Diseases caused by benzene or its toxic
"
homologues.
18. Diseases caused by toxic nitro- and amino-
"
derivatives of benzene or its homologues.
19. Diseases caused by nitroglycerin or other
"
nitric acid esters.
20. Diseases caused by alcohols, glycols or
"
ketones.
21. Diseases caused by asphyxiants: carbon
"
monoxide, hydrogen cyanide or its toxic
derivatives, hydrogen sulfide.
22. Hearing impairment caused by noise.
"
23. Diseases caused by vibration (disorders of
"
muscles, tendons, bones, joints, peripheral
blood vessels or peripheral nerves).
24. Diseases caused by work in compressed
"
air.
25. Diseases caused by ionising radiations.
the action of ionising radiations.
26. Skin diseases caused by physical, chemical
or biological agents not included under
the risk concerned.
other items.
27. Primary epitheliomatous cancer of the skin
"
caused by tar, pitch, bitumen, mineral oil,
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anthracene, or the compounds, products or
residues of these substances.
"
28. Lung cancer or mesotheliomas caused by
asbestos.
29. Infectious or parasitic diseases contracted •
(a) Health or laboratory work.
in an occupation where there is a particular •
(b) Veterinary work.
risk of contamination.
(c)
•
Work
handling
animals,
animal carcasses, parts of such
carcasses, or merchandise which
may have been contaminated by
animals, animal carcasses, or
parts of such carcasses.
•
(d)
Other
work
carrying
a
particular risk of contamination.
*In the application of this Schedule the degree and type of exposure should be taken
into account when appropriate.
3.6.
International Standards of Social Security51
Below is the list of Conventions and Recommendations of ILO on Social Security.
Comprehensive Standard Recommendations
Convention No.67: Income Security, 1944
Conventions No.102: Social Security (Minimum Standards) 1952
Conventions No. 118: Equality of Treatment (Social Security) 1962
51
Roger Blanpain, Jean-Cluade Javillier and Jean-Michel Servais (eds.) International Labour and
Social Security Law (Kluwer Law International The Hague, The Netherlands, 2002) xi-xviii.
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Medical Care and Sickness Benefit Conventions
Conventions No.24: Sickness Insurance (Industry) 1927
Conventions No.25: Sickness Insurance (Agriculture) 1927
Recommendation No 134: Medical Care and sickness Benefits 1969
Old age invalidity and survivors benefits
Conventions No. 35: Old age Insurance (Industry etc.) 1933
Conventions No. 36: Old age Insurance (Agriculture) 1933
Conventions No. 37: Invalidity Insurance (Industry, etc.) 1933
Conventions No. 38: Invalidity Insurance (Agriculture) 1933
Conventions No.39: Survivors’ Insurance (Industry, etc.) 1933
Conventions No. 40: Survivors’ Insurance (Agriculture) 1933
Conventions No.128: Invalidity Old age and Survivors Benefits 1967
Employment Injury Benefit
Conventions No. 12: Workmen’s Compensation (Agriculture) 1921
Conventions No. 17: Workmen’s Compensation (Accidents), 1925
Conventions No. 18: Workmen’s Compensation (Occupational Diseases) 1925
Conventions No. 19: Equality of Treatment (Accident Compensation) 1925
Conventions No. 42: Workmen’s Compensation (Occupational Diseases) (Revised),
1934
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Conventions No. 121 Employment Injury Benefits 1964
Recommendation No. 23 Workmen’s Compensation (Jurisdiction) 1925
Recommendation No. 25 Equality of Treatment (Accident Compensation) 1925
Recommendation No. 121 Employment Injury Benefits 1964
Unemployment Benefit
Conventional No.22 Unemployment Provision 1934
Recommendation No. 44 Unemployment Protection, 1934
Maternity Benefit
Convention No. 103 Maternity Protection (Revised) 1952
Convention No. 183: Maternity Protection 2000
Although social security systems have played an integral role in many States for
decades, the idea of a compulsory minimum level of non-contributory social
protection has really gained momentum only in the last ten years. In 2001, the General
Conference of the International Labour Organisation (ILO) referred for the first time
to the original vision of the ILO Constitution, namely the “extension of social security
measures to provide a basic income to all in need of such protection and
comprehensive medical care”. It simultaneously affirmed social security as a “Basic
Human Right” and noted the importance of improving and extending social security
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coverage to all. The final resolution recommended that countries with limited
resources prioritize pressing needs, and that they consider ways to address those
living in the informal economy.
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CHAPTER-4
EXISTING LEGAL FRAMEWORK OF
THE SOCIAL SECURITY LAWS IN INDIA
4.1.
Social Security Universal Human Need.
Social Security caters to the universal human need for reassurance and support in
times of unemployment, illness, disability, death and old age. The State bears the
primary responsibility for developing appropriate systems for providing protection
and assistance to its workforce and their families. Public support systems for social
security in India have gained prominence over traditional family support in tune with
the trends of urbanization and work place migrations. The dependence on social
security varies as per the need and income status.1 In India a large majority of
workforce is devoid of any formal social security protection. There is a dearth of
formal social security protection i.e. either a contribution based social insurance
scheme or tax/cess based social security benefits. This is a major challenge to the
existing social security systems that have evolved in the last century. Security and
institutional support are required by all persons in order to face difficulties and to
mitigate hardships in the event of losses due to sickness, injury, loss of income and
inability to work.2
The social security schemes in India cover only a very small segment of the organised
work force, which may be defined as workers who are having a direct regular
employer-employee relationship within an organization. Out of an estimated work
force of about 397 million, only 28 million are having the benefit of formal social
security protection.3 The Social Security Laws in India at present can be broadly
divided into two categories, namely, the contributory and the non-contributory. The
contributory laws are those which provide for financing of the social security
programmes by contributions paid by workers and employers and in some cases
1
S.N. Misra Labour and Industrial Law (Central Law Publications 25th edition, 2010) 407
Available
at
http://www.Planningcommission.nic.in/aboutuc/committee/wrkgrp/wg_soclscty.pdf
accessed on 25 September 2012.
3
As per the survey carried out by National Sample Survey Organisation ((NSSO) 2000-2001.
2
105 | P a g e
supplemented by contributions/grants from the Government. The important
contributory schemes include the Employees State Insurance Act, 1948 and the
Provident Fund, Pension and Deposit Linked Insurance Schemes framed under the
Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The three
major non-contributory laws are the Workmen’s Compensation Act, 1923, the
Maternity Benefit Act, 1961 and the Payment of Gratuity Act, 1972.4
An important pillar of India’s social protection policies is the food programme,
implemented in the late 1960s and integrated within a wider rural poverty alleviation
scheme.5 This combined a large programme for land reforms6 and the introduction of
new technologies and crops in the agriculture sector- the ‘Green revolution’7, with an
extensive rural employment scheme, designed to address the unemployment problems
of the landless.
4.2.
The Interim National Government of India8
The interim national government during its power had drawn up a programme for the
welfare of the working classes in our country. This programme had the following
major characteristics9:-
4
Patricia Justino “Social Security from Developing Countries: Myth or Necessity Evidence from
India” PRUS (Poverty Research Unit at Sussex) University of Sussex Working Paper NO.27 of 20
September 2003.
5
ibid
6
The term ‘land reforms’ involves procurement and redistribution of large holdings of agricultural
land among the small farmers and landless agricultural labourers. It is an instrument to bring about
improvements in the institutional framework of land. The responsibility of land reforms is owned by
the government with a view of benefiting those who either have petty holdings or have no land at all.
As big land owners are quite unlikely to share their holdings with their landless counterparts,
intervention by the government using force of law/legislation is necessary to secure social justice for
the masses.
7
The introduction of high-yielding varieties of seeds and the increased use of fertilizers and irrigation
are known collectively as the Green Revolution, which provided the increase in production needed to
make India self-sufficient in food grains, thus improving agriculture in India. High-yielding wheat was
first introduced to India in 1963 by Dr. Borlaug has been hailed as the Father of the Green Revolution
but M.S. Swaminathan is known as the “Father of the Green Revolution in India” The methods adopted
included the use of high yielding varieties(HYV) of seeds.
8
The Interim National Government of India was formed on 2nd Sept 1946 from the newly elected
Constituent Assembly of India and Pakistan from British rule to Independence. It was in power until
15th August 1947.
9
B. Singh, Labour Policy and Administration, (MD Publications Pvt Ltd, New Delhi 1996) 11-20
106 | P a g e
a) Statutory prescription of minimum wages in sweated industries and
occupations in agriculture.
b) Promotion of fair wage agreements.
c) Steps to secure for workers in plantations a living wage.
d) Reduction in the hours of work in mines to bring the working hours in line
with the hours of work in factories which have been reduced from 54 to 48
hours in a week.
e) Legislation to regulate the hours of work, spread over weekly rest periods and
holidays with pay for other classes of workers not now subject to regulation,
that is, those employed in shops and commercial undertakings, road transport
services, docks and municipal labour.
f) Overhaul of the Factories Act with a view to the prescription and enforced of
right standards in regard to lighting, ventilation, safety, health and welfare of
workers. Conditions of work are to be improved, particularly in unorganised
industries and workplaces, to which the present Factories Act does not apply.
g) Organization of industrial training and apprenticeship schemes on a large scale
with a view to improve the productive and earning capacity of workers.
h) Steps to secure for workers in plantations, mining and other categories
provision of housing.
i) Organization of the Health Insurance Scheme, applicable to the factory
workers to start with for the provision of medical treatment and monetary
relief during the sickness, maternity benefit on an extended scale, medical
treatment in case of disablement and to dependants in case of death in place of
lump sum payments.
j) A central law for maternity benefit to secure for other than factory workers the
extended scale of benefits provided under the Health Insurance Scheme.
k) Right to leave with allowances during the period of sickness.
l) Provision for crèches and canteens.
m) Welfare of coal mining labour and welfare of the mica mining labour.
n) Strengthening of the inspection staff and the inspection of mines.
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The labour policy followed in the successive five year plans since independence
adopted an approach which rested on considerations that the basic needs of workers
for food, clothing and shelter must be satisfied.
The objective of achieving
‘socialistic pattern of society’ was the avowed goal of early five year plans and
provisions were made accordingly for the welfare of workers. However, not much
could be achieved by way of all these efforts. Majority of the labour laws enacted
sought to benefit only the organized sector.10
The term social security has been defined differently by various authorities and thus,
there is no commonly accepted definition of the term. Recently, some new concepts
viz. social safety nets,11 social protection and social funds relating to social security
have emerged. Social safety nets are measures to mitigate the negative effects of
structural adjustments mostly in form of cash payments. Broadly all these concepts
are part of the all pervasive term ‘social security’.
4.3.
The Provisions of Constitution of India on Social Security
The Constitution of India has affirmed social and economic justice to all its citizens.
The Fundamental Rights and Directive Principles of State Policy, enshrined in our
Constitution, need a special mention in view of their supreme importance and
10
P.K. Padhi, Labour and Industrial Laws (PHI Learning Private Ltd New Delhi 2007) 49
In Southeast Asia, the issue of “Social Safety Nets” (SSNs) has emerged more prominently since the
financial crisis. Despite the increased interest in social safety nets, there is still considerable confusion
among scholars and national and international organizations regarding the use and meaning of the term.
This article considers the different definitions of the term—particularly as it was used during the Asian
Financial Crisis—and to attempt to clarify its meaning and proper use. The safety net analogy is drawn
from high-wire walkers who are protected by a safety net if they fall. The safety net prevents any
walker who falls—unexpectedly or not—from hitting the floor and incurring catastrophic injuries.
Following this line of reasoning, it is not surprising to learn that some organizations and scholars use
the term SSN such that it encompasses private and public mechanisms that assist individuals in
maintaining a minimum level of consumption. The term “social safety net” (SSN) began to be used by
Bretton Woods institutions in connection with structural adjustment programs related to their lending
programs. Developing countries introduced SSNs to mitigate the social impact of structural adjustment
measures on specific low-income groups. They were initially formulated to serve three objectives:
poverty alleviation, to make adjustment programs more politically acceptable and institutional reform.
During the Asian Financial Crisis, there was a great deal of confusion regarding the content and
consequent identification of SSN programs. [Srawooth P., Shigeyuki A., Nipon P., ‘The Meaning of
Social Security Nets’ Journal of Asian Economics vol.19, Issues 5-6 Nov-Dec 2007 pp-467-473.]
11
108 | P a g e
influencing the social security legislations, which provide sufficient guarantee against
exploitation.
Article 2112 - Right to life and liberty - The Constitution of India, guarantees
fundamental rights to every citizen. The most significant among them is Article 21
which guarantees right to life. The Supreme Court has elaborately considered this
Article many times and categorically held that right to livelihood is inherent in right
to life.13 The ultimate aim of social security is to ensure means of livelihood to
everyone. In other words, right to social security is inherent in right to life.
Article 24 - Prohibition of employment of children in factories, etc - No child
below the age of fourteen years shall be employed to work in any factory or mine or
engaged in any other hazardous employment.
Article 38 - State to secure a social order for the promotion of welfare of the
people (1) The State shall strive to promote the welfare of the people by securing and
protecting as effectively as it may a social order in which justice, social, economic
and political, shall inform all the institutions of the national life.14
(2) The State shall, in particular, strive to minimize the inequalities in income, and
endeavour to eliminate inequalities in status, facilities and opportunities, not only
amongst individuals but also amongst groups of people residing in different areas
or engaged in different vocations.15
Article 39 - Certain principles of policy to be followed by the State - The State
shall, in particular, direct its policy towards securing
12
Article 21. Protection of life and personal liberty- No person shall be deprived of his life or personal
liberty except according to procedure established by law.
13
Olga Tellis v Bombay Municipal Corporation AIR 1986 SC 180. The court held that the term ‘life’
in Art. 21 is not restricted to the mear animal existence of a person. It means something more and the
inhibitions against the deprivation of life extents to all those limits and faculties by which life is
enjoyed.
14
Article 38 renumbered as clause (1) thereof by the Constitution (Forty-fourth Amendment) Act,
1978, sec. 9 (with effect from 20-6-1979).
15
Inserted by the Constitution (Forty-fourth Amendment) Act, 1978, sec. 9 (with effect from 20-61979).
109 | P a g e
(a) that the citizens, men and women equally, have the right to an adequate means to
livelihood;
(b) that the ownership and control of the material resources of the community are so
distributed as best to sub-serve the common good;
(c) that the operation of the economic system does not result in the concentration of
wealth and means of production to the common detriment;
(d) that there is equal pay for equal work for both men and women;
(e) that the health and strength of workers, men and women, and the tender age of
children are not abused and that citizens are not forced by economic necessity to
enter avocations unsuited to their age or strength;
(f) that children are given opportunities and facilities to develop in a healthy manner
and in conditions of freedom and dignity and that childhood and youth are
protected against exploitation and against moral and material abandonment.16
Article 41 - Right to work, to education and to public assistance in certain cases The 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: - The State shall make provision for securing just and humane conditions of
work and for maternity relief.
Article 43 - Living wage, etc, for workers: - The State shall endeavour to secure, by
suitable legislation or economic organisation or in any other way, to all workers,
agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring
a decent standard of life and full enjoyment of leisure and social and cultural
opportunities and, in particular, the State shall endeavour to promote cottage
industries on an individual or co operative basis in rural areas.
16
Substituted by the Constitution (Forty-second Amendment) Act, 1976, sec. 7 for clause (f) (with
effect from 03-1-1977).
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Article 43A17 – Participation of workers in management of industries: - The state
shall take steps, by suitable legislation or in any other way, to secure the participation
of workers in the management of undertakings, establishments or other organisations
engaged in any industry.
Chapter I of the part XI of the Constitution of India deals with legislative relations
between Union and State. The matters in respect of which laws are to be have been
ascribed in three lists: - a) Union List b) Concurrent List and c) State List. The part
XXII, schedule VII, mentions the above three lists.
The matters of workers interest - The Union List, entries 13,18 28,19 55,20 61,21 65,22
and 94.23 The State List, entry 9.24 The Concurrent List, entries 20,25 21,26 22,27 23,28
24,29 25,30 36,31 and 45.32
The directives contained in Part IV are the common man’s pathway towards the
attainment of socio-economic justice. As rightly pointed out by Justice Ramaswamy33
“The poor, the workman and common man can secure and realize the
economic and social freedom only through the right to work and right to
adequate means of livelihood, to just and humane conditions of work, to a
17
Inserted by the Constitution (Forty-second Amendment) Act, 1976, sec. 9 (with effect from 3-11977).
18
Participation in international conferences, associations, and other bodies and implementing of
decisions made there.
19
Port quarantine, including hospitals connected therewith; seamen’s and marine hospitals.
20
Regulation of labour and safety in mines and oilfields.
21
Industrial disputes concerning union employees.
22
Union agencies and institutions for- a) professional, vocational or technical training, including the
training of police officers; or b) the promotion of special studies or research; or c) scientific or
technical assistance in the investigation or detection of crime.
23
Inquiries, surveys and statistics for the purpose of any of the matters in this list.
24
Relief for disabled and unemployable.
25
Economic and Social planning.
26
Commercial and industrial monopolies, combines and trusts.
27
Trade unions; industrial and labour disputes.
28
Social security and social insurance; employment and unemployment.
29
Welfare of labour including conditions of work, provident funds, employers’ liability, workmen’s
compensation, invalidity and old age pensions and maternity benefits.
30
Education, including technical education, medical education and universities, subject to the
provisions of entries 63,64,65,and 66 of List I; vocational and technical training of labour.
31
Factories.
32
Inquiries and statistics for the purpose of any of the matters specified in the list II or list III.
33
Air India Statutory Corporation v United Labour Union, AIR 1997 SC 645 at p. 648.
111 | P a g e
living wage, a decent standard of life, education and leisure. To them these
are fundamental facets of life....”
Though not justifiable, these principles are fundamental in the governance of the
country and State is duty bound to apply these principles in making laws. In a series
of decisions on the subject, the Supreme Court has categorically held34 that the State
has responsibility to protect the interests of workmen for establishing social and
economic democracy in which every workmen realize socio- economic justice
assured in the Preamble,35 Article 14,36 15,37 21 and Directive Principles of the
Constitution
34
PU.D.R. v Union of India AIR 1982 SC 1473, the Supreme Court held “.it is the constitutional
obligation of the state to take necessary steps for the purpose of interdicting such violation and
ensuring observance of fundamental rights”. In National Textile Workers Union v Ramakrishnan AIR
1983 SC 75, The Supreme Court observed: “The workers therefore have a special place in a socialist
pattern of society. They are producers of wealth. They produce labour without which capital would be
impotent. Our Constitution has shown profound concern of the workers and given them a pride of place
in the new socioeconomic order envisaged in the Preamble and Directive Principles of State Policy.
The Preamble contains the profound declaration concieved with meaning and hope of millions of
peasants and workers that India shall be socialist democratic republic where social and economic
justice will inform all institutions of national life and every endure shall be made to promote fraternity
ensuring the dignity of the individual”. So also in A.B.S.K. Sangh (Rly) v UOI AIR 1981 SC 298, it was
held that, “Article 37 of the Constitution emphatically state that Directive Principles are never the less
fundamental in the governance of the country. And it shall be the duty of the state to apply these
principles in making laws. .So we have to say that the constitutional goal is the establishment of a
Socialist Democracy in which justice, economic, social and political is secured and all men are equal
and have equal opportunity. The underprivileged, the deprived and exploited are to be protected and
nourished so as to take their place in an egalitarian society. State’s action is to be towards these ends”.
The decision in Chandra Bhavan Boarding v State of Mysore AIR 1970 SC 2042 also sounds the
same. The Court held that: “The mandate of the Constitution is to build a welfare society in which
justice, social, economic and political shall inform all institutions of our national life. The hopes and
aspirations aroused by the Constitution will be belied if the minimum needs of the lowest of our
citizens are not met the basic needs”
35
WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute India into a SOVEREIGN,
SOCIALIST, SECULAR, DEMOCRATIC, REPUBLIC and to secure to all its citizens:- JUSTICE,
social, economic and political; LIBERTY of thought, expression, belief, faith and worship;
EQUALITY of status and of opportunity; and to promote among them all FRATERNITY assuring the
dignity of the individual and the unity and integrity of the nation
36
Article 14. Equality before law- The State shall not deny to any person equality before the law or the
equal protection of the laws within the territory of India. Prohibition of discrimination on grounds of
religion, race, caste, sex or place of birth.
37
Article 15. Prohibition of discrimination on grounds of religion, race, caste, sex or place of birth- (1)
The State shall not discriminate against any citizen on grounds only of religion, race, caste, sex, place
of birth or any of them (2) No citizen shall, on grounds only of religion, race, caste, sex, place of birth
or any of them, be subject to any disability, liability, restriction or condition with regard to- (a) access
to shops, public restaurants, hotels and palaces of public entertainment; or (b) the use of wells, tanks,
bathing ghats, roads and places of public resort maintained wholly or partly out of State funds or
dedicated to the use of the general public. (3) Nothing in this article shall prevent the State from
making any special provision for women and children. (4) Nothing in this article or in clause (2) of
Article 29 shall prevent the State from making any special provision for the advancement of any
112 | P a g e
Social Security was also one of the topics discussed at the Fifth Asian Trade Union
seminar held at New Delhi from 30th November, to 3rd December, 1977. It made
several recommendations, of which some of the important ones related to (a)
provision of basic needs, essential services, medical care and legal aid; (b) work
guarantee as an integral part of social security; (c) adequate and effective measures
for rural social security; (d) rate of interest paid to the provident fund beneficiaries to
be well comparable with the bank rates (e) long term social security benefits to be
linked with the cost of living index; (f) creation of voluntary alternative investment
for the provident fund money into suitable government controlled or guaranteed
schemes yielding higher return. (g) Income redistribution effect of social security
programmes; (h) integration of various social security institutions.38
In 1995, the Government of India introduced for the first time an All-India protective
type social security scheme, the National Social Assistance Programme (NSAP). The
NSAP encompasses a national policy for social assistance benefits to poor households
in the case of old age, death of breadwinner and maternity. The programme has, so
far, three main components: the National Old Age Pension Scheme, the National
Family Benefit Scheme, and the National Maternity Benefit Scheme. The provision of
social security for the poorest sections of society is included in the 2011-2012 budget
as an area of priority within India’s social sector, together with other areas such as the
empowerment of women, population policy and health, which extends the system of
social security in India beyond the objectives of standard programmes implemented in
more advanced economies.39
Social Security legislations also
have been shaped and influenced by the
recommendations of the various National Committees and Commissions such as
First National Commission on Labour (1969)40 under the Chairmanship of Justice
socially and educationally backward classes of citizens or for the Scheduled Castes and the Scheduled
Tribes.
38
P. Swapna ET. al / VSRD Social Security Regarding Employee or Labour Welfare, International
Journal of Business & Management Research Vol. 1 (7), 2011, 397-497
39
S. K. Bhatia, Constructive Industrial Relations and Labour Laws (Deep and Deep Publications pvt.
Ltd, 2007) 118
40
Available at <http://pib.nic.in/focus/fojan99/fo1101991.html> accessed on 11 June 2012.
(The first National Commission on Labour was set up on 24th December 1966 under the chairmanship
of Justice P.B. Gajendragadkar. The Commission submitted its report in August, 1969 after detailed
examination of all aspects of labour problems, both in the organised and unorganised sectors. The
recommendations covered issues like recruitment agencies and practices, employment service
113 | P a g e
Gajendragadkar, National Commission on Rural Labour (1991)41, Second National
Commission on Labour (2002)42 under the Chairmanship of Shri Ravindra Varma
etc. and judicial pronouncements on labour related matters specifically pertaining
to minimum wages, bonded labour, child labour, contract labour etc.
Social Security and Five Year Plans
The First Five Year Plan43 apportioned with labour and industrial associations with
a humanistic approach. It standard the importance of labour in the self-actualization of
the targets of the plan and creating an economic order in the country. With this view,
the first plan associated certain rights and obligations with the role which labour had
to play.
The rights comprised aspects like adequate provision for the basic requirement of the
workers in respect of food, clothing and shelter so as to enable them to remain healthy
and efficient, provision for improved health conditions, wider provision for social
security, better educational opportunities and increased recreational and cultural
facilities; conditions of work that would safeguard the worker’s health and protection
administration, training and workers education, working conditions, labour welfare, housing, social
security, wages and earnings, wage policy, bonus, workers/employers organisations, industrial relations
machinery etc. Important recommendations of the Labour Commission have been implemented
through amendments to certain labour laws like the Workmen’s Compensation Act, 1923 ( for removal
of wage ceiling for coverage), the Industrial Disputes Act, 1947 ( mainly in respect of the unfair labour
practices). The Employees State Insurance Act, 1948 (enhancement in the wage limit for exemption
from payment of Employees’ Contribution), Factories Act, 1948 (for making penalties more stringent
for violation of safety requirements and provision of Welfare facilities), and the Employees Provident
Funds and Miscellaneous Provisions Act, 1952 (enhancement in the rate of contribution and making
default of dues a cognizable offence). Certain new laws have also been enacted like the Contract
Labour (Regulation and Abolition) Act, 1970, Limestone and Dolomite Mines Labour Welfare Fund
Act, 1972, Iron Ore, Manganese Ore and Chrome Ore Mines Labour Welfare Fund Act, 1976. Equal
Remuneration Act, 1976 and Child Labour (Prohibition & Regulation) Act, 1986. In the areas of wage
policy and minimum wages, employment services, vocational training, labour statistics and research
and workers’ education also, the recommendations made by the Commission have been largely taken
into account in modifying the policies, procedures and programmes of the Government. The National
Labour Institute was set up in 1972 in pursuance of the recommendations of the Commission).
41
The National Commission on Rural Labour (NCRL), 1991 under the Chairmanship of Dr. C. H.
Hanumantharao, discussed the issue of social security and recommended minimal social security
benefits for rural labourers such as old age pension, life insurance, maternity benefit, disability benefit
accident compensation, minimal health care and sickness benefit. Available at
<http://rural.nic.in/sites/downloads/gramin-bharat/gb_mar_eng09.pdf> accessed on 11 June 2012.
42
It suggested for (a) insurance against death or disability, (b) health insurance, (c) maternity cover,
and
(d)
old
age
benefits.
Available
at
<http://rural.nic.in/sites/downloads/graminbharat/gb_mar_eng09.pdf> accessed on 11 June 2012.
43
Planning Commission, Government of India - First Five Year Plan 1951-1956.
114 | P a g e
against occupational hazards, right to organize and to take lawful action in furtherance
of their rights and interests. The plan called upon labour to realize the fact that in an
underdeveloped economy, it cannot build for itself but they have to make a substantial
contribution. This will ultimately lead to peaceful industrial relations. The plan
envisaged for establishing a tripartite body for determining norms and standards,
standardization of wages with principles of social policy, profit sharing, permanent
wage boards etc. Above all, a full and effective implementation of minimum wage
legislations was the main recommendations in First Five Year Plan.
Second Five Year Plan44 dealt with employment aspects. This plan gave importance
to the employment opportunities with an objective of maximizing rate of growth
output through the utilization of available resources as a means for economic
development. The task is divided into three, firstly about providing employment
opportunities for the existing urban and rural growth, secondly, providing natural
increase in the labour force and lastly about those underemployed in agriculture and
household activities to be provided with increased work opportunities. With the
adoption of the policy of socialistic pattern of society, the labour policy in the Second
Plan was accordingly influenced.
The main emphasis of the Second Five Year Plan was on the problem of
unemployment and under employment. The plan gave high priority to the
development of large scale joint stock enterprises on the one hand and village and
small scale industries on the other for solving the unemployment problem.
Third Five Year Plan,45 apart from the implementation of the schemes drawn up in
the first two plans, social security measures were taken into consideration. It declared
the labour policy by emphasizing states’ responsibility in providing facilities and cooperative arrangements for settling disputes. It visualized that “the object is to secure
not peace alone but higher levels of industrial efficiency and rising standard of life of
working class.”
44
45
Planning Commission, Government of India- Second Five Year Plan 1956-1961.
Planning Commission, Government of India -Third Five Year Plan 1961-1966.
115 | P a g e
The Fourth Five Year Plan46 analysed the Employees State Insurance Scheme,
industrial training to craftsmen, employees provident fund scheme and initiate that
these expanded steadily. This plan endorsed for adoption of the ideology of ILO that
includes “development involving comprehensive programs of rural development,
labour intensive public work programmes and fuller utilization of industrial capacity,
promotion of labour intensive products in domestic and foreign markets and
application of economically sound labour intensive techniques in industrial
production”.47
The Fifth Five Year Plan48 found that “stray progress is being achieved in social
security measures”. It reiterated the suggestion of the Committee on Perspective
Planning appointed by the Employees’ State Insurance Corporation that the
Employees’ State Insurance Scheme should carry out a 5-year phased programme of
extension of additional categories of establishments, including smaller factories,
shops and commercial establishments, mines and other establishments. The Plan also
stated that the scope for integrating certain important social security measures is
being studied.
The Sixth Five Year Plan49 recognize that the time had come when labour policy
should be much more concerned with the interests of vast masses of workers who are
outside the organized sector and are unable to protect their interests. The plan spoke
about industrial policy i.e., ‘industrial development policy’ in a developing country
like India, it has to meet two conflicting requirements. It must protect the right of
the working class to organize and to struggle for its economic and social betterment
by all democratic and legal means.
The plan also envisaged for extension of benefit of minimum wages to more
beneficiaries, revising wage policy assuring similar wages for similar work, worker’s
46
Planning Commission, Government of India- Fourth Five Year Plan 1969-1974.
In the report of United Nations Environment Programme (UNEP), the International Labour
Organisation (ILO) has forcefully agreed for the integration of employment creation to economic
development through the maximum possible productive resources available labour to accelerate
economic growth and more particularly, to substitute labour for scarce capital where there is
economically feasible.
48
Planning Commission, Government of India- Fifth Five Year Plan 1974-1979.
49
Planning Commission, Government of India- Sixth Five Year Plan 1980-1985.
47
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share in profit and income, expansion of working of National Safety Councils and
National Council for Safety in Mines.
The Plan debated social security of workers under Employees State Insurance Act,
1948; Employees Provident Fund and Miscellaneous Provisions Act, 1948; Payment
of Gratuity Act, 1947 and Family Pension Scheme. The Plan envisaged for expansion
of coverage of these Acts not only to factories employing 10 to 19 persons using
power but also to shops, hotels, restaurants, cinemas, theatres, and motor transport
and newspaper establishments employing 20 workers or more.
The Seventh Year Plan50 recognize that the labour entered the production process
from the supply side as well as from the demand side and the thrust of Seventh Plan
was an improvement in ability utilization, efficiency and productivity. This plan has
given emphasis to industrial safety and required constant attention due to its
significant impact on the working conditions and welfare of workers and also on the
production mechanism.
The objective in the Eighth Five Year Plan51 was giving employment generation and
economic growth as complementary rather than conflicting processes. The plan took
the aspect of need of important scrutiny in the impact of macro-economic, sectoral
and labour policies on employment.
During Ninth Five Year Plan52 period. Appreciating the encouraging results of these
reforms, the plan document observed that Indian economy has responded well to the
change in policy direction.
The Tenth Five Year Plan53 as approved by National Development Council (NDC)
envisaged an annual growth of 8% which is higher than 5.5% achieved during the
Ninth Five Year Plan period. The plan targeted 10 million employment opportunities
per year over Tenth Plan period. The plan especially emphasised on social security
and framed a working group. The report54 elaborately discussed the present system of
50
Planning Commission, Government of India- Seventh Five Year Plan 1985-1990.
Planning Commission, Government of India - Eighth Five Year Plan 1992-1997.
52
Planning Commission, Government of India- Ninth Five Year Plan 1997-2002.
53
Planning Commission, Government of India -Tenth Five Year Plan 2002-2007.
54
Report of the Working Group on Social Security for the Tenth Five Year Plan 2002-2007, Planning
Commission, Government of India October, 2001
51
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social security in India. The objective of this plan was to support attainment of
economic and social objective in labour sector through a set of strategies. It is
believed that a reasonable return to labour is facilitated by labour laws including
provisions for social security to workers. The Plan envisaged that to reach out to the
entire labour force employed, many of the existing institutions, laws and programmes
including those on social security have to be restructured.
The Eleventh Five Year Plan55 considering the achievements made by the ESIC56
and the EPFO57 in providing institutionalized social security cover to a majority of the
workers in the organized sector has recommended that an attempt would be made to
widen their coverage and strengthen them. To cover more number of beneficiaries,
measures should be taken to enhance the capability of these institutions to cope with
the workload. To reduce harassment and corruption in these institutions, the
government will strive to streamline the delivery system in these institutions.
Twelfth Five Year Plan,58 for growth to be inclusive it must create adequate
livelihood opportunities and add to decent Employment commensurate with the
expectations of a growing labour force. India’s young age structure offers a potential
demographic dividend for growth, but this potential will be realized only if the extent
and quality of education and skill development among new entrants to the workforce
is greatly enhanced.
India is characterized by ambiguity in policy as well as in responsibility and lack of
effective implementation of legislations. There are many schemes but these have
been framed at various points of time and, therefore, do not conform to any overall
design reflecting a comprehensive and consistent policy or direction. The working
group on Labour Policy59set up by the Planning Commission also pointed out that the
schemes of social security, types of benefits or protection provided there under do not
conform to any overall plan or design. The public expenditure on social security in
55
Planning Commission, Government of India -Eleventh Five Year Plan 2007-2012.
57
58
Planning Commission, Government of India -Twelfth Five Year Plan 2012-2017
59 Report of Working Group for 11th Five Year Plan 2007-2012 under the Chairmanship of Prof.
B.L.Mungekar
56
118 | P a g e
India is 1.8% of the GDP against 4.7% in Sri Lanka and 3.6% in China.60 This itself
shows the disparity of human development that these countries have achieved and
that we are yet to achieve. In the light of the inadequate expenditure on social
security in India, it is necessary that plans and programmes be devised to address the
needs of diverse vulnerable sections of the people, comprising the total population of
India.
4.4.
An Overview of Social Security Legislations
The Indian Social Security legislations can be classified as follows:(a) Labour laws enacted by the Central Government, where the Central Government
has the sole responsibility for enforcement.
(b) Labour laws enacted by Central Government and enforced both by Central and
State Governments.
(c) Labour laws enacted by Central Government and enforced by the State
Governments.
4.4.1. Social Security laws enacted by the Central Government, where the
Central Government has the sole responsibility for enforcement61
The following are the Social Security laws wherein Central Government plays vital
role for the enforcement.
The Employees’ State Insurance Act, 1948
The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952
60
World Labour Report, 2000. Available at <http:// www.ilo.org/public/english/protection/socsec/
wlrblurb .htm> accessed on 25 Dec 2011.
61
The Royal Commission on Labour had ‘recommended that legislative authority should remain with
the Central Government, though the states could also be given jurisdiction provided that no legislation
was undertaken by the states without the previous concurrence of the Central Government and that
such legislation did not impair or infringe the Central Government’s legislation’. Report of the Royal
Commission on Labour in India, (1931) 38-83.
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The Dock Workers (Safety, Health and Welfare) Act, 1986
The Mines Act, 1952
The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare
(Cess) Act, 1976
The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare
Fund Act, 1976
The Mica Mines Labour Welfare Fund Act, 1946
The Beedi Workers Welfare Cess Act, 1976
The Limestone and Dolomite Mines Labour Welfare Fund Act, 1972
The Cine Workers Welfare (Cess) Act, 1981
The Beedi Workers Welfare Fund Act, 1976
The Cine Workers Welfare Fund Act, 1981
4.4.2. Social Security laws enacted by Central Government and enforced by
both Central and State Governments62
The following laws are enforced by both Central and State Governments
The Child Labour (Prohibition and Regulation) Act, 1986.
The Building and Other Constructions Workers’ (Regulation of Employment and
Conditions of Service) Act, 1996.
The Contract Labour (Regulation and Abolition) Act, 1970.
The Equal Remuneration Act, 1976.
62
ibid
120 | P a g e
The Industrial Disputes Act, 1947.
The Industrial Employment (Standing Orders) Act, 1946.
The Inter-State Migrant Workmen (Regulation of Employment and Conditions of
Service) Act, 1979.
The Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by
Certain Establishments) Act, 1988
The Maternity Benefit Act, 1961
The Minimum Wages Act, 1948
The Payment of Bonus Act, 1965
The Payment of Gratuity Act, 1972
The Payment of Wages Act, 1936
The Cine Workers and Cinema Theatre Workers (Regulation of Employment) Act,
1981
The Building and Other Construction Workers Cess Act, 1996
The Apprentices Act, 1961
Unorganized Workers Social Security Act, 2008
Working Journalists (Fixation of Rates of Wages) Act, 1958.
Merchant Shipping Act, 1958
Sales Promotion Employees Act, 1976
Dangerous Machines (Regulation) Act, 1983
Dock Workers (Regulation of Employment) Act, 1948
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Dock Workers (Regulation of Employment) (Inapplicability to Major Ports) Act,
1997
Private Security Agencies (Regulation) Act, 2005
4.4.3. Social Security laws enacted by Central Government and enforced by the
State Governments63
The following laws are enforced by the State Governments:
The Employers’ Liability Act, 1938
The Factories Act, 1948
The Motor Transport Workers Act, 1961
The Personal Injuries (Compensation Insurance) Act, 1963
The Personal Injuries (Emergency Provisions) Act, 1962
The Plantation Labour Act, 1951
The Sales Promotion Employees (Conditions of Service) Act, 1976
The Trade Unions Act, 1926
The Weekly Holidays Act, 1942
The Working Journalists and Other Newspapers Employees (Conditions of Service)
and Miscellaneous Provisions Act, 1955
63
As a matter of constitutional law, legislative power over labour and employment relations had been
largely shared concurrently by both Central and State governments since 1919, and hence the Royal
Commission was merely recommending the continuance of existing arrangements. This legal division
of power was also continued in the Constitution of India which came into effect in 1950, following the
securing of Indian independence from Britain in 1947. Under such legal arrangements Central and
State governments have continued to legislate for labour relations. However, there has been ongoing
debate over the years concerning the problems of co-ordination and uniformity of labour laws due to
the overlap of powers. Available at <http://www.buseco.monash.edu.au/blt/wclrg/workingpapers.html> accessed on 15 June 2012.
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The Workmen’s Compensation Act, 1923
The Employment Exchange (Compulsory Notification of Vacancies) Act, 1959
The Children (Pledging of Labour) Act 1938
The Bonded Labour System (Abolition) Act, 1976
The Beedi and Cigar Workers (Conditions of Employment) Act, 1966
The founding fathers of India adopted the course of a mixed economy64, and the
economic development of India since independence is unique in several ways. India's
development pattern during 1959-1980 was characterized by strong centralized
planning, excessive regulation and control of private enterprises, state ownership of
basic industries, trade protectionism and a cautious and selective approach towards
foreign capital65. It was nothing but a permit and license regime.
Since 1985, successive governments realized the lower rate of growth and carried
forward reforms in industrial, financial, fiscal and external affairs. It reached a stage
of liberalization, privatisation and globalization66 all the way. In the new liberalized
industrial and trade environment, the government is allowing competition and market
forces to guide investment decisions. Government started progressively assuming the
role of promoter, facilitator and catalytic agent instead of a controller and licenser of
private economic activities.
64 Capitalism and Marxism were the other two options. .Mixed economy means economy where
private and public enterprises co-exist. “An economy in which a substantial number, though by no
means all, of the activities of production, distribution and exchange are undertaken by the government,
and there is more interference by the State than there would be in a market economy. A mixed
economy thus combines the characteristics of both capitalism and socialism.” Alan and Trombley, the
Norton Dictionary of Modern Thought, (W. W. Norton & Company 1999) 535.
65 All these are regulated by specific laws and rules. The most important enactment was Foreign
Exchange Regulation Act, 1973.
66 These are the main components of new economic policies. See, Economic Reforms since 1991,
Chapter 7 p.98. The replacement of license, quota and permit (LQP) Rajy by liberalization,
privatization and globalization (LPG) Regime. Available at <http://www.ncert.nic.in/textbooks/
XI/Economics XI/Ch-7.pdf> accessed on 3 November 2011.
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4.5.
Organized and Unorganized Sectors in India
The organized sector includes primarily those establishments which are covered by
the Employees State Insurance Act, 1948, Factories Act, 1948, the Shops and
Commercial Establishments Acts of State Governments, the Industrial Employment
Standing Orders Act, 1946 etc. This sector already has a structure through which
social security benefits are extended to workers covered under these legislations.67
The unorganized sector on the other hand, is characterized by the lack of labour law
coverage, seasonal and temporary nature of occupations, high labour mobility,
dispersed functioning of operations, casualization of labour, lack of organizational
support, low bargaining power, etc. all of which make it vulnerable to socio-economic
hardships.
The nature of work in the unorganized sector varies between regions and
also between the rural areas and the urban areas, which may include the remote rural
areas as well as sometimes the most inhospitable urban concentrations. In the rural
areas it comprises of landless agricultural labourers, small and marginal farmers,
share croppers, persons engaged in animal husbandry, fishing, horticulture, beekeeping, toddy tapping, forest workers, rural artisans, etc. where as in the urban areas,
it comprises mainly of manual labourers in construction, carpentry, trade, transport,
communication etc. and also includes street vendors, hawkers, head load workers,
cobblers, tin smiths, garment makers, etc.68
4.6.
