According to ILO “SOCIAL SECURITY is the security that society furnishes, through appropriate organization, against certain risk to which its members are exposed. The risks are essentially contingencies against which the individual of small means cannot effectively provide by his own ability or foresight alone or even in private combination with his fellows”
The various risks are:
- Employment injury
- Old age
- Emergency expenses
OBJECTIVES OF SOCIAL SECURITY-
The purpose of all social security measures in three fold:
- Compensation: provides for income security and is based upon the idea that during spells of risks, the individual and his family should not be subjected to a double calamity involving both destitution and loss of health, limb, life or work.
- Restoration: implies cure of the sick and the invalid, re-employment and in habilitation .
- Prevention: designed to avoid the loss of productive capacity due to sickness, unemployment or invalidity and to render the available resources which are used up by avoidable disease and idleness and thus increase the material, intellectual and moral well being of the community.
THE MAIN OBJECTIVES-
- To increase the productivity of industrial workers
- To improve health and control sickness of industrial workers
- To prevent occupational diseases and take the remedial measures
- To remove mental and physical hazards to prevent industrial accidents
- To take care of old age and the other consequences resulting there from
- To ensure that various legislations are implemented properly to achieve the above objectives
THE PILLARS OF SOCIAL SECURITY-
- SOCIAL INSURANCE
These schemes are financed mainly through contributions of employers, workers and other beneficiaries Most are compulsorily established by the law. Benefits are linked to contributions of insured persons.
- SOCIAL ASSISTANCE
Provides benefits for meeting the minimum needs of the persons of small means.
Financed by state funds.
Benefits are changeable according to income and means of beneficiaries.
EVOLUTION AND GROWTH OF SOCIAL SECURITY IN INDIA-
Evolution has been slow, sporadic and on a more or less selective basis. Only in case of fatal injuries was some relief provided under the Fatal Accidents Act, 1855. With coming up of ILO in 1919 emphasis was on protecting workers against hazards of industrial lives.
A beginning was made ultimately in 1923 by passing of Workmen’s Compensation Act. The next contingency engaging the attention of the state was maternity leading to Maternity Benefit Act 1929.
ARTICLE 41 OF THE CONSTITUTION-
“ The state shall, within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and the public assistance in cases of unemployment, old age, sickness and disablement and in other cases of undeserved want.”
SOCIAL SECURITY LEGISLATIONS-
- Workmen’s Compensation Act, 1923
- Employee’s State insurance Act, 1948
- Employee’s Provident Fund and Miscellaneous Provisions Act, 1952
- Maternity Benefit Act, 1961
- Payment of Gratuity Act, 1972
- WORKEMEN’S COMPENSATION ACT, 1923
To impose an obligation upon the employers to pay compensation to workers for accidents arising out of and in course of employment. Under Section 2(3) of the Act, the state govt. are empowered to extend the scope of act to any class of persons whose occupations are considered hazardous. Does not apply to armed forces of Indian Union.
- A Person should be employed
- He should be employed for the purposes of the employer’s trade or business
- The capacity in which he works should be one set out in the list in Scheduled II of the Act
To be paid by the employer to a workman for any personal injury cost in course of his employment (Section 3). Employer will not be liable to pay compensation for any kind of disablement, (except death) which does not continue for more than 3 days.
The rate of compensation incase of death is an amount equal to 50 % of the monthly wages multiplied by the relevant factor or an amount of Rs. 80,000 which ever is more. In permanent total disablement the compensation will be amount equal to 60 % of the monthly wages multiplied by relevant factor or an amount of Rs. 90,000 which ever is more.
THE MATERNITY BENEFIT ACT, 1961-
Enacted to promote the welfare of working women. The Act prohibits the working of pregnant women for a specified period. Applies to every establishment being a factory mine or plantation and every shop or establishment in which 10 or more persons are employed.
Female workers are entitled for paid holidays not exceeding 12 weeks in a 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.
Incase of miscarriage , leave is available for a period not exceeding 6 weeks . Implementation of the Act depends upon the goodwill of the employer. A woman is entitled to maternity benefit if she has actually worked In an establishment for not less than 70 days in 12 months.
THE EMPLOYEES STATE INSURANCE SCHEME, 1948-
Provides For health care and cash benefit payments incase of sickness , maternity and employment injury. Applicable to non-seasonal factories using power and employing 10 or more employees. The Act is being implemented area-wise, in a phase manner. The ESI scheme is operated in 728 centers
FUNDING AND OPERATION OF THE SCHEME-
Financed by contributions from employers and employees. Employers contribution is 4.75 % and employees contribution is 1.75 % State govt. share the expenditure on the provision of medical care up to an extent of 12.5 % The ceiling on expenditure per insured person ,family unit has been raised to Rs. 900 per annum.
Scheme provides full medical facilities , from primary health care to super specialty treatment. Medical care scheme is administered by the state govt.