The Principal Social Security Legislations in India
The below are the Primary Social Security Legislations in India for the organised
sector.
67
68
Available at <http://labour.nic.in/content/division/social-security.php> accessed on 15 June 2012.
ibid
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4.6.1. The Employees’ State Insurance Act, 1948 (ESI Act)69
The question of introducing a Health Insurance Scheme in India was engaging the
attention of the Royal Commission on Labour appointed in 1929. However, the
publication of the Beveridge Report in 1942 outlining the health insurance scheme for
industrial workers in the United Kingdom renewed the interest for introducing a
similar health scheme in India. This coupled with the mounting pressure from tradeunions for positive action for introducing social security scheme for industrial
workers culminated in appointment of Professor B.P. Adarkar by the Government of
India to prepare a scheme of health insurance for industrial workers. On August 15,
1944, Professor Adarkar submitted a scheme of health insurance for workers to the
Government of India for covering workers below a certain wage ceiling in three major
groups of industries: Textile, Engineering and Minerals & Metals. The Scheme was
intended to provide medical care and sickness benefit for the insured persons.
Before proceeding to enact a health insurance law, the Government of India sought
the technical assistance from the ILO70 for carrying out an expert examination of the
scheme prepared by Prof. Adarkar. Accordingly, two ILO Experts, M. Stack and R.
Rao, examined the scheme and while agreeing with the fundamental principles laid
down by Adarkar regarding coverage of contingencies, the financial participation of
the provincial governments and the adoption of an integrated scheme covering
sickness, maternity and employment injury. Prof. Adarkar’s Scheme and the
suggestions made by the ILO experts were incorporated into the Workmen’s State
Insurance Bill of 1946, which was passed by the Legislative Assembly in April 1948
as the Employees’ State Insurance Act71 (ESI Act).
Presently, under Section 2(12) of the ESI Act, it is applicable to non-seasonal
factories employing 10 or more persons. Under Section 1(5) of the Act, the Scheme
has been extended to shops, hotels, and restaurants, cinemas including preview
theatres, road-motor transport undertakings and newspaper establishments employing
69
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
70
International Labour Organisation.
71
This was, in fact, the First Social Legislation adopted by the Country after independence.
125 | P a g e
20 or more persons.72 The Scheme73 is administered by a Corporate Body called the
Employees’ State Insurance Corporation74 which has the members representing
employers, employees, Central & State Governments, medical profession and the
Parliament.
A Standing Committee75 constituted from amongst the members of the Corporation
acts as the Executive Body for administering the Scheme. There is a Medical Benefit
Council to advise the Corporation in matters connected with provision of medical
care.
The Director General who is the Chief Executive Officer (CEO) of the
Corporation is also an Ex-Officio Member of the Corporation and its Standing
Committee.
The Scheme is financed mainly by contributions from employers and employees.
While the employer’s share of contribution is 4.75% of the wages payable to
employees and employees’ share of contribution is 1.75% of their wages. Employees
72
Under Section 1(5) of the ESI Act, the Appropriate Government is empowered to extend the Scheme
to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise.
Thus, a State Government may extend the provisions of the Act in consultation with the ESI
Corporation, and with the approval of the Central Government, after giving six months notice of its
intention in the official gazette; provided that where the provisions of this Act have been brought into
force in any part of State, the said provisions shall stand extended to any such establishment or class of
establishments within that part if the provisions have already been extended to similar establishments
or class of establishments in another part of that State.
73
Employees’ State Insurance Scheme of India is a multidimensional social security system tailored to
provide socio-economic protection to worker population and their dependants covered under the
scheme. Besides full medical care for self and dependants, that is admissible from day one of insurable
employment, the insured persons are also entitled to a variety of cash benefits in times of physical
distress due to sickness, temporary or permanent disablement etc. resulting in loss of earning capacity,
the confinement in respect of insured women, dependants of insured persons who die in industrial
accidents or because of employment injury or occupational hazard are entitled to a monthly pension
called the dependants benefit. Available at <http://www.esic.nic.in/esi_act.php> accessed on 25 March
2012.
74
Section 3 of ESI Act 1948- Establishment of Employees’ State Insurance Corporation- (1) With
effect from such date as the Central Government may, by notification in the Official Gazette, appoint in
this behalf, there shall be established for the administration of the scheme of Employees’ State Insurance in accordance with the provisions of this Act a Corporation to be known as the Employees’ State
Insurance Corporation.(2)The Corporation shall be a body corporate by the name of Employees’ State
Insurance Corporation having perpetual succession and a common seal and shall by the said name sue
and be sued.
75
Section 8 of ESI Act 1948- Constitution of Standing Committee. — A Standing Committee of the
Corporation shall be constituted from among its members, consisting of a) a Chairman [appointed] by
the Central Government ;(b) three members of the Corporation, [appointed] by the Central
Government] ; (bb) three members of the Corporation representing such three State Governments
thereon as the Central Government may, by notification in the Official Gazette, specify from time to
time ;(c) [eight] members elected by the Corporation as follows- (i)[* * *] (ii) [three] members from
among the members of the Corporation representing employers ; (iii) [three] members from among
the members of the Corporation representing employees ;(iv) one member from among the members of
the Corporation representing the medical profession ; and (v) one member from among the members
of the Corporation elected by [Parliament] ;(d) the Director-General of the Corporation ex-officio.
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drawing wages up to Rs.100/- per day are not required to contribute. However,
employers are required to pay their share of contribution. The State Government’s
share of expenditure on provision of medical care is to the extent of 12.5% of the total
expenditure on medical care in their respective States subject to a per capita ceiling
prescribed by the Corporation from time to time, beyond which the expenditure is
borne by the State Governments. An employer is liable to pay his contribution in
respect of every employee and deduct employee’s contribution from wages bill and
shall pay these contributions at the above specified rates to the Corporation within 21
days of the last day of the Calendar month in which the contributions fall due. The
Corporation has authorized designated branches of the State Bank of India and some
other banks to receive the payments on its behalf.76
The section 4677 of the Act envisages the following social security benefits
76
77
Available at <http://www.esic.nic.in/esi_act.php> accessed on 25 March 2012.
Section 46 Benefits. —
(1)
Subject to the provisions of this Act, the insured persons, [their dependants or the persons
hereinafter mentioned, as the case may be,] shall be entitled to the following benefits,
namely: —
(a) periodical payments to any insured person in case of his sickness certified by a duly
appointed medical practitioner [or by any other person possessing such qualifications and experience as the Corporation may, by regulations, specify in this behalf]
(hereinafter referred to as sickness benefit) ;
(b) periodical payments to an insured woman in case of confinement or miscarriage or
sickness arising out of pregnancy, confinement, premature birth of child or
miscarriage, such woman being certified to be eligible for such payments by an
authority specified in this behalf by the regulations (hereinafter referred to as
maternity benefit) ;
(c) periodical payments to an insured person suffering from disablement as a result of
an employment injury sustained as an employee under this Act and certified to be
eligible for such payments by an authority specified in this behalf by the regulations
(hereinafter referred to as disablement benefit) ;
(d) periodical payments to such dependants of an insured person who dies as a result of
an employment injury sustained as an employee under this Act, as are entitled to
compensation under this Act (hereinafter referred to as dependants’ benefit) ;
(e) medical treatment for and attendance on insured persons (hereinafter referred to as
medical benefit) ; and
(f)
payment to the eldest surviving member of the family of an insured person who has
died, towards the expenditure on the funeral of the deceased insured person, or,
where the insured person did not have a family or was not living with his family at
the time of his death, to the person who actually incurs the expenditure on the funeral of the deceased insured person (to be known as [funeral expenses].
Provided that the amount of such payment shall not exceed [such amount as may be
prescribed by the Central Government] and the claim for such payment shall be
made within three months of the death of the insured person or within such
extended period as the Corporation or any officer or authority authorized by it in
this behalf may allow.
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Medical Benefit (MB): Full medical care is provided to an Insured person and his
family members from the day he enters insurable employment. There is no ceiling on
expenditure on the treatment of an Insured Person or his family member. Medical care
is also provided to retired and permanently disabled insured persons and their spouses
on payment of a token annual premium of Rs.120/- .
System of Treatment
Scale of Medical Benefit
Benefits to Retired IPs
Administration of Medical Benefit in a State
Domiciliary treatment
Specialist consultation
In-Patient treatment
Imaging Services
Artificial Limbs & Aids
Special Provisions and Reimbursement
Sickness Benefit (SB) : Sickness Benefit in the form of cash compensation at the rate
of 70 per cent of wages is payable to insured workers during the periods of certified
sickness for a maximum of 91 days in a year. In order to qualify for sickness benefit
the insured worker is required to contribute for 78 days in a contribution period of 6
months.
(2)
The Corporation may, at the request of the appropriate Government, and subject to such
conditions as may be laid down in the regulations, extend the medical benefits to the
family of an insured person.
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Extended Sickness Benefit (ESB) : SB extendable up to two years in the case of 34
malignant and long-term diseases at an enhanced rate of 80 per cent of wages.
Disablement Benefit:
Temporary disablement benefit (TDB) : From day one of entering insurable
employment & irrespective of having paid any contribution in case of employment
injury. Temporary Disablement Benefit at the rate of 90% of wage is payable so long
as disability continues.
Permanent disablement benefit (PDB) : The benefit is paid at the rate of 90% of
wage in the form of monthly payment depending upon the extent of loss of earning
capacity as certified by a Medical Board
Dependants’ Benefit (DB) : DB paid at the rate of 90% of wage in the form of
monthly payment to the dependants of a deceased Insured person in cases where death
occurs due to employment injury or occupational hazards.
Other Benefits:
Funeral Expenses: An amount of Rs.10000/- is payable to the dependents or to the
person who performs last rites from day one of entering insurable employment.
Confinement Expenses: An Insured Women or an Insured Person (IP) in respect of
his wife in case of confinement occurs at a place where necessary medical facilities
under ESI Scheme are not available.
In addition, the scheme also provides some other need based benefits to insured
workers:
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Vocational Rehabilitation: To permanently disabled Insured Person for undergoing
VR Training at VRS.
Physical Rehabilitation: In case of physical disablement due to employment injury.
Old Age Medical Care: For Insured Person retiring on attaining the age of
superannuation or under VRS/ERS and person having to leave service due to
permanent disability insured person and spouse on payment of Rs. 120/- per annum.
Rajiv Gandhi Shramik Kalyan Yojan: This scheme of Unemployment allowance
was introduced with effect from 01-04-2005. An Insured Person who become
unemployed after being insured three or more years, due to closure of
factory/establishment, retrenchment or permanent invalidity are entitled to :Unemployment Allowance equal to 50% of wage for a maximum period of up to one
year. Medical care for self and family from ESI Hospitals/Dispensaries during the
period IP receives unemployment allowance. Vocational Training provided for
upgrading skills - Expenditure on fee/travelling allowance borne by ESIC.
The medical care services under ESI scheme in the states are provided by the
respective State Government except in Delhi and Noida where the medical care
services are provided directly by ESI Corporation. Besides this ESI Corporation is
also running one hospital in the state (which has been designated as Model hospital)
and five Occupational Disease Centres. Medical care services to beneficiaries are
provided by two ways:•
Direct Provision through ESI schemes own network of dispensaries,
diagnostic centres and hospitals.
•
Indirect Provision by contracting with private clinics (panel system),
diagnostic centres and hospitals.
ESI Scheme is providing medical care under different systems depending upon the
requirements of the region. The various systems prevalent are:•
Allopathy78
78
Allopathic medicine refers to the practice of conventional medicine, and especially the practices now
referred to as heroic medicine it was coined by Samuel Hahnemann (1755–1843) in1810. Allopathy is
the treatment of symptoms of a disease by unrelated or opposite substances. The method of treating
130 | P a g e
•
AYUSH79 which include
o
Ayurveda,80
o
Sidha,81
o
Unani,82
o
Homeopathy83 and
disease by the use of agents that produce effects different from those of the disease treated (opposed to
homeopathy). The treatment of disease by conventional means, i.e., with drugs having opposite effects
to the symptoms.
Available at <http://mannclassicalhomoeopathy.webs.com/apps/blog/entries/show/7301288-what-isallopathy-> accessed on 22 Dec 2012.
79
AYUSH is an acronym that is used to refer to the non-allopathic medical systems in India. It
includes the Indian medical system of Ayurveda, Yoga, Unani, Siddha, and also Homeopathy.
Available at <http://indianmedicine.nic.in/> accessed on 22 Dec 2012.
80
Ayurveda can be defined as a system, which uses the inherent principles of nature, to help maintain
health in a person by keeping the individual’s body, mind and spirit in perfect equilibrium with nature.
Ayurveda is a Sanskrit term, made up of the words ‘ayus’ and ‘veda.’ ‘Ayus’ means life and ‘Veda’
means knowledge or science. The term ‘ayurveda’ thus means ‘the knowledge of life’ or ‘the science
of life’. According to the ancient Ayurvedic scholar Charaka, ‘ayu’ comprises the mind, body, senses
and the soul. Available at <http://hinduism.about.com/od/ayurveda/p/ayurveda.htm> accessed on 22
December 2012.
81
The Siddha Medicine is one of the oldest medical systems known to mankind. This system of
medicine originated from south India in Tamil Nadu, as part of the trio Indian medicines - ayurveda,
siddha and unani. This system was very popular in ancient India. Believed to be more than 10,000
years old, the Siddha system of medicine is considered to be one of the most antiquated traditional
medical systems. The system is believed to be developed by the 18 siddhas of the south popular called
the Siddhars. Siddhars were spiritual adepts who possessed the ashta siddhis, or the eight supernatural
powers. Sage Agathiyar is considered the guru of all Sidhars, and the Siddha system is believed to have
been handed over to him by Lord Muruga, son of the Hindu God - Lord Shiva and Goddess Parvathi.
So, are the siddhars the followers of Lord Shiva (Shaivaites). Agathiyar is the first Siddhar and his 18
disciples contributed thousands of texts on Siddha, including medicine, and form the propounders of
the system in this world. Available at <http://gandeepam.org/siddhahosp_whatis.php> accessed on 21
Dec 2012.
82
Unani medicine as the name suggests, originated in greece or unan. It was the greek philosopherphysician Hippocrates (460-377BC) who freed medicine from the realm of superstition and magic and
gave the status of science. The theorectical frame work of unani medicine is based on the teachings of
Hippocrates. He believed that whenever and where ever possible medicine should be gentle and safe.
This is the main objective of unani medicine. After Hippocrates, a number of Greek scholars enriched
the system and it imbibed the best from contemporary system of medicine in Egypt, Syria, Iraq, Persia,
and India, china and other Middle East and Far East countries. That’s why the system is known in
different parts of the world by different names, like Greco-Arab medicine, Ionian medicine, Arab or
Islamic medicine, Oriental medicine and so on. The fundamental principle of the unani system
recognises that disease is a natural process and symptoms of a disease are body’s reaction to disease.
The chief function of the physician is to aid the natural forces of the body. The unani medicine is based
on the Humoral theory-which presupposes the presence of four humors. They are Dum (blood),
Balgham (phlegm), Safra (yellow bile) and Sauda (black bile). The body has the power of self
preservation to maintain a correct balance of these humors, which is called as Quwwat-e-Mudabbira
(Medicatrix natura). Unani medicines help the body to regain this balance.
The essential constituents and the working principles of the body, according to Unani, can be classified
into seven main groups: arkan or elements, comprising earth, water, air and fire as different states of
matter and the building blocks of everything in the universe; mizaj (temperament); akhlat (humours);
aza (organs); arwah (life, spirits or vital breaths); quva (energy); and af'al (action). Available at
<http://www.unanidoctors.com/unanimedicine.htm> accessed on 21 Dec 2012.
83
Homeopathy is a system of medicine which involves treating the individual with highly diluted
substances, given mainly in tablet form, with the aim of triggering the body’s natural system of healing.
131 | P a g e
o
•
Yoga84
ESI Scheme provides all three different levels of care i.e. Primary care,
Secondary care and Tertiary care (Super specialty care). Primary care is
provided through dispensaries & panel clinics. Secondary care is provided
through diagnostic centres and hospitals. Tertiary care is provided by entering
into tie up arrangement with specialized private and government diagnostic
facilities and hospitals.
ESI scheme is providing full medical care to its beneficiaries which include
preventive, promotive, curative and rehabilitative services. The various benefits
available are85:•
Health education
•
Family welfare services
•
Immunization services
•
HIV and AIDS control services
•
Outpatients, inpatients, emergency medical services
•
Diagnostic laboratory and radiological services
•
Antenatal, natal and post natal services
•
Occupational health services
•
Super specialty services including specialized investigations
•
Physical and vocational rehabilitation
•
Ambulance services
Based on their specific symptoms, a homeopath will match the most appropriate medicine to each
patient. Homeopathy is based on the principle that you can treat ‘like with like’, that is, a substance
which causes symptoms when taken in large doses, can be used in small amounts to treat those same
symptoms. For example, drinking too much coffee can cause sleeplessness and agitation, so according
to this principle, when made into a homeopathic medicine, it could be used to treat people with these
symptoms. This concept is sometimes used in conventional medicine, for example, the stimulant
Ritalin is used to treat patients with Attention Deficit Hyperactivity Disorder (ADHD), or small doses
of allergens such as pollen are sometimes used to de-sensitise allergic patients. However, one major
difference with homeopathic medicines is that substances are used in ultra high dilutions, which makes
them non-toxic.
Available
at
<http://www.homeopathy-soh.org/about-homeopathy/what-ishomeopathy/> accessed on 22 December 2012.
84
If you thought that yoga was all about bending and twisting your body in odd shapes, it’s time to
rethink. Yoga is much more. In very simple words, giving care to your body, mind and breath is yoga.
This means that the century-old practice includes yoga postures (asanas), breathing techniques
(pranayamas) and meditation. Through these, the body, mind and breath come in harmony with each
other and that very moment yoga (Union) happens. Available at <http://www.artofliving.org/inen/yoga> accessed on 22 Dec 2012.
85
Available at <http://www.esic.nic.in/esi_act.php> accessed on 25 March 2012.
132 | P a g e
•
Artificial aids and appliances such as spectacles, dentures, hearing aids,
artificial limbs etc.
•
Drugs and dressings
Major initiatives of corporation in recent past for carrying out perfection in the
scheme
The Corporation has gradually increased the scope of coverage to bring more and
more employees within the Social Security umbrella. Some of the major steps taken
in this direction were as under –
Initially the scheme applies only to factories using power and employing 10 or more
persons. Based on the recommendation of a Committee on Perspective Planning
(1972), the Corporation gradually extended the threshold for coverage to non-power
using factories employing 20 or more persons. Side by side several non-factory
establishments such as shops, hotels, restaurants, cinemas including preview theatres,
road-motor-transport undertakings and newspaper establishments employing 20 or
more persons were brought within the purview of the scheme (now employing 10 or
more persons irrespective of using power), by using the enabling provisions of
Section 1(5)86 of the Act, which empower the appropriate Govt. to extend the scheme
to new categories of establishments.
The Scheme, which started with just two centres, namely, Delhi and Kanpur with
effect from 24.2.1952, to-day, applies to 718 centres in 25 States and Union
Territories covering 84.98 lakh insured persons and a total of 329.73 lakh
beneficiaries. This was achieved by phased implementation of the scheme with the
cooperation of the concerned State Governments in so far as the States have to first
86
Section 1(5): The appropriate Government may, in consultation with the Corporation and [where the
appropriate Government is a State Government, with the approval of the Central Government], after
giving [one month’s] notice of its intention of so doing by notification in the Official Gazette, extend
the provisions of this Act or any of them, to any other establishment, or class of establishments,
industrial, commercial, agricultural or otherwise.[Provided that where the provisions of this Act have
been brought into force in any part of a State, the said provisions shall stand extended to any such
establishment or class of establishments within that part if the provisions have already been extended to
similar establishment or class of establishments in another part of that State.]
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create necessary infrastructure for providing medical care before the scheme can be
extended to a new area.87
Initially when the scheme was introduced only employees drawing wages up to
Rs.400/- were covered under the Scheme, the wage ceiling for coverage was gradually
extended from time to time to keep pace with rise in the wages due to increase in the
cost of living index. The ceiling was enhanced from Rs.400/- to Rs.500/- in 1966,
Rs.1, 000/- in 1975, Rs.1, 600/- in 1985, Rs.3, 000/- in 1992, Rs.6, 500/- in 1997, and
Rs.7, 500/- from 1.4.2004. The Corporation has since approved in its 136th meeting
of the Corporation held on 15.6.2006 approved enhancement in the wage ceiling from
Rs.7,500/- to Rs.10,000/- and at present the ceiling limit is Rs. 1500088 per month for
the coverage of the workers (Minimum wage limit for Physically Disabled Persons for
availing ESIC Benefits is Rs. 25,000/-). When the Scheme was initially introduced,
medical care under the scheme was provided only to the insured worker himself.
However, with effect from 1977 the medical care was also extended to families of
insured worker.89
An interesting feature of the ESI Scheme is that the contributions are related to the
paying capacity as a fixed percentage of the workers wages, whereas, they are
provided social security benefits according to individual needs without distinction.
Cash Benefits are disbursed by the Corporation through its Branch Offices (BOs) /
Pay Offices (POs), subject to certain contributory conditions.90
A Sub Committee of the Corporation known as General Purpose Medical Care Sub
Committee comprising of representatives of employers and employees visits the States
to supervise and monitor the functioning of the Scheme. Recommendations and
observations of this committee are placed before the members of ESI Corporation for
its consideration and implementation. In order to facilitate the flow of funds, to the
State Governments. A Scheme of Revolving Fund has been introduced. Under this, an
amount as per requirement of State Govt. is kept with the Regional Directors for the
purpose of super-speciality treatment of the beneficiaries. The amount is also to be
utilised for speciality treatment if not available in ESI institutions. This methodology
87
Available at <http://www.esic.nic.in/esi_act.php> accessed on 25 March 2014
With effect from 1st May 2010.
89
Available at <http://www.esic.nic.in/esi_act.php> accessed on 25 March 2014
90
ibid
88
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has become very popular with the States, since the funds are directly and readily
available.
Hospital Vigilance Committees have been constituted at the hospital level with the
representatives of employees, employers and medical professions to monitor the
activities of the hospital in a participative way. A Perspective Plan has been drafted to
take various steps with regard to removal of duality of control in administration,
reorganization of hospitals and dispensaries infrastructure, up gradation of primary
health care services, direct flow of fund to ESI scheme, utilization of rate contract for
drugs and equipments, utilization of training funds and human resource development
etc. The Perspective Plan aims at ensuring efficiency in service and cost effectiveness
through optimum utilization of the already constructed infrastructure, wherein it has
been proposed to upgrade and modernize hospital services wherever bed occupancy is
good, open the services to general public wherein there is low occupancy of hospital
but adequate coverage exists and involve Third Party Participation for the
administration of hospitals, wherein the bed occupancy is low and there are
inadequate number of I.Ps.
A scheme of model hospitals has been implemented in 2001 as per the decision of the
ESI Corporation. As per the model hospital scheme one hospital in the state is to be
taken over from the state government and run by ESI Corporation directly. Till now
twelve hospitals have been taken over from the state governments by the ESIC.
Besides these Five ESIC hospitals cum Occupational Disease Centres are also
functioning as model hospitals for these states. To monitor the functioning of the
Schemes regular inspections are taken up through the Medical Referees,
SSMCs/SMCs, Regional Directors, Officers of the Hqrs. Office and Ministry etc. and
remedial actions are taken on their observations.91
A Project Implementation Plan 1999-2004 had been approved through World
Bank/NACO92 to take up various activities for prevention and control of HIV/AIDS
91
92
ibid
National AIDS Control Organization.
135 | P a g e
amongst ESI beneficiaries. Under this plan a number of Blood Banks, Blood Storage
and STD clinics/VCTCs93 have been set up in ESI Hospitals.
4.6.2. Workmen’s Compensation Act, 192394
The Workmen’s Compensation Act is the oldest of the social security legislations
intended for the welfare of workers. At present, the Act is applicable to workers
employed in 50 hazardous employment/ occupations. When it was originally enacted
there was a wage ceiling for coverage under the Act. However, it has been
subsequently, removed and the provisions of this Act are now applicable to all the
workers including casual workers employed in industries etc. mentioned in the
Schedule. This Act takes care of two contingencies namely disablement due to
employment injury and death due to employment injury. A lump sum compensation
amount is paid to the disabled worker or the dependants as the case may be during
both the contingencies. The maximum amount of compensation for disablement is
Rs.5.48 lakhs and for death is Rs. 4.56 lakhs. In case of temporary disablement
monthly payments are made at 50% of wages up to 5 years.95
It is an employer’s liability scheme, which mainly relies upon the good behaviour of
employers. Where the employers are enlightened or where there are powerful trade
unions, the rights of the workers are protected and the compensations are paid as per
the Act. In all other cases there is a tendency to pay a nominal compensation or even
to deny it. In such cases the only remedy available to the workers or the dependants is
to approach the State labour Department concerned and seek their intervention which
goes up to arbitration which is a time consuming process. Even after arbitration there
is no way by which the State authorities are in a position to enforce the payment of
compensation. Very often, it is seen that small employers even with good intentions
do not have adequate funds to discharge their liabilities.96
93
Voluntary Counselling and Testing Centres
Report of the Working Group on Social Security for the Tenth Five Year Plan (2002-2007),
Working Group Sr. No. 48/2001, p.18
95
ibid
96
ibid 19
94
136 | P a g e
The lump sum payment, which the worker or the dependant receives, does not provide
real social security. In our social conditions there is a tendency to spend the money
immediately even on non-essential items. As a result the lump sum amount paid is
spent within a short time and the worker or the dependants are again in dire financial
straits. Even in cases where they manage to retain the money, due to lack of
knowledge about proper investment, they do not get adequate returns. With the cost of
living going up year after year the standard of living deteriorates due to reduced
availability of resources. In the case of periodical pensions, there is a system of
indexing, which takes care of the adverse effect of increase in cost of living to a large
extent. Such a provision is not available in the Workmen’s Compensation Act97.
The Workmen’s Compensation Act is not applicable to those workers who are
covered by the ESI Act.
4.6.3. Maternity Benefit Act, 196198
This Act is applicable to every establishment being a factory, plantation or mine and
to every shop or establishment in which 10 or more persons are employed. The State
Governments may, with the approval of the Central Government, declare that all or,
any of the provisions of the Act shall apply also to any other establishments or class
of establishment, industrial, commercial, agricultural or otherwise.
Under this Act female workers are entitled for paid holidays not exceeding 12 weeks
in the case of maternity and during this period they are eligible to receive full wages.
There is also provision for pre-natal confinement and post-natal care free of charge
failing which employer is liable to pay medical bonus of Rs.250/-. In the case of
miscarriage, maternity leave is available for a period not exceeding six weeks. There
is also provision for sick leave for a period not exceeding one month in case of
sickness arising out of maternity.
97
ibid
Report of the Working Group on Social Security for the Tenth Five Year Plan (2002-2007),
Working Group Sr. No. 48/2001, p. 20
98
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This Act is also based on employer’s liabilities. Like Workmen’s Compensation Act,
the actual implementation of the benefit provisions of this Act also depends largely
upon the good will of the employer. Here also the implementation is not satisfactory.
Where employers are enlightened or where there are powerful trade unions, the rights
of the workers are protected and the compensations are paid as per the law. In all
other cases, it is very difficult for the female workers to take advantage of the
provisions of this Act. Not infrequently the female workers are discharged even well
before their due date of confinement and they are not paid anything till they are fit
enough to resume their duties.
4.6.4. Payment of Gratuity Act, 197299
Extending to whole of India, the Act applies to factories, mines, oil fields, plantations,
ports, railway companies, and to shops and establishment employing ten or more
persons. The Act came into force on 16 September 1972.Other establishments
included by notification are Motor Transport, Clubs, Chambers of Commerce &
Industry, Inland Water Transport, Local Bodies and Solicitors Office.
This Act provides for payment of lump sum gratuity to the employees. Under the
Scheme Gratuity is payable at 15 day’ wages for every completed year of service
subject to monetary ceiling of Rs.3.50 lakh. In case of seasonal establishments
gratuity is payable at 7 day’s wages. The gratuity is payable in the contingency of
superannuation, retirement, resignation, death or disablement due to accident or
disease subject to completion of 5 years continuous service. The condition is however,
not applicable in case of death or disablement. Like Workmen’s Compensation Act
and Maternity Benefit Act the Payment of Gratuity Act is also an employers’ liability
scheme. In the absence of proper enforcement, many of the provisions of this Act also
are observed only in their breach. The financial constraints of small employers also
add to the problems in proper enforcement.
99
ibid 21
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4.6.5. The Employees’ Provident Fund Act, 1952100
The Employees’ Provident Fund Act was passed in 1952 to provide for institution of
provident fund for the employees of factories and other establishments. The Scheme
came into force from 1st November 1952. The Scheme is presently applicable to 180
industries/class of establishments employing 20 or more persons. Coverage under the
Scheme is restricted to employees drawing pay plus dearness allowance not exceeding
Rs.6,500/- per month. At present 4.40 lakh establishments having 2.6 crore employees
are covered under the EPF Scheme.
The Scheme is basically meant for security of workers after their retirement. It
provides for lump sum payment of provident fund, monthly pension and deposit
linked insurance. The basic rate of provident fund contribution is 10% of basic
wage/salary and the higher rate is 12%. The basic rate of 10% applicable to 5 main
industries namely, beedi, brick, jute, coir and guar gum for the rest it is 12%. Out of
the employer share of contribution, a sum equal to 8.33% of wages is diverted to
pension fund account while the balance of employer’s share of contribution and
employee’s share of contribution is credited to the provident fund account.
The accumulation in the provident fund account of a member becomes payable for
final settlement under following situations:
•
On retirement from service after attaining the age of 55 years.
•
On retirement as a result of total and permanent disablement rendering the
Worker incapable of working.
•
Immediately before migration from India for permanent settlement abroad
for
taking up employment abroad;
•
Termination of service upon mass or individual retrenchment;
•
Termination of service under a voluntary retirement scheme; and
•
Termination of job and remaining unemployed for over two months or leaving the
job from a covered establishment and joining an establishment not covered by P.F.
100
ibid 25
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4.7.
Social Security Schemes in India
India has implemented the following Social Security schemes in different areas
(a) Preventive Schemes: Preventive Schemes are the Schemes aimed at risk
prevention. In the strategy of social management of risks, preventive approach tries to
prevent poverty and helps people under below poverty line to come above poverty
line. Preventive health care, vaccinations against diseases forms part of the preventive
strategies. Majority of the schemes are of social assistance in nature.
(b) Promotional Schemes: Promotional social security schemes are mainly of Means
tested Social Assistance type, where to guarantee minimum standards of living to
vulnerable groups of population, the Governments at the State and Centre draft
schemes financed from the general revenues of the Government. These are the
strategies of risk mitigation. This guarantee:
Food and Nutritional Security by ensuring per capita availability of food grains,
access to food, developing agriculture sector, targeted Public Distribution system etc.
Employment security by ensuring employment by generating employment,
redeploying the surplus manpower in any sector, creating rural employment
opportunities, encourages technological up gradation.
Health Security by ensuring availability of medical facilities, maintaining standards of
sanitation and drinking water, eradication and control of communicable diseases,
timely vaccination of children and child bearing women, health insurance, old age
homes and social insurance for the elderly.
Education Security by ensuring opening of schools, Encouraging children to attend
classes, making education compulsory up to certain age, opening adult learning
centres or formulating schemes like Sakshara, running schemes like mid day meals
etc.
Women Security by empowering women, encouraging women literacy, banning
dowry, designing widow pension schemes. Assistance to the disabled by undertaking
programmes to promote health and education among the disabled persons, providing
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rehabilitation services and reservations in services so as to enable them to participate
in social and economic activity.
All the above form part of promotional social security schemes where State
Governments are more involved than the Central Government. Examples of schemes
in the promotional social security area include:
•
Food for work
•
Jawahar Rojgar Yojana
•
Antyodaya
•
Rural Landless Labourers Employment Guarantee Schemes
•
Programmes of Integrated Rural Development Project
•
Drought prone area Programmes
•
Sakshara
•
Integrated Child Development Scheme (ICDS)
•
Public Distribution System
•
Reservations for the disabled in services
•
Special educational institutions for the disabled persons
4.8.
The Present Initiatives
The various Central Acts on Social Security are being examined in the light of the
recommendations of the 2nd National Commission on Labour. Relevant amendments
are proposed in the EPF and MP Act as also the ESI Act. The consultation process is
on with reference to the amendment suggestions received in case of the Maternity
Benefit Act and the Workmen’s Compensation Act.
Innovative measures are proposed in the running of the Social Security Schemes of
EPFO101 and ESIC102. This includes flexible benefit schemes tailored to the specific
requirements of different segments of the population.
101
102
Employees’ Provident Fund Organization
Employees’ State Insurance Corporation
141 | P a g e
The profiles of the Employees’ Provident Fund Organization and the Employees’
State Insurance Corporation are being changed towards greater accessibility and client
satisfaction.
The EPFO extends to the entire country covering over 393824 establishments. At
present, over 3.9 crore EPF Members and their families get benefits under the social
security schemes administered by the EPFO. The total corpus of the EPF Scheme
1952, EDLI103 Scheme 1976 and Employees Pension Scheme 1995 together amounts
to about Rs.1,39,000 crores. Over the years, the volume of service rendered to
subscribers as well as investments made, etc. by EPFO have grown manifold. With a
view to provide better services to subscribers and employers, the organization has
launched the Project Re-Inventing EPF, India since June, 2001. The prime objectives
of this Project are to provide the subscribers better and efficient services, to help the
employers by reducing the cost of compliance and to benefit the organization to
register geometric growth104 in all fields. An important part of this Project is the
allotment of the Unique Identification Number, Social Security Number to the EPF
subscribers, issuing of Business Numbers to the employers and business process reengineering. The strategy for implementation has been evolved and the allotment of
the Social Security Number has begun with the entire activity being carried out in
smaller phases for effective data collection. The criteria considered for the allotment
of SSN105 include the centralized control of Uniqueness, ensuring the least manual
intervention during allotment and near 100% Uniqueness accuracy levels. The Social
Security Number in a nutshell is a big effort towards solving the problem of providing
social protection to migrant labour and to make the data base of EPFO adaptable to
the present trend of high job mobility among workers.
Social security is essential for the well being of people and society. It is the basic
human right and its fulfilment will contribute to achieving various developmental
goals of nation. Social Security measures have far reaching benefits in the form of
improving and bringing sense of pride and self respect amongst the citizens. Such
measures also help in providing the minimal level of providing protection against
103
Employees’ Deposit Linked Insurance
Geometric growth refers to the situation where successive changes in a population differ by a
constant ratio
105
Social Security Number
104
142 | P a g e
health and life hazards in work situations. It can progressively pay standard to social
security welfare measures involving provisions of better Health Care, Maternity Care,
and Old Age Pension etc.
4.8.1. 45th Session of the Indian Labour Conference Concludes with a Resolve
to Provide Universal Social Security Coverage and Assured Pension to the
Entire Working Population106
During the course of Conference the Labour Ministers of State Governments, Central
Trade Union Leaders, Employers’ representatives, and Officials of the central and
state governments deliberated on four agenda items namely, (a) service conditions,
wages and social security for various categories of workers employed in different
Central and State Government schemes; (b) social security with special reference to
Assured Pension with indexation for all workers including self-employed; (c) labour
laws for MSME107 sector; (d) and measures to improve employment
and
employability.
Some of the salient points, which emerged during the two-day deliberations, were
extending social security benefits to all workers working under various government
schemes and to regulate their service conditions. It was also suggested that these
workers should be provided with basic amenities, suitable working place and right to
organize and collective bargaining. The stakeholders also unanimously agreed for
providing universal social security coverage and assured pension to the entire working
population. Suggestions were also made for making pension benefits responsive to
price rise and to enhance current government spending on social security measures.
All the stakeholders recognized the enormous contribution of the MSME sector in
terms of employment, export and economic growth and felt the need for
simplification and consolidation of existing laws without compromising crucial
aspects related to workers such as wages, social security and conditions of work.
There were also suggestions by social partners to adequately focus on off-farm and
on-farm sector and continued investment in infrastructure projects for enhancing
106
107
Press Information Bureau Government of India Ministry of Labour & Employment- 18 May 2013
Ministry of Micro and Medium Enterprises
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employment opportunities. In context of skill development social partners
recommended for strengthening Labour Market Information System (LMIS) to bridge
the skill demand-supply mis-match, enhancing the outreach of and access to skill
development centres, recognizing MSME enterprises as ‘on-the-job training centres
and to put in place a National Skills Qualifications Framework to ensure quality
assured
training
and
facilitating
horizontal
and
vertical
mobility.
Shri Mallikarjun Khargee108 said the Conference Committee on Service conditions,
wages and social security for various categories of workers employed in different
Central Government and State Government schemes (Anganwadi, Mid-day meal,
ASHA, Sarva Shiksha Abhiyan and other schemes) under various Ministeries of
Central Government” deliberated for extension of Social Security benefits under
Rashtriya Swasthya Bima Yojna and Aam Aadmi Bima Yojna to these workers.
Moreover, it was also recommended that these categories of workers should be
granted Right to Collective Bargaining. There have been other important
recommendations by this Committee.
The Conference Committee on “Social Security with special reference to Assured
Pension with indexation for all workers including self-employed” recommended that
we should work towards the goal of universal social security coverage. It has also
been recommended that Government should examine implementation of the ‘Right to
Work’.
108
The Former Union Labour and Employment Minster, in United Progressive Alliance (UPA)
Government (2012-2013).
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CHAPTER-5
AN ANALYISIS OF THE TERM ‘EMPLOYEE’ WITH
THE DECISIONS OF HIGH COURTS AND SUPREME
COURT
5.1.
Path of Transformation
Jawaharlal Nehru, the first Prime Minister of India, said in his famous ‘tryst with
destiny’ speech in the Constituent Assembly, on the eve of Independence towards
midnight on 14 August, 1947.
“The service of India means the service of the Millions who suffer. It means
the ending of poverty and ignorance and diseases and inequality of
opportunity. The ambition of the greatest man of our generation has been to
wipe every tear from every eye. That may be beyond us but as long as there is
tears and suffering, so long our work will not be over.”1
Since the end of First World War, two revolutions had been running parallel in India.
One was the national revolution for ‘Swaraj’, the political freedom, and other, Social
Revolution
for
‘Purna
Swaraj’,
freedom
from
hunger,
poverty,
disease,
unemployment and squalor, which were then the legacies of British colonialism. With
Independence, the dream of ‘Swaraj’ became a reality and national revolution was
completed. But the dream of ‘Purna Swaraj’, the mission of social revolution,
remained ‘a vision’ to be realised.
When the Constituent Assembly was constituted to draft the Constitution for ‘free
India’, Nehru said:
“The task of this Assembly is to free India through a new Constitution, to feed
the starving people, and clothe the naked masses and to give every Indian
1
Granville Austin, The Indian Constitution- Cornerstone of a nation (Oxford University Press, New
Delhi, 2000) 26
145 | P a g e
fullest opportunity to develop himself according to his capacity.”2the political
Revolution to end with Independence, the Social Revolution to free India from
social inequalities, and the Economic Revolution to transform the primitive
Indian rural economy to scientific and planning agriculture and industry.3
Dr. Radhakrishnan4 wished India to have ‘a socio-economic revolution’ to bring about
a fundamental change in the structure of Indian society.5 Dr. Rajendra Prasad6 assured
the people that ‘the Assembly’s aim was to end poverty and squalor to abolish
distinction and exploitation’.7
Such views were held by many more in the Assembly. The reason was that most of
the members were socialists by themselves but of distinct varieties such as Fabian8
socialists, Gandhian socialists, Marxists, Humanists, Democratic socialists and
Radicals, each one with his own definition of ‘socialism’.
On the eve of Independence, India was infested with mass poverty, drain of her
wealth and ruin of her agriculture and industries. Nehru then said,“I see no way of ending the poverty, the vast unemployment, the
degradation and the subjection of the Indian people except through
socialism….It means bringing a new civilization radically different
from the present capitalist.”9
It was the time when the clarion calls of the philosophers of the Russian and French
revolutions, preaching ‘socio-economic-political justice’ and ‘equality and liberty’,
respectively, reverberated in the international arena. Labour and trade unionism were
making a swift entry into Indian industrial sector. The British-pampered industrial
2
Constituent Assembly Debates II,3,316
K. Santhanam, The Hindustan Times, 8 September, 1946, New Delhi p 4
4
Sarvapalli Radhakrishnan (Dr.S.Radhakrishnan) was the first Vice-President of India (1952-1962)
and subsequently the second President of India (1962-1967)
5
Constituent Assembly Debates II 1,269-1,273
6
Dr. Rejendra Prasad served as the President of the Constituent Assembly that drafted the first
Constitution of the Republic, which lasted from 1948 to 1950. Two and a half years after
Independence, on janavary 26, 1950, the Constitution of Independent India was ratified and Dr.
Rajendra Prasad was elected as the nation’s first President.
7
Constituent Assembly Debates V, 1-2
8
A member or supporter of the Fabian Society, an organization of socialists aiming to achieve
socialism by gradual rather than revolutionary means.
9
Jagdish P. Sharma, Nehru & the People’s Movement (Manak Publications, New Delhi, 1997) 21
3
146 | P a g e
capitalism was raising its head having the potentiality of class conflict, in terms of
Marxist analysis. The global socialist movements like Fabianism10, Syndicalism,11
Communism12 and radicalism were also emerging simultaneously.
In the background of such an intellectual and emotional commitment to socialism, the
Constituent Assembly’s first task was to draft a Constitution that would serve the
ultimate goal of social revolution. Thus, the Constitutional vision of socialism
emanated from the urge to have a social revolution or socio-economic revolution
both, in the present context, means nearly the same and are in harmony.
The Constituent Assembly in the ‘Objective Revolution’ and the debate on it,
established that the Constitution must be dedicated to some form of socialism and to
the social regeneration of India. But streaming the social revolution was felt as more
complicated task than the simple drafting of the Constitution. When the framing of the
Constitution was in progress, the contemporaneous events13 made the Assembly to
believe that economic progress, or social revolution, could not be fulfilled unless there
was central planning, which involved a major role for the State to control the means
of production and distribution and to place the public sector in the commanding
heights of the economy. Another question before the Assembly was what form of
political institution would foster or at least permit the social revolution. Everyone
concurred with the preference for democratic political institutions of the
parliamentary form.
Thus, the Constitutional vision of socialism in economic and industrial context is
founded on the principles of democracy and planned development. Democracy
requires guarantee to the individuals, protected to the maximum possible extent and
planned development involves planning for common good. These two founding
principles put together, gave rise to the concept of Mixed economy, in which private
sector is allowed to operate along with public sector but channelized to public welfare
10
Socialism to be established by gradual reforms within the law
A movement for transferring the ownership and control of the means of production and distribution
to workers’ unions. Influenced by the French social philosopher Georges Sorel (1847–1922),
syndicalism developed in French trade unions during the late 19th century and was at its most vigorous
between 1900 and 1914, particularly in France, Italy, Spain, and the US.
12
A theory or system of social organization in which all property is owned by the community and each
person contributes and receives according to their ability and needs.
13
Communal riots, famine, scarcity of food and internal security problems from Communists,
Telanganas and Princely States.
11
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through planning. Thus constitutional vision of socialism was designated as
democratic socialism.14
The majority of the provisions of the Constitution either directly or indirectly foster
the goals of the socio-economic justice, the essence of Indian socialism. The core of
the commitment lies in the Preamble, Fundamental Rights and Part IV of the
Constitution. In Directive Principles of State Policy, one finds a clear statement of
socialism and there it is said,“The Directive Principles were a declaration of economic independence, a
declaration that the privilege of the colonial era had ended, and a declaration
that the Indian capitalists should not inherit the empire of British
colonialists.”15
Nehru, as the Chairman of First Planning Commission of Free India, did not prefer
immediate adoption of socialist development of industries but adopted ‘Socialistic
patterned’ development which was not socialism in its pure form, but which he
believed would lead the country in the direction of socialism.16Through the concept of
mixed economy with public sector bias Nehru evolved the first two Industrial Policy
Resolutions of 1948 and 1956 to achieve Socialism Pattern of Society which aimed to
have greater industrial production with an equitable distribution of national wealth. It
formed the hard core of the Industrial Policy Resolutions. The socialistic pattern of
society took the form of ‘socialism’ during Mrs. Indira Gandhi’s initial period of
Prime Minister ship with full nationalization of industries and the Constitution came
to be reckoned expressly as ‘socialist’ through the Constitution (42nd Amendment)
Act, 1976.
In the light of the above views by the Constituent Assembly Members and the basic
concepts of preamble of the Constitution the study focuses on analysis of the term
‘Employee’ under the Employee’s State Insurance Act, 1948 (ESI Act).
14
The adjective ‘Democratic’ sharply distinguishes it from socialism practiced in totalitarian
economies.
15
Granville Austin, The Indian Constitution-Corner Stone of a Nation (Oxford University Press, New
Delhi, 2000) 61
16
Resolution on Socialistic Pattern of Society- Avado Session of the Indian National Congress held in
January, 1995.
148 | P a g e
The Employee’s State Insurance Act, 1948 (Henceforth, the Act) is a social security
legislation and was enacted to revolutionize various risks and contingencies sustained
by workers while serving in a factory or establishment. It is thus entitled to promote
the general welfare of the worker. Hence, the enactment demands a liberal
interpretation in order to achieve the legislative purpose and object.17
The Act is designed in the interest of ‘employees’ and its dependents to provide cash
benefit in the case of sickness, maternity and employment injury, payment in the form
of pension to the dependent of workers who died of employment injury and medical
benefit to workers. It introduces the contributory principle against such contingencies,
provides protection against sickness, replaces lump sum payments by pension in the
case of dependents benefit and places the liability for claims on a statutory
organisation. However, because of the vastness of the country and the considerable
preparatory work involved, such as provision of building, equipment and personal, the
scheme could not be implemented throughout the country simultaneously. Plan for its
phased extension to different places was drawn up. The Act also envisages transitory
provisions requiring payment of special contribution by all employees in order to
meet the objection of employees in covered areas that the ESI levy would affect their
competitive position adversely. The contribution of employers in the implemented
areas was fixed at a rate higher than that of employers in non-implemented areas. The
scheme came into operation in Kanpur and Delhi on 24th February, 1952.18
Section 1(4) of the Act provides that the Act shall apply in the first instance to all
factories including factories belonging to Government other than seasonal factories.
Initially the definition of ‘factory’ in the Act was as per the Factories Act. Although
the definition of ‘factory’ was amended in the Factories Act in 1948, similar
amendment was not made in the ESI Act till 1989 in spite of the fact that the ESIS
Review Committee had recommended such an amendment as early as in 1966. It is
however now at par with the definition in the Factories Act. Thus, the Act is now
applicable to all factories using power or without power employing 10 or more
employees. It is however not applicable to a factory or establishment belonging to or
under the control of the Government whose employees are otherwise in receipt of
17
18
ESI Corporation, Hyderabad v J.C. and Co. Products Ltd 1980 Lab IC 1078 (Andhra Pradesh)
Report of the First National Commission on Labour 1969, 166-67
149 | P a g e
benefits substantially similar or superior to the benefits provided under the Act. The
ESIS Review Committee 1966 had recommended that smaller factories not using
power and employing 10 or more persons as well as all factories employing five or
more persons should be brought under cover of the ESI Act in stages. This
recommendation has not yet been implemented. Seasonal factories are excluded from
coverage under the Act. A series of recommendations have been made to amend the
Act, so as to cover seasonal factories also, but the amendment has not been carried out
so far. Proposals have also been made for evolving appropriate schemes for the
seasonal factories. A modified scheme of contribution and benefits called ESI
(Cashew Workers) Scheme 1989 was introduced for cashew workers in 1989 under
Section 1(5) of the Act on an experimental basis. The working of the ESI (Cashew
Workers) Scheme, 1989 was reviewed by a Sub - Committee of the Corporation and
based on recommendations of the Committee. The Scheme was not extended beyond
30.09.1997. The Scheme ceased to exist since 30.03.1997. Thus the question of
extending the Act to seasonal factories is still pending consideration.
In the first instance, the Act applies to all factories including those belonging to the
Government except seasonal factories.19The appropriate Government is given power
to extend the different provisions of the Act to any other establishment or class of
establishments, industrial, commercial or otherwise after consulting the Employees’
State Insurance Corporation.20However, if the appropriate Government is a State
Government, such application must be with the approval of the Central Government.
In all cases six months’ notice of the intention to such application must be given
through notification in the official Gazette. Thus, the Act applies in the following
manner.
Section 1(4) of the Act postulates different treatment between perennial and seasonal
factories; seasonal factories are excluded from the purview of the Act. This may be on
the ground of administrative exigency of convenience.21Thus, all factories within the
implemented areas are brought within the purview of the Act. If the establishment in a
factory as defined under the Act, it applies to such establishment automatically and
19
Section 1(4), However, as per the proviso added by the 1989 amendment, it will not be applicable to
factories or establishments under the control of the Government whose employees are otherwise in
receipt of benefits substantially similar or superior to the benefits provided under this Act.
20
Section 1 (5) of the Act
21
ESI Corporation Hyderabad v Jayalakshmi Products 1980 Lab IC 100 (Bombay)
150 | P a g e
that it does not require any action on the part of the Corporation or of the Government
to apply the provisions of the Act to the factory. Hence, the question of giving a
reasonable opportunity to the employer of the factory or establishment does not arise
and that there is no denial of natural justice because the Corporation has not informed
such employer before applying the provisions of the Act to such factory or
establishment.22
After the enforcement of the provisions of the ESI Amendment Act, 1989, the Act is
now applicable, in the first instance, to non-seasonal factories whether using power or
not and employing 10 or more persons and shops and establishments employing 20 or
more persons. As of now, by notification No S-38025/04/2010-SS-1 dated 20th April,
2010 effective from 1st May, 2010, the employees of the factories and establishments
covered under the Act earning wages up to Rs.15, 000 per month come under the
purview of the Act and the Scheme.
5.2.
Definition of the term ‘Employee’ under the Act
Section 2(9) of the Act, defines “Employee” which means any person employed for
wages in or in connection with the work of a factory or establishment to which this
Act applies and —
(i)
who is directly employed by the principal employer on any work of, or
incidental or preliminary to or connected with the work of, the factory or
establishment, whether such work is done by the employee in the factory
or establishment or elsewhere ; or
(ii)
who is employed by or through an immediate employer on the premises
of the factory or establishment or under the supervision of the principal
employer or his agent on work which is ordinarily part of the work of the
factory or establishment or which is preliminary to the work carried on
in or incidental to the purpose of the factory or establishment; or
22
ibid
151 | P a g e
(iii) whose services are temporarily lent or let on hire to the principal
employer by the person with whom the person whose services are so lent
or let on hire has entered into a contract of service; and includes any
person employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch
thereof or with the purchase of raw materials for, or the distribution or
sale of the products of, the factory or establishment;
Or any person engaged as an apprentice, not being an apprentice engaged under the
Apprentices Act, 1961 (52 of 1961), and includes such person engaged as apprentice
whose training period is extended to any length of time
But does not include:
(a)
Any member of the Indian naval, military or air forces; or
(b)
Any person so employed whose wages (excluding remuneration for
overtime work) exceed such wages as may be prescribed by the Central
Government:
Provided that an employee whose wages (excluding remuneration for overtime work)
exceed such wages as may be prescribed by the Central Government at any time after
(and not before) the beginning of the contribution period, shall continue to be an
employee until the end of that period.
5.3.
An analysis of the term ‘employee’.
In the light of the above mentioned definition of ‘employee’ the researcher would
now analyse its different aspects.
The original bill was called the Workmen’s State Insurance Bill. It was applicable to
workers in factories only. The Select Committee to which the bill was referred made
certain modifications. One of the important modifications was that the benefits
provided by the Act should not be confined to workmen only but should be extended
152 | P a g e
to other employees in factories. The term ‘workmen’ was therefore replaced by the
term ‘employees’ wherever it occurred. The Select Committee also made provision
for extending the Act to other establishments, or classes of establishments, industrial,
commercial, agricultural or otherwise. The Select Committee further provided for
extension of the medical benefit to the families of insured persons.
The definition of an employee as given in Section 2(9) the Act is very comprehensive;
the following are the ingredients of the definition of an ‘employee’ under the Act:
(1) the employment of the person must be for wages and should be (a) in an
establishment; (b) in a factory; (c) in connection with the work of the factory
including any work connected with:
(i)
Administration of the factory or establishment or any part, department or
branch therefore ;or
(ii)
Purchase of raw materials for the factory or establishment; or
(iii)
Distribution or sale of the product of a factory or establishment
(2) The employee also includes any person engaged as an apprentice, not being an
apprentice engaged under the Apprentices Act, 1961, or under the standing order
of the establishment.
(3) The employee must be employed in any factory or establishment to which the Act
applies. The employment may be:
a) directly with the principal employer ; or
b) by or through an immediate employer; or
c) lent or let on hire by the principal employer.
(4) In case of an employee directly employed by the principal employer, the
employment must be on any work of the factory or establishment or any worka) which is incidental or preliminary to; or
b) connected with the work of the factory or establishment. It is immaterial that
the work of the factory or establishment or elsewhere.
153 | P a g e
(5) In case of an employee, employed by or through an immediate employer, the
employment must be:
a) in the premises of the factory or establishment ; or
b) under the supervision of the principal employer or his agent on work which is;
i.
ordinarily part of the work of the factory or establishment ; or
ii.
preliminary to the work carried on in the factory or establishment ; or
iii.
incidental to the purpose of the factory or establishment.
(6) In case of an employee whose services are lent or let on hire to the principal
employer, the letting on hire must be by the person who has entered into a contract
of service with the person whose services are so lent or let on hire. The
employment of such person by the principal employer must be or in connection
with the work of a factory or establishment to which this Act applies.
(7) The following are not employees;
a) any member of the Indian Naval, Military or Air Force ; or
b) any person so employed whose wages (excluding remuneration for overtime
work) exceed such wages as may be prescribed by the Central Government.
Overtime pay shall not be included in wages. In the term ‘remuneration’ employer’s
contribution to Provident Fund is not included.23
There is an exception to the above rule: namely an employee whose wages exceed
such wages as may be prescribed by the Central Government at any time after (and
not before) they beginning of the contribution period shall continue to be an employee
until the end of the period.
The definition of an employee under the Act has a wider meaning and it covers
persons who work outside the business premises but whose duties are connected with
the business. It also covers employees who are paid daily wages or employed on part
time wages.
23
Manager Harrisons and Crosfield Ltd. Quilon v Manager AIR 1970 Kerala 194.
154 | P a g e
5.4.
Wages
One of the most important aspects of a job for most workers is the wage it pays.
Wages allow workers to make a living from their labour. They also provide incentives
to be productive and loyal to an employer.
Wages is defined under Section 2(22) of the ESI Act, which mean:(1) all remunerations paid or payable in cash to an employee if the terms of the
employment are fulfilled;
(2) any payment to an employment in respect of :
(a) any period of authorised leave;
(b) lock-out or strike which is not illegal;
(c) lay-off; and
(d) any other additional remuneration, if any, paid at intervals not exceeding
two months.
However, the following will not be wages
(1) Any contribution paid by the employer to any pension fund or provident fund;
(2) Any contribution paid under this Act;
(a) any travelling allowance or value of travelling concession;
(b) any sum to the person employed to defray special expenses entitled on him by
the nature of his employment;
(c) any gratuity payable on discharge.
5.4.1. Inam or incentive is wages
If the payment is one sided offer made by the management and is not among the terms
of contract of employment it will not be treated as Wages. However, any additional
155 | P a g e
remuneration paid otherwise than the terms of the contract can be treated as wages for
the purpose of the Act provided that payment is made by way of remuneration.24
5.4.2. Overtime Remuneration
Remuneration for overtime work will not be included in the definition of Wages. An
employee has a right to his wages but cannot claim as a matter of right additional
remuneration for the work beyond the scheduled hours of work of the remuneration
for such overtime work will not be included in the definition of Wages.25
Present position with an example:
Whether ESI contributions will be payable if an employee is covered under the ESI
Act and his wages are Rs.14,500 per month, however, with overtime working he gets
around Rs.18,000 per month. Can one liable to pay ESI contributions on Rs.14, 500 or
Rs.18, 000?
The ESI contributions will be payable on Rs.18, 000 and not on Rs.14, 500 per month.
In a case the salary/wages of the employee employed by you is Rs.15, 000 or less
(excluding overtime). The employee is covered under the provisions of the ESI Act
and contribution is required to be paid on the overtime paid such employee. The
element of overtime is not included in salary/wages for the purpose of coverage of
employee. Overtime payment made to an independent person by an employer will
come within the definition of wages for deduction and deposit of ESI contributions;
hence the High Court will not interfere in the appeal as filed against the Employee’s
State Insurance Court.26
5.4.3. Incentive bonus is included in the definition of wages.27
The Calcutta High Court differs from the Andhra Pradesh full bench decision to hold
that where an employee has a right to his wages there is no such right to incentive
24
Brait waite & Co. v E.S.I. Corporation AIR 1968 SC 413; N.C.E.F. Ltd v Deputy Regl Director,
E.S.I. Corporation, Bangalore 1980 Lab IC 431 (Kerala)
25
Hindustan Motors Ltd. v E.S.I. Corporation 1979 lab IC 852 (Cal) ; Brait waite and Co v E.S.I.
Corporation AIR 1968 SC 413
26
Raj Mechanical Industries v Employee’s State Insurance Corporation 2009 (121) FLR 717 (Punjab
&Haryana)
27
E.S.I. Corporation, Hyderabad v A.P. Paper Mills AIR 1978 Andhra Pradesh 18 (FB); See also
E.S.I. Corporation., Madras v Amalgamation Rep. Co. Ltd., Madras 1983 II L.L.J. 193 (Madras)
156 | P a g e
bonus. For incentive bonus, it depends upon performance of a minimum percentage of
normal work allowed and gradual increase in such performance of work. Further, an
incentive bonus scheme can be withdrawn or modified on the happening of the events
mentioned in the scheme and that it may be withdrawn totally or modified at the
option of the employer. It may be noted the decision of the Calcutta Division Bench
appears to be sound in this respect.
5.5.
Factory
Factory is redefined under Section 2(12) of the Act by the 2010 Amendment as
below:“Factory” means any premises including the precincts thereof whereon ten or more
persons are employed or were employed on any day of the preceding twelve months,
and in any part of which a manufacturing process is being carried on or is ordinarily
so carried on, but does not include a mine subject to the operation of the Mines Act,
1952 or a railway running shed.
5.6.
Seasonal factory
Seasonal factories are excluded from the purview of the Act. The essential conditions
required for a factory to be called as seasonal factory are:(1) The factory must be engaged exclusively in one or more of the manufacturing
process, namely:
(a) cotton ginning;
(b) cotton or jute processing;
(c) any manufacturing process which is incidental to or connected with any of the
aforesaid processes.
157 | P a g e
This includes a factory which is engaged for a period not exceeding seven months in a
year in any process of blending, packing or re-packing of tea or coffee or any such
other manufacturing process as the Central Government may specify by notification
in the official Gazette.
The exclusion of seasonal factories from the purview of the Act has resulted the denial
of the various benefits under the Act to a number of employees in the country. The
employees in seasonal factories need as such care and protection against risk as
those in factories now within purview of the Act. It is high time to widen the scope of
the act to extend its operation to seasonal factories also. In respect of seasonal
factories the rate of contribution may be proportionally fixed depending upon the
duration for which they function in a year.28
(2) The appropriate governments are given power under Section 1(5) of the Act to
extend provisions of the Act to certain class of establishments other than factories
if such establishments were industrial, commercial, agricultural or otherwise. The
term ‘establishment’ is not defined in the Act and, therefore, it must carry the
ordinary meaning of the term. It means an organised staff of employees or
servants including or occupationally limited to building in which they are
located.29
The ESI Act, being a social welfare legislation, intended to benefit as far as possible
workers belonging to all categories, and has to be liberal in interpreting the words
occurring therein. In construction, as to suppress the mischief and advance the
remedy.30A country organising sale of products of another company for commission
carried on commercial activity and so it is a shop attracting the provisions of the Act
within the meaning of Section 1(5).31 Shop is a place where any kind of industry is
pursued or a place of employment or activity. Generally, a shop is a place where
commercial activities like buying and selling takes place. It may be a servicing nature
28
E.S.I. Corporation, Hyderabad v J.C.& Co.Products Ltd 1980 Lab IC 1078 at P. 1081 (Andhra
Pradesh)
29
Shorter Oxford English Dictionary
30
Cochin Shipping Corporation. v ESI Corporation., AIR 1993SC 252; Brooke Bond India v Regl,
Director, ESI Corporation., Trichur 1980 Lab IC 74 (Kerala)
31
Darast Ltd v ESI Corpn 1980 Lab IC 72 (Kerala)
158 | P a g e
like radio repairing shop, shoe repairing shop or cycle repairing shop, clearing and
forwarding operations of carrier. 32
The Persons employed in the shops of establishments must be embraced within the
meaning of the Act and that they must be employed for wages in order to avail of the
benefit under the Act. Therefore, apprentices or self-employed persons like cabaret
artists and orchestra players are not entitled to the benefits because they are not
persons employed for wages.33
However, persons employed by contractors are entitled to the benefit of the Act if
such contractors are immediate employers under a principal employer and such
principal employer will be liable to pay the contribution under the Act.34The power
given under Section 1(5) is to extend the provisions of the Act having regards to the
nature of the operations carried out in the establishments and not having regards to
their geographical location.35
5.7.
Manufacturing Process
The phrase manufacturing process36is given the same meaning assigned to it under
Section 2(K) of the Factories Act. Manufacturing process is defined thus:
“manufacturing process means any process for making, packing, oiling, washing,
cleaning, breaking up, demolishing or otherwise treating or adopting any article or
substance with a ‘view to its use, sale, transport, delivery or disposal”. Under this
definition, a variety of actions like preparation of food,37 using electrical
appliances,38transmitting electrical energy from high to low potential and the process
32
Cochin Shipping Co. v ESI, Corporation, AIR 1993 SC 252; I.T. Commr. A.P. v Taj Mahal Hotel,
AIR 1972 SC 168; Also see Dattaram Advertising Pvt. Ltd. v Regl Director Maharastra E.S.I.
Corporation., (1987) I LLJ 9 (Bombay)
33
E.S.I. Corporation. Hyderabad v Maharaj Bombay and Restaurant, 1979 Lab IC 1147 (Andhra
Pradesh)
34
Fariyas Hotel v Maharastra, 1983, I LLJ 24 (Bombay)
35
Royal Talkies, secunderabad v E.S.I. Corporation., AIR 1978 SC 1478.
36
Section 2(14AA), inserted by the 1989 Amendment
37
Cricket Club, India v E.S.I. Corporation 1992 Lab IC 2029 (Bombay) ; Poona Indus. Hotel v I.C.
Sarin 1980 Lab IC 100 (Bombay)
38
ESI Corporation v Spencer &CO 1978 Lab IC 1759 (Madras) ; Poona Lakshman Rao & Son v
Addl. Inspector of Factories AIR 1959 Andhra Pradesh 142
159 | P a g e
to transmitting the energy through supply line,39etc. will come within the
comprehensive of manufacturing process. Printing of text-books, journals, stationery
items amount to manufacturing process and so such printing and press dept is factory.
Toddy shops run by contractors on an annual auction basis comes under the definition
of ‘shop’.40
The term ‘manufacturing process’ is not restricted to an activity which may result into
outcome of processed product or manufacturing any item hence, a petrol pump will be
covered under the ESI Act.41
In a radical judgment -The Assistant Director, ESIC v M/S. Western Outdoor
Interactive Pvt Ltd and Others42 that is expected to have a significant impact on all
the computer and software industries in India, the Bombay High Court has held that
information technology and the software industries are liable to pay a contribution
under the Employees' State Insurance Act, 1948 (“ESI Act”) for the benefit of its
employees. The High Court disposed of 2 appeals by its common order dated July 11,
2012, against orders passed by the Employees’ Insurance Court, Mumbai. One of
appeals had been filed against Western Outdoor Interactive Pvt. Ltd. (“Western
Outdoor”) and the other appeal was filed by Reliable Software Systems Pvt. Ltd.
(“Reliable Software”), both being in the business of software development in
Mumbai. Both the appeals involved Employees’ State Insurance Corporation
(“ESIC”) as the common contesting party. Vide this judgment passed by Justice
Mridula Bhatkar, the Bombay High Court for the time being has put to rest the very
pertinent issues of “whether creation of software or development of software itself is
a manufacturing process or not?” and “whether the premises where computers are
involved in manufacturing process is a factory under the ESI Act?” by answering
both these questions in the affirmative.
39
Nagpur Electric Light and Power Co. v Regl, Director, ESI Corporation AIR 1967 SC 1364
Osmania University v Regl, Director, ESI Corporation 1986 I LLJ 136 SC
41
Qazi Noorul Hasan Hussian Petrol Pump v Dy. Director, Employee’s State Insurance Corporation,
Kanpur 2003 LLR 476 (Allahabad)
42
First Appeal (FA) 143. 2012. Judgment Pronounced on 11th July 2012
40
160 | P a g e
In rendering its judgment, the Court inter alia relied upon the decision in the case of
Quzi Noorul, H.H.H. Petrol Pump and Anr. v Deputy Director, ESIC,43 wherein it was
held that “the words ‘manufacturing process’ in different statutes have different
meanings and we cannot apply the definition of ‘manufacturing process’ in one statute
to another statute”. The present appeals were under the ESI Act, and hence the
interpretation of “manufacturing process” and the term “factory” were to be
understood for the purpose of ESI Act and not under the Factories Act.
The Court also observed that Explanation II of Section 2(m) of the Factories Act is
inserted in the Factories Act and not in the ESI Act. It marks the difference in its
interpretation and application. The meaning of the term “factory” for the purpose of
the ESI Act is broader than the definition under the Factories Act.
The Court also relied upon a letter dated December 9, 2003 issued by the Joint
Director, ESIC, New Delhi to the Regional Director, where it was communicated that
vide letters dated March 9, 2003 and September 22, 2003 issued by the Ministry of
Labour, it has been clarified that the term “software development” falls within the
meaning of “manufacturing process” under section 2(k) the Factories Act. Adopting
this clarification, the Court held that software development is a “manufacturing
process”.
In the course of delivering this judgment, Justice Bhatkar disagreed with a contrary
view taken by the Madras High Court in the case of Seelan Raj and Others v P.O., I
Addl. Labour Court and Others,44 where it was held that any use of the computer or
any work carried out with the help of the computer is taken out of the purview of
labour laws, and observed that this issue is still res-integra (i.e. a point of law which is
still under consideration and has not yet been decided) since the Supreme Court has
referred the case to a larger bench.
43
44
2003 (96) FLR 1090
(1997) II LLJ 972 (Madras)
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5.8.
Principal Employer
Section 1(17) defines principal employer in relation to factory or establishment to
means:(i)
the owner or occupier of the factory including managing agent of such
owner or occupier;
(ii)
the legal representative of the deceased owner or occupier;
(iii)
the manager of the factory so named in the Factories Act.
Principal employer in relation to an establishment under the control of any
department of Government means—
(a) Head of the department where no authority is appointed by the
Government; or
(b) The authority so appointed by the Government to administer the
affairs of the department.
Under Section 40, the principal employer is primarily responsible to pay the
employer’s contribution and the contribution of employees who were directly
employed by him or through an immediate employer.
In a case where the respondent company is engaged in the manufacture of paper and
allied products, manufacturing process is required materials like burned lime, lime
kilns owned by the respondent company were leased out and the lessee entered into an
agreement for supply of burned lime to the respondent. The lessee obtained a separate
factory licence in his name to run the lime kiln factory. The respondent supplied the
raw materials for converting lime stone into burned lime, deputed its own security
staff. The lessee employed workers for operating and running the lime kilns. The
entire responsibility regarding quality control of the finished products was with the
respondent. In these circumstances it was held that the respondent company was the
principal employer and the lessee was the immediate employer and that workers
employed in the lime kilns were employees within Section 2(9) of the Act. The
162 | P a g e
respondent company was, therefore, liable to pay contribution in respect of the
employees employed in the lime kilns leased out to the immediate employer.45
In Royal Talkies v Hyderabad Corporation,46 a canteen and a cycle stand situated in
the premises of a theatre were leased out to contractors under an agreement of lease
and the contractors employed their own servants to run the canteen and the cycle
stand. Question arose whether the owner of the theatre can be said to be principal
employer with reference to the persons employed by the contractors in the canteen
and cycle stand attached to the theatre. The Supreme Court found that the two
portions, viz., keeping a cycle stand and running a canteen are incidental or adjunct to
the primary purpose of the theatre and, therefore, the theatre owners were the
principal employers.
The Supreme Court formulated the test that the owner of premises where the work
is carried on will be the principal employer if there is proximity and functional
unity.47
An officer or the manager or the person responsible for the control of the
establishment is ‘principal employer’, not necessarily an ‘occupier’ of the factory
defined under the Factories Act.48
5.9.
Immediate Employer
Section 2(13) of the ESI Act defines immediate employer:(i)
a person who has undertaken to execute the work in the premises of a factory
or establishment to which this Act applies; or
(ii)
a person who has undertaken to execute some work under the supervision of
principal employer or his agent; or
45
Regl. Director, ESI Corporation. v Andhra Paper Mills Ltd 1980 Lab IC 604 (Andhra Pradesh)
AIR 1978 SC 1478
47
Lakshmana Murthy v ESI Corporation AIR 1974 SC 756
48
Regional Director, ESIC v Fact Engineering Works 2003 LLR 619 (Kerala)
46
163 | P a g e
(iii)
the work undertaken by such person being ordinarily a part of the work of the
factory or establishment of the principal employer which is preliminary or
incidental to the work carried on in the factory or establishment.
5.10. Insurable Employment and Insured Person
Insurable employment means an employment in a factory or establishment to which
this Act applies.49 Insured person means a person who is or was an employee in
respect of whom contributions are or were payable under this Act and who is entitled
to any benefit provided by this Act.50
After the 1966 amendment to Section 2(9) an employee will cover a person employed
for wages on any work connected with administration of the factory or establishment
or any part, department or branch there to or with the purpose of the distribution or
the sale of products of the factory or establishment. It applies to those categories of
employees even outside the factory if their work was of the nature mentioned above.51
5.11. Casual Employee
A person casually employed in a factory or establishment is within the ambit of the
definition under Section 2(9).52The consideration whether the worker is permanent,
temporary or casual is not relevant to the definition of employee.53 Casual employees
are as such within the scope of the Act as regular employees. But self-employed
persons like cabaret artists and orchestra players will not be employees. They perform
their special skills and place their service at the disposal of the restaurant for the
limited purpose of entertaining the customers during the fixed times. What they
49
Section 2(13-A)
Section 2(14)
51
Employees, N.T. Corporation, Bangalore v Regional Directors, ESI, Bangalore 1992 Lab IC 1825
(Karnataka); D.E.E.S.I. Corporation v Scientfic Instrument Co 1995 Lab IC 651 (Allahabad)
52
Heavy Engg. v ESI Corpn 1979 Lab IC 771 (Patna); Hyderabad Asbetos Cement Products v
Employees Insurance Corporation AIR 1978 SC 356; Boehringer Knoll Ltd v Regl. Director, ESI
Corporation 1977 Lab IC 116 (Bombay); Nagpur Electric Light and Power Co. v Regl. Director ESI
Corporation AIR 1967 SC 1364
53
ESI Corporation Chandigarh v Oswal Wollen Mills 1980 Lab IC 1064 (Punjab and Haryana)
50
164 | P a g e
perform is purely artistic in nature and the management or the proprietor cannot give
any direction regarding the manner of performance by such artists and
players.54Similarly, an apprentice is not an employee within the meaning of Section
2(9). An apprentice remains learner and there is no element of employment as such in
a trade or industry.55The shareholders employed in a registered co-operative society
are employee and the ESI Act is applicable in that case.56
5.12. Exempted Employee
Exempted employee means an employee who is not liable under this Act to pay
employees contribution.57
5.13. Judicial Approach (Supreme Court Cases)
In the face of this situation of legislative and executive inadequacies, it is the
judiciary, which has played a major role in the development of “Jurisprudence of
Employee”. The following are some of the land mark judgments pronounced by the
Supreme Court.
In Hyderabad Asbestos v Employees Insurance Court,
58
the question was whether
person employed in Zonal Office and Branch Offices of a factory and concerned with
establishment administrative work and the work of canvassing sale would be covered
by the provisions of the Act. It was held that an employee may be working within the
factory or outside the factory or may be employed for administrative purposes or for
the purchase of raw materials or for the sale of the finished goods, all such employees
54
AP State Electricity Board v ESI Corpn 1977 Lab IC 316 (Andhra Pradesh); Regional Director, ESI
Corporation. v Devanagri Cotton Mills 1977 Lab IC 747 ; ESI Corporation Trichur v Ayurvedic
Industrial Co 1980 Lab IC 557 (Kerala)
55
ESI Corp. v Tata Engg. Co AIR 1976 SC 66; ESI Corporation Hyderabad v Maharaja Bar &
Restaurant 1979 Lab IC; Regl; Director ESI Corporation. v Fiber Mangalore (1986) I LLJ 216
(Karnataka)
56
Pondicherry State Weavers Co-operative Society v Regional Director, ESI Corporation Madras
(1983) I LLJ 17 (Madras)
57
Section 2(10) of the Act
58
AIR 1968 SC 356
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are included within the definition of ‘employees’ in Section 2(9) of the Act. It is not
essential that one must be working in a factory.
Branch Manager, State Bank of Hyderabad v Abdul Raheem and another,59 in the
present case the appellant had asked the loanee to post a watchman to look after the
goods kept in the godowns. Though it may be at the instance of the bank, the loanee
had appointed the respondent and requested the bank to debit its accounts towards his
emoluments. It was held that the first respondent was not the employee of the bank as
he was appointed by the owner (loanee) of goods, which were hypothecated to the
bank. The respondent was neither appointed by the bank nor worked under the
guidance of the Branch Manager concerned. Therefore respondent workman was not
an employee of the bank.
In Saraswath Films v Regional Director, ESI Corporation, Trichur,60security guards
in cinema hall were employed through another agency which used to send the guards
by rotation. The appellant pleaded that these security guards were not their
employees. The Supreme Court held that the definition of ‘employee’ in the Act is
wide and comprehensive. The appellant was the principal employer of the security
guards and they were employees under Section 2(9) of the Employees’ State
Insurance Act, 1948 as they were working under the control and guidance of the
appellant.
In Regional Director ESI Corporation, Madras v South India Flour Mills,61 the
Company which was engaged in milling wheat products employed workers on daily
wage for construction of additional buildings in the compounds of existing factory as
part of its expansion of the existing factory buildings. The Company was called upon
to pay the contribution in respect of such daily wages workers. It was held that the
definition of the term “employee” includes within its ambit any person employed on
any work incidental or preliminary to or connected with the factory or establishment.
It is difficult to enumerate types of work which may be said to be incidental or
preliminary to or connected with the work of the factory or establishment. Any work
that is conducive with the work of the factory or establishment. In this view the work
59
(2001) I LLJ 3 (SC)
(2002) III LLJ 169 (SC)
61
(1986) II LLJ 304 (SC)
60
166 | P a g e
of construction of additional buildings has a link of employees within the meaning of
Section 2(9) of the Act. The contribution is payable in respect of such employees.
In C.E.S.C. Ltd, etc. v Subhash Chandra Bose and others,62the respondents were
carrying on business of electrical installations as independent contractors holding
licences from the Government of West Bengal. They were engaged to lay
underground cable and correct overhead lines in public roads by Calcutta Electric
Supply Corporation (India) Limited. The Employees State Insurance authorities
informed C.E.S.C. that the employees whose wages are paid through contractors
would fall within the scope of Section 2(9). The contractors contended for carrying
out their contracts they were not supervised by the C.S.E.C., the principal employer
and they were carrying out works allotted to them at sites outside the factory
establishment and as such the workers engaged by them were not covered by the
definition of employee under Section 2(9) of the Act. It was held that when the
employee is put to work under the eye and gaze of the principal employer, or his
agent, where he can be watched secretly, accidentally or occasionally while the work
is in progress, so as to scrutinise the quality there of and to detect faults therein, as
also put to timely remedial measures by directions given, finally leading to the
satisfactory completion and acceptance of the work., that would be supervision for the
purposes of Section 2(9). This function can be delegated by the principal employer to
his agent. Therefore the employees of the contractor are covered by the definition
under Section 2(9) of the Act.
Royal Talkies, Hyderabad v. E.S.I. Corporation,63 is a significant decision of the
Supreme Court explaining the meaning of the term ‘employee’ under the Act. In this
case a cinema theatre manager, who had no statutory obligation to run a canteen or
provide a cycle stand but, for the better amenities of his customers and improvement
of his business, entered into an arrangement with another to maintain a canteen and a
cycle stand and that other employed, on his own, workers in connection with the
canteen and cycle stand. It was held the persons so employed are employees of the
cinema theatre. They were covered by the definition of employee because under
Section 2(9) anyone who is employed in “connection with the work of an
62
63
(1992) I LLJ 475 (SC)
AIR 1978 SC 1478 ; II LLJ 390 (SC)
167 | P a g e
establishment” is an employee provided that such an employee works on the premises
of establishment, or under the supervision of the principal employer or his agent “on
work which is ordinarily part of the work of the establishment or which is preliminary
to the work carried on or incidental to the purpose of the establishment. However,
some nexus must exist between the establishment and the work of the employee,
although it may be a loose connection. Such work should not be extraneous or
contrary to the purpose of the establishment but need not be integral to it either. Here
the two operations namely, keeping a cycle-stand and running a canteen are
incidental or adjuncts to the primary purpose of the theatre. An establishment like a
cinema theatre is not bound to run a canteen or keep a cycle-stand nevertheless such
activities have connection with the cinema theatre and even further the revenue.
Sri Naraksaritrakshan Ltd., and others v ESI Corporation,64 in this case the question
was whether employees working in administrative and editorial section of newspaper
factory could be regarded as employees within the meaning of the Employees’ State
Insurance Act. The Supreme Court held them to be employees under the Act because
they are directly employed by the management on work incidental or preliminary or
connected with the work of the factory. A printing press established for the
publication of a newspaper cannot effectively function at all without the service of the
members of the editorial staff being made available almost till the newspaper comes
out of the printing machines and the words “includes any person employed for wages
on any work connected with the administration of the factory” in Section 2(9) covers
the administrative staff also.
The position of a partner in the firm was examined by the Supreme Court. It was held
that the status of a partner in the firm is different from employees working under the
firm. A partner is not an employee notwithstanding the fact that he is being paid some
remuneration for any special attention which he devotes to the firm.65
Establishment includes factory also —Establishment is a wide term which is capable
of embracing even a factory. The use of the words “any other” preceding
“establishment” in Section 1(5) of the Act supports the view that a factory is also an
64
65
(1985) I LLJ 1 (SC)
ESIC Trichur v Ramanuj Math Industries, (1985) I LLJ 69 (SC)
168 | P a g e
“establishment” and an establishment which is not a factory in view of the definition
can be brought within the fold of the power to extend the application of the statute.66
By adoption of the mischief rule of interpretation the term establishment will
comprehend hostels67and shops.68
5.13.1. Judicial Approach (High Court cases)
In Tara Chand Mohan Lal v ESI Corporation,69 37 labourers were working for
considerable period in a factory, dealing in production of mustard oil and dal. These
labourers were employed through Sardars who were the immediate employer and the
firm Mohan Lal was the employer. They were working under the supervision of the
principal employer even if they were supplied by the Sardars. These labourers were
held to be employees within the meaning of Section 2(9) (1) of the Act as they were
directly employed for wages by the principal employer in connection with the normal
work of the factory.
In Sen Raleigh v ESI Corporation,70 the factory was situated at Asanaol and the head
office was situated at Calcutta. It was held that in spite of the fact that the head office
and factory were situated at different places the employees in the head office who are
engaged in any type of work specified in Section 2(9) are employees within the
meaning of this Act because the head office is at Calcutta where the provisions of the
Act are applicable.
In Director General ESI Corporation & another v The Scientific Instrument Co.
Ltd.,71 the company with its head office at Allahabad has branch sales offices at Delhi,
Bombay, Calcutta and Madras. The Employees were engaged in the sale and
distribution of the products of the Indian and Foreign companies and the sale of the
company’s own products at the branch sales office which is only marginal. It was held
that the expression ‘employed for wages in or in connection with the work of a
66
Sunder Paper Co v State of Orissa 1977 Lab IC 1213 Orissa; Christan Medical College v E.S.I.
Corporation (2001) 1 SCC 256
67
East west Hotels v Regl. Director ESIC 1986 I LLJ 172 (Karnataka); All India ITDC Employees
Union v Hotel Asoka, (1984) I LLJ 99 (Karnataka)
68
Brook Bond Tea Ltd. v Regional Director, E.S.I. Corpn 1980 Lab IC 74 Kerala; George Mathew v.
Regl. Director, E.S.I. Corporation AIR 1978 Kerala 660
69
AIR 1971 Andaman and Nicobar 65
70
AIR 1977 Calcutta 165
71
169 | P a g e
factory or establishment’ is of very wide amplitude and its generality is not in any
way prejudiced by the expression ‘and includes any person employed for wages of
any work connected with the administration of the factory or establishment or in
connection with sale or distribution of the products of the factory or establishment’.
The provisions of the Act have to be constructed liberally. If the employment is in
connection with the work of factory or establishment, the employees would come
within the definition of Section 2(9) of the Act because what is important is whether
the business of sale or distribution, either principally or marginally of the products of
the foreign company is being done on behalf of the respondent company.
It was held in ESI Corporation v Raj kamal Transport & others,72 the driver
employed by the transport corporation to drive the truck on payment of remuneration
for each trip is employed in connection with its business and he comes within the
definition of employee under the Act.