The wage sealing for coverage of employees under the ESI Act, 1948 was enhanced from Rs. 7500 to Rs.10,000 per month. The daily rate of allowance under vocational rehabilitation scheme is enhanced from Rs. 45 to Rs. 123 per day.
THE PAYMENT OF GRATUITY ACT, 1972-
Provides for a scheme of compulsory payment of gratuity to employees engaged in factories, mines oil fields, plantations ,ports, railway companies, shops or other establishments.
- Every employee , other than apprentice irrespective of his wages is entitled to receive gratuity after he has rendered continuous service for 5 years or more. Payable at the time of termination of his services eitherOn superannuation
- Retirement or resignation
- On death or disablement due to accident or disease
- Termination of services includes retrenchment
- In case of death of the employee, gratuity is payable to nominee, and if no nomination has been made then to his heirs
CALCULATION OF BENEFITS-
For every completed year of service or part thereof in excess of 6 months, the employer pays gratuity to an employee at the rate of 15 days wages based on the rate of wages last drawn
The amount of the gratuity payable to an employee not to exceed (3,50,000)
EMPLOYEES PROVIDENT FUND AND MISCELLANOUS PROVISION ACT, 1952-
It is a Legislation enacted for purpose of instituting a provident fund for employees working in factories and establishments. The act aims at providing timely monetary assistance to industrial employees and their families.
SCHEMES UNDER THE ACT THROUGH THE EPFO-
Employee’s Provident Fund Scheme, 1952
Employee’s Deposit Linked Insurance Scheme, 1976
Employee’s Pension Scheme, 1995
Extends to the whole of India , excluding the state of J&K
Act is applicable to factories and other classes of establishments engaged in specific industries, classes of establishments employing 20 or more persons.
does not apply to employees of state and central govt. or local authority
The membership of the fund is compulsory for employees drawing a pay not exceeding Rs. 6500 per month. The employees drawing more than 6500 per month may become member on a joint option of employer and employee
EMPLOYEE’S DEPOSIT LINKED INSURANCE SCHEME-
Applicable to all factories/ establishments with effect from August 01, 1976.Employers are required to pay contributions to the insurance fund at the rate of 0.5 % of pay i.e. basic wages, DA including cash value of food concession and retaining allowance, if any.
EMPLOYEES PENSION SCHEME-
Was amended and a separate pension scheme was launched in 1995 replacing the then Employees Family Pension Scheme, 1971. Superannuation pension will be payable on attaining the age of 58 years and completion of 20 years of service or more Early pension can be taken at a reduced rate between 50 -58 years of age , on completion of 10 years pensionable service
Permanent total disablement
Widow or widower’s pension
Children pension or orphan pension
Nominee pension/dependant parents pension
From and out of the contributions payable by the employer in each month to the PF , apart of contribution representing 8.33 percent of the employees pay is remitted to the employee’s pension fund
Employer to pay for cost of remittance
Central govt. contributes 1.16% of the pay
Social Security has been universally accepted as the responsibility of the state to protect employee and his dependents against certain hazardswhen they are unable to earn and restore themselves. However, the application of social security to the developing countries in South Asiais a challenging task due to the existence of large informal sectors, incomplete structural transformation and high level of poverty. According to Dreze and Sen (1989) Social security in developing countries needed to be viewed from a broader perspective as an objective to be pursued through public means rather than depending upon a definite set of strategies as it is influenced by external factors like changing economic and political pressure, rapid inflation, high unemployment, changing employment patterns and budgetary pressure etc. Joseph Bonder (1983) examined the Direct Deposit Programme through the electronic fund transfer system to state that since 1975 monthly benefit is paid directly to the bank account of the beneficiaries. The Statutory Schemes in India has limited coverage by keeping away the small industrial workers, unorganized and agricultural labors from the modern forms of social protection which is undesirable. Modern Social Security Programmes may be regarded as the device to distribute incomeas per the need to divert part of the fruits of current production for the benefit of injured workers, secure minimum pensions for lowly paid employees, partly at the expense of their better paid colleagues, spread the social cost of widowhood by appropriate tax measures and the industrial sector to directly assist the development of basic health services for the people at large. The efficiency of the state in providing the benefits as per the expectations of the beneficiaries by extending the coverage need to be focused.The coverage of Employees State Insurance Scheme should be extended to agricultural workers and self-employment. The corporation should focus to establish more dispensaries and hospitalswith improved medical facilities. Steps should be taken to include Old age benefits. According to William Ambaka (2011) financial viability for sustained generation of sufficient funds to provide pension benefits and other social security to the retirees is the principal challenge in most countries which created severe pressure and uncertainty for future. Comprehensive social security policy should link and co-ordinate different schemes to achieve inter complementary goals of different schemes. Social security schemes will contribute towards social protection if carefully designed to meet the local needs, adequately supported with resources, and integrating with the National Policy which is committed to providing social protection to the excluded majority.