In Mohd Ismail Ansari v ESI Corporation Bombay,73the appellant claimed
disablement benefit which was dismissed by the Insurance Court on two grounds: first
that his wages exceeded Rs.500 and secondly, that he could not claim to be an
employee under Section 2(9). It was held that the word “wages” as defined in Section
2(22) means all remuneration paid or payable in cash to an employee if the terms of
the contract of employment express or implied were fulfilled. Therefore, an employee
who was paid only for 21 days in a month due to an accident so that the actual amount
of wages paid to him less than Rs.500 would be an ‘employee’ as defined in Section
2(9) as cash is to be determined by reference to the quantum of wages actually paid to
the employee.
In K. Venkateswara Rao v State of A.P.,74 it was held that if a theatre manager who
has no statutory obligation to run a canteen or provide cycle stand but for the better
amenities of his customers and improvement of his business enters into an
arrangement with another person to maintain a canteen or cycle stand, the manager of
the cinema theatre is liable for contribution as the principal employer. Although they
are engaged independently by the owner of the canteen or the cycle stand.
72
(1995) I LLJ 94 (Andhra Pradesh)
(1979)II LLJ 168 (Bombay)
74
73
170 | P a g e
Whether a person is a casual labour or an employee would depend upon the fact
whether there was a contract of service resulting in the relationship of master and
servant whether the person employed was under the disciplinary control of the other
person or not. It is neither the length of service nor the manner in which parties
choose to refer to such service that would be relevant.75
In Jodhpur Vidyut Vitran Nigam Ltd. v Karmchari Rajya Beema Nigam and
another,76 the Central Government by a notification extended the provisions of the
Employees State Insurance Act to Hanumangadh Town and therefore the Insurance
Scheme was applicable in this area also. The appellant contended before the High
Court that it was not a factory and as such its employees were not covered by the
Employees State Insurance Scheme. It was held by the High Court that the term
‘employees’ in Section 2(9) of the Act was not confined to those employed in a
factory but extended as well to those engaged in work incidental to preliminary work
of establishment. In this case it was not disputed that the sub-station of the appellant
was engaged in distribution of energy and hence it was in connection with the work of
generation of electricity of factory. Hence the appellant was held liable under the Act.
In Bata India Limited v Employees’ State Insurance Corporation and others,77the
Head office is situated at one place and its sales organisation at different place in
Calcutta. The two are completely distinct and separate organisations of the company.
Bata India has their factories at Batanagar and Faridabad respectively. All these have
their separate administration and are separately registered under the Factories Act,
1948. The petitioner factory is situated at Batanagar a non-implemented area. It has
two other branch factories at Batanagar and Faridabad and the administrative offices
of these two are situated at Calcutta. They have their sales organisation in Calcutta.
The question is whether these sales offices of Bata factory are covered by the
Employees’ State Insurance Act, 1948. Liability for contribution under the
Employees’ State Insurance Act was questioned in respect of employees working in
sales department at Calcutta. It was held that notwithstanding the fact the main factory
was not covered by the Employees’ State Insurance Act, 1948 its employees working
75
E.S.I.Corporation v Ayurvedic Indust. Co-op. Pharmacy Puthur (1980) II LLJ 66 (Kerala)
(2003) I LLJ 104 (Rajasthan)
77
(2003) III LLJ 716 (Calcutta)
76
171 | P a g e
at Calcutta (a place covered by the Act) would be treated as employees under the
inclusive definition of Section 2(9) of the Act.
It was held in Bharat Commerce and Industries Ltd., Birlagram Nagda v Regional
Director, Employees’ State Insurance Corporation, Indore and others,78that an
apprentice could not be held to be an employee within the meaning of Section 2(9) of
the Employees’ State Insurance Act, 1948.
In Employees’ State Insurance Corporation Hyderabad v Prakash Paper Mart,
Hyderabad,79 the respondent firm was carrying on business in notebooks and registers
etc. It entrusted the job of book binding to binders piece-rate basis and the binder in
his turn got the books bound with workers of his choice. The firm was asked to pay
Employees’ State Insurance contribution in respect of payments called ‘conversion
charges’ made to such binders. The demand was resisted on the ground that the
workers who did the binding work were not its employees. It was held by the High
Court that there was no evidence that the workers employed by the binders worked on
the premises of the respondent and hence Section 2(9) (ii) of the Employees’ State
Insurance Act was not attracted so as to make the respondent liable as a principal
employer and as such the respondent was not liable to pay contribution under the Act.
Employees’ State Corporation, Hyderabad and Others v Chirala Co-operative
Spinning Mills Ltd, Chirala Prakasam,80certain persons who were sent by Polytechnic
Institute as trainees in the respondent spinning mill. The corporation sent demand
notice under the Act regarding these trainees. The respondent pleaded that these
persons were only trainees from polytechnic Institute sent for training under a scheme
introduced by the Ministry of Human Resources and Development and as such were
not employees. They were paid only conveyance charges and no wages of any kind
was paid to them. The appellant corporation treated the said amount of conveyance
charges as wages and on that basic sought of justify the levy of contribution. It was
held by the High Court that basically the payment of wages was the important factor
to decide whether a person was an ‘employee’ or not. In this case it was not even
alleged that the respondent paid any wages to the persons concerned. Further
78
(2005) I LLJ 482 (Madhya Pradesh)
(2003) III LLJ 1117 (Andhra Pradesh)
80
79
172 | P a g e
travelling allowance paid to them could not be treated as wages under the Act and the
persons who were trainees were not employees of the respondent. Hence spinning
mills were not liable to contribute in respect of these trainees. The appeal was
dismissed.
The expression ‘employed’ suggests two meanings: (i) engaged or occupied, (ii) a
contract of service between the workers and the owner of a factory, i.e., a relationship
of master and servant. But the relationship of master and servant is not always
necessary and there is no relationship of master and servant and yet such person
would be an employee.
The principal requirement of a control of service is the right of the master in some
reasonable sense to control the method of doing work; the nature and extent of the
control must necessarily vary from business to business.81Where, therefore, in a
handloom as well as power loom factory the master had a voice in the selection of the
goods to be manufactured as well as in its quality and had also provided that the work
should be done in his own premises by the workers, it was held that there was a
contract of service even though they might be paid at a piece rate basis.82
In ESI Corporation Trichur v Poopally Foods, Alleppy,83the Kerala High Court was
asked to determine whether an export firm dealing in prawns is liable to pay
contribution under Act for charges paid to an independent contractor for peeling and
grading prawns. It was held that the answer to this question will depend on whether
there was a ‘contract of service’ or a ‘contract for service’. Since the firm had no
supervision in the peeling and grading work done, therefore, there was no contract of
employment. Workers were not the employees of the firm and hence the firm was not
liable to pay any contribution under the Act in respect of the peeling and grading
charges paid to them.
In Bombay Wires Manufacturing Company, Bombay v ESI Corporation,84 the
company was an ancillary unit engaged in manufacture of Wires in factory premises.
The factory used to give these wires for threading and bundling to house-wives at
81
Kandaswami Weaving Factory v Regional Director E.S.I.C. Madras 1969 Lab IC 362 (Madras)
ibid
83
84
(1986) II LLJ 121 (Bombay)
82
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their own houses. It was held that the house-wives who do the work at their own
premises are not employees of the factory and hence the company is not liable to pay
contribution under the Act in respect of them.
5.14. Continuous Applicability of the Act
Will the ESI Act continue to be applicable when the total number of employees, as
prescribed for coverage, falls below the said limit?
By an amendment of the ESI Act in 1989, it has been provided that a factory or an
establishment shall continue to be governed by this Act not withstanding that the
number of persons employed therein at any time falls below the limits specified by or
under this Act or the manufacturing process therein ceases to be carried on with the
aid of power.
5.15. Contributions on Company Becoming Economically Sick
Can a company be exonerated from payment of ESI contributions on becoming sick?
The answer is no. Timely payment of ESI’s contribution is the responsibility of the
employer and does not depend upon actual disbursement of wages and, as such, an
employer cannot escape its obligation by taking the plea that the company has become
sick and the scheme of rehabilitation has been sanctioned by BIFR.85
5.16. Continuation of Employment
How long an employee as member of ESI will remain covered when his wages
increase and are above the coverable ceiling?
85
ESI Corporation, Sub-Regional Office, Hubli v A.P.S. Star Industries Ltd., Dharwad 2003 LLR 972:
(2003) III LLJ 411: 2003 (98) FLR 1207 (Karnataka) (Board of Industrial and Financial
Reconstruction-An agency deals and manages with companies and public sector undertakings in poor
financial and commercial condition)
174 | P a g e
Any employee who crosses the salary limit within the currency of contribution period
will remain covered till the end of contribution period. The contribution periods are as
follows:
April to September and October to march i.e., an employee covered at the beginning
of contribution period will remain covered till the end of contribution period.
5.17. Loaders and Unloaders-Whether Liable to be covered
Are the loaders and unloaders, engaged casually or by the transporters, be covered
under the ESI Act?
Merely because the loaders and unloaders have been able to get benefit, it will not be
a ground for non-coverage under the ESI Act. The definition of an ‘employee’ make it
abundantly clear that the persons engaged through an immediate employer are also
employees for the purpose of the Act and, therefore, the liability for payment of
contribution on the wages paid to such employees is on the employer. That definition
is in wide terms and includes persons who are engaged in doing any work which is
even preliminary to the work carried or incidental to the performance of the factory or
establishment.86
However, the loaders and unloaders are engaged by the contractors only make a
casual entry on the premises of the appellant-Corporation’s depots for the purpose of
loading and they are answerable only to the contractor for due performance of the said
work and not to the appellant-Corporation as held by Andhra Pradesh High Court.
The Court also held that the Petroleum Corporation is not to pay ESI contributions for
loaders and unloaders by transporters.87
86
E.K. Haj Mohammadmeera Sahib and sons v Regional Director, ‘Employees’ State Insurance
Corporation, 2003 LLR 308; 2003 (96) FLR 1174 (Madras)
87
Hindustan Petrolum Corporation Ltd v Employee’s State Insurance Corporation (represented by its
Regional Director) 2008 LLR 490 (Andhra Pradesh)
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5.18. Clubbing of Branches for Coverage
The question arose before the Courts, will different branches be taken into
consideration in calculating the number of employees for coverage under the ESI Act?
The ESI ACT will apply on all branches of an establishment when total number
exceeds 20.88Different sales and service outlets will be clubbed for applicability of
ESI Act even when number of employees 10 or more.89
For instance two petrol pumps owned by the same owner, through located at different
locations but having functional integrity, will be treated as single entity to be clubbed
together for coverage under ESI Act. Hence, the findings of the Employees’ Insurance
Court excluding one petrol pump to be covered for want of 20 employees is liable to
be set aside.90However, when father allows his son to use the premises for different
types of business, their establishments cannot be clubbed for coverage under ESI
Act.91But the employees of two establishments can be clubbed for coverage under ESI
when there is functional integrity.92
5.19. Coverage of Fabricator’s Workers for Exporter
Whether the employees engaged through the fabricators for an export house are
covered under the ESI Act?
In case the fabricators are doing the job exclusively for a covered establishment, the
workers engaged by fabricators will be covered under the scheme and the fabricator
will be the immediate employer and as such the principal employer, will be
responsible for the payment of contributions. But in case the fabricator is doing job
work for other also i.e., other exporters, in such event the workers employed by
88
Southern Agencies v Andhra Pradesh E.S.I. Corporation 2001 LLR 191 (SC)
Bata India Ltd., Calcutta v ESI Corporation 2003 LLR 1018; 2003 (III) LLJ 716 (Calcutta)
90
Assistant Regional Director, Employees’ State Insurance Corporation v Kolhapur Motor Malak
Sangh Ltd 2007 LLR 1242 (Bombay)
91
ESIC v Ved Prakash Gupta 2008 LLR 881 (Delhi)
92
M/s. Sumangali v Regional Director, ESI Corporation 2008 LLR 941 (SC); AIR 2009 SC 1298
89
176 | P a g e
fabricators are not coverable and there is no responsibility for the payment of
contribution.
The ESI Corporation has issued Notification No.T-11/13/53/3-2000-Ins-IV dated 6-32000 clarifying that the workers engaged through the fabricators, doing work for
others also, would not be liable to be covered under the ESI Act. However, by Internal
Instructions bearing No.P-12/11/51/9/2004-Rev.II dated 26-8-2005, the Corporation
has superseded its earlier instruction. In addition to above, further clarifications have
been given in the Instructions bearing No. P-12/11/51/9/2000-Rev.II dated 17-8-2006
and as such in view of the present position, the ESI contributions will be payable.
However, some of the employers have challenged the instructions as issued but no
judgement has been given by the High Court or the Supreme Court.
5.20. Partner of a Firm -Not an ‘Employee’
Whether a partner of a firm, being an establishment under the ESI Act, would be
covered under the Act?
The Supreme Court has held that a partner, engaged for the work of the factory or
establishment and being paid monthly, will not come within the purview of an
‘employee’ as defined in section2(9) of the ESI Act.93 The Kerala High Court has
observed that unlike the Managing Director of the Company, a partner of a firm is
different entity being in the capacity of employer, hence not liable to be covered
under the ESI Act.94
93
94
E.S.I. Corporation v Apex Engineering (P) Ltd 1997 LLR 1097 (SC)
Regional Director, ESI Corporation v Arun Granites 2007 LLR 1045 (Kerala)
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5.21. Managing Director Liable to be covered
A Managing Director of a Company will be covered under the Act if his salary is
below prescribed ceiling.95The Delhi High Court has also taken the same view.96
5.22. Apprentice-Is he an employee?
Only those apprentices who are engaged under the Apprentices Act, 1961 for a
particular period are not employees under section 2(9) of the ESI Act.97 The
apprentices as engaged under the Industrial Employment (Standing Orders) Act, will
no longer be exempted from the ESI Act. However, the apprentices/trainees other than
those engaged under the Apprentices Act, 1961 will be covered under the Act.98
In order to determine the question as to whether an individual designated as
apprentices is an employee or not, the test is whether he is actually engaged as an
apprentices or he is given regular duties and paid normal wages. The Madras High
Court has clarified that for determination about the status of an apprentice to exclude
from the purview of the ESI Act the nomenclature used by the employer will not have
any relevancy. The legal position
about non-coverage of apprentices under the
Apprentice Act, 1961 is very clear as when the question about the apprentices as to
whether they are apprentices under the Apprentices Act and/or to be covered or not
under the ESI does not involve question of law, the appeal under the Employee’s
Insurance Court will not be tenable.99
In ESI Corp. v Tata Engg. & Co.100it was held that apprentices are not employees.
They are engaged by a Company merely as trainees for a particular period for a
distinct purpose and the Company is not bound to employ them in their work after the
95
ESI Corporation v Apex Engineering (p) Ltd. 1997 LLR 1097 (SC)
Employee’s State Insurance Corporation. v Navchetan Press 2004 LLR 1047 (Delhi)
97
T.V. Punj v Regional Director, Employees’ State Insurance Corporation 1982 Lab IC (Karnataka)
102
98
Andhra Prabha (p) Ltd., Hyderabad v Employees’ State Insurance Corporation, Hyderabad 1996
LLR 827 (Andhra Pradesh)
99
Employee’s State Insurance Corporation v Arvind Mills Ltd. 2009 Lab IC 1885 (Gujarat)
100
AIR 1976 SC 66: (1976) I LLJ 81 (SC); See also Regional Director, E.S.I. Corporation v M/s. Fire
Manglore (p) Ltd. (1986) I LLJ 216 (Karnataka)
96
178 | P a g e
training period is over. The object of apprenticeship is learning under certain agreed
terms. Simply because certain payment is made to him and he has to be under certain
rules of discipline do not convert him to a regular employee. They are not said to be
employed in or in connection with the work of the Company. They are also not given
wages within the meaning of that word in Section 2(2).
It was held in Regional Director ESI Corporation v M/s. Arudyog & other,101 that the
apprentices under any scheme are exempted from the operation of law relating to
labour by virtue of clause (b) of Section 18 of the Apprentices Act. Hence apprentices
are not employees for the purpose of determining the coverage of the Act.
In Regional Director, Employees’ State Insurance Corporation, Mumbai v Golden
Gate Restaurant,102the respondent restaurant was catering to the needs of the
customers to serve them food. At the time of checking by the vigilance officer 71
persons were found working in restaurant including its kitchen. They also found a list
of workers on the roll. It was found that no contribution was being paid in respect of
37 persons who were also found working. The explanation of the respondent about
these 37 persons was that they were relatives of the employees of the restaurant taking
training there. They were allowed to learn the work and they were given free food and
residential accommodation and were not paid any wages in cash. The demand for
contribution in respect of these persons was contested by the respondent and it was
held by the High Court that though no cash payment was made to these persons, they
were getting remuneration in the form of free lodging and boarding for their work and
as such were employees under Section 2(9) of the Employees’ State Insurance Act,
1948. It was pointed out that amended definition included trainees and apprentices as
well.
101
102
(1987) I LLJ 292 (Bombay)
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5.23. Work incidental or preliminary to the work of factory
The Supreme Court has enlarged the meaning of an ‘employee’ under section 2(9) of
the ESI Act and has held that the employees engaged for the construction of
additional building required for expansion of a factory will fall within the definition
of an ‘employee’. Hence, they are covered under the Act.103
Ensuing Asian Games the hotels were to be completed and partial operations were to
be commenced that means that the remaining construction work was akin to the
expansion of work of an establishment work the demand for ESI contributions was
quashed.104
The Employee’s State Insurance Corporation in its memorandum No.P-12(11)11/27/99-Employees’ State Insurance Corporation IV dated 31-3-2000, has clarified
that if the additional building is constructed either directly or through contractor
within the premises/precincts of already covered factory, the workers will be covered
either engaged through contractors or directly. However, if the additional building
is constructed for residential purpose, the workers will not be covered. Also if
another building of the factory/establishment including residential accommodation
is constructed away from the factory, the workers will not be covered.
The Bombay High Court has held that even if an employee is working outside the
premises of the establishment but if his duty is connected with the work of the
establishment, he will be treated as an employee to be covered under the ESI Act. The
members of the Society who have been taking yarn beams prepared on the binding
machines by the Society and supplying finished goods will be coverable under the
ESI Act.105
If within the same premises or compound a number of departments are situated and all
such departments are engaged in any work in connection with or incidental to
manufacturing process of the factory, all of them would prima facie from part of the
103
Employee’s State Insurance Corporation, Madras v South India Flour Mills (p) Ltd. 1986 Lab IC
1193 (SC): AIR 1986 SC 1686: Employees’ State Insurance Corporation v. Vijayamohini Mills 1990
LLR 447 (Kerala)
104
Employees’ State Insurance Corporation v Hotel Corporation of Delhi 2008 LLR 640 (Delhi)
105
Employee’s State Insurance Corporation v Apex Engineering (p) Ltd. 1997 LLR 1097 (SC); (1998)1
SCC 86
180 | P a g e
factory.106 If a person is neither employed on any work of the factory, nor any work
incidental or preliminary to or connected with the manufacturing process, he will not
be an employee within the meaning of the Act.107
It was held in Regional Director, ESI Corp. v Suresh Trading Company,108that casual
employees engaged by the immediate employer in connection with incidental or
preliminary work of principal establishment or in connection with work of the
principal establishment will be employees of the principal establishment.
Similarly in Regional Director, ESI Corp. v Ramlal Textiles,109 yarn was supplied by
manufacturers to master weavers who carried by the yarn to their work place and
weave cloth either by themselves or other persons engaged by them. The
manufactured cloth is sold to the manufacturers’ establishment. It was held that the
right of rejection of sub-standard cloth spells out effective degree of supervision and
control. Identical work as is done by workers is done in the premises of the factory. In
view of all this the out workers who are paid wages through contractors are
employees as defined in Section 2(9) of the Act.
5.24. Managing Partner of a firm may be an employee
Where a manager employed by the firm to manage the affairs of the firm and the
managing partners have not been taking active part in the running of the business of
the firm, the burden of proof is on the firm to prove that the managing partner is
rendering services to the firm within its premises and should, therefore, be treated as
an employee. Unless it is proved, the managing partner cannot be said to be an
employee of the factory.110
106
Employee’s State Insurance Corporation v Sriamula Naidu AIR 1960 Madras 248
Hindustan Corporation Co. Ltd. v ESI Corporation 1969 Lab IC 67 (Assam)
108
109
(1990) II LLJ 568 (Kerala)
110
E.S.I.C. v Pioneer Laundry (1966) II LLJ 527
107
181 | P a g e
5.25. Consumer Protection Act Application
Does Consumer Protection apply for making claim under ESI?
The medical service rendered in an ESI hospital/dispensary to an insured employee
falls within the ambit of section 2(1)(o) of the Consumer Protection Act, and,
therefore, the Consumer Forums have jurisdiction to adjudicate upon a dispute arising
between the insured and the Employer’s State Insurance Corporation.111
5.26. Availability of Benefits
Non-payment of contributions won’t affect for availing of ESI benefits by an
employee.112
5.27. Non-Availability of Funds
Can non-availability of funds be an excuse for non-payment of ESI contributions?
There is no provision to waive off the amount due on account of contribution, interest
and damages as payable by an employer of a covered establishment. However, the
damages can be waived off in relation to a factory or establishment which is declared
as sick industrial company and in respect of which a rehabilitation scheme has been
sanctioned by the Board for Industrial and Financial Reconstruction. The quantum of
relief is mentioned in Regulation 31C of ESIC (General) Regulations, 1950.
5.28. Advantages of ESI to an Employer
(a) Exemption from the Maternity Benefit Act, 1961
111
112
Kishore Lal v Chairman, Employee’s State Insurance Corporation 2007 LLR 740 (SC)
Bharagath Engineering v R.Ranganayaki 2003 LLR 227 (SC): (2003) 2 SCC 138
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Section 50 of the ESI Act read with rule 56 of the ESI Rules and also Regulations 87
to 95 provide that the insured person will be entitled to maternity benefit from the
Employee’s State Insurance Act Corporation. Hence, the employer is exempted from
the applicability of the maternity Benefit Act, 1961
(b) Exemption from the Workmen’s Compensation Act, 1923
Section 53 of the ESI Act provides that an insured person or his dependents shall not
be entitled to receive or recover, whether from the employer of the insured person or
from any other person., any compensation or damages under the Workmen’s
Compensation Act, 1923 (8 of 1923) or any other law for time being in force or
otherwise, in respect of an employment injury sustained by the insured person as an
employee under this Act. Thus, the employer concerned under the ESI Act will not be
liable to pay compensation or accident.
The Division Bench of the Bombay High Court has held that the bar created under
section 53 of the ESI Act is not limited only to contractual obligation to pay
compensation or damages under any law including the Workmen’s Compensation
Act. It was further held that section 61 of the ESI Act, therefore, specifically provides
that when a person is entitled to any of the benefits provided by the Act, then shall not
be entitled to recover any similar benefits admissible under the provisions of any
other enactments.113
(c) Miscellaneous
An employer is exempted from provisions of medical care (in kind), medical
allowance (in cash) or reimbursement of medical expenses in respect of employees
and their dependents who are covered under the ESI Scheme.
An employer can be represented on the Employers’ State Insurance Corporation, its
Standing Committee and the Medical Benefit Council and any other sub-committee of
113
Associate Electrical industries v Commissioner for workmen’s Compensation 1994 LLR 860
(Bombay)
183 | P a g e
the Corporation appointed for any specific reasons concerning policy-making and
decision-making.
Employers are authorised to recover from their covered/coverable employees and
their contractors, etc., any cash contribution payable on their part. The employers
have the right to go in for appeal to Employees’ State Insurance Courts or the Special
Tribunal against excess demand of contribution made by the Corporation.
An employer can seek exemption from applicability of the ESI Act in case the social
security benefits provided to the employees are superior to those available under the
ESI Scheme.
“The question of extension of the ESI Scheme to plantations came up recently before
Justice M.P. Menon Commission of Enquiry. The ESIC proposed the coverage of
plantations but neither the employers nor the workers of the plantations were in
favour of the Extension of the ESI Scheme to the plantation sector. Although the
sickness and other benefits provided under the scheme are more than those provided
under the Plantations Labour Act the plantation workers were unanimously of the
view that the medical benefits now enjoyed by them under the Plantation Labour
Rules without paying any contribution were in no way inferior to those under the ESI
Scheme. They alleged that the workers covered by the ESI Scheme have a lot of
complaints about the implementation of the Scheme; Service in ESI dispensaries and
hospitals is not quite satisfactory; the qualifying conditions for getting sickness
benefit are a disincentive; that contributions have to be paid during the periods;
whether the worker is claiming benefits relating to that period or not. It is also alleged
that the employers apprehend that the liberal grant of sickness benefits under the ESI
Scheme only encourages absenteeism among workers. Many workers have been
approaching the High Court to prevent the extension of the ESI Scheme to their
employments.” The Conference of State Labour Ministers held on 7th and 8th of July
1993 is stated to have come to the conclusion that it is not advisable to extend the ESI
Scheme to the plantation sector. In taking such decisions it does not seem that the
184 | P a g e
feasibility of extending the ESI Scheme to mines and plantations for cash benefits,
and not for medical benefit, was considered.114
5.29. Jurisdiction of Civil Courts and High Court
Can civil courts determine whether ESI Act is applicable to an establishment or not?
No. Section 75(3) of the ESI Act imposes express and complete bar of jurisdiction of
a civil court in such matter. The ESI Act creates a special right or a liability and
further lays down those questions about the said right/liability shall be determined by
the Employee’s State Insurance Court constituted under Section 74 of the Act. The
Employees’ Insurance Court has exclusive jurisdiction to determine the disputes as to
whether a particular establishment comes within the purview of the ESI Act or
not.115The Punjab and Haryana Court has also held that the disputes between
employers and the employees have to be decided by the Employees’ State Insurance
Court and Civil Courts will have no jurisdiction to decide such disputes.116
When an employer is aggrieved with the findings of the ESI Authorities based on the
factual position at the time of inspection since there were 11 and not 9 employees as
rebutted by the employer, the appropriate remedy is provided for filing an appeal
before the Insurance Court and also further appeal by any of the parties before the
High Court but not the writ petition in the High Court, which will frustrate the
statutory condition in depositing 50% of the determined amount, hence the writ
petition filed by the employer is liable to be dismissed.117
An appropriate National Policy on Safety, Health and Environment at workplace, is
not only to eliminate the incidence of work related injuries, diseases, fatalities,
disaster and loss of national assets and also ensuring a high level of occupational
114
Available at <http://indialabourarchives.org/usr/local/gsdl/cgi-bin/library?e=d-000-00---0ncl-ncl01-0-0-0prompt-14-Document---0-1l--1-en-50---20-preferences---001-001-1-0isoZz-8859Zz-1&a=d&cl=CL2.16&d=HASH445101261de83f8e1210bb.403> accessed on 20 December 2013
115
Ram Parshad v ESI Corporation 1988 (57) FLR 139 (Delhi)
116
Employees’ State Insurance Corporation v Jaladhar Gymkhana Club 1992 LLR 733 (Punjab &
Haryana)
117
M/s. Dhanbad Cold Storage Pvt. Ltd. v Employees’ State Insurance Corporation 2009 LLR 404
(Jharkhand)
185 | P a g e
safety, health and environment performance through proactive approaches along with
enhancement of well-being of the employee and society, at large. With this the
researcher shall move to the next chapter to analyse the aspect of ‘Employment
Injury’.
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CHAPTER-6
AN ANALYSIS OF THE TERM ‘EMPLOYMENT INJURY’ IN
THE LIGHT OF THE HIGH COURTS AND SUPREME COURT
JUDGMENTS
6.1.
Foundations of Health and Safety
The Bhopal Gas Tragedy (4 December 1984) was the turning point in the history of health and
safety in India. It led to a serious review of legislative measures. As a result the Factories Act
underwent a major revision in 1987 and practical implementation in the late 90s. The salient
features and impact can be summarized as follows1:
1. Owner’s responsibilities enhanced
2. Prepare and communicate Health and Safety Policy in all covered establishments
3. Hazardous processes well defined
4. Information to workers, inspectorate, and the great public made mandatory
5. Prepare and practice Disaster Management Programmes
6. Medical examinations and records
7. Occupational health facilities on site defined
8. All hazardous plants must have an Occupational Health Centre
9. Qualification and attendance of doctors specified
10. Equipments and drugs described.
1
Available at <http://admin.indiaenvironmentportal.org.in/> accessed on 15 January 2014
187 | P a g e
The Declaration of Philadelphia2 (paragraph III (g)) which provides that the ILO3 has the solemn
obligation to further among the nations of the world, programmes which will achieve adequate
protection for the life and health of workers in all occupations.
The ILO Constitution sets forth the principle that workers should be protected from sickness,
disease and injury arising from their employment. Yet for millions of workers the reality is very
different. Some two million people die every year from work-related accidents and diseases. An
estimated 160 million people suffer from work-related diseases, and there are an estimated 270
million fatal and non-fatal work-related accidents per year. The suffering caused by such
accidents and illnesses to workers and their families is incalculable. In economic terms, the ILO
has estimated that 4% of the world’s annual GDP 4 is lost as a consequence of occupational
diseases and accidents. Employers face costly early retirements, loss of skilled staff,
absenteeism, and high insurance premiums due to work-related accidents and diseases. Yet many
of these tragedies are preventable through the implementation of sound prevention, reporting and
inspection practices. ILO standards on occupational safety and health provide essential tools for
governments, employers, and workers to establish such practices and to provide for maximum
safety at work. In 2003 the ILO adopted a “Global Strategy to Improve Occupational Safety and
Health” which included the introduction of a preventive safety and health culture, the promotion
and development of relevant instruments, and technical assistance.5
The ILO has adopted more than 40 instruments specifically dealing with occupational safety and
health, as well as over 40 Codes of Practice.6 Nearly half of ILO instruments deal directly or
indirectly with occupational safety and health issues.
2
Declaration concerning the aims and purposes of the International Labour Organization adopted at the 26th session
of the ILO, Philadelphia on 10 May 1944Available at <http://www.ilo.org/global/standards/subjects-covered-byinternational-labour-standards/occupational-safety-and-health/lang--en/index.htm> accessed on 21 May 2014
3
4
5
Available
at
<http://www.ilo.org/global/standards/subjects-covered-by-international-labour-standards/
occupational-safety-and-health/lang--en/index.htm> accessed on 21 May 2014
6
ILO Codes of Practice set out practical guidelines for public authorities, employers, workers, enterprises, and
specialized occupational safety and health protection bodies (such as enterprise safety committees). They are not
legally binding instruments and are not intended to replace the provisions of national laws or regulations, or
accepted standards. Codes of Practice provide guidance on safety and health at work in certain economic sectors
(e.g. construction, opencast mines, coal mines, iron and steel industries, non-ferrous metals industries, agriculture,
shipbuilding and ship repairing, forestry), on protecting workers against certain hazards (e.g. radiation, lasers, visual
188 | P a g e
6.2.
Fundamental conventions of occupational safety and health7
6.2.1. Occupational Safety and Health Convention, 1981 (No. 155)
The convention provides for the adoption of a Coherent National Occupational Safety and Health
Policy, as well as action to be taken by governments and within enterprises to promote
occupational safety and health and to improve working conditions. This policy shall be
developed by taking into consideration national conditions and practice. The convention calls for
the establishment and the periodic review of requirements and procedures for the recording and
notification of occupational accidents and diseases, and for the publication of related annual
statistics.
6.2.2. Occupational Health Services Convention, 1985 (No. 161)
This Convention provides for the establishment of enterprise-level occupational health services
which are entrusted with essentially preventive functions and which are responsible for advising
the employer, the workers and their representatives in the enterprise on maintaining a safe and
healthy working environment.
6.2.3. Promotional Framework for Occupational Safety and Health Convention, 2006 (No.
187)
This Convention aims at promoting a preventative safety and health culture and progressively
achieving a safe and healthy working environment. It requires ratifying States to develop, in
consultation with the most representative organizations of employers and workers, a national
policy, national system, and national programme on occupational safety and health. The national
display units, chemicals, asbestos, airborne substances), and on certain safety and health measures (e.g. occupational
safety and health management systems; ethical guidelines for workers’ health surveillance; recording and
notification of occupational accidents and diseases; protection of workers’ personal data; safety, health and working
conditions in the transfer of technology to developing countries) Available at <http://www.ilo.org/global/standards/
subjects-covered-by-international-labour-standards/occupational-safety-and-health/lang--en/index.htm>accessed
on 21 May 2014
7
ibid
189 | P a g e
policy shall be developed in accordance with the principles of Article 48 of the Occupational
Safety and Health Convention, 1981 (No. 155), and the national systems and programmes shall
be developed taking into account the principles set out in relevant ILO instruments.9 A list of
relevant instruments is contained in the Annex to the Promotional Framework for Occupational
Safety and Health Recommendation, 2006 (No. 197). National systems shall provide the
infrastructure for implementing national policy and programmes on occupational safety and
health, such as laws and regulations, authorities or bodies, compliance mechanisms including
systems of inspection, and arrangements at the level of the undertaking. National programmes
shall include time-bound measures to promote occupational safety and health, enabling a
measuring of progress.
6.3.
Plan of action (2010-2016) to achieve widespread ratification and
effective implementation of the occupational safety and health
instruments (Convention No. 155 of 2002, its 2002 Protocol and
Convention No. 187 of 2006)10
The Plan of Action is intended to serve as a basis for concerted and broad-based action to attain a
significant reduction in the unacceptable human suffering and economic losses that are still
caused by work-related accidents and illnesses worldwide. The Plan of Action outlines strategies
focused on: mapping the current situation at the national level and the readiness to take action;
promoting and supporting the development of a preventive safety and health culture; overcoming
8
Article 4 (1) Each Member shall, in the light of national conditions and practice, and in consultation with the most
representative organizations of employers and workers, formulate, implement and periodically review a coherent
national policy on occupational safety, occupational health and the working environment.
(2) The aim of the policy shall be to prevent accidents and injury to health arising out of, linked with or occurring in
the course of work, by minimizing, so far as is reasonably practicable, the causes of hazards inherent in the working
environment.
9
The ILO has adopted more than 40 instruments specifically dealing with occupational safety and health, as well as
over 40 Codes of Practice. Available at <http://www.ilo.org/global/standards/subjects-covered-by-internationallabour-standards/occupational-safety-and-health/lang--en/index.htm> accessed on 24 May 2014
10
Available at <http://www.ilo.org/global/standards/WCMS_125616/lang--en/index.htm> accessed on 24 May 2014
190 | P a g e
shortcomings in the implementation of ratified Conventions; and improving OSH11 conditions in
small and medium-sized enterprises and the informal economy.
It is pertinent to note that India has not yet ratified any of the above mentioned Conventions.
Earlier ILO Conventions and Recommendations
The concern felt by the International Labour Organization for providing medical and health care
resulted in several ILO Conventions and Recommendations. As early as in 1927 the ILO adopted
Convention No. 25 concerning sickness. Insurance and Recommendation No. 29 relating to
general principles on sickness insurance. Further, in 1944 the Philadelphia Convention adopted a
Recommendation No. 29 which laid down norms of medical care. Again in June, 1953, the ILO
adopted Recommendation No. 97 concerning the protection of health of workers in places of
employment. The recommendation laid down that employment for occupations involving special
risk to the health of workers should be on the condition that
(i)
medical examination is carried out shortly before or after a worker enters
employment, and
(ii)
periodical medical examination is done after he has joined the employment.
In 1959, the ILO adopted another recommendation concerning occupational health services. The
recommendation envisages that “Occupational Health Services” should be established in or near
a place of employment for
(i)
protecting the workers against any health hazard arising from work or conditions in
which work is carried on,
(ii)
contributing towards the workers’ physical and mental adjustment, and
(iii)
contributing to establishment and maintenance of the highest possible degree of
physical and mental well-being of workers.12
Time and again, the Organization has expressed its concern about increased hazards from
radiation processes, as a result of fast changes in industrial technology. Thus, in June, 1960, it
11
12
SC Srivastava, ‘Occupational Health of Workers in India Law and Practice’ (2002) 31 BLJ 11,18-19
191 | P a g e
adopted Recommendation NO. 114 and Convention NO. 115 concerning the protection of
workers against ionizing radiation. The same year witnessed the passing of the Radiation
Protection Convention, 1960.13 This was followed by several other important conventions such
as Benzene Convention, 1971.
14
Occupational Cancer Convention, 1974.
15
Working
Environment (Air Pollution, Noise and Vibration) Convention, 197716 and Occupational Safety
and Health (Dock Work) Convention, 1979.17 The International Labor Organization being alive
to the problems of enforcement set standards by adopting occupational safety and health
Convention, 1981 providing for the enforcement of law and regulation concerning occupational
health and requiring adequate and appropriate inspection machinery. Despite the existence of
aforesaid ILO Conventions and Recommendations, the problems of occupational health of
workers continues and commissions to cause concern.18
6.4.
Supreme Court’s Emphasis on Right to Health and Medical Care as a
Fundamental Right
In the landmark case Consumer Education and Research Centre and others v Union of India
and others19, the apex court has held that the right to health and medical care to protect one’s
health and vigor, while in service or post-retirement, is a fundamental right of a worker under
Article 2120 read with Articles 39(e)21, 41,22 43,23 48-A24 and all related Articles and fundamental
13
Article 12
Articles 9 and 10
15
.Article 5
16
.Article 11
17
.Article 36
18
SC Srivastava, ‘Occupational Health of Workers in India Law and Practice’ (2002) 31 BLJ 11,18-19
19
(1995) 3 SCC 42
20
Protection of life and personal liberty: No person shall be deprived of his life or personal liberty except according
to procedure established by law
21
(e) That the health and strength of workers, men and women, and the tender age of children are not abused and
that citizens are not forced by economic necessity to enter avocations unsuited to their age or strength
22
Right to work, to education and to public assistance in certain cases:The 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.
23
Living wage, etc., for workers: The State shall endeavour to secure, by suitable legislation or economic
organization or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions
of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities and, in
particular, the State shall endeavour to promote cottage industries on an individual or co-operative basis in rural
areas
14
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human rights to make the life of the workman meaningful and purposeful with dignity of person.
The Court held that the compelling necessity to work in an industry exposed to health hazards
due to indigence to bread-winning for him and his dependents should not be at the cost of health
and vigor of the workman.
Right to health i.e. right to live in a clean, hygienic and safe environment is a right flowing from
Article 21. Clean surroundings lead to healthy body and healthy mind. But, unfortunately, for
eking a livelihood and for national interest, many employees work in dangerous, risky and
unhygienic environment. Right to live with human dignity enshrined in Article 21 derives its life
breath from the Directive Principles of State Policy, particularly clauses (e) and (f)25 of Article
39 and Articles 41 and 42.26 Those Articles include protection of health and strength of workers
and just and humane conditions of work. Those are minimum requirements which must exist to
enable a person to live with human dignity. Every State has an obligation and duty to provide at
least the minimum condition ensuring human dignity.
6.5.
National Policy on Safety, Health and Environment at workplace
The fundamental purpose of the National Policy on Safety, Health and Environment at
workplace, is not only to eliminate the incidence of work related injuries, diseases, fatalities,
disaster and loss of national assets and also ensuring a high level of occupational safety, health
and environment performance through proactive approaches along with enhancement of wellbeing of the employee and society, at large.27
24
Protection and improvement of environment and safeguarding of forests and wild life: The State shall endeavour to
protect and improve the environment and to safeguard the forests and wild life of the Country
25
(f) That children are given opportunities and facilities to develop in a healthy manner and in conditions of freedom
and dignity and that childhood and youth are protected against exploitation and against moral and material
abandonment.
26
Provision for just and humane conditions of work and maternity relief: The State shall make provision for securing
just and humane conditions of work and for maternity relief
27
Available at<http://labour.nic.in/upload/uploadfiles/files/Policies/SafetyHealthandEnvironmentatWorkPlace.pdf>
accessed on 20 May 2014
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With help of the above mentioned background now the study shall focus on analysis of the
definition ‘Employment Injury’ under the Employee’s State Insurance Act, 1948 (Henceforth
‘the Act’)
6.6.
Definition of the term ‘Employment Injury’ under the Act
Section 2 (8) of the Act defines ‘Employment Injury’ which means a personal injury to an employee caused by accident or an occupational disease arising out of and in the course of his
employment, being an insurable employment, whether the accident occurs or the occupational
disease is contracted within or outside the territorial limits of India.
The following are the ingredients of an Employment Injury
•
The injury must be personal to an employee.
•
The injury must be caused by an accident; or occupational disease.
•
The accident must arise out of and in the course of employment.
•
The Employment must be insurable.
6.6.1. Meaning of Employment, Injury, Personal Injury and Employment Injury
The concept of Employment implies three essential elements: (1) employer (2) employee and (3)
the contract of service. The Employment is a contract of service between the employer and
employee, where the employee agrees to serve the employer subject to his control and
supervision28. Employment is not confined to actual work or place of work. It extends to all
things which the workman is entitled by the contract of employment expressly or impliedly to
do29.
Injury ordinarily refers to a physiological injury. The first essential condition of an employment
injury is that personal injury must have been caused. The term ‘personal injury’ is somewhat
wider than physical or bodily injury but does not include an injury to the belongings or
28
29
Chintaman Rao v State of M.P AIR 1958 SC 388
1955 ILR 922 (Punjab)
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reputation of the person. It covers any physiological injury, for example, a man suffering nervous
shock or insanity as a result of witnessing a terrible accident might be regarded as suffering from
personal injury. An emotional impulse, however, does not constitute an injury unless it is
accompanied by some physiological injury. Further, compensation is payable for the result of the
injury and not for the injury itself. Thus, a man who suffers from shock would not get
compensation unless the shock results in his being disabled.30
In Indian New Chronicle v Mrs. Lazarus,31a workman, employed as an electrician had frequently
to go to a heating room from a cooling plant, was attacked by pneumonia and died after a short
illness of five days. The Court held that the injury caused by an accident is not confined to
physical injury and the injury in the instant case was due to his working and going from a heating
room to a cooling plant as it was his indispensable duty.
Employment Injury is the personal injury to an employee caused by an accident or by an
occupational disease arising out of employment of the employee in a covered factory or
establishment, and arising in the course of his employment in a covered factory or
establishment.32
6.7.
Accident
The expression “accident” has not been defined in the Act. It means any unexpected mishap,
untoward event, or consequence brought about by some unanticipated or undersigned act. The
basic and indispensable ingredient of the accident is the unexpectation. Although an accident
means particular occurrence which happens at a particular time but it is not necessary that the
workman must be able to locate it in order to succeed in his claim.
30
Available at <http://www.esicoimbatore.org/info/employment_injury.htm> accessed on 20 May 2014
AIR 1961 Punjab 102
32
ibid
31
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6.8.
Notice of accident
Under Regulation 65 of the Act every employee who sustains personal injury caused by accident
arising out of and in the course of his employment in a factory or establishment shall give notice
of such injury either in writing or orally, as soon as practicable after the happening of the
accident.
Provided that any such notice required to be given by an employee may be given by some other
person acting on his behalf.
No such notice shall be required to be given by an employee if an employment injury is caused
by any Occupational Disease.
Every such notice shall be given to the employer or to a foreman or to other official under whose
supervision the employee is employed at the time of the accident or any other person designated
for the purpose by the employer and shall contain the appropriate particulars.
Any entry of the appropriate particulars of the accident made in a book kept for that purpose, if
made as soon as practicable after the happening of the accident by the employee or by some
other person acting on his behalf, is sufficient notice of the accident.
Appropriate particulars to be written are:
(a) Full name, Insurance Number, sex, age, address, occupation, department and shift of the
injured person;
(b) Date and time of accident;
(c) Place where accident happened;
(d) Cause and nature of injury;
(e) Name, address and occupation of the person giving the notice, if he is other than the injured
person;
(f) A statement of what exactly the injured person was doing at the time of injury;
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(g) Names, addresses and occupation of two persons who were present at the spot when accident
happened; and
(h) Remarks, if any.
6.9.
The modernization and innovation in industries and rapid increase in chemical, hazardous, and
polluting industries in recent years has not only resulted in unsafe working conditions but has
created problems of occupational health hazards. The incidence of occupational diseases is much
higher in developing countries than developed ones, although no region of the world is immune
from this. In developing countries the workers most exposed to occupational risks are those
employed in agriculture, chemical and primary extraction industries and heavy manufacturing.
Quite apart from this poor equipment, heavy workload and even poisoning due to pesticide’s and
organic dusts take their heavy toll on workers, health and safety. Further, work related hazards
are changing with the introduction of new chemical substances which pose a threat to community
and workers alike. Moreover, occupational risks such as temperature (excessive heat or cold),
humidity of air, dampness inducing chill, low air movements and defective lighting in the work
place affect the workers. Also, other factors like noise, sustained vibration, excessive
uncontrolled ionizing radiation; high voltage electric current and abnormal air pressure produce
damaging effects on certain organs of the body. Quite apart from this certain substances cause
poisoning or disease in industry. It is, therefore, essential to take effective measures to protect the
workers from such risks and dangers. The gravity of situation may be gauged from the
observation made in 1992 by Justice Ramaswamy that “in three minutes somewhere in the world
one worker dies and in every second that passes, at least three workers are injured”, and in India
“on average every day 1,100 workers are injured and three are killed.”33
The major purpose of the law of occupational health is to provide workers with safe and healthy
working conditions. The basic premise for the establishment of standard is derived from the fact
33
SC Srivastava, ‘Occupational Health of Workers in India Law and Practice’ (2002) 31 BLJ 11
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that employer should have general duty to furnish employment free from recognized hazards. An
employer who fails to comply with the established health standard should be made liable.
The term ‘occupational disease’ has not been defined but a perusal of sub-section (1) of Section
52Aread with The Third Schedule of the Act makes it clear that it is a disease contracted by, or
caused to, a person employed in one of the occupations described in the said Third Schedule.
Section 52Aof the Act which is the relevant law on occupational diseases is reproduced as
under:52A (1) If an employee employed in any employment specified in Part A of the Third Schedule
contracts any disease specified therein as an occupational disease peculiar to that employment, or
if an employee employed in the employment specified in Part B of that Schedule for a
continuous period of not less than six months contracts any disease specified therein as an
occupational disease peculiar to that employment or if an employee employed in any
employment specified in Part C of that Schedule for such continuous period as the Corporation
may specify in respect of each such employment, contracts any disease specified therein as an
occupational disease peculiar to that employment, the contracting of the disease shall, unless the
contrary is proved, be deemed to be an ‘employment injury’ arising out of and in the course of
employment.
(2) (i) Where the Central Government or a State Government, as the case may be, adds any
description of employment to the employments specified in Schedule III to the Workmen’s
Compensation Act, 1923 (8 of 1923) by virtue of the powers vested in it under sub-section (3) of
Section 3 of the said Act, the said description of employment and the occupational disease
specified under that sub-section as peculiar to that description of employment shall be deemed to
form part of the Third Schedule.
(ii)Without prejudice to the provisions of clause (i) the Corporation after giving, by notification
in the Official Gazette, not less than three months’ notice of its intention so to do, may, by a like
notification, add any description of employment to the employments specified in the Third
Schedule and shall specify in the case of employments so added the diseases which shall be
deemed for the purposes of this section to be occupational diseases peculiar to those
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employments respectively and thereupon the provisions of this Act shall apply, as if such
diseases had been declared by this Act to be occupational diseases peculiar to those
employments.
(3) Save as provided by sub-sections (1) and (2), no benefit shall be payable to an employee in
respect of any disease unless the disease is directly attributable to a specific injury by accident
arising out of and in the course of his employment.
(4) The provisions of Section 51-A shall not apply to the case to which Section 52-A applies.
The Third Schedule of the Act has replaced the old schedule with effect from 27.1.1985 and is
much more comprehensive than the earlier schedule (can be seen as Annexure).
If an employee employed in any employment mentioned in Part A of the above referred
Schedule contracts any disease specified therein as an occupational disease peculiar to that
employment, the contracting of the disease shall be deemed to be an employment injury arising
out of and in the course of employment unless the contrary is proved.
It would, thus, be observed that in so far as the diseases falling in Part A are concerned, the mere
fact of being employed in the employment specified therein raises a presumption as to the
contracting of the disease being an employment injury. No minimum period of employment is
required.
In so far as the occupational diseases specified in Part B of the Third Schedule are concerned, an
employee employed in any of the employments specified therein for a continuous period of not
less than six months becomes entitled to the presumption of the occupational disease amounting
to an employment injury. All that is to be seen in this case is whether the employee had been,
before the date of contracting the disease, in the specified employment for a continuous period of
not less than six months. So long as the period of service is continuous, it does not matter
whether the employee has served with the same employer or with different employers in the
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same kind of employment. But, each such employer should be of a factory or establishment
covered under the Act.
As per sub-section (1) of Section 52-A, to claim compensation for diseases listed in Part C of the
Third Schedule, a continuous period of employment such as the Corporation may specify in
respect of each employment causing the disease related theretois necessary. The Corporation has
notified the following periods of continuous employment for the diseases included in Part C of
the Schedule as well as for certain other diseases added by it through a notification by virtue of
powers vested in it under Sub-Section (2) (ii) of the Section.
Silicosis
6 months
Coal Miner’s Pneumoconiosis
7 years
Asbestosis
3 years
Bagassosis
3 years
Byssinosis
3 years
Farmer’s lung
5 years
Pneumoconiosis
7 years
In all the cases mentioned in the preceding paras the presumption avails in favour of the claimant
if he satisfies the conditions specified. If the Corporation contests the claim, the burden of
disproving the occupational origin of the disease rests on the Corporation.
The periods specified above for occupational diseases included in Part C caused hardship to
those sufferers who could not fulfill the minimum qualifying period of employment. The
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Corporation, at its meeting held on 25-2-1992, resolved to add the following proviso to its
Resolution passed earlier fixing the periods of employment for diseases under Part C:
“Provided that if it is proved that an employee whilst in the service of one or more employers in
any employment specified in Part C of the Third Schedule to the ESI Act, 1948, has contracted a
disease specified therein as an occupational disease peculiar to that employment during a
continuous period which is less than the period specified by the Corporation for that
employment, and that the disease has arisen out of and in the course of employment, the
contracting of such disease shall be deemed to be an ‘Employment Injury’ within the meaning of
Section 52A of the ESI Act, 1948.”
The Third Schedule of the Act is exactly identical to Schedule-III to the Workmen’s
Compensation Act, 1923, it is legislation under which compensation is payable to a workman
sustaining a personal injury from accident or by contracting an occupational disease while in the
employment of a factory or establishment not covered under the Act. Section 3 of the
Workmen’s Compensation Act empowers the Central Government as well as a State
Government to add any description of employment as well as an occupational disease peculiar to
such employment, to Schedule III to the Workmen’s Compensation Act. Sub-section (2) ( i ) of
Section 52A of the Act says that when such an addition is made by the Central or State
Government , it shall also stand automatically added so as to form part of the Third Schedule to
the Act. In addition, the Employees State Insurance Corporation has also been empowered by
Section 52A (2) (ii) to add of its own accord any description of employment and the
corresponding occupational disease in the Third Schedule to the ESI Act.
In so far as any disease other than the diseases specified in the Third Schedule is concerned, no
disablement benefit is payable to an employee unless the disease is directly attributable to a
specific injury by accident arising out of and in the course of employment. It would, therefore, be
necessary in case of such other disease to prove that the disease constitutes an accident within the
meaning of the word and not within the special meaning of Section 52A (1) that the accident
arose both out of and in the course of employment and that the disease was directly attributable
to a specific injury sustained in that accident.
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6.10. Regulation of Occupational Health in India (Responses of Committees
and Commissions)
In India various Committees and Commissions were appointed from time to time by the
Government of India to inquire into the problems of health of industrial workers. In 1929 the
Royal Commission on Labor noted that in a number of factories due to manufacturing processes
a large amount of dust is deposited and that arrangements for its elimination were mostly
defective. The Commission further observed:
“Mechanical systems resulting in a constant flow of fresh air would add greatly
to the comfort of the operative, and would in some cases improve his output. More
important is the conservation of the workers’ health, for the prevalence of dust
may result in pulmonary disease. In certain manufacturing processes, particularly
connected with cotton, jute and wool, the reduction of dust to a minimum should
be made obligatory. Section 10 of the old Factories Act confers ample powers on
Inspectors of Factories in this respect and these should be more extensively used.
More attention should also be paid to the general cleanliness of the factories.
Where quantities of dust and fluff are produced, it is important that floors and
walls should be regularly cleaned. Periodic white-washing of the interior walls
and roofs not only removes collected dust, but helps to improve the lighting. It is
difficult to associate efficiency with the grime to be found in some factories. We
recommend that where the rules made by local Government do not require the
cleaning of factories annually, they should be supplemented in their direction,
and that in all cases such rules should be strictly enforced”.34
In October, 1943 the Government of India appointed Health Survey and Development
Committee to consider and suggest broad objectives of health and medical care in the country.
The Committee observed:
34
Govt. of India, Report of the Royal Commission on Labour, (1931) p. 56
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“The health programme must, from the beginning, lay special emphasis on
preventive work. The creation and maintenance of as healthy an environment as
possible in the homes of the people as well as in all places where they congregate
for work, amusement or recreation are essential, so long as environmental
hygiene is neglected, so long as the faulty modes of life of the individual and of
the community remain uncorrected, so long as these and other factors weakening
man’s power of resistance and increasing his susceptibility to disease are allowed
to operate unchecked, so long
will our towns and villages continue to be
factories for the supply of cases to our hospitals and dispensaries”35
Later, the Labor Investigation Committee set up under the Chairmanship of Shri D.D. Rege by
the Government of India emphasized in its report, submitted in 1946, the responsibility of the
employer to provide for medical and health facilities. The Committee stated:
“Although provision of such amenities was largely the function in municipal and
local bodies, it was also the responsibility of employer partly to provide such
facilities to their workers. The Committee, therefore, supported the move, then
reported to be under the consideration of the Government of India, for a unified
scheme of social insurance to provide medical and health care in respect of three
contingencies--sickness, employment injury and child birth”
Dr. Thomas Bedford in his report on the Health of the Industrial Worker in India (1946) drew
the attention of the authorities, inter alia, to the inadequacy of protection given to Indian factory
workers from dangerous dusts and to the importance of keeping a careful watch on industries in
which organic solvents and radioactive materials were used.36 In 1969 the Committee on Labor
Welfare observed:
“While a universal provision of such amenities in the present day context of
country’s economy cannot be realistic, it is felt that the provision of this important
welfare amenity at selected places, to start with, should be explored. We,
35
36
Government of India, Report of the Committee on Labour Welfare, p. 23
N.S. Nankiker, ‘Working Conditions in Factories referred in Government of India’ The Conference of Chief Inspectors of
Factories held at New Delhi, (1968) p.16
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therefore, recommend that the Government may, with the assistance and cooperation of State Governments, public sector undertakings, Central employers’
and workers’ organizations and autonomous corporations like the Employees’
State Insurance Corporation and the life Insurance Corporation should take
initiative in the matter for formulating a scheme for convalescent homes and
sanatoria etc. for workers”
The National Commission on Labour has laid considerable emphasis on continuous study of
new problems with a view to suggesting remedies to suit the changing environment and to avoid
health hazards. The Commission observed:
There are two aspects of such protection:
(i) Preventive and (ii) curative. The former consists of pre-employment and
periodic medical examination; removal of health hazards to the extent possible;
surveillance over certain classes of workers such as women, young persons and
persons exposed to special risks; emergency treatment for accidents; training of
first aid personnel; and education of workers in health and hygiene. The curative
aspect will begin once a worker suffers from ill health or disease. The statutory
provisions in the labour laws for safeguarding the health of workers such as
restrictions on employment of women at certain hours and places; protection for
young person’s; provision of first aid and ambulance services, provisions relating
to cleanliness, disposal of wastes and effluents, ventilation and temperature, and
dust, fumes and lighting are known already...
The Commission continued:
While the curative side can be attended to, the basic difficulty associated with the
preventive aspect is the general economic condition in the country. There is a
general fear among workers that a medical check-up may result in disqualification
for continuing in employment if something adverse is detected. This can be
overcome only in the long run. Presently, all that can be done is to move towards
preventive side. In addition, the more malignant and difficult cases should be
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taken up and arrangements be made for both physical and psychological
treatment. This is an area where closer co-operation between authorities who are
in charge of prevention and others who look after cure will be necessary.37
The advent of the era of planning brought in its wake new problems as well as popular
expectations. All the plans not only recognized the adequacy of the legislative framework, but
also emphasized the need for effective and adequate measures for implementation of health
provisions.
The health facilities for industrial workers are governed by labour legislation. A survey of
statutory provisions regarding the health of industrial workers shows that the parties are
dissatisfied with the industrial health legislation. Workers are critical of the existing statutory
provisions. They argue that (i) health facilities provided in the stature are inadequate and
unsatisfactory; (ii) the health provisions of industrial workers have not been effectively
implemented. The management on the other hand, opposed the idea of providing better health
facilities to workers on the two grounds: first, health facilities have caused a heavy financial
burden on the industry, and second, where statutory health facilities have been provided, the
same have either remained underutilized or improperly utilized by workers.38
India is one of the most important developing countries in the world. According to 2001 census,
about 40 million people belong to the working population. There are 300,000 registered
industrial factories and more than 36500 hazardous factories employing 2046092.
Approximately 10 million persons were employed in various factories. The current burden of
accumulated occupational diseases in India is estimated to be at around 18 million cases.39
A report by NIOH, 40 records more than 3 million people working in various type of mines,
ceramics, potteries, foundries, metal grinding, stone crushing, agate grinding, slate pencil
industry etc. These workers are occupationally exposed to free silica dust and are at potential risk
of developing silicosis.
37
38
Government of India, Report of the National Commission on Labour, (1969) p.106
ibid
39
40
As per Director General of Factory Advisory Services & Labour Institutes [DGFASLI]
National Institute of Occupational Health Report, 2010
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The major occupational diseases/morbidity of concern in India are: silicosis,41 musculoskeletal
injuries, 42 coal workers’ pneumoconiosis, 43 chronic obstructive lung diseases, asbestosis, 44
byssinosis45 pesticide poisoning and noise-induced hearing loss. Figures have revealed that there
is an increase of about 28% male workers and 45% female workers from 1991 to 2001. The
male: female working population ratio was 78:22 in 1991, but it has now changed to 68:35 in
2010. This increase in the working female population leads to certain concerns, such as adverse
effects on reproductive health, exposure to toxic chemicals in the workplace.46
WHO47 in its sixtieth World Health Assembly has expressed concerns over major gaps between
and within countries in the exposure of workers and local communities to occupational hazards
and in their access to occupational health services.The occupational health training is carried out
in a few medical colleges for graduate and postgraduate diplomas and degrees. The Central
Labour Institute under DGFASLI 48 offers a 3-month certificate course in Industrial Health,
which is statutorily approved. The following Occupational Health Institutes in India provide
41
Silicosis is the commonest and one of the most serious occupational diseases. It is irreversible fibrosis of the lungs
caused by inhalation of free silica dust. It is estimated that about 3 million people working in various types of mines,
ceramics, potteries, foundries, metal grinding, stone crushing, agate grinding, slate pencil industry etc., are
occupationally exposed to free silica dust and are at potential risk of developing silicosis. Silica exposure also
predisposes to development of pulmonary tuberculosis, which is an important public health problem in the country.
Available at <http://nioh.org/projects/silicosis.html> accessed on 20 June 2014
42
Musculoskeletal injuries are pain in body’s joints, ligaments, muscles, nerves, tendons, and structures that support
limbs, neck and back. These are degenerative diseases and inflammatory conditions that cause pain and impair
normal activities. They can affect many different parts of the body including upper and lower back, neck, shoulders
and extremities (arms, legs, feet, and hands). MSDs can arise from a sudden exertion (e.g., lifting a heavy object), or
they can arise from making the same motions repeatedly repetitive strain, or from repeated exposure to force,
vibration, or awkward posture. Available at <http://nioh.org/projects/silicosis.html> accessed on 20 June 2014
43
Pneumoconiosis is a lung disease caused by the inhalation of various types of industrial dust. The dust causes
inflammation of the lungs and gradually damages the lungs over time. The damage, in turn, causes fibrosis, a
condition where the lungs begin to stiffen. When this occurs, it becomes difficult for a person to breathe easily.
44
Exposure to asbestos causes asbestosis, lung cancer and mesothelioma of pleura and peritoneum. In India, the total
use of asbestos is 1.25 lakh tonnes, out of which more than 1.0 lakh tonnes are being imported. Significant
occupational exposure to asbestos occurs mainly in asbestos cement factories, asbestos textile industry and asbestos
mining and milling. Available at <http://nioh.org/projects/silicosis.html> accessed on 20 June 2014
45
Byssinosis is an occupational lung disease caused by exposure to cotton, flax and hemp dust. Maximum number of
workers with byssinosis is reported in the cotton textile industry as it is one of the largest industries in the world. In
India, there are about 1.07 million workers engaged in the manufacture of cotton textiles. Available at
<http://nioh.org/projects/silicosis.html> accessed on 20 June 2014
46
47
World Health Organization
48
Director General of Factory Advisory Services & Labour Institutes
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training and carry out research in occupational health.
1.
Central Labour Institute, Mumbai49
2.
National Institute of Occupational Health, Ahmadabad50
3.
Industrial Toxicology Research Centre, Lucknow51
4.
Central Mining Research Station, Dhanbad
5.
Regional OHCs at Calcutta and Bangalore
6.
Regional Labour Institutes at Calcutta, Madras, Faridabad and Kanpur
7.
Medical Colleges and Institutes
Central Labour Institute (CLI), Mumbai, working under the Ministry of Labour has five regional
labour institutes. These Institutes carry out training and research related to industrial safety and
health. These institutes also test and develop personal protective equipment. Until recently, CLI
was the only institute conducting statutory training/certification course. The certification is
mandatory for all industrial medical officers employed in hazardous industries.52
National Institute of Occupational Health [NIOH] is one of the prime institutes of the Indian
Council of Medical Research [ICMR] and has two Regional Occupational Health Centers
(ROHC) at Bangalore (1977) and Calcutta (1980) for catering to regional needs. Established in
1966 and originally designated as the Occupational Health Research Institute, it was redesignated as the National Institute of Occupational Health (NIOH), in 1970. Its major activity is
research in occupational health. The Institute has published over 500 research papers in national
and international journals. The other activities of the Institute include short-term training
programmes for industrial medical officers, industrial hygienists, factory inspectors, workers and
trade unions, etc. The Institute advises the Ministry of Health, Ministry of Labour, Ministry of
Environment and Ministry of Commerce on issues related to occupational health, safety and
49
CLI
NIOH
51
ITRC
52
50
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environment.53
6.11. Judicial Response
In Consumer Education and Research Centre v Union of India54, the Supreme Court observed,
“be it the State or its undertaking or private employer to make the right to life meaningful; to
prevent pollution of workplace; protection of the environment; protection of the health of the
workmen or to preserve free and unpolluted water for the safety and health of the people. The
authority or even private persons or industry are bound by the directions issued by this court
under Articles 3255 and 14256 of the Constitution.”
The court accordingly issued the following direction to all the industries : (i) to maintain and
keep maintaining the health record of every worker up to minimum period of 40 years from the
beginning of the employment or 5 years after retirement or cessation of the employment
whichever is later; (ii) the Membrane Filter test, should be adopted by all the factories or
establishments at par with the Mines Regulations, 1961 and Rules issued under the Vienna
Convention to detect asbestos and fiber; (iii) all the factories whether covered by the Employees’
State Insurance Act or Workmen’s Compensation Act or otherwise are directed to compulsorily
insure health coverage to every worker; (iv) the Union and the State Governments are directed to
review the standards of permissible exposure limit value of fiber/cc in tune with the international
53
ibid
1996 (72) FLR 481
55
32. Remedies for enforcement of rights conferred by this Part (1) The right to move the Supreme Court by
appropriate proceedings for the enforcement of the rights conferred by this Part is guaranteed (2) The Supreme
Court shall have power to issue directions or orders or writs, including writs in the nature of habeas corpus,
mandamus, prohibition, quo warranto and certiorari, whichever may be appropriate, for the enforcement of any of
the rights conferred by this Part (3) Without prejudice to the powers conferred on the Supreme Court by clause ( 1 )
and ( 2 ), Parliament may by law empower any other court to exercise within the local limits of its jurisdiction all or
any of the powers exercisable by the Supreme Court under clause ( 2 ) (4) The right guaranteed by this article shall
not be suspended except as otherwise provided for by this Constitution
56
142. Enforcement of decrees and orders of Supreme Court and unless as to discovery, etc ( 1 ) The Supreme Court
in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice
in any cause or matter pending before it, and any decree so passed or orders so made shall be enforceable throughout
the territory of India in such manner as may be prescribed by or under any law made by Parliament and, until
provision in that behalf is so made, in such manner as the President may by order prescribe (2) Subject to the
provisions of any law made in this behalf by Parliament, the Supreme Court shall, as respects the whole of the
territory of India, have all and every power to make any order for the purpose of securing the attendance of any
person, the discovery or production of any documents, or the investigation or punishment of any contempt of itself
54
208 | P a g e
standards reducing the permissible content as prayed in the writ petition referred to at the
beginning. The review shall be continued after every 10 years and also as and when the ILO
gives directions in this behalf consistent with its recommendations or any conventions; (v) the
Union and the State Governments are directed to consider inclusion of such of those small scale
factory or factories or industries to protect health hazards of the worker engaged in the
manufacture of asbestos or its ancillary products; (vi) the appropriate Inspector of Factories in
particular of the State of Gujarat is directed to send all the workers, examined by the concerned
ESI hospital, for re-examination by the National Institute of Occupational Health (NIOH) to
detect whether all or many of them are suffering from asbestos.
The Court directed all the industries large, medium, small, mines milling units etc. to cover their
workers by health insurance. The Court also directed the Government of India to evaluate TLV57
as and when necessary and to take it up to 1 or 4 ml by the methods recommended by ILO. The
Court instructed all the concerned authorities i.e. Industries, State and Central Governments
Research Institutes, Bureau of Indian Mines and Bureau of Indian Standards to follow ILO
Convention accepted by Government of India.
The Court further directed all the factory inspectorates, particularly, the factory inspectorate of
Gujarat to get all the workers examined by ESIC and other such bodies to be examined by
NIOH. The cases certified by NIOH should be paid one lakh rupees compensation by the
concerned industries and authorities. The workers covered under ESIC are entitled for such
compensation.
In the most recent case (2014) Occupational Health and Safety Association v Union of India58
the Supreme Court directed the Ministry of Labour to ensure that the suggestions made by the
petitioner for the welfare of workers are properly implemented by the Centre and the State
governments. The suggestions included 1. Comprehensive medical checkup of all workers by doctors appointed in consultation with the
trade unions. First medical check up to be completed within six months and to be done on
yearly basis.
57
58
Threshold Limit Value (in chemicals)
209 | P a g e
3. Services of the workmen not to be terminated during illness and to be treated as if on duty.
4. Compensation to be paid to workmen suffering from any occupational disease, aliment or
accident in accordance with the provisions of the laws.
5. Modern protective equipment to be provided to workmen as recommended by an expert body
in consultation with the trade unions.
vibration and radiation as recommended by the National Institute of Occupational Health
(NIOH) Ahmadabad, Gujarat.
7. All employees to abide by the Code of Practice on Occupational Safety and Health Audit as
developed by the Bureau of Indian Standards.
8. Safe methods be followed for the handling, collection and disposal of hazardous waste to be
recommended by NIOH.
representatives and Health and Safety NGO’s to look into the issue of Health and Safety of
Workers and make recommendations.
While delineating the scope of constitutional provisions, Justice K. Ramaswamy in his dissenting
judgement in Calcutta Electricity Supply Corporation v Subhas Chandra Bose59 observed that
Health is a Human Right enshrined in the Universal Declaration of Human Rights (Articles 2228) and International Covenant on Economic Social and Cultural Rights. Further, it is a
Fundamental Right of Workmen. The “maintenance of health is a most important constitutional
goal”. Health does not mean “absence of disease or infirmity but a state of complete physical,
mental and social well-being.”
In Consumer Education & Research v Union of India60 a three-Judge Bench of the Supreme
Court held that the jurisprudence of person-hood or philosophy of the right to life envisaged in
Article 21 of the Constitution enlarges its sweep to encompass human personality in its full
blossom with invigorated health which is a wealth to the workman to earn his livelihood, to
59
60
(1992) 1 SCC 441
(1995) 3 SCC 42
210 | P a g e
sustain the dignity of person and to live a life with dignity and equality. The expression life'
assured in Article 21 does not connote mere animal existence or continued drudgery through life.
It has a much wider meaning which includes Right to Livelihood, better standard of living,
hygienic conditions in the workplace and leisure facilities and opportunities to eliminate sickness
and physical disability of the workmen. The health of the worker is an integral facet of the Right
to Life. Denial thereof denudes the workman the finer facets of life violating Article 21. Medical
facilities, therefore, is a Fundamental and Human Right to protect his health. In that case health
insurance, while in service or after retirement was held to be a fundamental right and even
private industries were enjoined to provide health insurance to the workmen.
The aforesaid view was reiterated in Kirloskar Brothers Ltd. v Employees’ State Insurance
Corporation.61 The Court observed that in expanding economic activity in a liberalized economy
Part IV of the Constitution enjoins not only the State and its instrumentalities but even private
industries to ensure safety to the workman and to provide facilities and opportunities for health
and vigor of the workman assured in relevant provisions in Part IV which are integral part of the
right to equality under Article 14 and the right to life under Article 21 which are fundamental
rights to the workman.
6.12. Liability in Hazardous and Dangerous Industries
The Supreme Court in M.C. Mehta v. Union of India62 evolved a new concept of liability to deal
with problems of hazardous and inherently dangerous industries. The court held that an
enterprise which is engaged in a hazardous or inherently dangerous industry which poses a
potential threat to the health and safety of the persons working in the factory and residing in the
surrounding areas owes an absolute and non-delegable duty to the community to ensure that no
harm results to anyone on account of hazardous or inherently dangerous nature of the activity
which it has under taken. The enterprise engaged in such nature of activity should indemnify all
those who suffer on account of the carrying on of such activity regardless of whether it is carried
on carefully or not.
61
1996 SCALE (2)1
62
AIR 1987 SC 1086
211 | P a g e
6.13. Courts Direction of Closure of Highly Polluted and Hazardous
Industries
The Supreme Court in M.C. Mehta v Union of India 63 , where tanneries were discharging
effluents into the river Ganges prevented the tanneries etc., from discharging effluents into the
river Ganga, directed establishment of primary treatment plants etc., and ordered the closure of
industries not complying with the directions.
In Rural litigation and Entitlement Kendra v State of Uttar Pradesh64, large scale pollution was
caused by lime stone quarries adversely affecting the safety and health of the people living in the
area on the suggestions of the Committee appointed by the Supreme Court, the Court ordered the
closure of certain lime stone quarries.
6.14. Determination of Occupational Disease
As per Regulation 74 any question whether an employment injury is caused by an Occupational
Disease specified in the Third Schedule to the Act shall be determined by a Special Medical
Board which shall examine the disabled person and send a report in such form as may be
prescribed by the Director-General in this behalf to the appropriate Regional Office stating:
(a) whether the disabled person is suffering from one or more of the diseases specified in
the said Schedule ;
(b) whether the relevant disease has resulted in permanent disablement ;
63
64
AIR 1987 SC 965
AIR 1988 SC 2187
212 | P a g e
(c) whether the extent of loss of earning capacity can be assessed provisionally or finally;
(d) the assessment of the proportion of loss of earning capacity and in case of provisional
assessment, the period for which such assessment shall hold good.
All assessments which are provisional may be referred to the Special Medical Board for review
by the appropriate Regional Office not later than the end of the period taken into account by the
provisional assessment. Any decision of the Special Medical Board may be reviewed by it at any
time. The disabled person shall be informed in writing of the decision of the Special Medical
Board by the appropriate Regional Office and the benefit, if any, to which the insured person
shall be entitled.
6.14.1. Contracting of an occupational disease after discontinuance of service
If any such disease as mentioned in Part A of Schedule III develops after a workman has left the
employment, compensation shall be payable to him.
The employer shall be liable to pay compensation to a workman for contracting any disease:
1. If a workman has served under any employer in any employment specified in Part B
of Schedule III for a continuous period of six months.
2. If a workman has after cessation of his service contracted any disease specified in
Part B of Schedule III as an occupational disease peculiar to that employment.
3. If it is proved that such disease arose out of the employment.
Part C of Schedule III. - Where a workman contracts any disease specified in Part C of Schedule
III the employer shall be liable:
(1) If a workman was in the service of one or more employers in any employment specified
in Part C of Schedule III for such continuous period as the Central Government may
specify in respect of each such employment; and
213 | P a g e
(2) If he contracts any disease specified therein as an occupational disease peculiar to that
employment.
If the above two conditions are fulfilled, the contracting of the disease shall be deemed to be an
injury by accident within the meaning of section 3 of the Act and unless contrary is proved the
accident shall be deemed to have arisen out of and in the course of employment.
According to the first provision to sub-section (2) of section 3 if it is proved:
(a) that a workman while in service of one or more employers in any employment specified in
Part C of Schedule III has contracted a disease specified therein as an occupational disease
peculiar to the employment during a continuous period which is less than the period specified
under sub-section (2) of section 3 for that employment, and (b) that the disease has arisen out of
and in the course of employment; the contracting of such disease shall be deemed to be an injury
by accident within the meaning of section 3 of the Act.
Mere vague offer to keep and continue the workman in the employment even after the injury and
the resultant disablement is not sufficient to disqualify the workman’s claim under section 3 of
the Act.65
6.15. Presumption as to accident arising out of and in the course of
employment
Sections 51-A, 51-B, 51-C, 51-D and 51-E of the Act, deal with certain presumptions regarding
accidents which arise in the course of employment.
For the purposes of Section 51-A of the Act, an accident arising in the course of employment
shall be presumed, in the absence of evidence to the contrary, also to have arisen out of that
employment. However, this presumption is rebuttable.
65
Jaybharat Saw Mill v Babulal Ambalal SodhParmar (1992) II LLJ 186 (Gujarat)
214 | P a g e
Under Section 51-B OF the Act an accident shall be deemed to arise out of and in the course of
employment not withstanding that he is at the time of the accident acting in contravention of the
provisions of any law applicable to him, or of any orders given by or on behalf of his employer
or that he is acting without instructions from his employer, if (a)
the accident would have been
deemed so to have arisen had the act not been done in contravention as aforesaid or without
instructions from his employer, as the case may be ; and (b) the act is done for the purpose of and
in connection with the employer’s trade or business.
Under Section 51-C, an accident while the employee was travelling in the employer’s transport
either with his express or implied permission is presumed to arise out of and in the course of his
employment if (i) the accident would have been deemed so to have arisen had he been not under
such obligation; and (ii) at the time of the accident, the vehicle was being operated by and on
behalf of the employer or some other person by whom it is provided under a contract with the
employer or the vehicle was not being operated in the ordinary course of public transport service.
In Regional Director, ESI Corporation v Lakshmi,66the employee met with an accident while
returning home from the factory in a bus which was given permit with a time schedule suiting
the employee’s convenience to come to and return from the factory. The bus was to operate
between the factory gate and different places where the employees reside. This bus was so
provided, by the joint effort of the management and the employees union. In such a case it would
be deemed that it was an implied condition of the employment and the employee might travel to
and from his workplace by the bus in question and that when the accident happened he was using
the means of egress and the court held, accident must be deemed to have occurred in the course
of his employment.
In such cases the doctrine of notional extension will apply in the sense that the time and places
of the work of the employee will be notionally extended from the actual area of work and time.67
Under Section 51-D when an insured person sustains injury by an accident on the premises of
his employment it shall be deemed to arise out of and in the course of his employment if:
66
1979 Lab IC 167 (Kerala)
For more details see Chapter IX on workmen’s Compensation Act and the following case; B.E.S.T. undertaking v
Mrs. Agnes AIR 1964 SC 193
67
215 | P a g e
(i)
the insured person is employed on such premises for the purpose of employer’s trade
or business; or
(ii)
if he takes steps on actual or supposed emergency in the premises; or
(iii)
if the insured person was trained to rescue or protect persons who are or are thought
to be injured or imperiled; or
(iv)
to avert or minimize serious damage to property .
Under Section 51-E an accident occurring to an employee while commuting from his residence
to the place of employment for duty or from the place of employment to his residence after
performing duty, shall be deemed to have arisen out of and in the course of employment if nexus
between the circumstances, time and place in which the accident occurred and the employment is
established.
6.16. Arising out of and in the course of employment. (Judicial Approach)
The expression “arising out of” suggests the cause of accident and the expression “in the
course of”points out to the place and circumstances under which the accident takes place and the
time when it occurred. A causal connection or association between the injury by accident and
employment is necessary. The onus is on the claimant to prove that accident arose out of and in
the course of employment.68 The employment should have given rise to the circumstances of
injury by accident. But a direct connection between the injury caused by an accident and the
employment of the workman is not always essential. Arising out of the employment does not
mean that personal injury must have resulted from the mere nature of employment and is also not
limited to cases where the personal injury is preferable to the duties which the workman has to
discharge.69The words ‘arising out of employment’ are understood to mean that “during the
course of the employment, injury has resulted from some risk incidental to the duties of the
service which unless engaged in the duty owing to the master it is reasonable to believe the
workman would not otherwise have suffered. There must be a causal relationship between
the accident and employment. If the accident had occurred on account of a risk which is an
68
69
M/s. Chowgule and Co. (pvt) Ltd. v SmtFelicidade AIR 1970 Goa 127
Central Glass Industries v Abdul Hussain, AIR 1948 Calcutta 12
216 | P a g e
accident of the employment; the claim for compensation must succeed unless of course the
workman has exposed himself to do an added peril by his own imprudence.” 70 This
expression applies to employment as such, to its nature, its conditions, its obligations and its
incidents and if by reason of any of these, a workman is brought within the zone of special
danger and so injured or killed, and the Act would apply.71 The employee must show that he was
at the time of injury engaged in the employer’s business or in furthering that business and was
not doing something for his own benefit or accommodation. 72 The question that should be
considered is whether the workman was required or expected to do the thing which resulted in
the accident though he might have imprudently or disobediently done the same. In other words,
was the act which resulted in the injury so outside the scope of the duties with which the
workman was entrusted by his employer as to say that the accident did not arise out of his
employment?73
In the course of employment refers to the period of employment and the place of work. It is
neither limited to the period of actual labour nor includes acts necessitated by the workman’s
employment. “Another important question” as pointed out by Francis H.Bohlenishow for a
servant is entitled to go outside his appointed sphere in obedience to the orders of a superior. Of
course, if such superior has the power to fix the spheres of labour for the workman, a workman,
by obeying them, merely passes into a new “course of employment”, but even if he has not, it
seems that the servant is justified if he honestly believes that such superior is authorized to
employ him. 74 An injury received within reasonable limits of time and space, such as while
satisfying thirst or bodily needs, taking food or drink is to be regarded as injury received in the
course of employment.75
The claimant must prove that the accident has occurred due to the circumstances arising out of
employment. If the risk taken by the workman was only because of the employment, it is a valid
casual connection. If the risk taken was on the worker’s own account and not due to
employment, then the employer is not liable. Worker was doing something for the furtherance of
70
M. Mackenzie vI.M. Issak AIR1970 SC 1906
Nawab Ali v Hanuman Jute Mills AIR 1933 Calcutta 513
72
JankiAmmal v Divisional Engineer Highway, Kozhikode(1956) II LLJ 233 (SC)
73
Smt. Koduri v PalongiAtchamma 1969 Lab IC 1415 (Andhra Pradesh)
74
Francis H Bohlen 25 HarvL.Rev. 418
75
P.E. Davis and Co. v KestoRouthAIR 1968 Calcutta 129
71
217 | P a g e
the employer’s business and not for his own benefit, it is a valid connection. Worker should not
be doing something which is way out of scope of his employment-Doctrine of Added Peril.
There is no problem in detecting that the accident occurred in the course of employment when a
workman is injured in the working place and in the working hour and doing his duty. The
problem arises when these elements do not coincide together. But a workman if injured just near
the work premises or just before joining the work or in the way to work problem arises. To
address this kind of problem and giving some kind of relief to the workmen the theory of
notional extension evolved.
“As a rule, the employment of a workman does not commence until he has reached the place of
employment and does not continue when he has left the place of employment, the journey to and
from the place of employment being excluded. It is now well-settled, however, that this is subject
to the theory of notional extension of the employer’s premises so as to include an area which the
workman passes in going to and in leaving the actual place of work. There may be some
reasonable extension in both time and place and a workman may be regarded as in the course of
his employment even though he had not reached or had left his employer’s premises. The facts
and circumstances of each case will have to be examined very carefully in order to determine
whether the accident arose out of and in the course of the employment of a workman, keeping in
view at all times this theory of notional extension.”
Public Place and Doctrine of Notional Extension
There are some situations where this doctrine does not apply. When a workman is on the public
road or public place and not there for fulfilling the obligation and his work does not make
necessary to be there. The proximity of the work premises and spot of accident become
immaterial. The notional extension of the place of work cease when workman comes to a public
road. There were some clarifications made in the following case.
In Saurashtra Salt Manufacturing Co. v Valu Raja76 Justice Jafer Imam said that:
76
AIR 1958 SC 881
218 | P a g e
“It is well settled that when a workman is on a public road or a public place or on a public
transport he is there as any other member of the public and is not there in the course of his
employment unless the very nature of his employment makes it necessary for him to be there. A
workman is not in the course of his employment from the moment he leaves his home and is on
his way to his work. He certainly is in the course of his employment if he reaches the place of
work or a point or an area which comes within the theory of notional extension, outside of which
the employer is not liable to pay compensation for any accident happening to him.”
In later cases the courts have taken more liberate stand in expanding the definition of notional
extension realizing the social view point and objective of the Act. Since the Act is welfare
legislation, it is expected that the provisions would receive liberal interpretation so as to advance
the object and purpose of the Act relevant cases are discussed below.
A great deal has been written in an attempt to define and apply the simple statutory requirement,
“in the course of and arising out of employment,” which has been described as one of the most
difficult problems in connection with claims for compensation. It has been acknowledged that no
exact formula can be stated which will be determinative of every case, and whether a given
accident is so related or incident to the business must depend upon its own particular
circumstances. The question is frequently a close one. Although it is acknowledged that one
should not apply a technical meaning to the words “in the course of and arising out of
employment” and that it was the legislature’s intention that they be given their plain, usual,
and ordinary meaning, the courts are still languishing in “a labyrinth of judicial utterances”
and lost in a jungle of contradictions.
The study of the following case laws sets out lucid portrait of development of the term
‘Employment Injury’ which is significantly based upon two phrases as mentioned above,
they are “in the course of employment” and “arising out of employment”. Further, it is
most relevant to point out that, language of Section 2(8) of the ESI Act is identical with
219 | P a g e
Section 377 of the Workmen’s Compensation Act and Section 1 of the English Workmen’s
Compensation Act of 1925, wherein courts have applied the same principles.
This was discussed by the House of Lords in the case of St Hellen’s Colliery Ltd. v Hewlston,78
in this case, the worker was not obligated to use employer’s train to work. He could use any
other means to commute. So it was held that an accident arising while on the special train was
not in the course of employment.
In Lancashire and Yorkshire Railway Co. v Highley79 Lord Sumner laid down the following test
for determining whether an accident “arose out of the employment”. Was it part of the injured
person’s employment to hazard, to suffer, or to do that which caused his injury? If yes, the
accident arose out of his employment. If nay, it did not, because, what it was not part of the
employment to hazard, to suffer, or to do cannot well be the cause of an accident arising out of
the employment. To ask if the cause was within the sphere of the employment, or was one of the
ordinary risks of the employment, or reasonably incidental to the employment, or conversely,
was an added peril and outside the sphere of the employment, are all different ways of asking
whether it was a part of his employment, that the workman should have acted as he was acting or
should have been in the position in which he was, whereby in the course of that employment he
sustained injury.”
Lord Birkenhead L.C. in Lancaster v Blackwell Colliery Co. Ltd.80observed:
“If the facts which are proved give rise to conflicting inferences of equal degrees of probability
so that the choice between them is a mere matter of conjecture, then, of course, the applicant fails
to prove his case because it is plain that the onus in these matters is upon the applicant. But
where the known facts are not equally consistent, where there is ground for comparing and
balancing probabilities as to their respective value, and where a reasonable man might hold that
77
Employer’s Liability for Compensation: If personal injury is caused to a workman by accident arising out of and in
the course of his employment his employer shall be liable to pay compensation in accordance with the provisions of
this Chapter.
78
[1924] AC 59
79
[1917] AC 352
80
1918 WC Rep 345
220 | P a g e
the more probable conclusion is that for which the applicant contends, then the Arbitrator is
justified in drawing an inference in his favour.”
In cases of the unexplained drowning of seamen, the question has often arisen as to whether or
not there was evidence to justify the inference drawn by the Arbitrator that the seaman met his
death through accident arising out of and in the course of his employment.
The question was considered by the House of Lords in Kerr or Lendrum v Ayr Steam Shipping
Co. Ltd.81 in which the steward of a ship, which was in harbour, was lying in his bunk, when he
was told by the captain to prepare tea for the crew. He was shortly afterwards missing, and the
next day his dead body, dressed in his underclothes only, was found in the sea near the ship. The
bulwarks were 3 feet 5 inches above the deck. The steward was a sober man, but was subject to
nausea. Murder and suicide were negatived by the Arbitrator, who drew the inference that the
deceased left his bunk, went on deck, and accidentally fell overboard and was drowned. He
accordingly held that the accident arose out of and in the course of his employment as steward.
The Court of Sessions reversed its decision on the ground that there was no evidence to support
it.
The House of Lords (Earl Lorebum, Lord Shaw of Dunfermline and Lord Parmoor, Lord
Dunedin and Lord Atkinson dissenting), however, upheld the decision of the Arbitrator on the
ground that, although upon the evidence it was open to him to have taken a different view, his
conclusion was such as a reasonable man could reach. “I should state my main proposition
thus,” said Lord Shaw of Dunfermline, “that we in this House are not considering whether we
would have come to the same conclusion upon the facts stated as that at which the
learned Arbitrator has arrived. Our duty is a very different, a strikingly different one. It is to
consider whether the Arbitrator appointed to be the judge of the facts, and having the advantage
of hearing and seeing the witnesses, has come to a conclusion which could not have been
reached by a reasonable man.” Lord Parmoor said “I wish to express no opinion either way on
the reasonableness of the finding in it as long as it is possible finding for a reasonable man,”
81
[1915] AC 217
221 | P a g e
whilst Earl Loreburn observed that “they should regard these awards in a very broad way and
constantly remember that they were not the tribunal to decide.”
In the case of unexplained drowning of seamen, the English Court of Appeal has drawn some
very fine distinctions in the following landmark case.
In Bender v Owners of S.S. Zent,82 the chief cook on board of a steamship fell overboard and was
drowned while the ship was on the high seas. He was seen at 5.25 am. Looking over the side;
5.30 am was his usual time for turning out; and he was last seen at 5.35 am going aft. The
weather was line at the time, it was daylight, the ship was steady, and there was no suggestion
that the duties of the deceased would lead him into any danger. There was a 4 ft. rail and bulwark
all-round the ship and there was no evidence to show how the deceased had fallen overboard.
The County Court Judge drew the inference that his death was caused by an accident arising out
of and in the course of his employment, but the Court of Appeal held that there was no evidence
to warrant such inference, pointing out that, although it was conceivable that he might have been
engaged on some ship’s work, it was equally conceivable that he had been larking or had
committed suicide.
Bender’s case was followed in Marshall v Owners of S.S. Wild Rose,83 where an engineer came
on board of his vessel, which was lying in a harbor basin, shortly after 10 pm, since Steam had to
be got up by midnight. He went below and took off his clothes, except his trousers, shirt and
socks. It was a very hot night, and he subsequently came out of his berth, saying that he was
going on deck for a breath of fresh air. Next morning his dead body was found at the side of the
vessel, just under the place where the men usually sat. It was held by the Court of Appeal,
reversing the County Court Judge, that there was no legitimate ground for drawing the inference
that the engineer died from an accident, arising out of his employment. Farwell, L.J. said:
“If an ordinary sailor is a member of the watch and is on duty during the night and
disappears, the inference might fairly be drawn that he died from an
accident arising out of his employment. But if, on the other hand, he was not a
82
83
[1909] 2 KB 41
[1909] 2 KB 46
222 | P a g e
member of the watch, and was down below and came up on deck when he was
not required for the purpose of any duty to be performed on deck, and disappeared
without our knowing anything else, it seems to me that there is absolutely nothing
from which any Court could draw the inference that he died from an accident
arising out of his employment.”
But in Rice v Owner of Ship Swansea Vale84 where the deceased was a “seaman” in the strict
sense of the term–that is to say, one whose duty it was to work on deck–and not as a ship cook,
as in Bender’s case, nor an engineer as in Marshall’s case, a different conclusion was arrived at.
In that case the chief officer of a vessel, who was on duty on deck, disappeared from the ship in
broad daylight, no one, saw him fall overboard, but there was evidence that not long before he
had complained of headache and giddiness. It was held, (Buckley, L.J. dissenting) that there was
evidence from which the Court might infer that he fell overboard from an accident arising out of
and in the course of his employment. The cases of Bender and Marshall were distinguished, as in
those cases the men’s duties were below deck at the time they lost their lives they had certainly
no duties which called them on the deck.
In Gatton v Limerick Steamship Co,85 a night watchman on board a vessel, whose hours of duty
were from 7 pm to 7 am when he awoke the crew, was last seen on board at 6 am but on that
morning he did not awake the crew. His cap was found on the deck, and his body was found in
the harbour some months afterwards. The County Judge held that it was not proved that the
accident arose “out of’ his employment. The Court of Appeal on the ground that this was a
finding of fact with evidence to support it, refused to interfere. Holmes, L.J., however, stated that
the County Court Judge might have arrived at a different conclusion of fact, whilst Cherry, L.J.,
said that, if he had been the Arbitrator, he would have found that the deceased had met with his
death by accident arising out of and in the course of his employment.
In another similar case Rourke v Mold & Co86 a seaman disappeared during his spell of duty at
the wheel in the wheel house in the Centre of the flying deck and was not afterwards seen. The
night was rough, the sea choppy but the vessel was steady. The flying deck was protected by a
84
[1912] AC 238
[1910] 2 IR 561
86
[1917] 2 Ire Rep 318
85
223 | P a g e
rail. There was no evidence as to how the man met his death and in spite of the presumption
against suicide the County Court Judge was unable to draw the inference that the death was due
to accident. It was held by the Court of Appeal that in the circumstances the conclusion of the
County Court Judge was right.
In Simpson v L.M. & S. Railway Co,87 Lord Tomlin reviewed all the previous authorities and
stated the principle as follows:
“ …… from these passages to which I have referred I think this rule may be deduced for
application to that class of case which may be called unexplained accident cases–namely, that
where the evidence establishes that in the course of his employment the workman properly in a
place to which some risk particular thereto attaches and an accident occurs capable of
explanation solely by reference to that risk, it is legitimate, notwithstanding the absence of
evidence as to the immediate circumstances of the accident, to attribute the accident to that risk,
and to hold that the accident arose out of the employment; but the inference as to the origin of
the accident may be displaced by evidence tending to show that the accident was due to some
action of the workman outside the scope of the employment”.
Mackinnon Mackenzie and Co. Pvt. Ltd v Ibrahim Mohammed Issak,88in this landmark judgment
the Supreme Court has discussed “in the course of employment” and “arising out of
employment” in detail. In the case ‘S’ who was employed as a deck-hand on a ship was found
missing on board. The respondent filed an application under s. 3 of the Workmen’s
Compensation Act claiming compensation for the death of ‘S’ which according to him occurred
on account of a personal injury caused by an accident arising out of and in the course of
employment. The Additional Commissioner held that there was no evidence to show that the
seaman was dead (body was never found) and there was in any event no evidence to justify the
inference that the death of the seaman was caused by an accident which arose out of
employment. The High Court reversed the judgment of the Additional Commissioner. In appeal
the Supreme Court, held: The Additional Commissioner did not commit any error of law in
reaching his findings and the High Court was not justified in reversing them.
87
88
[1931] AC 351
AIR 1970 SC 1906
224 | P a g e
In the course of his judgment the Additional Commissioner had observed as follows:
“Now in the present case what is the evidence before me? It is argued on behalf
of applicant that I must presume that the man fell down accidentally. From
which place did he fall down? How did he fall down? At what time he fell
down? Why was he at the time at the place from which he fell down? All these
questions, it is impossible to answer. Am I to decide them in favour of the
applicant simply because his ‘missing’ occurs in the course of his employment?
In my opinion there is absolutely no material before me to come to a conclusion
and connect the man’s disappearance with an accident. There are too many
missing links. Evidence does not show that it was a stormy night. I had visited
the ship, seen the position of the Bridge and deck and there was a bulwark more
than 31/2 feet. The man was not on duty. Nobody saw him at the so-called place
of accident. In these circumstances I am unable to draw any presumption or
conclusion that the man is dead or that his death was due to an accident arising
out of his employment. Such a conclusion, presumption or inference would be
only speculative and unwarranted by any principle of judicial assessment of
evidence or permissible presumptions.”
Supreme Court held, to come within the Act the injury by accident must arise both out of and in
the course of employment. The words “in the course of the employment” mean “in the course of
the work which the workman is employed to do and which is incidental to it.” The words
“arising out of employment” are understood to mean that “during the course of the employment,
injury has resulted from some risk incidental to the duties of the service, which unless engaged in
the duty owing to the master, it is reasonable to believe the workman would not otherwise have
suffered.” In other words there must be a causal relationship between the accident and the
employment. The expression “arising out of employment” is again not confined to the mere
nature of the employment. The expression applies to employment as such to its nature, its
conditions, its obligations and its incidents. If by reason of any of these factors the workman is
brought within the scene of special danger the injury would be one which arises ‘out of
employment’. To put it differently if the accident had occurred on account of a risk which is an
225 | P a g e
incident of the employment, the claim for compensation must succeed, unless of course the
workman has exposed himself to an added peril by his own imprudent act.89
Further court said in the case of death caused by accident the burden of proof rests upon the
workman to prove that the accident arose out of employment as well as in the course of
employment. But this does not mean that a workman who comes to court for relief must
necessarily prove it by direct evidence. Although the onus of proving that the injury by accident
arose both out of and in the course of employment rests upon the applicant these essentials may
be inferred when the facts proved justify the inference. On the one hand the Commissioner must
not surmise, conjecture or guess; on the other hand, he may draw an inference from the proved
facts so long as it is a legitimate inference. It is of course impossible to lay down any rule as to
the degree of proof which is sufficient to justify an inference being drawn, but the evidence must
be such as would induce a reasonable man to draw it.90
In the case of Varadarajulu v Masaya Boyan91 court held that the worker had no other means to
go to the work place other than to use the employer’s lorry. So, accident happening while in lorry
is in the due course of employment.
In Rajappa v Employees’ State Insurance Corporation 92 , an employee of the KIMCO was
attacked by some persons and his left hand was cut off while he was on his way to home after
finishing the work in the factory. The corporation met all the expenses when he was under
treatment. It was held that where employment is not a contributing factor to create any incident
or accident or to accelerate causes of death or personal injury of employee, a claim cannot be
made for compensation under the Act. The condition precedent to a liability under Act is causal
connection or association extension has to apply to the factual situation pertaining to the
particular case. In the present case there is no relationship between the assault causing injury to
the employee and the employment.
89
ibid
ibid
91
AIR 1954 Madras 1113
92
(1992)II LLJ 714 (Karnataka)
90
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InMaherunishaAhemad Khan Pathan and other v Employees State Insurance Corporation93, a
workman while returning home was assaulted by a mob during communal riots and died. It was
held that the place of accident need not necessarily be located within the limits of the factory
premises so long as the accident falls within a zone which can be notionally deemed to be the
zone of the factory for the propose of the Act by recourse to the theory of notional extension.
Therefore court held death was employment injury within the meaning of Section 2(8) of Act.
In Sathybhama v ESI Corpn,94 a woman employee while returning home was hit by a scooter on
public road in front of the factory gate. It was held that theory of notional extension cannot be
reduced to a mathematical formula of distance and time. Decision would depend on the facts and
circumstances of each case. In the present case considering both the point of time as that of
distance the theory of notional extension shall apply and the injury sustained is an employment
injury.
In Sheela v ESI Corporation,95an employee of M/s. Electronic Product of India, Chandigarh left
his house at about 8.30 a.m. to join his duties at 9 am. He died at bus-stand while waiting for the
local bus. It was held that the employee died while he was going to his place of work. The theory
of notional extension will apply and the death occurred in the course of employment.
InIndian Rare Earths Ltd. v SubaidaBeedi96, a workman of the appellant was involved in an
accident while travelling by his cycle to the work spot. The employer has provided for bus
subsidy to its workmen but the concerned workman was not residing on any of the bus routes
and hence he used to go by bicycle. While on way to the work spot a car dashed against him on
public road and he died. It was held that although travelling by bus was an implied condition of
service but in view of the fact that the concerned workman was not on any of the bus route, the
exigencies of the employment and circumstances obliged him and the company allowed him to
ride a bicycle to the work place. In other words it was an implied condition of his employment
that he may travel to his work place from his residence and back home by a bicycle. Therefore,
93
95
(1991) II LLJ 247 (Punjab & Haryana)
96
(1981) II LLJ 293 (SC)
94
227 | P a g e
the workman was in the course of his employment from the moment he began to ride the bicycle
for reaching his work place.
It was further held that an injury sustained by an employee by an accident arising in the
course of his employment is, in all cases without exception, one arising out of his employment
though perhaps it cannot be said that all injuries caused by accidents arising out of
employment are injuries caused by accident arising in the course of employment.97
In Regional Director ESI Corporation v L, Rang Rao98, an employee of M/s. Mysore Breweries
Ltd., working as Refrigerator operator was run over and killed on the spot by an unidentified
motor vehicle when he was on his way to factory to join his duty. His father claimed benefits
under the Act by moving ESI Court. The injury was held to be an employment injury. It was held
that if it is proved that the injury to the employee was caused by an accident arising out of and in
the course of employment then it is immaterial whether it occurred inside the factory or outside
or whether it occurred during office hours or after. However, the place or time of accident should
not be totally unrelated to the employment. There should be a nexus or causal connection
between the accident and employment.
In Employees State Insurance Corporation, Calcutta v Abdul Salam and others99, the respondent
No. 1 was an employee of the petitioner came to resume his duty after a gap of about 4 years but
he was not allowed to join duty in spite of producing medical certificate and at that point of time
the respondent No. 1 being a paralytic patient had an accidental fall resulting in injury for which
he claimed benefit as permissible under the Employee’s State Insurance Schemes. The claim was
opposed by the petitioner. It was held that at that relevant time respondent No. 1 was not in
employment and hence the injury was not out of and in the course of employment. Therefore, no
benefits could legally be claimed under the Employee’s State Insurance Act, 1948.
InEmployees State Insurance Corporation v Sasi,100while the respondent was returning to his
house after the night shift, he was assaulted by some persons near the bus stop adjacent to the
factory. The investigation revealed that he was assaulted on account of personal vengeance. He
97
ibid
99
(2003) I LLJ 765 (Calcutta)
100
(2002) Lab IC 2097 (Kerala)
98
228 | P a g e
sustained injury on his left hand and claimed benefits admissible for employment injury as
defined under Section 2 (8) of the Employees State Insurance Act. The appellant denied the
injury to be an employment injury in as it was the result of an assault by a stranger outside the
premises of the factory and had not arisen out of employment. Allowing the appeal the High
Court held that the injury sustained by the employee was due to an assault to him by strangers
outside the premises of the factory and while he was on his way to his house. This could not be
said to have its origin in his employment in the factory and as such was not employment injury
under Section 2(8) of the Employees State Insurance Act, 1948 and no benefits were payable
under the Act.
In Regional Director, E.S.I.C. Ahmedabad v Batulbibi and another101, the workman of a textile
mill while on duty had gone to canteen during the short recess to take tea, where he died of
cardiac infraction. His widow and son claimed compensation. It was held that the death arose out
of and in the cases of employment because the recess period is not so long as to disrupt the
continuity of the employment. If the recess was indeed short, the liberty of an employee to go
away does not in reality mean anything, since he could not have gone so far as to snatch the
continuity of his employment.
The State of Rajasthan v Ram Prasad and another,102the workman died due to natural lighting
while working at the site. It was held by the Supreme Court that a workman may succeed in his
claim for compensation it is no doubt true that the accident must have causal connection with the
employment and arise out of it but if the workman is injured as a result of natural force of
lighting though it is in itself has no connection with employment of deceased Smt. Gita, the
employer can still be held liable if the claimant shows that the employment exposed the deceased
to such injury. In the present case the deceased was working on the site and would not have been
exposed to such hazard of lighting had she not been working so? Therefore the appellant was
held liable to pay compensation.
101
102
(2001) I LLJ 177 (SC)
229 | P a g e
In R BMoodra and Co.vMst. Bhanwari, 103 the deceased was employed as a driver on the
appellant’s truck used for the purpose of carrying petrol in a tank. On the previous day he had
reported to his employer that the tank was leaking and so water was put in it for detecting the
place from where it leaked. The next morning the deceased was asked by the appellant to enter
the tank to see from where it leaked. Accordingly, he entered the tank which had no petrol in it
and for the purpose of detecting the leakage he lighted a match stick. The tank caught a fire and
the deceased received burn injuries and later on succumbed to death. In this case it was
contended that the workman has himself added to his peril by negligently and carelessly lighting
a match stick inside the petrol tank. It was held that the accident arose out of employment and
the act of lighting match stick even if rash or negligent would not debar his widow from claiming
compensation. If the act leading to the accident was one within the sphere of employment or
incidental to it or in the interest of the employer, then the accident would fail. In this case the
deceased did something in furtherance of his employer’s work when the accident occurred
although he was careless or negligent inasmuch as he lighted the match stick instead of using to
detect the leakage. But because the tank was empty and was partly filled with water on the
previous night he could not have little reason to foresee the risk involved.
In Trustees Port of Bombay v Yamunabai,104 a bomb placed in the premises workshop by some
unknown person exploded and caused injury to a workman. It was held that the workman was
not responsible for placing of the bomb, and the injury due to its explosion was caused at the
time and place at which he was employed, therefore the injury was the result of an accident
arising out of his employment. The rule is that if a particular accident would not have happened
to a workman had he not been employed to work in the particular place and condition, it would
be accident arising out of the employment.
Likewise where the workman, in some factory injured due to crashing down within the factory
premises of some aircraft, it will be an injury resulting from an accident arising out of
employment for the workman are not responsible for the air crash and they are exposed to that
danger by reason of their presence on the place of accident because of their employment.
103
104
AIR 1970 Rajasthan 111
AIR 1952 Bombay 382
230 | P a g e
In Oriental Insurance Company Ltd.v Sorumai Gagoi and others.105 Respondents were parents of
a driver employed by the third respondent, who was owner of the vehicle in question. From a
certain day in 1996, for more than 7 years, nothing was heard of the driver. His parents made a
claim for compensation and the Commissioner for Compensation awarded a sum of Rs.2.29
lakhs. The High Court confirmed it. Hence the Insurance Company preferred an appeal to the
Supreme Court. Allowing the appeal the Supreme Court observed that there was nothing on
record to show that death had occurred to the driver in an accident arising out of employment. If
some miscreants had taken away the driver along with the vehicle or had murdered him, it did
not give rise to a presumption that death had occurred in accident arising out of employment.
Further, the rights of the parties were required to be determined on the date of the incident (from
which date nothing was heard or known of the driver). It was held that the presumption under
Section 108 of the Evidence Act could not be invoked in support of the claim.
A workman who was employed to repair clocks at various stations was stabbed in a railway
compartment while he was in transit. It was held that the death of the workman in question was
due to an accident arising out of and in the course of his employment.
In the course of employment means during the currency of employment.106 In order to succeed in
his claim a workman has to prove that he was at the time of injury engaged in the employer’s
business or in furthering that business and was not doing something for his own benefit or
accommodation.107 He must show that he was doing something in discharge of a duty to his
employer directly or indirectly imposed upon him by his contract of service.108 The distinction
between “arising out of “, and “arising in the course of “employment as pointed out by Bombay
High Court is that the latter suggests the point time, i.e., the injury must be caused during
currency of employment and the former conveys the idea that there must be some sort of
connection between the employment and the injury caused to a workman as a result of
accident.109
105
(2008) II LLJ 863 (SC)
Trustees, Port of Bombay v yamunabai. AIR 1952 Bombay 382
107
JankiAmmal v Civil Engg. Highways, Kozhikode (1956) II LLJ 233
108
Tobacco Manufacturers (India) Ltd. v Mrs.Marain Stewart AIR 1950 Calcutta 164
109
Trustees, Port of Bombay v Yamunabai AIR 1952 Bombay 382
106
231 | P a g e
In Smt. Koduri v PolongiAtchamma,110 a person was the employee in the lorry belonging to his
employer carrying quarry material from the quarry site to the work spot of the P.W.D. His duties
were to load the material on the lorry and go to along with the same for unloading the material at
the work spot. While the lorry was moving he attempted to hit a rabbit passing on the road and in
the attempt he fell down from the lorry and died. His wife claimed compensation for the loss of
his life of her husband. It was held that she was not entitled to compensation for “it is not enough
that injury should have been sustained by the workman during the period of his employment, it
should have been in the course of the employment. The act which resulted in the accident must
have some connection with the work for which the workman is employed. The workman must
have been doing something which is part of his service though it need not be his actual work: it
should be work naturally connected with the class of work and the injury must result from it.
Applying this principle by no stretch of imagination can it be said that hitting a wild rabbit which
ran across the truck was part of service of the workman for which he was employed. The mere
fact that the workman was during the particular period, travelling in the employer’s truck with
the quarry material from the quarry site to the work spot is not.”
In National Iron and Steel Co. Ltd. v Manoorama,111a boy employed by the appellant in a tea
shop and it was part of his duty to take tea from the shop which was situated outside the factory
gate to various persons working in the factory. One day when the boy was coming out of the
factory after serving the tea to the workers he passed through a violent mob of factory workers
who were leaving the factory. This mob attacked the police and the police had to fire upon the
mob in self-defense. Unfortunately, the boy was severely wounded by a bullet injury and died
the following day in the hospital. The mother of the boy claimed compensation. It was held that
the accident arose in the course of employment and death occurred because of the risk to which
he was exposed by the nature of his employment.
In Public Works Department v KaunsaGokul112 a gang Jamadar while going to collect salary of
the labourers from the office of the Public Works Department was murdered in the way at a
place on which he sat down to take his meals near a well. He was found dead at a considerable
110
(1969) Lab IC 1415 (Andhra Pradesh)
112
(1967) I LLJ 344 (Madhya Pradesh)
111
232 | P a g e
distance from the place where other members of his gang were actually working on the road.
Applying the principle laid down in Trustees of the Port of Bombaycase the court held that the
death of Gokul was an accident arising out of his employment. In this case the accident arose
because of the nature of employment that exposed him to some particular danger.
The employer’s duty to his servants is to take reasonable care for their safety. Safety means the
safety of the premises and the plant and to the method and conduct of the work. Their duty is to
take reasonable steps to avoid exposing the servant to a reasonable risk of injury.113(The farm
labourer contracted leptosporosis from handling materials on which rats had urinated.
The court held that defendant was not liable. It was not known at the time that leptosporosis
could be transmitted in this way. Whilst it was foreseeable he may contract the disease by a rat
bite the way he contracted the disease was not foreseeable).
Thus, where under the rules of the Company nobody was allowed to graze cattle inside the mill
premises but the wife of a worker of the Company attempted to graze her cattle inside the
premises. The watchman asked her not to graze inside the premises. This infuriated her husband
who assaulted the watchman, resulting in his disablement. It was held that the injury of the
watchman arose out of employment and in the course of enforcing the rules; therefore, he is
entitled to get compensation.114
In Chairman Madras port trust, Madras v kamala115it was held that fetching food is part of
employee’s duty. Therefore, accident to an employee while fetching food is in the course of
employment.
In JyothiAdemma v Plant Engineer, Nellore,116 the deceased workman was suffering from heart
disease. His job was only to switch on or off in the thermal station where he was employed. The
Supreme Court observed that there was no scope for any stress or strain in his duties. His death
to heart attack was, therefore, rightly held as not caused by accident arising out of and in the
course of his employment. Therefore, the judgment of the High Court holding the appellant not
113
Tremain v Pike, [1969] 3 All ER 1303
Mnagement of Sri Sabari Mills Ltd. v M. Kulandai (1984) I LLJ 254 (Madras)
115
AIR 1970 Madras 386
116
(2006) III LLJ 324 (SC)
114
233 | P a g e
entitled to compensation for death of her husband was affirmed by the Supreme Court though the
amount already paid to the appellant was directed not to be recovered from her.
In Imperial Tobacco Co.(India) Ltd. v SalonaBibi,117a workman was suffering from high fever
was recommended two days leave by the doctor. When he returned on the third day the doctor
found him suffering from malaria and Broncho pneumonia. He was again granted three day’s
leave. After expiry of the leave when he came in a rickshaw to report to the doctor, his condition
was so serious that he had to be taken upstairs to the dispensary in a stretcher. The doctor found
him in almost dying condition and therefore, hastened to administer injection but he died after a
few minutes. It held that, “as the stress and strain of the journey was responsible for causing or
precipitating the workman’s death, there was an accident arising out of and in the course of
employment.”
In KamlaBai v. Divisional Superintendent Central Railway, Nagpur,118deceased, the appellant’s
husband was a goods train driver. While on duty he collapsed and died. He took rest at
intermediate stations. He died while talking to the guard at wayside station who gave red signal
to stop the train. It was held that the death of the driver was an accident in the sense that it was
unexpected without there being any design on the part of the workman. But in order to see
whether there is unequivocal evidence that the workman died because of particular strain during
the course of his duties. The fact that the workman died a natural death because of a disease from
which he was suffering and that
he died on a account of normal wear and tear of his
employment are not sufficient to entitle the claimant to the compensation. It must also be proved
that the deceased not only died because of some contributing cause on account of his
employment or duties which he was performing. In the present case it was held that there was no
evidence to show any causal connection between death of the workman and his employment and
his death was not due to any particular strain which he had on account of his employment.
117
118
234 | P a g e
In DevshiBhanjiKhona v Mary Burno119, it was held that where the death of a workman takes
place due to heart attack while carrying a load, the death shall be deemed to have arisen out of
and in the course of employment. There is causal connection between the death and employment.
In ShakuntalaChandrakantShreshti v PrabhakarMarutiGarveli and Another,120the appellant was
the mother of a workman (cleaner in motor vehicle). The workman died of cardiac arrest while
travelling in the vehicle. The Commissioner for Workmen’s Compensation granted
compensation. On appeal, the High Court held that conclusion that workman died as a result of
accident during course of employment was not sustainable. Hence this appeal was filed before
the Supreme Court.
The Supreme Court dismissing the appeal held that there must be causal connection between
injury and accident occurring in course of employment and the onus was on the applicant to
show strain resulted from work.
It was further observed that unless evidence was brought on record that death of workman by
way of cardiac arrest had occurred because of stress or strain (which was held not proved in this
case) the Commissioner would not have the jurisdiction to grant damages.
The Divisional Manager, United India Insurance Co. Ltd. v ShanmugaMudaliarT.and others,121a
person was employed as a diver of the bus belonging to Shanmuga Mudaliar T. He died of heart
failure at a bus stop where he stepped out to have refreshments. His widow claimed
compensation which was awarded by the Commissioner for workman’s Compensation against
the insured employer and not the insurance company. In appeal filed by the employer, the
learned Single Judge of the High Court held that the Insurance Company and employer both are
jointly and severally liable to pay compensation. And therefore, two appeals were filed, one by
the Insurance Company and the other by the employer. It was held by the Division Bench of the
High Court that the connection between accident and employment might be established if the
strain had contributed to or accelerated the accident. If probabilities were in favour of the
applicant, then the Commissioner for Workman’s Compensation was justified in inferring that
119
(1985) II LLJ 70 (Kerala)
(2007) I LLJ 474 (SC)
121
(2003) I LLJ 776 (Madras)
120
235 | P a g e
the accident arose out of and in the course of the employment. In this case there could be no
dispute that the driver in the course of his employment, since there was no occasion for him to be
at Tiruvannamalai bus stand (where he died) unless he had been driving the bus. The death was
capable of being attributed to the strain ordinarily inherent in the discharge of his duty.
In M/s. J.D. and Co. Mills. v E.S.I. Corporation, 122 the mechanic and fitter employed to
disconnect the crushing machine from the rest of the moving machinery was absent from the
premises. The crushing machine was running without any business. A workman who was an
unskilled worker and whose duty was to feed the oil mill by pouring groundnut seeds into
crushing machine, kicked of the moving pulley to stop the running of the crushing machine. His
leg got caught between the pulley and the belt. He was pulled up to a height of about six feet
from where he fell down and died instantaneously. The accident was held to have arisen out of
and in the course of employment because the employer was guilty of negligence in not
complying with safety rules and whatever the deceased workman did was in the interest of the
employer and in order to prevent the machine from getting thereby resulting in loss to the
employer.
In Mackinnon Mackenzie and Co. Ltd. v Miss Velma William,123 the deceased was a seaman, an
employee of the shipping company in Calcutta. One day when the ship was on its voyage he tried
to commit suicide by jumping over board but was prevented by his co-workers and was back to
his room. Queried by the master of the ship that he was worried because he did not receive any
letter from his home. He also promised never to attempt to commit suicide in future. The surgeon
who examined him certified that he was mentally deranged and should, therefore, be kept under
constant supervision using force if necessary. After being kept in the hospital for a few days he
was one day allowed on medical advice to go on the deck under escort. In the next morning
while walking up and down on the deck the seaman suddenly seized both the guards, threw them
sideways with such force that they fell down on the deck and then jumped overboard. On a claim
for compensation made by his sister it was held that:
122
123
AIR 1963 Andhra Pradesh 210
236 | P a g e
“Theaccident in the case was not due to any personal injury carried to the workman by any
accident out of and in the course of his employment. So as to make the employer liable for it.
Merely, because the seaman was in service, his continuity of service did not bring him within
that expression. In cases of suicide resulting from insanity or mental derangement the onus lies
upon the applicant to show that the death is due to accident and that insanity is the direct result of
injury”.
Similarly in Sir Jayaram Motor Service v Pitchammal, 124 a night watchman of the appellant
company had died 90 minutes after return from work. The question was whether death, that
occurred one and a half hour after the employee had ceased to work.Can still be said to be in the
course of employment? It was held that if death was the result of stress and strain which the
employee suffered earlier during the period of work, a connection is established between the
employment and his death. Thus, in this case death was held to be in the course of employment.
In Superintendent Engineer ParambilulamAliar Project, Pollachi v Andammal125the deceased
was employed in Irrigation department to regulate the flow of water in the canal. He was
assaulted by some people who were inimical towards him in connection with his employment in
the release of water for the purpose of irrigation. The death was held to have arisen out of and in
the course of employment. By reason of his being in the particular place, he had to face the
indignant agriculturists who had unauthorisedly diverted the water from the canal and about
whom he had made a complaint and by reason to that he had to face a peril and the accident
resulting in his death was caused by reason of that peril.
In Riley v William Holland and Sons Ltd.,126 the applicant was employed at the respondent’s
mill. He was discharged on Wednesday. By the usage of the mill, the wages were made up to
Wednesday and were payable at the mill on Friday. The applicant went to the mill on Friday for
her wages which were paid to her. Ongoing down the stairs of the mill she slipped and was
injured. The accident was held to have arisen out of and in the course of her employment.
124
126
(1911) I KB 1029
125
237 | P a g e
It was held in ZubedaBano and others v Maharastra S.R.T. Corpn, and others127that the liability
of the employer under the Act is conceptually quite different from the liability under tort. The
Act should be construed in a broad and liberal manner. Therefore, the death of a bus driver of a
State Road Transport Corporation who sustained heart attack and collapsed while changing
destination name board is death out of and in the course of employment.
In Director (T and M) D.N.K. Project v Smt. Buchitalloi,128 a factory worker having a heart
disease, while coming out of the factory, profusely sweated and died after four hours of work
inside the factory premises. It was held that the stress and strain of four hours of work in the
factory must be taken to be an accelerating factor to death and therefore, the employer is liable to
pay compensation.
InRaj Dulari v Superintendent Engineer P.S.E.B.and anther, 129 an employee under the Punjab
State Electricity Board was engaged in fixing electric wire on poles. While he was beyond his
duty hours. But under the direction of a lineman, to complete the job he was fixing electric wire
on poles.A bus came at a high speed and dragged the electric wires hanging on the road as a
result the pole on which he was working was broken from the middle and he fell down and died
instantaneously. It was held that the accident occurred in the course of employment. If a
workman continues to work beyond his duty hours on a job directly by his superior, he continues
to be on duty.
In Salamabegum v District Branch manager Maharastra State Co-operative Land Development
Bank, Beed and another,130a jeep driver of Bank took the officers of the bank to a village in
connection with recovery proceedings conducted by the bank. He rested the jeep in the rest house
and went to the market where he was assaulted by some unknown persons in the crowd and was
found dead. It was held that the expression “accident arising out of and in the course of
employment” rather denotes a point of time than a factual connection with the employment and
the accident. The risk incurred by the driver from going to the market was incidental to his
employment of taking the jeep to the village. Thus the accident having taken place without the
127
(1989) I LLJ 259 (Orissa)
129
(1989) II LLJ 132 (Punjab and Haryana)
130
128
238 | P a g e
fault of the driver and while he was on duty in the village must be taken to be arising out of and
in the course of employment.
InGeneral Manager, South Eastern Railway and others v Abdul Wahid,131the respondent who
was a railway workman was struck down while on way from his residence to work place by an
electric loco engine at a railway level crossing. He was awarded compensation and an appeal was
preferred against that order. Allowing the appeal the High Court held that the accident cannot be
said to have occurred in the course of employment as the level crossing was away from the
workman’s place of work.
In State of Rajasthan v Smt. Kanta,132 a driver in the Irrigation Survey Sub-division was on
election duty all the 24 hours and he was found dead. It was held that he died in the course of
employment. It was further held that unless it is established by cogent evidence from the
employer that the employee has not died in the discharge of his duty it will be presumed that the
employee did not die in the discharge of his duty it will be presumed that the employee died in
the course of employment.
In New India Assurance Co. Ltd., v R. Shridhara and another,133 amanufacturer had taken a
Group Insurance covering for four employees of the establishment to the amount of Rs. 25,000/each in respect of any miscellaneous injury suffered by the employees in the manufacturing unit.
It was held that the Insurance Company was liable to pay under the policy. The fact that the
Insurance Company has different types of policies including the one under the provisions of
Workmen’s Compensation Act, will not absolve the Insurance Company from paying under the
Miscellaneous Group Insurance Scheme. There is no dual liability of the Insurance Company to
the insured as well as the workman.
InSenior Divisional Personnel Officer, S. Rly Trichy v Smt. Kanagambal, 134 the respondent,
employed as a points-man in Railway, was assaulted by unknown person while on duty resulting
in his death. The death was held to be arising in the course of and out of employment and the
workman was entitled to compensation.
131
(2002) III LLJ 615 (Jharkhand)
(1989) II LLJ 135 (Rajasthan)
133
134
132
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If the accident has occurred on account of the risk which is an incident of employment, it has to
be held that the accident has arisen out of the employment. Since in driving a motor vehicle risk
of accident is present a driver who sustains injuries in accident would be entitled to
compensation.135
In New India Insurance Co. Ltd. v G. Krishna Rao and others,136the workman was residing in a
hut provided by the employer. The hut caught fire and the workman was burnt alive in the night.
It was held that the fire in this case has no nexus with employment. The accommodation
provided by the employer by itself cannot form basis for a claim for compensation. The
employer is not liable as accident did not occur in the course of employment.
In Divnl. Personal Officer, Western Railway, Jaipur and another v Ashiya Begum, 137
VazirAhamad, husband of the respondent Ashiya Begum was employed as a senior cook in
running room in Railway. He suffered an accident on account of excessive gas inhaled while
cooking food and died after a week. According to Railway Doctor the death of the workman was
due to hyper tension. The Commissioner for Workman’s Compensation held that working on the
cooking stove may not be the immediate cause of death but a situation could arise where hard
cooking on cooking stove could lead to strain and accelerate the death. In his view the workman
died in the course of employment and therefore awarded compensation. In appeal the High Court
held that it is not necessary that there should be a direct connection between the cause of death
and the nature of duties. Even a causal connection between the two would be sufficient to claim
compensation. It is not for the courts to look into minute details but they should see whether no
board analysis of the material before the court, it can be said that the accident which resulted in
injury was in the course of or out of employment. If it is accepted that the deceased was suffering
from high blood-pressure from last one year, his duties as cook added strain and this strain had
caused relationship with the cause of his death. It cannot be accepted that a Doctor would be able
to analyze each step in order to show how the deceased developed the disease and succumbed to
the same. Suddenly becoming unconscious as a result of strain is an unexpected event which can
be said to be an accident leading to an injury in the course of and out of employment due to
135
Oriental Insurance Co. Ltd. vNanguli Singh and another, (1995) I LLJ 298 (Orissa)
(1995) II LLJ 1041 (Orissa)
137
(1994) II LLJ 795 (Rajasthan)
136
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working conditions. Strenuous duties and working condition accelerated the death of the
deceased and his dependants are, therefore entitled to compensation.
In ReenaPadhi and others v Owners and Parties and another, 138 Rabindranath Padhi, the
husband of appellant was employed as Chief Engineer in a ship of G.E. Shipping Company.
While on duty in ship in Japan, he met with an accident and died. His wife and two children filed
a suit in admiralty jurisdiction of the High Court which refused to entertain the suit. Hence an
appeal was made in the Supreme Court. The Supreme Court in view
of special facts and
circumstances of the case ordered rupees five lakhs to be paid to the appellant as compensation.
But it was pointed out that this case will not be treated as a precedent for future.
The term “arising out of” has been subjected to judicial interpretation from the very beginning
and in most of the times it has been seen that court has tried to give wide meaning to it. This
phrase has been most of the time coupled with the “arising out of employment”. Even though the
meanings of these two phrases are different, then also there is an inseparable connection between
them. Previously it was thought that arising “in the course” is a big circle and “out of” is a small
circle within it. But the new notion is that these two phrases are different circle which intersect
somewhere. These two criteria need to fulfill to get compensation. These two phrases are
conjunctive under this act. If these terms have been disjunctive a large area could have been
covered and more number of workers could have been benefited and fulfill more efficiently the
objective of the act as it would have been sufficient to prove only one condition. The judiciary
has come up with the concept of notional extension which essentially wider the scope of the
terms and cover the areas which is not conventionally considered under this terms. This doctrine
appeared to be very helpful for workmen to get facility given under this Act.
It is submitted that the definition and application of the term “in the course of and arising out of
employment” is an area in which no single formula should be applied, but one in which a number
of rules or limitations are to be used. These rules are to be liberally applied since the purpose of
the Act is to, whenever possible, compensate and reimburse the accidentally injured employee
and it is just that his employer, industry, and eventually the public who benefit from his labours
should bear this burden.
138
(1994) II LLJ 1045 (SC)
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CHAPTER-7
CONCLUSION AND SUGGESTIONS
The fundamental scheme behind social security measures is that there is a duty on the society to
defend the working class that contributes to the welfare of the society against hazards. It protects
not just the workman, but also his entire family in financial security and health care. The social
security can be provided by institutional and non-institutional agencies. The non-institutional
agencies existed from time immemorial and they are the back boneof the present social security
programmes. India is a good example of having non-institutional form of social security
measures in the world.1
The needy and unfortunate are seen protected in joint family set up and the caste system. The
hardship due to unemployment, economic difficulties, old age, widowhood etc., was taken care
of by joint family system. It had a religious backing also. An additional help from individual and
institutions was provided to them through the guilds,2 community and Panchayats, orphanages,
widow homes and charity centers available during that time.
This indicates that India had its own social security system of following3
(1) Self-sufficient village economy;
(2) Caste system;
(3) Joint family system; and
(4) Organizations of charity.
1
Prof. Harry Calvert, Social Security Law, (Sweet & Maxwell, London 1978) 38
An association of people for mutual aid or the pursuit of a common goal. Available
<www.thefreedictionary.com/guild>accessed on 12 January 2014
3
Mamuria and Doshi, Labour Problems and Social Welfare in India, (KitabMahalPvt.Ltd., Allahabad 1966) 339
2
at
242 | P a g e
Following the development of liberalism and individualism fostered by the western influence,
these roots of Indian society were shaken and ultimately lost its significance. The society, its
culture and custom were affected a great deal by foreign impact and a new society based on class
gradually emerged.
Industrialization created a new class and this rising up class with its rural background and
without social and material resources urgently necessitated systematic help from various social
security agencies other than the traditional ones. The ideals of social security ultimately became
a social responsibility largely depending on the resources and needs of the country. India is a
country where economic resources are less and needs are more. The social security enactments
that we find today in India are an amalgam of the ideals and principles emerged over the years.
The development of modern state totally changed the social set up in India and the state assumed
the role of protector of people from evils. The philosophy of welfarism has resulted in legislative
schemes designed to channel all economic activity for collective good. Originally, labour law
was almost a part of private law but now it has become part of public law.
From the middle of 19th Century to the end of First World War, the Indian industrial legislation
was in the period of origin. It was through a slow and steady process that the industrial law took
root in India.
Cotton mills and jute mills that were established during 1850s manifest the beginning of factory
system in India. The condition of workers in those mills were pathetic due to long working hours
without any safety and security. Based on the principles of torts, Fatal Accidents Act, 1855 was
enacted for providing compensation to legal heirs of these employees where death occurred by
an actionable wrong. Minimum rate of compensation, to some selected legal heirs and a
restricted application were the main drawback of the said Act.
By 1881, factory system clearly emerged in India, but workers did not organize themselves
simultaneously with the industrialization. The safety and working conditions of these workers
were prime concerns for many members of the House of Lords and they argued for legislation.
Thus in 1881, Indian Factories Act was passed. In order to improve the conditions of plantation
243 | P a g e
labours, Island Emigration Act 1892 was passed and to secure safe and healthy conditions of
work in mines, Indian Mines Act, 1901was passed.
During and after the First World War period, there had been incredible change in the approach of
state and society towards labour. ILO 4 was established in 1919 which aimed at welfare of
workers globally. India is a member since its foundation. ILO has adopted many conventions and
recommendations casting different types of liability on industry, Government and labour.
Under the Montague-Chelmsford Reforms in 1919, the central legislature was given specific
legislative power to enact industrial laws. By means of that power, in 1923, India approved a
major enactment called Workmen’s Compensation Act, 1923, with an object to do away with
hardship caused to workmen injured, through providing timely payment of benefits in spite of
fault from their side and with minimum legal formalities. It imposed obligation upon employers
to pay compensation to workers for accidents “arising out of and in the course of employment”
and for death and disablement. In 1925, Government of India enacted another Act, Provident
Fund Act, 1925. Royal Commission on Labour was appointed in 1929 which suggested a scheme
for health insurance to industrial workers on a contributory basis financed by employers along
with small deductions from the wages of workers and provisions against old age and payment of
gratuity.
Another phase when many significant development in the field of social security occurred on a
firm and sound footing was the Second World War. The war created an acute shortage of man
and materials. This necessitated increased production and that required greater co-operation of
labour. To ensure this a number of concessions were made to the working class under Defence of
India Rules (Rule 81-A).5
4
International Labour Organisation
Available at
<http://www.delhi.gov.in/wps/wcm/connect/doit_labour/Labour/Home/Acts+Implemented/Details+of+the+Acts+Im
plemented/The+Industrial+Disputes+Act/> accessed on 2 June 2014
5
244 | P a g e
In 1943, a committee called the ‘Standing Labour Committee’ was appointed by Government of
India. Constitution of this Committee and Indian Labour Conference effected outstanding
changes in the approach of Government towards labour. The committee was constituted for the
purpose of formulating a scheme for health insurance for individual workers. Another committee
was also appointed to make survey on the position of health conditions and health organizations
in existence. All these provided for a forum for the discussion of labour matters.
The two ILO publications viz; ‘Approaches to social security—an International Survey’ and
‘Social security—Principles and Problems Arising Out of War’ highlighted the tendency in
planning social security to bring under a single scheme for assuring maintenance in case of
inability to work and to extend this to all the employees, employed or self-employed, rural or
urban.
The publication of Beveridge Report in England also had a significant impact on Indian scene.
The Government of India made attempts to introduce sickness benefits in India. The provincial
governments were entrusted with this task. But they doubted its success because of migratory
nature of Indian workers and intricacy in locating them in villages. Shortage of medical staff for
certification and treatment was yet another reason. About this, the ESI 6 Review Committee
observed:
“Sickness is an important contributory cause of indebtedness with all that debt
entails. Under existing conditions at the time of greatest need the worker may find
himself destitute of resources, unable to take proper measures to restore his health
and in difficulties regarding even in the means of subsistence.”7
Recommendations of the ESI Review Committee were measured by Government of India and
positioned the same in the First Labour Minister’s Conference held in New Delhi in 1940. In the
same year Employees Conference held at Bombay under the joint auspices of All India
Organization of Industrial Employers and the Employees examined the question of sickness
insurance and favoured the tripartite contribution. The decision in Second Labour Minister’s
Conference held in 1941, Third Labour Minister’s Conference held in 1942 and the ILO
6
7
Employees State Insurance
ESI Review Committee appointed by Government of India in (1966) p 87
245 | P a g e
Conventions and recommendations forced Government of India to appoint a commission in 1943
under the Chairmanship of Professor B.R.Adarkar. The scheme formulated by him envisaged to
cover only perennial factories belonging to textile engineering, mineral and metal groups of
industries. Government of India requested ILO to depute experts to examine Adarkar Report.
ILO deputed Mr.Stack and Mr. Rao for evaluating Adarkar Report and they suggested certain
modifications relating to classification of workers, contribution benefits, and the organization of
medical services and financial structure of the scheme.
In 1947, India became independent and an interim government was formed which caused greater
encouragement to worker’s legitimate ambitions and accelerated harmony in the industrial
relations. The interim government formulated a five year programme for the welfare of the
labour class. The significant features of the programme were:
(i)
Organization of the health insurance scheme;
(ii)
Revision of the Workmen’s Compensation Act;
(iii)
Central law for maternity benefit; and
(iv)
Extension to other classes of workers the right within specificlimits to leave
withallowances during sickness8
Employee’s State Insurance Act was passed in 1948. It introduced a scheme of compulsory
health insurance and benefits in the event of sickness, maternity and employment injury to
workmen.
Soon after the commencement of the Constitution, Five Year Plans were introduced in India in
order to ensure social justice and better standard of life to the people. In 1954, India declared and
adopted a socialistic pattern of society and this reshaped the labour policy.9
In 1952, the Employees Provident Fund Act was passed on the basis of experience of provident
fund schemes of coal mine workers and constant demand from employees. The Act provided for
old age, invalidity and survivorship benefits to the workforce in the organized sector.
8
9
Report of the First National Commission on Labour (1969) p.163
Constitution was Amended (Second Amendment-1952) and added the word ‘Socialist’ to the preamble
246 | P a g e
The Maternity Benefit Act was passed in 1961 replacing all state laws on this subject. It applies
to all establishments, factories, plantations and shops where 10 or more persons are employed.
Maternity benefits are also provided under ESI Act and an insured woman is entitled to
maternity benefit in the form of periodical payments in case of confinement, miscarriage or
sickness arising out of pregnancy. They are also entitled to medical care under the ESI scheme
for maternity. The factories or establishment to which the provisions of ESI scheme apply are
excluded from the purview of Maternity Benefit Act. But high salaried women above the wage
ceiling under ESI Act are entitled to be benefited under this Act. There is no wage limit for
coverage under the Maternity Benefit Act. The provisions under ESI Act for medical benefit are
more comprehensive as they include medical care and maternity benefit than provision under
Maternity Benefit Act.
In 1957 a study group on social security10 to work out a comprehensive social security scheme
was appointed, their recommendations could not make any contact. Hence in 1966, a Committee
on Labour Welfare and National Commission on Labour were appointed. The Committee on
Labour Welfare was set up for examining the functioning of various welfare schemes in
operation in industrial establishments and to suggest improvements. Both the Committee and the
Commission submitted detailed reports in 1969.
Apart from the above mentioned legislative efforts, Committees and Commissions, a key role is
being played by the Planning Commission. The five year plans included in their mandate
adequate provision for the basic need of the workers in respect of food, clothing and shelter
so as to enable them to remain healthy and efficient, provision for improved health
conditions, wider provision for social security, better educational opportunities and
increased recreational and cultural facilities; conditions of work that would safeguard the
worker’s health and protection against occupational hazards, right to organize and to take lawful
action in furtherance of their rights and interests. The plans have also called upon labour to
realize the fact that in an undeveloped economy, it cannot build for itself but they have to make a
substantial contribution. This will ultimately lead to peaceful industrial relations.
10
Recommendation of Study Group on Social Security, Government of India, 1957
247 | P a g e
The ESI Act is designed in the interest of “Employees” and its dependents to provide cash
benefit in the case of sickness, maternity and employment injury, payment in the form of pension
to the dependent of workers who died of employment injury and medical benefit to workers. It
introduces the contributory principle against such contingencies, provides protection against
sickness, replaces lump sum payments by pension in the case of dependents benefit and places
the liability for claims on a statutory organisation. However, because of the vastness of the
country and the considerable preparatory work involved, such as provision of building,
equipment and personal, the scheme could not be implemented throughout the country
simultaneously. Plan for its phased extension to different places was drawn up. The Act also
envisages provisions requiring payment of special contribution by all employees in order to meet
the requirement. The contribution of employers in the implemented areas was fixed at a rate
higher than that of employers in non-implemented areas.
Under Section 2(12) the ESI Act is applicable to non-seasonal factories employing 10 or more
persons. Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, and
restaurants, cinemas including preview theatres, road-motor transport undertakings and
newspaper establishments employing 20 or more persons. Further under section 1(5) of the Act,
the Scheme has been extended to Private Medical and Educational institutions employing 20 or
more persons. The existing wage limit for coverage under the Act is Rs. 15,000/- per month
(with effect from 01/05/2010).11
The Declaration of Philadelphia 12 (paragraph III (g)) which provides that the ILO 13 has the
solemn obligation to further among the nations of the world programmes which will achieve
adequate protection for the life and health of workers in all occupations.
The ILO Constitution sets forth the principle that workers should be protected from sickness,
disease and injury arising from their employment. Yet for millions of workers the reality is
very different. Some two million people die every year from work-related accidents and
diseases. An estimated 160 million people suffer from work-related diseases, and there are an
11
Available at <http://www.esic.nic.in/coverage.php> accessed on 19 June 2014
Declaration concerning the aims and purposes of the International Labour Organization adopted at the 26th session
of the ILO, Philadelphia on 10 May 1944 Available at <http://www.ilo.org/global/standards/subjects-covered-byinternational-labour-standards/occupational-safety-and-health/lang--en/index.htm> accessed on 21 May 2014
13
12
248 | P a g e
estimated 270 million fatal and non-fatal work-related accidents per year. The suffering
caused by such accidents and illnesses to workers and their families is incalculable. In
economic terms, the ILO has estimated that 4% of the world’s annual GDP14 is lost as a
consequence of occupational diseases and accidents. Employers face costly early retirements,
loss of skilled staff, absenteeism, and high insurance premiums due to work-related accidents
and diseases. Yet many of these tragedies are preventable through the implementation of sound
prevention, reporting and inspection practices. ILO standards on occupational safety and health
provide essential tools for governments, employers, and workers to establish such practices and
to provide for maximum safety at work. In 2003 the ILO adopted a “Global Strategy to Improve
Occupational Safety and Health” which included the introduction of a preventive safety and
health culture, the promotion and development of relevant instruments, and technical
assistance.15
The ILO has adopted more than 40 instruments specifically dealing with occupational safety and
health, as well as over 40 Codes of Practice.16 Nearly half of ILO instruments deal directly or
indirectly with occupational safety and health issues.17
In the landmark case Consumer Education and Research Centre and others v Union of India
and others18, the apex court has held that the right to health and medical care to protect one’s
health and vigor, while in service or post-retirement, is a fundamental right of a worker under
14
Available
at
<http://www.ilo.org/global/standards/subjects-covered-by-international-labour-standards/
occupational-safety-and-health/ lang--en/index.htm> accessed on 21 May 2014
16
ILO Codes of Practice set out practical guidelines for public authorities, employers, workers, enterprises, and
specialized occupational safety and health protection bodies (such as enterprise safety committees). They are not
legally binding instruments and are not intended to replace the provisions of national laws or regulations, or
accepted standards. Codes of Practice provide guidance on safety and health at work in certain economic sectors
(e.g. construction, opencast mines, coal mines, iron and steel industries, non-ferrous metals industries, agriculture,
shipbuilding and ship repairing, forestry), on protecting workers against certain hazards (e.g. radiation, lasers, visual
display units, chemicals, asbestos, airborne substances), and on certain safety and health measures (e.g. occupational
safety and health management systems; ethical guidelines for workers’ health surveillance; recording and
notification of occupational accidents and diseases; protection of workers’ personal data; safety, health and working
conditions
in
the
transfer
of
technology
to
developing
countries)
Available
at
<http://www.ilo.org/global/standards/subjects-covered-by-international-labour-standards/occupational-safety-andhealth/lang--en/index.htm> accessed on 21 May 2014
17
ibid
18
(1995) 3 SCC 42
15
249 | P a g e
Article 21 19 read with Articles 39(e) 20 , 41, 21 43, 22 48-A 23 and all related Articles and
Fundamental Human Rights to make the life of the workman meaningful and purposeful with
dignity of person. The Court held that the compelling necessity to work in an industry exposed
to health hazards due to indigence to bread-winning for him and his dependents should not be
at the cost of health and vigor of the workman.
Right to Health i.e. Right to Live in a clean, hygienic and safe environment is a ‘Right’
flowing from Article 21. Clean surroundings lead to healthy body and healthy mind. But,
unfortunately, for eking a livelihood and for national interest, many employees work in
dangerous, risky and unhygienic environment. Right to live with human dignity enshrined in
Article 21 derives its life breath from the Directive Principles of State Policy, particularly
clauses (e) and (f)24 of Article 39 and Article 41 and 42.25 Those Articles include protection of
health and strength of workers and just and humane conditions of work. Those are minimum
requirements which must exist to enable a person to live with human dignity. Every State has an
obligation and duty to provide at least the minimum condition ensuring human dignity.
In the most recent case (2014) Occupational Health and Safety Association v Union of India26
the Supreme Court directed the Ministry of Labour to ensure that the suggestions made by the
19
Protection of life and personal liberty: No person shall be deprived of his life or personal liberty except according
to procedure established by law
20
(e) That the health and strength of workers, men and women, and the tender age of children are not abused and
that citizens are not forced by economic necessity to enter avocations unsuited to their age or strength
21
Right to work, to education and to public assistance in certain cases: The 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.
22
Living wage, etc., for workers: The State shall endeavour to secure, by suitable legislation or economic
organization or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions
of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities and, in
particular, the State shall endeavour to promote cottage industries on an individual or co-operative basis in rural
areas
23
Protection and improvement of environment and safeguarding of forests and wild life: The State shall endeavour to
protect and improve the environment and to safeguard the forests and wild life of the country
24
(f) That children are given opportunities and facilities to develop in a healthy manner and in conditions of freedom
and dignity and that childhood and youth are protected against exploitation and against moral and material
abandonment.
25
Provision for just and humane conditions of work and maternity relief: The State shall make provision for
securing just and humane conditions of work and for maternity relief
26
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petitioner for the welfare of workers are properly implemented by the Centre and the State
governments. The suggestions included 1. Comprehensive medical checkup of all workers by doctors appointed in consultation with the
trade unions. First medical check up to be completed within six months and to be done on
yearly basis.
3. Services of the workmen not to be terminated during illness and to be treated as if on duty.
4. Compensation to be paid to workmen suffering from any occupational disease, aliment or
accident in accordance with the provisions of the laws.
5. Modern protective equipment to be provided to workmen as recommended by an expert body
in consultation with the trade unions.
vibration and radiation as recommended by the National Institute of Occupational Health
(NIOH) Ahmadabad, Gujarat.
7. All employees to abide by the Code of Practice on Occupational Safety and Health Audit as
developed by the Bureau of Indian Standards.
8. Safe methods be followed for the handling, collection and disposal of hazardous waste to be
recommended by NIOH.
representatives and Health and Safety NGO’s to look into the issue of Health and Safety of
Workers and make recommendations.
In the light of the above mentioned the researcher would like to arrive at the following
conclusion and suggestions:
Under a social insurance scheme the right of the beneficiary to any benefit is acquired by making
a contribution. It is in one sense a contractual right, not a social right. It follows that if social
security has to be provided to all citizens as a basic Human Right social insurance cannot be the
appropriate vehicle for it. It calls for a non-contribution approach.
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A sense of insecurity is inherent in human condition as man is exposed to various kinds of risks
and dangers. Initially, the dangers were perceived in the external environment by the threats
posed by natural phenomena, as civilization progressed man began to look upon his fellow
beings as his enemies and to protect himself against them. Societies and States were formed
and the institutions of the army and the police came into being. As civilization progressed
further social ills and economic dangers began to pose greater threat to human life. So social
security was born to protect them against such risks.
The ambush of globalization and privatization has caused concern for human welfare and the
role of the State in promoting welfare. The private sector and the market economy have been
ridiculing welfarism as outmoded and are advocating the dismantling of the welfare system,
indeed there is an ongoing debate all over the world about the crisis of the welfare state which is
said to be in liquidation or in retreat. This subject ranks high on the political agenda in many
countries. But there has been no fundamental change in the welfare system in any country except
perhaps the former socialist countries. Some adjustments have been made in the welfare schemes
to tide over immediate financial difficulties but the welfare system as such exists and there is
reason to believe that it will continue to exist. At the General Assembly of the International
Social Security Association, an association of social security institutions, held in 1992, it was
noted that all over the world in both developed and developing countries there is a growing need
for social protection, and nowhere is this need diminishing.
India is avowedly a Socialist State. Its aim is to eliminate inequality of income and status and
standards of living. The basic framework of socialism is to provide a decent standard of life to
the working people. According to UNDP27
“For most people, a feeling of insecurity arises more from worries about daily
life than from the dread of a cataclysmic world event. Will they and their
families have enough to eat? Will they lose their jobs? Will their streets and
neighbourhoods be safe from crime? Will they be tortured by a repressive state?
Will they become a victim of violence because of their gender? Will their
religion or ethnic origin target them for prosecution? In the final analysis,
27
United Nations Development Programme
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human security is a child who did not die, a disease that did not spread, a job
that was not cut, an ethnic tension that did not explode in violence, a dissident
who was not silenced. Human security is not a concern with weapons; it is a
concern with human life and dignity.”
Human security can be said to have two main aspects. It means, first, safety from such chronic
threats as hunger disease and repression. And second, it means protection from sudden and
hurtful disruptions in the patterns of daily life - whether in homes, in jobs or in communities.
Such threats can exist at all levels of national income and development. The loss of human
security can be a slow, silent processor an abrupt, loud emergency. It can be human made, due to
wrong policy choices. It can stem from the forces of nature. Or it can be a combination of both as
is often the case when environmental degradation leads to a natural disaster, followed by human
tragedy.
The economically developed countries have established such safety nets on which they are
spending up to 40 % of their GDP Developing countries generally and India in particular, are
lagging behind in this area as well. According to the World Labour Report, 2000, the public
expenditure on social security in India is 1.8 % of GDP against 4.7 % in Sri Lanka and 3.6 % in
China. It is one of the measures of human development these countries have achieved and the
distance they have yet to travel.
In view of the researcher “every country needs to establish effective social safety nets to catch
the victims of the competitive struggle such as the temporarily unemployed, to protect the lowest
income groups, the young, the old and the disabled.”
However, the analysis of researcher is that, for better focus on social security a more direct
approach is called for, especially in the context of the commitment made to the United Nations
by ratifying the Covenant on Social Economic and Cultural Rights.28 But the State has failed in
its fundamental duty by not securing any enforceable Constitutional status to the social security.
28
Preamble-In accordance with the principles proclaimed in the Charter of the United Nations, recognition of the
inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of
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Right to Social Security is one of the basic Human Rights. Although the Constitution of India
does not recognize it as a Fundamental Right, the Supreme Court has ruled that the Right to
Livelihood is inherent in the Right to Life which is a Fundamental Right. As the ultimate
object of social security is to assure everyone the means of livelihood it follows that the Right
to Social Security is also inherent in the Right to Life.
Although social security is universally declared as a basic Human Right the Constitution of India
does not recognize it as a Fundamental Right. Suggestions have been made to amend the
Constitution so as to include the right to social security as one of the Fundamental Rights. The
opinion contrary to this suggestion is that unless the State has the capacity to enforce the right it
should not be made a fundamental right. But the researcher feels that there are no objective
criteria to decide whether or not the country has the capacity to make provision for and to
enforce it as a Fundamental Right. It depends on the priority that is attached to the various
functions, activities and programmes of the Government and the allocation of resources
thereto. In view of the fact that the right to social security is regarded as one of the basic Human
Rights and the Government of India has recognized it as such by ratifying the Covenant on
Social Economic and Cultural Rights. Hence, in my opinion it should be given the status of a
Fundamental Right under the Constitution of India and necessary resources should be allocated
to it.
The National Commission on Labour shall make a strong recommendation for amendment of the
Constitution so as to make it a Fundamental Right.
Social security situation in India is characterized by lack of policy. There are a variety of
schemes, namely, employers’ liability schemes, social insurance schemes, social assistance
schemes, provident fund schemes, welfare funds etc. which are not called social security schemes
but providing social security type benefits or protection, and lacking any clearly articulated
freedom, justice and peace in the world and also recognizing that these rights derive from the inherent dignity of the
human person. Available at <http://www.ohchr.org/en/professionalinterest/pages/ccpr.aspx> accessed on 12 April
2014
254 | P a g e
goals or objectives. These schemes have been framed at various times at random and do not
conform to any overall design. They do not represent a unified policy or plan. Therefore there is
an obvious need for a social security policy for India.
The execution of such social security as is existing in the country is split between the Centre
and the States and at each level among different ministries, departments and agencies. For
example National Social Assistance Programme being administered by the Ministry of Rural
Development; programmes for the elderly, disabled and other vulnerable sections being
administered by the Ministry of Social Justice; programmes for women and children
development administered by the Department of Women and Child Development; midday meal
scheme being implemented by the Ministry of Education; food and housing schemes being
administered by the Ministry of Urban Development; There is little consistency in policy
formulation, programme scheming, execution and monitoring. The data base is mainly poor.
Having gazed at to the preceding facts, the Working Group on Labour Policy for the Ninth
Plan29had recommended that a national policy on social security should be announced with a
view to ensuring uniformity and efficiency.
The researcher endorses the recommendation of the Working Group and emphasizes that, while
evolving the policy the Directive Principles of State Policy of the Constitution concerning social
security should be kept in view.
According to the ILO, the scope of social security is limited to maintenance of one’s income
against loss or diminution. This is called protective form of social security.
According to the other view the object of social security is broader to enable a person to attain a
decent standard of life and also to maintain it. It may be preventive or promotional as the case
may be. It is said that in the Indian context social security policies and strategies would need to
be addressed as a part of anti-poverty policies and that social security should include income
support through promotional measures such as employment promotion, food subsidy and child
nutrition and income maintenance through protective measures such as public assistance for old
age, maternity, disability and death. Lately certain new concepts have come into vogue such as
29
The Ninth Five Year Plan, launched in the 50th year of India’s Independence (1997-2002)
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social safety net, social protections social funds etc. There is no basic difference among them;
difference, if any, lies in the scope of social security and the strategies for achieving the
objective.
The conclusion of the researcher is that in the Indian context the term social security should be
used in its broadest sense. It may therefore be defined as consisting of all types of measures
preventive, promotional or protective as the case may be designed to:
(a) Prevent deprivation (preventive measures)
(b) Assure everyone of a basic minimum income which would be adequate for meeting the basic
needs of oneself and one’s family or dependents (promotional measures)
(c) Protect the income against loss or reduction due to the occurrence of any contingency
including sickness (protective measures.)
The measures may be statutory non statutory, public or private.
The term encompasses social insurance, social assistance, social protection social safety net and
other such terms currently in vogue.
There are basically two approaches to social security, the community approach and the
beneficiary approach. The schemes the benefits of which accrue to the community at large are
said to be based on the community approach. The schemes the benefits of which accrue to an
individual based on his or her constitutional, statutory or contractual rights are said to be based
on the beneficiary approach.
Schemes drawn up under the Basic Common Services programs such as supply of food grains at
concessional prices, drinking water etc. are examples of schemes based on community approach.
Workmen’s compensation, maternity benefit, old age pension, etc. are examples of schemes
based on beneficiary approach. Broadly speaking, preventive and promotional measures of social
security are ordinarily based on the community approach and the protective measures are based
on the beneficiary approach.
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The Schemes drawn up under the beneficiary approach may also be of two kinds. They may be
based on one’s citizenship or residential status (in the case of migrant workers) or they may be
occupational (work based) in nature. Schemes the benefits of which accrue universally to all
citizens subject to such eligibility criteria that may be prescribed are of the former kind. For
example the National Social Assistance Programme.30 The schemes, the benefits of which accrue
to a person by virtue of his /her employment and the contribution he/ she makes are of the second
kind. For example the Employees State Insurance Scheme is applicable to persons employed in
the industries or classes of establishments to which it has been made applicable.
Dr. AmartyaSen31 and Jean Dreze32 have referred two other approaches, as follows:
“It is possible in principle to distinguish two contrasting approaches to the
removal of precarious living conditions. One approach is to promote economic
growth and take the best possible advantage of the potentialities released by
greater general affluence, including not only an expansion of private incomes but
also an improved basis for public support. This may be called the strategy of
‘growth mediated security’. Another alternative is to resort directly to wide
ranging public support in the domains such as employment provision, income
redistribution, health care, education, and social assistance in order to remove
destitution without waiting for a transformation in the level of general affluence.
Here success may have to be based at discriminating use of national resources, the
efficiency of public services, and a redistributive bias in their delivery. This may
be called the strategy of ‘support led security’ Having examined the experience of
30
The National Social Assistance Programme (NSAP) which came into effect from 15th August, 1995 represents a
significant step towards the fulfillment of the Directive Principles in Article 41 of the Constitution. The programme
introduced a National Policy for Social Assistance for the poor and aims at ensuring minimum national standard for
social assistance in addition to the benefits that states are currently providing or might provide in future. NSAP at
present comprises of Indira Gandhi National Old Age Pension Scheme (IGNOAPS), Indira Gandhi National Widow
Pension Scheme (IGNWPS), Indira Gandhi National Disability Pension Scheme (IGNDPS), National Family
Benefit Scheme (NFBS) and Annapurna. Available at <http://nsap.nic.in> accessed on 10 May 2014
31
Indian economist who was awarded the 1998 Nobel Prize in Economic Sciences for his contributions to welfare
economics and social choice theory and for his interest in the problems of society’s poorest members. Sen was best
known for his work on the causes of famine, which led to the development of practical solutions for preventing or
limiting the effects of real or perceived shortages of food. Available at <www.nobelprize.org/nobel_prizes/
economic-sciences/.../sen-bio.html>accessed on 14 May 2014
32
JeanDreaz is a development economist who has been influential in Indian economic policymaking. He is a
naturalized Indian of Belgian origin. Available at <www.timesofindia.indiatimes.com>dated 24 July 2013 accessed
on 14 May 2014
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the various countries which have adopted these approaches in terms of one of the
indicators of success they have come to the conclusion that direct public support
has been the driving force behind the success of some of the major countries like
China and Cuba, while growth mediated security was an important part of the
experiences of countries like Korea and Singapore.
The Ninth Five Year Plan recognizes that a large number of people in India live in acute poverty.
The consumer expenditure data of the 55th Round on a 30 day recall basis yields the poverty
ratio for 1999-2000 of 27.09 percent in rural areas, 23.62 in urban areas and 26 .1 percent for the
country as a whole. The corresponding figures from the seven day recall period was 24.02
percent in rural areas, 21.59 percent in urban areas and 23.33 percent for the country as a
whole.33
According to the World Labour Report 2000 the percentage of persons with income under
poverty line in 1994 was 35percent.
The child population (0-14 years) as per the 1991 Census accounts for 319 million (37.8%)
which include 153.85 million female children. Of the total child population , 18.9 million (5.9% )
are below 1 year Infants) , 38 .1 million (11.9%) are in the age group 1-2 years (toddlers) , 73
million (22.8 %) are in the age group 3-5 years, (pre-school) and another 189.6 million(59.4 % )
are in the age group 6-14 years.34
According to the 1991 Census, India had an elderly population of 56 million of whom the old
numbered 20 million. It was expected to go up to 71 million by 2001, 96.30 million by 2011,
133.31 million by 2021, 236.01 million by 2041 and 300 .96 million by 2051. In terms of
percentage it was 6.58 in 1991.and it was expected to go up to 7.1 % in 2001,8.2 % in 2011,
9.9.in 2021, 11.39 in 2031, 14.5 % in 2041, and 17.3 % in 2051.35
According to the National Sample Surveys conducted in 1981 and 1991 there were 136.74 lakh
disabled persons in 1981 and 163.02 lakh persons in 1991 who were having at least one other of
33
Available at <http://mospi.nic.in/Mospi_New/site/inner.aspx?status=3&menu_id=31>accessed on January 2014
(Ministry of Statistics and Programme Implementation )
34
ibid
35
ibid
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the four types of disabilities, viz. Locomotive, visual, hearing and speech. The magnitude and the
size of various disabilities as revealed by the latest survey are given below.
A sample survey conducted in 1991 showed that 3 percent of the child population had mental
retardation. Among the adults, 1 percent was suffering from various forms of mental disorders 10
to 15 percent were suffering from various mental health problems.
The number of leprosy affected disabled persons was estimated to be about 4 million of whom
about one fifth were children and above 15 to 20 percent were left with deformities. The
prevalence was more than 5 per thousand in the 196 high endemic districts in the country.
The National Sample Survey (1981) identified 12 million persons having one or the other
disability constituting about 1.8% of the total population. It has gone up to 14.56 million or 1.9%
of the population by 1991. About 10% of these physically handicapped were reported to have
more than one type of disability. A more recent survey (1986-89) estimated 12 million blind
persons. The number of mentally retarded people was estimated to be about 3 to 4% of the total
population.
The finale of the researcher is that, in the Indian context, Social Security policy and plans and
programmes would have to be tailored to the needs of the diverse vulnerable sections of the
people, comprising the total population of India. No single approach to the exclusion of the
others would be adequate and the problem will have to be addressed by both. Pronged approach
and all the approaches discussed above would be relevant in different contexts.
The requirements for social security differ according to the characterization of the term; there
are extensive lists of social security needs drawn up by diverse authorities:
a) According to Lord Beveridge the primary needs for social security are of eight kinds,
reckoning the composite needs of a married woman as one and including also the needs of
childhood and the need for universal comprehensive medical treatment and rehabilitation. These
needs are set out below:
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Unemployment: that is to say, inability to obtain employment by a person dependent on it and
physically fit for it met by unemployment benefit with removal and lodging grants;
Disability: that is to say, inability of a person of working age, through illness or accident, to
pursue a gainful occupation, met by disability benefit and industrial pension.
Loss of livelihood: by person not dependent on paid employment, met by training benefit.
Retirement: from occupation, paid or unpaid, through age, met by retirement pension.
Marriage needs: of a woman met by Housewife’s Policy
Funeral expenses: of self or any person for whom responsible, met by funeral grant
Childhood: provided for by children’s allowances if in full time education, till sixteen.
Physical disease or Incapacity: met by medical treatment, domiciliary and institutional, for self
and dependants in comprehensive health service and by post medical rehabilitation.
b) ILO
According to Recommendation No.67 of the ILO concerning Income Security, social security is
required for meeting the following types of contingencies:
Unemployment
Sickness
Employment Injury
Maternity
Invalidity
Old age
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Death
Emergency expenses
c) The Social Security (Minimum Standards) Convention 102 of the ILO added medical care
and family benefits to the foregoing list and dropped Emergency Expenses (The rest Eight have
been already mentioned in the Chapter 3) . Hence, total nine.
d) World Bank
The World Bank has adopted a typology of risks which consists of the following:
Natural (Disasters)
Health
Social
Gender
Economic Political and Environmental
The end view of the researcher is that, social insecurity in India is poverty and that is mostly due
to need of sufficient or productive employment opportunities. It is described as “chronic or
structural social insecurity, a ‘primary-order’ type of social insecurity arising from insufficient
degree of overall economic development.” It is associated with the other insecurities,
“emanating from conventional contingencies such as the loss of employment, disability, old age,
death, etc.” which are called the ‘second-order’ type of insecurities or conventional social
insecurity. We have to tackle both. Provision of sufficient and firm income will enable the poor to
satisfy their basic needs and thereby their other social security needs as well. Till then the State
has to assume the basic responsibility of providing social security, especially in respect of those
contingencies which would be difficult for individuals to cover without assistance from the State.
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The State also has the responsibility to provide the means of livelihood to those who cannot work
and earn their living due to early childhood, old age or other infirmities.
Suggestions
On the journey of my loud thinking and in-depth analytical study fathoming the issues, concepts
and consequential implementation, following are the pearls of wisdom that I as researcher have
collected and intended to share the same.
1.
Working Group on Social Security
The Ministry of Labour had appointed a Working Group on Social Security for the Ninth Five
Year Plan. The Working Group had made the following observations. Even though the Social
Security Programs/Schemes have been on the ground for many years, the Social Security System
in the country continues to suffer from several weaknesses which, inter-alia, include the
following:
(i)
The Schemes of Social Security, types of benefits or protection provided there under do
not conform to any overall plan or design. There is, as a matter of fact, no policy on
social security, and the Five Year Plans are practically silent about this important aspect.
(ii)
There is no commonly accepted definition of the term ‘Social Security’ in India and it
means different things to different people.
(iii)
The Social Security Schemes are limited in their scope of coverage which is decided with
reference to wage ceilings, the number of workers employed in an establishment, the
number of years for which an establishment has been in existence etc. Further there is no
uniform criterion under various schemes for the purpose of coverage.
(iv)
Even though the schemes have been revised from time to time, majority of the Schemes
continue to be applicable to the wage earning classes of people employed in
comparatively stable employments. Workers in the un-organized sector which constitute
over 90% of the work and whose incomes and employment are uncertain because of
uncertainty of markets, the recession or boom of economies, the whims and caprice of the
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employment, the political situation and rapidly changing policies of government,
continue to suffer from economic insecurity.
(v)
There are different organizations which are implementing various social security schemes
and in many cases there is duplication of effort.
Keeping in view the need for providing social security to workers both in the organized and unorganized sector, the need for simplification and cost effectiveness, the Working Group had
recommended the following initiatives in the field of social security during the 9th Five Year
Plan:
(i)
A National Policy on Social Security should be framed with a view to ensuring,
compulsion and direction. For this purpose the concept of social security should be
clearly defined.
(ii)
The ILO Convention on Social Security (Minimum) Standard, 1952 should be examined
and efforts be made to ratify’ the same.
(iii)
Social Security should, be firmly and comprehensively be integrated with, the economic
development and planning process and if necessary, the Union and State Governments
should provide extra budgetary support for social security.
(iv)
It should be the endeavour of the Government to evolve an Integrated Comprehensive
Scheme of Social Security by combining in a single legislation the provisions of all
existing social security schemes. This would definitely result in increased coverage,
reduced overhead costs and improvement in the content and quality of the program.
If necessary, a separate department of social security within the Ministry of Labour should be set
up with a strong Research and Development Wing to facilitate and accelerate the development
process and achieve extension of social protection to all sections of the working population. This
should also provide for introduction of contributory unemployment insurance scheme in the
organized sector as because of restructuring of economy in the wake of liberalization, it may be
necessary for many workers either to change jobs or to remain unemployed for some time.
The researcher strongly suggests and supports the above recommendations of the Working
Group on Social Security of the Ninth Five Year Plan.
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Later, the recommendations of the Working Group were considered by the Planning Commission
and the National Development Council, subsequently included in the Approach Paper to the
Ninth Five Year Plan. In pursuance of these recommendations the Government of India
constituted, in December 1997, a Task force on Social Security headed by Mr. S.K.Wadhawan.
The Task Force submitted its report in 1999 recommending inter alia administrative merger of
the ESIC 36 and the EPFO 37 as a first step towards introduction of a single comprehensive
legislation. The Task Force has also recommended integration of the Workmen’s Compensation
Act and the Maternity Benefit Act in the ESI component but till this time there is no action on
the above mentioned.
2.
Different Levels of Social Security System
In India there is already a three level Social Security system which is in existence and the same
can be extended and consolidated.
In the first level there is National Social Assistance Programme and other Social Assistance
Programmes.
At the Second level there are the social insurance schemes namely; the ESI Scheme, the Schemes
framed under the EPF Act, the employers’ liability schemes and such others.
At the third level are the numerous voluntary health insurance and old age pension schemes
which are being run by LIC,38 GIC,39 the UTI and other financial institutions.
Lately a new set of schemes have appeared on the scene and they are the welfare funds,
subsidised insurance schemes, self-help groups, micro credit, micro finance and micro insurance
schemes etc.
36
38
Life Insurance Corporation
39
Guaranteed Investment Certificate
37
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Each of these levels needs to be expanded to cover the whole population along with the
following envisaged four levels, namely:(i)
Social assistance programmes financed wholly tax based and financed form the
exchequer
(ii)
Schemes which are partly contributory and partly subsidized by the State
(iii)
Wholly contributory social insurance schemes
(iv)
Voluntary Schemes
On the basis of the above mentioned the researcher suggests the following:
Destitute and people below the poverty line who cannot make any contribution for their security
may be covered under the tax based schemes in the first level. Workers in the unorganized sector
who have some contributory power but cannot be self-sufficient may be covered under the
subsidized schemes in the second level. Those who either by themselves or jointly with their
employers can make adequate contribution to the schemes so as to be self-sufficient may be
covered under the social insurance schemes in the third level. Others who are comparatively
affluent and can make their own provision for meeting the contingencies or risks as they arise
may be covered under voluntary schemes which the new insurance companies can provide.
3.
Consultative Committee of Parliament
In July, 1993, the Government of India constituted a sub-committee of the Consultative
Committee of Parliament attached to the Ministry of Labour to study the evils of the arrears of
contributions and to suggest corrective measures. The committee headed by Shri Gurudas
Dasgupta, Member of Parliament (MP), has recommended that the ESI and EPF authorities
should be given the same powers for search, seizure and issue of warrants against delinquent
individuals and establishments as are available with the Customs and Excise authorities for
recovering statutory dues. The committee has also made the following recommendations.
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1. Non-payment of PF40 and ESI dues should be made a non-bailable offence
2. Employers should be made to pay the dues within 90 days of the company being declared as
sick unit by the BIFR41 as a precondition for considering its revival proposal;
3. The PF and ESI Acts should be amended to allow attachment and sale of personal property of
employers in case of default;
4. In case an employer does not agree with the recovery officers’ action and seeks judicial
intervention in a Court, he should be allowed to do so only after depositing 75 per cent of the
amount specified in the recovery order;
5. Special branches in High Courts and separate courts at district level should be created for
adjudication of PF and ESI cases; and
6. The defaulter should be banned from getting import licenses and government patronage till
such time as he remains a defaulter.
These recommendations are stated to be under consideration of the Government.
As a result of the various measures taken by the Corporation it could recover Rs.14.29 crores
only from the defaulting employers during the year 1993-94, while there was an increase in the
arrears to the extent of over Rs.37 crores during the same period.
The researcher completely agrees with the above mentioned suggestions and states that the
Parliament shall amend the concerned enactments in the interest of the employees and the
beneficiaries.
3.
Appropriate Government’s Power of Exemption
Section 87 of the ESI Act provides that the appropriate Government may by notification exempt
any factory or establishment or class of establishments from the operation of the Act for a period
of one year at a time subject to periodical review and such other conditions as may be specified.
The Act also provides for grant of exemption in favour of any person or persons employed in any
40
41
Provident Fund
Board for Industrial and Financial Reconstruction
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factory or other establishment to which the Act applies. There is also a further provision for grant
of exemption to any factory or establishment belonging to the Government or a local authority if
the employees of such factory or establishment are in receipt of benefits substantially similar or
superior to those provided under the Act. Several factories and establishments have been granted
exemption by virtue of these provisions. The main criterion for grant of exemption has been that
the employees of the establishments enjoy benefits substantially similar or superior to those
provided under the Act. For this purpose the standard of medical care and the scale of cash
benefits provided are taken into account. The wishes of the employees are also taken into
consideration before granting reviewing exemptions.
The ESI Corporation has been generally opposed to grant of exemption on the ground that it is
against the principle of solidarity. But the appropriate Government has been granting exemptions
liberally.
Neither the Government of India nor the Corporation has however published the number of
factories, establishments of persons who have gone out of coverage because of the exemptions. It
is also not clear whether the number of employees covered under the scheme as reported by the
Corporation is inclusive of the number of persons employed with exempted establishments or
exclusive of them.
Therefore, the researcher suggests that the Corporation shall publish every year a clear
depiction of the number of employees covered under the scheme as reported by the
Corporation is inclusive of the number of persons employed with exempted establishments or
exclusive of them, this is to know the exact number of employees covered under the ESI Act.
4.
Application of the Wage Ceiling for Cover
The power to fix the wage ceiling is vested with the Central Government. The Central
Government however acts on the recommendations of the Corporation.
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Since, the wage ceiling of those employees whose wages exceed the prescribed amount cannot
be covered under the Act and those who are covered, their wages being below the prescribed
amount also go out of coverage when their wages go above the ceiling. But they are again
brought under cover when the ceiling is raised. Such fluctuation between coverage and noncoverage has been causing much difficulty to many employees.
Therefore, the researcher suggests to remove the ceiling or to raise the ceiling more frequently
proportionate with the rise in the wage levels. Further suggestion is that a provision should be
made in the Act that an employee once covered remains covered even if his wages exceed the
ceiling or an amendment to be made to the Act deleting wage ceiling limit all together.
5.
Coverage of Seasonal Factories
Seasonal factories are excluded from coverage under the Act. A series of recommendations have
been made to amend the Act so as to cover seasonal factories, but the amendment has not been
carried out so far. Proposals have also been made for evolving appropriate schemes for the
seasonal factories. A modified scheme of contribution and benefits called ESI (Cashew Workers)
Scheme 1989 was introduced for cashew workers in 1989 under Section 1(5) of the Act on an
experimental basis. The working of the ESI (Cashew Workers) Scheme, 1989 was reviewed by a
Sub-Committee of the Corporation and based on recommendations of the Committee. The
Scheme was not extended beyond 30.09.1997. The Scheme ceased to exist since 30.03.1997.
Thus the question of extending the Act to seasonal factories is still pending consideration.
The researcher suggests that ESI Act should be amended to incorporate the seasonal factories
also.
The exclusion of seasonal factories from the purview of the Act has resulted in denial of the
various benefits under the Act to a number of employees in the country. The employees in
seasonal factories need as such care and protection against risk as those in factories now within
purview of the Act. It is high time to widen the scope of the act to extend its operation to
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seasonal factories also. In respect of seasonal factories the rate of contribution may be
proportionally fixed depending upon the duration for which they function in a year.42
7.
Rehabilitation of workers of incapacities due to Occupational Disability43
The rehabilitation of a worker disabled should be one of the most beneficial objectives of the
Workmen’s Compensation Act, 1923 or the Employees State Insurance Act, 1948. If the disabled
worker can be rehabilitated and returned to useful productive capacity, the cost saving in future
benefits can move. This is also desirable from social view point. However, this benefit has not so
far been provided under the labour legislation particularly in the Workmen’s Compensation Act,
1923 or the Employees State Insurance Act, 1948. In the absence of any legislative norm, the
Supreme Court played a creative role to protect the interest of workers for premature
incapacitation to do the required work due to occupational disability. Thus in Anand Bihari v
Rajasthan State Road Transport Corporation, Jaipur44 the Court, inter alia, was called upon to
decide whether the order of termination of service of drivers (over 40 years of age) for
developing weak or sub-normal eyesight or losing required vision on account of their occupation
as drivers of the corporation was proper, equitable and just? If not what should be done? Is it
desirable to evolve a compensatory or alternate scheme for employment to meet the hardship? If
so what should be the scheme in these cases? In the absence of any provision for compensation
in the Employees’ State Insurance Act or in the Workmen’s Compensation Act to provide social
security to workmen and for adequate safeguard to remedy the situation of the members of their
family and dependents who have been thrown out of their employment for the occupational
injury, the Supreme Court evolved the following scheme of relief:
(i)
The Corporation shall in addition to giving each of the retired workmen his retirement
benefits, offer him any other alternative job which may be available and which he is
eligible to perform.
42
43
44
ESI Corpn, Hyderabad v J.C.&Co.Products Ltd 1980 Lab IC 1078 at P. 1081 (Andhra Pradesh)
SC Srivastava, ‘Occupational Health of Workers in India Law and Practice’ (2002) 31 BLJ 11, 39-40
1991 Lab IC 494
269 | P a g e
(ii)
In case no such alternative job is available, each of the workmen shall be paid along
with his retirement benefits, an additional compensatory amount as follows:
(a) Where the employee has put in 5 years or less than 5 years, service, the amount of
compensation shall be equivalent to 7 days’ salary per year of the balance of his
service;
(b) Where the employee has put in more than 5 years but less than 10 years service,
the amount of compensation shall be equivalent to 15 days salary per year of the
balance of his service;
(c) Where the employee has put in more than 10 years, but less than 15 years service,
the amount of compensation shall be equivalent to 21 days salary per year of the
balance of his service.
(d) Where the employee has put in more than 15 years service but less than 20 years
service, the amount of compensation shall be equivalent to one month's salary per
year of the balance of his service;
(e) Where the employee has put in more than 20 years service, the amount of
compensation shall be equivalent to two months’ salary per year of the balance of
his service.
The salary will mean the total monthly emoluments that the workman was drawing on
the date of his retirement.
(iii)
If the alternative job is not available immediately but becomes available at a later
date, the Corporation may offer it to the workman provided he refunds the
proportionate compensatory amount.
(iv)
The option to accept either of the two reliefs, if an alternative job is offered by the
Corporation, shall be that of the workman.45
The aforesaid scheme is subject to three limitations, namely, (i) incapacitated workmen are not
rendered incapable of taking any other job either in the company/corporation or outside, (ii)
workmen must be at the advanced stage of their life and it would be difficult for them to get a
45
ibid 501-502
270 | P a g e
suitable alternative employment outside; and (iii) relief made available under the scheme should
not be such as would induce the workmen to feign disability which in the case of disability such
as the present one, viz., the development of a defective eyesight, it may be easy to do so.46
In Consumer Education and research Centre v Union of India47, the Supreme Court observed, be
it the State or its undertaking or private employer to make the Right to Life meaningful; to
prevent pollution of workplace; protection of the environment; protection of the health of the
workmen or to preserve free and unpolluted water for the safety and health of the people. The
authority or even private persons or industry are bound by the directions issued by this court
under Articles 3248 and 14249 of the Constitution.
The court accordingly issued the following direction to all the industries : (i) to maintain and
keep maintaining the health record of every worker up to minimum period of 40 years from the
beginning of the employment or 5 years after retirement or cessation of the employment
whichever is later; (ii) the Membrane Filter test, should be adopted by all the factories or
establishments at par with the Mines Regulations, 1961and Rules issued under the Vienna
Convention to detect asbestos and fiber; (iii) all the factories whether covered by the Employees’
State Insurance Act or Workmen’s Compensation Act or otherwise are directed to compulsorily
insure health coverage to every worker; (iv) the Union and the State Governments are directed to
review the standards of permissible exposure limit value of fiber/cc in tune with the international
standards reducing the permissible content. The review shall be continued after every 10 years
and also as and when the ILO gives directions in this behalf consistent with its recommendations
or any conventions; (v) the Union and the State Governments are directed to consider inclusion
of such of those small scale factory or factories or industries to protect health hazards of the
worker engaged in the manufacture of asbestos or its ancillary products; (vi) the appropriate
Inspector of Factories directed to send all the workers, examined by the concerned ESI hospital,
for re-examination by the National Institute of Occupational Health (NIOH) to detect whether
all or many of them are suffering from asbestos.
46
SC Srivastava, ‘Occupational Health of Workers in India Law and Practice’ (2002) 31 11, 40-41
1996 (72) FLR 481
48
Remedies for enforcement of rights conferred by the third part of the Indian Constitution
49
Enforcement of decrees and orders of Supreme Court and orders as to discovery, etc.
47
271 | P a g e
The Court directed all the industries large, medium, small, mines milling units etc. to cover their
workers by health insurance. The Court also directed the Government of India to evaluate TLV50
as and when necessary and to take it up to 1 or 4 ml by the methods recommended by ILO. The
Court instructed all the concerned authorities i.e. industries, State and Central Governments
research institutes. Bureau of Indian Mines and Bureau of Indian Standards to follow ILO
Convention accepted by Government of India.
Aforesaid decisions are a milestone in the progress of Social Security Law not for what the
Supreme Court decided in these cases but for the reason that in the first case it has formulated
a scheme for compensatory relief to safeguard the interest of such workmen who have to face
premature termination of service on account of disabilities contracted from their job and in
the second case protection of Health of workmen. Hence, it is suggested that the Governments
and Employees State Insurance Corporation shall implement strictly the above mentioned in
the interest of workmen.
8.
Coverage of Other Non-Factory Establishments
The coverage of the Employees’ State Insurance Act, 1948, is very limited. There is large body
of workers in the unorganized sectors of employments such as power looms, diamond cutting
workshops, quarries and tanneries and agricultural labour that are more prone to occupational
diseases are outside the scope of the ESI Act. This constitutes one of the most serious short
coming of the Scheme under the Act.
The researcher however feels that it can be done in phases and to begin with at least the
medical and disablement benefits are to be extended to such employees suffering from
occupational diseases.
Section 1(5) of the Act provides that the appropriate Government may in consultation with the
Corporation, after giving six months’ notice, extend the provisions of the Act to any other
establishment or class of establishments, industrial, commercial, agricultural or otherwise. By
50
Threshold Limit Value (in chemicals)
272 | P a g e
virtue of this provision the scheme has been extended to shops, hotels, restaurants, cinemas
including preview theatres, road motor transport and newspaper establishment’s employing 20 or
more persons.
The researcher suggests that in addition to above mentioned, all educational institutions should
also be brought within the purview of the ESI Act through an amendment.
9.
Regular examination of the sufficiency of existing facilities
One of the main reasons for dissatisfaction with services of ESI scheme is that improvement in
facilities has not been keeping pace with increase of number of workers covered in the covered
area. Hence, there is, a need to periodically review the growth of industries in the covered area
and the adequacy of existing facilities as suggested by the ESI Scheme Review Committee,
1982.51
10.
Training in Occupation Diseases
A scheme be framed and executed for systematic training in occupational diseases in
collaboration between the Employees’ State Insurance Corporation and the Director General,
Factories Advise Service and Labour Institute working in the area of occupational health for
systematic training in occupational diseases for a substantial proportion of insurance doctors.
The ESI corporation may collaborate with other agencies working in the field in surveying and
investigating the incidence of occupational diseases in different areas and industries and devising
means for medical checkup and treatment of the affected workers.
51
The ESI Scheme Review Committee (1982) had recommended that wherever Government or other dispensaries
are available and can be utilized local insurable population may be covered even if the concentration of such
population is below 500. But the Corporation did not accept this recommendation.
273 | P a g e
11.
Preventive Measure
There is a need to shift the emphasis to prevention of occupational diseases. The most
important and effective means of prevention of diseases is periodical medical checkup. All
the workers covered over the Employees’ State Insurance Act, on their entry into regular services
should be required to undergo a medical checkup and thereafter at least once in one year. This
should be done particularly in those cases where workers are liable to contract occupational
diseases and also there is a need to take more effective steps for proper identification of
occupational diseases in each industry.
12.
Revision of the List of Occupational Diseases
The current list of occupational diseases in the Third Schedule of the Employees State Insurance
Act, 1948 and the Factories Act, 1948 and the Workmen’s Compensation Act, 1923 should as far
as possible be uniform and the list of diseases should be reviewed and revised in the light of the
list of occupational diseases laid down in the ILO Convention 52 on the subject taking into
account the nature of industries and occupations prevalent in the country. The
government/corporation has power to add new diseases to the schedule.
13.
Strengthening of Inspection Machinery
The labour inspection machinery should be strengthened. Further, there should be frequent
inspection to detect occupational diseases.
52
See in the chapter 3 under the point 3.5.9
274 | P a g e
14.
Capacity building
Occupational health not only deals with work-related disorders/diseases but it also encompasses
all factors that affect workers’ health. With changing business scenario, the role of an
Occupational Health Physician has become more demanding and those unable to keep pace with
such developments may find themselves redundant. Hence, there is an urgent need for
strengthening skills, developing newer capacities and broadening knowledge in the area of
occupational health. If the efficiency of the currently existing training facilities in India is
increased, the prospect of occupational health will obviously improve a great deal.
The need for competent professionals is of critical importance in the management of
occupational health in the liberalized economy. The country needs close to 10,000 qualified
Occupational Health Professionals and there is a tremendous gap between the need and
availability of qualified personnel.
15.
Reporting system
Occupational accidents and diseases, in particular the ones which occur in small workplaces, are
often left unreported in the government reporting system. We need to increase our efforts to
develop well-functioning reporting systems and help occupational accident and disease victims
receive timely treatment and compensation. Accident and disease reporting can be strengthened
in many ways such as frequent campaigns, easy-to-use reporting systems. Several countries
have succeeded in increasing the number of accidents and diseases reported through linking
accident and disease reporting to the employment injury insurance scheme.
16.
Integration of Occupational Health with Primary Health Care
In India, occupational health is not integrated with primary health care. Occupational Safety and
Health till date remains under the mandate of the Ministry of Labour and not under the Ministry
275 | P a g e
of Health. The researcher suggests that for the smooth, efficient and effective conduction the
area of occupational health should be brought under the mandate of Ministry of Health.
17.
Non-contributory system
States must ensure, at the very least, minimum essential levels of non-contributory social
protection not as a policy option, but rather as a legal obligation under International Human
Rights Law.53
18.
Gender-sensitiveness
States should ensure that all social protection programmes are subject to gender-sensitive
eligibility criteria which take into account intra-household dynamics to ensure that women are
reached by and able to benefit from social protection.54
19.
Removing of obstacles to accessibility
A number of factors can prevent people living in poverty and illiteracy from accessing the social
protection benefits to which they are entitled. These include:
•
Administrative requirements, such as the production of identification documents or biometric
information;
•
Application processes that require literacy or involve complex or formalistic language;
•
Geographical remote nessnecessitating long-distance travel or high opportunity or transport
costs;
53
54
ILO, World Social Security Report (2010/2011): Providing coverage in time of crises and beyond, (2010), 13-15
ibid
276 | P a g e
•
Limited physical mobility, safety concerns and inadequate transport and infrastructure
facilities.
The above mentioned obstacles should be removed.
Path Ahead
Today, the need for a Human Rights-based approach to social security is greater than ever. Ever
since the global economic and financial crises in the financial markets arose in 2007, they have
had a devastating impact on the prevalence and severity of poverty and presented a serious threat
to the lives and livelihoods of hundreds of millions of people across the globe. Their disastrous
impact has been amplified by the fact that only 20 per cent of the world’s working-age
population and their families had effective access to social security at that time.55 The onset of
the crises therefore exacerbated deprivations and resulted in inequality and poverty becoming not
only more widespread, but more deeply entrenched.
According to World Bank estimates, as a result of the crises, an additional 50 million people
fell into income poverty (less than $1.25 a day) during 2009 and an estimated 64 million more
were living in income poverty by the end of 2010. Furthermore, around 71 million additional
people will remain in extreme poverty until 2020. 56 Because ingrained discrimination and
structural disadvantage restrict the access of vulnerable groups to services and social protection,
they have endured, and continue to endure, the gravest effects of the crises.
The critical role played by social security systems in helping States respond to the crises gives
further weight to the claim that social security could be a key strategy to reinvigorate efforts to
achieve the Millennium Development Goals (MDG) by 2015, and the ideal successor to the
MDG agenda. In the Outcome Document of the 2010 Millennium Summit, States first
55
56
World Social Security Report 2010–2011 (Geneva: international Labour Organisation), 33.
The World Bank Group’s Response to the Global Economic Crisis (Washington, D.C: The World Bank, 2010), 11
277 | P a g e
acknowledged that social security was one of the more successful approaches which could
contribute to consolidating and achieving further gains towards the MDGs, and then
strengthening their political commitment to replicate and scale up social security initiatives. It is
hoped that, as 2015 approaches, social security will continue to gain prominence and political
support, enough that it can provide the framework for the post-2015 development agenda.
As we navigate these uncertain times, with inequality steadily rising and official development
assistance budgets shrinking, the imperative to adopt social security is increasingly clear.
However, unless a Human Rights framework is applied to the design, implementation,
monitoring and evaluation of social security programmes, the impact and outcomes of social
security will not be equitable or sustainable, and the poorest and most vulnerable will be left
behind.
The world has made remarkable progress in reducing extreme poverty. In 1990, close to half of
the people in developing regions lived on less than $1.25 a day. This rate dropped to 22 per cent
by 2010. This means that the world reached the MDG57 target—of halving the proportion of
people living in extreme poverty—five years ahead of the 2015 deadline. Meantime, the absolute
number of people living in extreme poverty fell from 1.9 billion in 1990 to 1.2 billion in 2010.
Despite this overall achievement, progress on poverty reduction has been uneven. Some regions,
such as Eastern Asia and South-Eastern Asia, have met the target of halving the extreme poverty
rate, whereas other regions, such as sub-Saharan Africa and Southern Asia, still lag behind.
According to World Bank projections, sub-Saharan Africa will be unlikely to meet the target by
2015.58
The overwhelming majority of people living on less than $1.25 a day belong to two regions:
Southern Asia and sub-Saharan Africa. In 2010, one third of the world’s 1.2 billion extreme
poor lived in India alone. China, despite much progress in poverty reduction, ranked second,
and was home to about 13 per cent of the global extreme poor. Nigeria (9 per cent), Bangladesh
57
Millennium Development Goal
Millennium Development Goal Report (2014) p 9 Available at <www.un.org/millenniumgoals> accessed on 1
August 2014
58
278 | P a g e
(5 per cent) and the Democratic Republic of the Congo (5 per cent) followed. Nearly two thirds
of the extreme poor lived in those five countries in 2010.59
Further, there are many factors, which are changing the industrial environment, such as
globalization, outsourcing, transfer of technologies, newer type of jobs (IT, Call Centre), change
in employment patterns, etc. Additionally, factors like increasing literacy / education are also
ensuring worker awareness and more and more “Right to Know” demands from workers.
Nongovernmental organizations (NGO), media and employee pressure groups are also playing a
positive role in this matter.
The above mentioned necessitates having international collaboration in the following key areas:
Creating awareness / felt need for occupational health
Research in occupational health
Generation of data in priority areas through research studies
Capacity building and competence building
Technical exchange of experts / fellowships
Quality assurance, accreditation
Model programmes/pilot projects may be undertaken with the support from ILO / WHO along
with NGOs.
The researcher would like to conclude with the following paragraphs:
Can we realize that “what does a common man expects in a living environment?” We may
not find that a common man needs more than the basic life security, family security, health care,
education, employment, housing, water, electricity, roads, corruption free administration. It
59
ibid
279 | P a g e
seems amazing that after 67 years of independence, none of the basic measure or accountability
of the livelihood for millions of Indians has been secured by any administration. More amazingly
this serious matter of urgency is not the agenda of any people group or political group!
The existing System of Administration in India has been unable to deliver the prosperity to most
of the Indian People due to small number of vested interest Political Ideologies that have
segregated the society in different wings. Most importantly - None of these ideologies work for
the benefit of Common People of India or the universe. The ideologies such as “Independence
Movements” “GaribiHatao”, “Ram Mandir”, “North East Movements”, “Violent Movements”,
“Samajwadi Movements”, “Separatist Movements”, “Communism Movements”, “Religious
Movements,” “Dalit movements” and numerous others have not been able achieve prosperity
and justice to the common man of India. Though, with the help of these popular ideologies, their
leaders are successful to achieve desired political platforms of vested interests.
Hence, unless a Human Rights framework is applied to the design, implementation, monitoring
and evaluation of social security programmes, the impact and outcomes of social security will
not be equitable or sustainable, and the poorest and most vulnerable will be left behind.
280 | P a g e
THE EMPLOYEES' STATE INSURANCE (AMENDMENT)
ACT, 2010
(NO. 18 OF 2010)
[24th May, 2010.]
An Act further to amend the Employees’ State Insurance Act, 1948.
BE it enacted by Parliament in the Sixty-first
follows:—
Year of the Republic of India as
1. Short title and commencement. - (1) This Act may be called the Employees’ State
Insurance (Amendment) Act, 2010.
(2) Section 18 shall be deemed to have come into force on the 3rd day of July, 2008 and
the remaining provisions of this Act shall come into force on such date as the Central
Government may, by notification in the Official Gazette, appoint.
2. Amendment of section 1.B - In the Employees' State Insurance Act, 1948 (hereinafter
referred to as the principal Act), in section 1, in sub-section (5), for the words "six
months'", the words "one month's" shall be substituted.
3. Amendment of section 2. - In section 2 of the principal Act, —
(A) in clause (6A),—
(a) for sub-clause (i), the following sub-clause shall be substituted,
namely:—
"(i) a widow, a legitimate or adopted son who has not attained the age
of twenty-five years, an unmarried legitimate or adopted daughter,";
(b) in sub-clause (ii), for the words "eighteen years", the words "twentyfive years" shall be substituted;
(B) in clause (9), for the words "or under the standing orders of the
establishment;", the words "and includes such person engaged as apprentice whose
training period is extended to any length of time" shall be substituted;
(C) in clause (11), for sub-clause (v), the following sub-clauses shall be
substituted, namely:—
"(v) dependant parents, whose income from all sources does not exceed
such income as may be prescribed by the Central Government;
(vi) in case the insured person is unmarried and his or her parents are not
alive, a minor brother or sister wholly dependant upon the earnings of the
insured person;";
(D) for clause (12), the following clause shall be substituted, namely:—
‘(12) "factory" means any premises including the precincts thereof
whereon ten or more persons are employed or were employed on any day of the
preceding twelve months, and in any part of which a manufacturing process is
being carried on or is ordinarily so carried on, but does not include a mine
subject to the operation of the Mines Act, 1952 or a railway running shed;’.
4. Amendment of section 10. - In section 10 of the principal Act, in sub-section (1),
for clauses (a) and (b), the following clauses shall be substituted, namely:—
"(a) the Director General,
ex officio as Chairman;
the Employees'
State Insurance Corporation,
(b) the Director General, Health Services, ex officio as Co-chairman;".
5. Amendment of section 12. - In section 12 of the principal Act, for sub-section
(3), the following sub-section shall be substituted, namely:—
"(3) A person referred to in clause (i) of section 4 shall cease to be a member
on becoming a Minister or Speaker or Deputy Speaker of the House of the People
or Deputy Chairman of the Council of States or when he ceases to be a member of
Parliament.".
6. Amendment of section 17. - In section 17 of the principal Act, in sub-section (2),
in clause (a), after the proviso, the following proviso shall be inserted, namely:—
"Provided further that this sub-section shall not apply to appointment of
consultants and specialists in various fields appointed on contract basis,".
7. Amendment of section 37. - In section 37 of the principal Act, for the words "five
years", the words "three years" shall be substituted.
8. Amendment of section 45. - In section 45 of the principal Act,—
(a) for the words "Inspectors" and “Inspector”, wherever they occur, the words
"Social Security Officers" and "Social Security Officer" shall respectively be
substituted;
(b) after sub-section (3), the following sub-section shall be inserted, namely:—
"(4) Any officer of the Corporation authorised in this behalf by it may,
carry out re-inspection or test inspection of the records and returns submitted
under section 44 for the purpose of verifying the correctness and quality of the
inspection carried out by a Social Security Officer.".
9. Amendment of section 45A. - In section 45A of the principal Act, in sub-section
(1),—
(i) for the word "Inspector", the words "Social Security Officer" shall be
substituted;
(ii) after the proviso, the following proviso shall be inserted, namely:—
"Provided further that no such order shall be passed by the Corporation in
respect of the period beyond five years from the date on which the contribution
shall become payable.".
10. Insertion of new section 45AA. -After section 45A of the principal Act, the
following section shall be inserted, namely:—
"45AA. Appellate authority. - If an employer is not satisfied with the order
referred to in section 45A, he may prefer an appeal to an appellate authority as may
be provided by regulation, within sixty days of the date of such order after
depositing twenty-five per cent. of the contribution so ordered or the contribution as
per his own calculation, whichever is higher, with the Corporation:
Provided that if the employer finally succeeds in the appeal, the Corporation
shall refund such deposit to the employer together with such interest as may be
specified in the regulation.".
11. Amendment of sections 51A and 51B. - In the principal Act, in sections 51A and
51B, for the words "an insured person's", the words "an employee's" shall be substituted.
12. Amendment of sections 51C and 51D.In the principal Act, in sections 51C and
51D, for the words "insured person", the word "employee" shall be substituted.
13. Insertion of new section 51E. - After section 51D of the principal Act, the
"51 E. Accidents happening while commuting to the place of work and vice
versa. - An accident occurring to an employee while commuting from his residence
to the place of employment for duty or from the place of employment to his
residence after performing duty, shall be deemed to have arisen out of and in the
course of employment if nexus between the circumstances, time and place in which
the accident occurred and the employment is established.".
14. Amendment of section 56. - In section 56 of the principal Act, in sub-section
(3), for the third proviso, the following proviso shall be substituted, namely:—
"Provided also that an insured person who has attained the age of
superannuation, a person who retires under a Voluntary Retirement Scheme or takes
premature retirement, and his spouse shall be eligible to receive medical benefits
subject to payment of contribution and such other conditions as may be prescribed
by the Central Government.".
15. Amendment of section 58. - In section 58 of the principal Act, after sub-section
(4),
the
following
sub-sections shall be inserted, namely:—
“(5) The State Government may, in addition to the Corporation under this Act,
with the previous approval of the Central Government, establish such organisation
(by whatever name called) to provide for certain benefits to employees in case of
sickness, maternity and employment injury:
Provided that any reference to the State Government in the Act shall also
include reference to the organisation as and when such organisation is established by
the State Government.
(6) The organisation referred to in sub-section (5) shall have such structure and
discharge functions, exercise powers and undertake such activities as may be
prescribed.”.
16. Amendment of section 59. - In section 59 of the principal Act, after sub-section
(2), the following sub-section shall be inserted, namely:—
"(3) The Corporation may also enter into agreement with any local authority,
local body or private body for commissioning and running Employees' State
Insurance hospitals through third party participation for providing medical treatment
and attendance to insured persons and where such medical benefit has been extended
to their families, to their families.".
17. Insertion of new section 59B. - After section 59A of the principal Act, the following
section shall be inserted, namely:—
"59B. Medical and para-medical education. - The Corporation may establish
medical colleges, nursing colleges and training institutes for its para-medical staff
and other employees with a view to improve the quality of services provided under
the Employees' State Insurance Scheme.".
18. Substitution of new Chapter for Chapter VA. - For Chapter VA of the principal Act,
the following Chapter shall be substituted, namely:—
CHAPTER VA
SCHEME FOR OTHER BENEFICIARIES
73A. Definitions. - In this Chapter,—
(a) "other beneficiaries" means persons other than the person insured under this
Act;
(b) "Scheme" means any Scheme framed by the Central Government from time
to time under section 73B for the medical facility for other beneficiaries;
(c) "underutilised hospital" means any hospital not fully utilised by the persons
insured under this Act;
(d) "user charges" means the amount which is to be charged from the other
beneficiaries for medical facilities as may be notified by the Corporation in
consultation with the Central Government from time to time.
73B. Power to frame Schemes. - Notwithstanding anything contained in this Act,
the Central Government may, by notification in the Official Gazette, frame Scheme for
other beneficiaries and the members of their families for providing medical facility in any
hospital established by the Corporation in any area which is underutilised on payment of
user charges.
73C. Collection of user charges. - The user charges collected from the other
beneficiaries shall be deemed to be the contribution and shall form part of the
Employees' State Insurance Fund.
73D. Scheme for other beneficiaries. - The Scheme may provide for all or any of
the following matters, namely:—
(i) the other beneficiaries who may be covered under this Scheme;
(ii) the time and manner in which the medical facilities may be availed by the
other beneficiaries;
(iii) the form in which the other beneficiary shall furnish particulars about
himself and his family whenever required as may be specified by the Corporation;
(iv) any other matter which is to be provided for in the Scheme or which may
be necessary or proper for the purpose of implementing the Scheme.
73E. Power to amend Scheme. - The Central Government may, by notification in the
Official Gazette, add to, amend, vary or rescind the Scheme.
73F. Laying of Scheme framed under this Chapter. - Every Scheme framed under
this Chapter shall be laid, as soon as may be after it is made, before each House of
Parliament while it is in session, for a total period of thirty days which may be comprised
in one session or in two or more successive sessions, and if, before the expiry of the
session immediately following the session or the successive sessions aforesaid, both
Houses agree in making any modification in the Scheme or both Houses agree that the
Scheme should not be made, the Scheme shall thereafter have effect only in such
modified form or to be of no effect, as the case may be; so, however, that any such
modification or annulment shall be without prejudice to the validity of anything
previously done under that Scheme.’.
19. Validation. -All things done, or, omitted to be done, and all actions or measures
taken or not taken during the period beginning on or after the 3rd day of July, 2008 and
ending immediately before the date of commencement of the Employees' State Insurance
(Amendment) Act, 2010, shall in so far as they are in conformity with the provisions of
this Act, as amended by the Employees' State Insurance (Amendment) Act, 2010, be
deemed to have been done, or taken, or not taken, under the provisions of this Act, as
amended by the Employees' State Insurance (Amendment) Act, 2010, as if such
provisions were in force at the time such things were done or omitted to be done and
actions or measures taken or not taken during the said period.
20. Amendment of section 87. - In section 87 of the principal Act, the following
provisos shall be inserted at the end, namely:—
"Provided that such exemptions may be granted only if the employees in such
factories or establishments are otherwise in receipt of benefits substantially similar
or superior to the benefits provided under this Act:
Provided further that an application for renewal shall be made three months
before the date of expiry of the exemption period and a decision on the same shall be
taken by the appropriate Government within two months of receipt of such
application.".
21. Amendment of section 91A. - In section 91A of the principal Act, for the words
"either prospectively or retrospectively", the word "prospectively" shall be substituted.
22. Insertion of new section 91AA. - After section 91A of the principal Act, the
"91AA. Central Government to be appropriate Government. - Notwithstanding
anything contained in this Act, in respect of establishments located in the States
where medical benefit is provided by the Corporation, the Central Government shall
be the appropriate Government.".
23. Amendment of section 95.- In section 95 of the principal Act, in sub-section
(2),—
(i) after clause (ef), the following clause shall be inserted, namely:—
"(eff) the income of dependant parents from all sources;";
(ii) after clause (eh), the following clause shall be inserted, namely:—
"(ehh) the conditions under which the medical benefits shall be payable to
the insured person and spouse of an insured person who has attained the age
ofsuperannuation, the person who retires under Voluntary Retirement Scheme
and the person who takes pre-mature retirement;".
(1), after clause (e), the following clause shall be inserted, namely: —
‘‘(ee) the organisational structure, functions, powers, activities and other matters for
the establishment of the organisation;’’.
(2), —
(i) in clause (xx), for the word "Inspectors",
Officers" shall be substituted;
the words "Social Security
(ii) after clause (xx), the following clause shall be inserted, namely:—
"(xxa) the constitution of the appellate authority and the interest on
amount deposited by the employer with the Corporation.".
V. K. BHASIN,
Secy. to the Govt. of India.
List of International Labour Organization Conventions Ratified by India
Sl.
No.
1.
No. and Title of Convention
No.1 Hours of Work (Industry) Convention, 1919
Date of
Ratification
14.07.1921
2
No.2 Unemployment Convention, 1919
14.07.1921
3.
No.4 Night Work (Women) Convention, 1919
14.07.1921
4.
No.5 Minimum Age (Industry) Convention, 1919
09.09.1955
5.
No.6 Night Work of Young Persons (Industry) Convention, 1919
14.07.1921
6.
No.11 Right of Association (Agriculture) Convention, 1921
11.05.1923
7.
No.14 Weekly Rest (Industry) Convention, 1921
11.05.1923
8.
No.15 Minimum Age (Trimmers and Stokers) Convention, 1921
20.11.1922
9.
No.16 Medical Examination of Young Persons (Sea) Convention,
20.11.1922
1921
10.
No.18 Workmen’s Compensation (Occupational Diseases)
30.09.1927
Convention, 1925
11.
No.19 Equality of Treatment (Accident Compensation) Convention,
30.09.1927
1925
12.
No.21 Inspection of Emigrants Convention, 1926
14.01.1928
13.
No.22 Seamen’s Articles of Agreement Convention, 1926
31.10.1932
14.
No.26 Minimum Wage-Fixing Machinery, Convention, 1928
10.01.1955
15.
No.27 Marking of Weight (Packages Transported by Vessels)
07.09.1931
Convention, 1929
16.
No.29 Forced Labour Convention, 1930
30.11.1954
17.
No.32 Protection Against Accidents (Dockers) Convention (Revised),
10.02.1947
1932
18.
No.41 Night Work (Women) Convention (Revised), 1934
22.11.1935
19.
No.42 Workmen’s Compensation (Occupational Diseases)
13.01.1964
Convention (Revised), 1934
20
No.45 Underground Work (Women) Convention, 1935
25.03.1938
21.
No.80 Final Articles Revision Convention, 1946
17.11.1947
22.
No.81 Labour Inspection Convention, 1947
07.04.1949
23.
No.88 Employment Services Convention, 1948
24.06.1959
24.
No.89 Night Work (Women) Convention (Revised), 1948
27.02.1950
25.
No.90 Night Work of Young Persons (Industry) (Revised), 1948
27.02.1950
26.
No.100 Equal Remuneration Convention, 1951
25.09.1958
27.
No.107 Indigenous and Tribal Population Convention, 1957
29.09.1958
28.
No.111 Discrimination (Employment & Occupation) Convention,
03.06.1960
1958
29.
No.116 Final Articles Revision Convention, 1961
21.06.1962
30.
No.118 Equality of Treatment (Social Security) Convention, 1962
19.08.1964
31.
No.123 Minimum Age (Underground Work) Convention, 1965
20.03.1975
32.
No.115 Radiation Protection Convention, 1960
17.11.1975
33.
No.141 Rural Workers’ Organisation Convention, 1975
18.08.1977
34.
No.144 Tripartite Consultation (International Labour Standards)
27.02.1978
Convention, 1976
35.
No.136 Benzene Convention, 1971
11.06.1991
36.
No.160 Labour Statistics Convention, 1985
01.04.1992
37.
No.147 Merchant Shipping (Minimum Standards), 1976
26.09.1996
38.
No.122 Employment Policy Convention 1964
17.11.1998
39.
No.105 Abolition of Forced Labour, 1957
18.05.2000
40.
No.108 Seafarers' Identity Documents Convention, 1958
07.01.2005
41.
No.174 Prevention of Major Industrial Accidents
06.06.2008
42.
No. 142 Human Resources Development
25.3.2009
43
No. 127 Maximum Weight
26.3.2010
BOOKS & ARTICLES
1.
Jain P.C.,Labour in Ancient India (UK publications, 1971)
2.
Alan and Trombley, the Norton Dictionary of Modern Thought, (W. W. Norton &
Company 1999)
3.
Austin G.,The Indian Constitution- Cornerstone of a nation (Oxford University Press,
New Delhi, 2000)
4.
Prof.CalvertH.,Social Security Law, (Sweet & Maxwell, London 1978)
5.
Mamuria
and
Doshi,
Labour
Problems
and
Social
Welfare
in
India,
(KitabMahalPvt.Ltd., Allahabad 1966)
6.
Rao P.M.,Social Security Administration in India: A Study of Provident Funds and
Pension Scheme, (The Icfai University Press, 2007)
7.
SharmaJ. P.,Nehru & the People’s Movement (Manak Publications, New Delhi,
1997)
8.
C Revri, The lndian Trade Union Movement, (Orient Publications pvt ltd New Delhi,
1972) 21 -23.
9.
Newman R,Workers and Unions in Bombay 1918-1929. Canberra, 1981
10.
Fulbrook J, Law at Work; Social Security, (Sweet and Maxwell, London 1980)
11.
Singh B, Labour Policy and Administration, (MD Publications Pvt Ltd, New Delhi
1996)
12.
Shukla V. N., Constitution of India : (Eastern Book Company Lucknow 10th Edition
2003)
13.
Bhatia S. K., Constructive Industrial Relations and Labour Laws(Deep and Deep
Publications pvt. Ltd, 2007)
14.
Padhi P.K.,Labour and Industrial Laws (PHI Learning Private Ltd New Delhi 2007)
15.
The Indian Law Institute, Labour Law and Labour Relations Cases and
Materials(Indian Law Institute, New Delhi, 2007)
16.
Pillai K.M., Labour and Industrial Law (Allahabad Law Agency 10th edition 2005)
17.
Barrie P., Compensation for Personal Injuries(Oxford University Press 1st edition,
2002)
18.
Misra S.N., Labour and Industrial Law(Central Law Publications 25th edition, 2010)
19.
Blanpain R., (ed.) Collective Bargaining, Discrimination, Social Security and
European Integration(Kluwer Law International Hague, 2003)
20.
Blanpain
R.,
Jean
ClacudeJavillier
and
Jean
Michel
Servais
(eds.)
InternationalLabour and Social Security Law(Kluwer Law International Hague,
2002)
21.
Malik P.L., Handbook of Labour and Industrial Law(Eastern Book Company 10th
edition, 2006)
22.
Ranajit Das Gupta, A Labour History of Social Security and Mutual Assistance in
India, Economic and Political Weekly vol. XXIX No.11 March 12, 1994, 612 cited in
J Krishnamurty, “The Occupational Structure” in Dharma Kumar (ed), The
Cambridge Economic History of India. Vol 2, Cambridge, 1982, Indian reprint, 1984
23.
Srawooth P., Shigeyuki A., Nipon P., ‘The Meaning of Social Security Nets’ Journal
of Asian Economicsvol.19, Issues 5-6 Nov-Dec 2007
24.
SC Srivastava, ‘Occupational Health of Workers in India Law and Practice’ (2002)
31 Banaras Law Journal11
25.
P. SwapnaET. al / VSRD Social Security Regarding Employee or Labour
Welfare,International Journal of Business & Management Research Vol. 1 (7), 2011
26.
Social Security Bulletin Vol. 55, No. 1 spring 1992
27.
Chakrabarty, SasipadaBanerjei; ‘a Study in the Nature of the First Contact of the
Bengali Bhadralok, with the Working Classes of Bengal’, Indian Historical Review,
January 1976).
28.
S. Deakin, P. Lele and M. Siems, ‘The Evolution of Labour Law: Calibrating and
Comparing RegulatoryRegimes’ (2007) 146 InternatioanalLabour Review 133; R.
Mitchell, P. Gahan, A. Stewart, S. Cooney and S.
29.
Marshall, ‘The Evolution of Labour Law in Australia: Measuring the Change’ (2010)
23 Australian Journal of
30.
Labour Law 61; G. Anderson, P. Gahan, R. Mitchell and A. Stewart, ‘The Evolution
of Labor Law in NewZealand: A Comparative Study of New Zealand, Australia and
Five Other Countries’ (2011) 33 ComparativeLabor Law and Policy Journal 137.
31.
Ahlering, B. (2007) ‘Labour regulation, corporate governance and legal origin: a case
of institutional complementarity?’Law and Society Review, 41: 865-908.
32.
Lele, P., Siems, M. (2007), ‘The evolution of labour law: calibrating and comparing
regulatory regimes’International Labour Review, 146: 133-162.
33.
Sarkar, P. (2008) ‘Assessing the long-run economic impact of labour law systems: a
theoretical reappraisal and analysis of new time series data’, Industrial Relations
Journal, 39: 453-487.
34.
Reberioux, A. (2009) ‘Corporate governance, labour relations and human resource
management in Britain and France: convergence or divergence’, in J.-P. Touffut (ed.)
Does Corporate Ownership Matter? (Cheltenham: Edward Elgar).
35.
Singh, A. (2009) ‘the past, present and future of industrial policy in India: adapting to
the changing domestic and international environment’, in M. Cimoli, G. Dosi and J.
Stiglitz (eds) Industrial Policy and Development. The Political Economy of
Capabilities and Accumulation (Oxford: Oxford University Press)
36.
Armour, J. and Lele, P. (2008) ‘Law, finance and development: the case of India’,
CBR Working Paper No. 361.
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ID:3065524>
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•
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ANG,P55_DOCUMENT,P55_NODE:CON,en,C102,/Document#A32>
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AN ANALYTICAL STUDY OF THE JURISPRUDENTIAL

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