CLAT PG Exam > CLAT PG Notes > Labour and Industrial Law > Cheat Sheet: Social Security and Labour Welfare
Cheat Sheet: Social Security and Labour Welfare
1. Constitutional Framework
1.1 Constitutional Provisions
| Provision | Content |
|---|---|
| Article 38 | State to secure social order for promotion of welfare; minimize inequalities |
| Article 39 | Adequate means of livelihood; equal pay for equal work; protection of workers' health |
| Article 41 | Right to work, education, and public assistance in cases of unemployment, old age, sickness, disablement |
| Article 42 | Just and humane conditions of work and maternity relief |
| Article 43 | Living wage, decent standard of life, leisure and social/cultural opportunities for workers |
| Article 43A | Participation of workers in management of undertakings (42nd Amendment, 1976) |
2. Employees' State Insurance Act, 1948
2.1 Basic Framework
| Aspect | Details |
|---|---|
| Applicability | Factories with 10+ employees; wage ceiling ₹21,000 per month (as amended) |
| Administration | Employees' State Insurance Corporation (ESIC); autonomous body under Ministry of Labour |
| Contribution Rate | Employer: 3.25%; Employee: 0.75% of wages |
| Objective | Provide medical, cash, maternity, and disability benefits to insured employees and dependents |
2.2 Benefits Under ESI Act
| Benefit Type | Details |
|---|---|
| Sickness Benefit | 70% of wages for maximum 91 days in a year; requires 78 days contribution in preceding 6 months |
| Maternity Benefit | Full wages for 26 weeks (extended pregnancy period); requires 70 days contribution in preceding 2 years |
| Disablement Benefit | Temporary: 90% of wages during disability period; Permanent: monthly payment based on loss of earning capacity |
| Dependents' Benefit | 90% of wages as monthly payment to dependents in case of death due to employment injury |
| Medical Benefit | Full medical care for insured person and family; no contribution period required |
| Funeral Expenses | ₹15,000 to eldest surviving family member |
2.3 ESI Corporation Structure
- Standing Committee: Executive body for ESI Corporation
- Medical Benefit Council: Advises on medical benefit matters
- Regional and Local Committees: Implementation at regional/local levels
- Director General: Chief executive officer of ESIC
3. Employees' Provident Funds and Miscellaneous Provisions Act, 1952
3.1 Basic Framework
| Aspect | Details |
|---|---|
| Applicability | Establishments with 20+ employees in notified industries/classes |
| Wage Ceiling | ₹15,000 per month for coverage (as amended) |
| Administration | Central Board of Trustees (CBT) under Employees' Provident Fund Organisation (EPFO) |
| Three Schemes | Employees' Provident Fund (EPF), Employees' Pension Scheme (EPS), Employees' Deposit Linked Insurance (EDLI) |
3.2 Employees' Provident Fund Scheme, 1952
| Aspect | Details |
|---|---|
| Contribution | Employee: 12% of basic wages + DA; Employer: 12% of basic wages + DA |
| Account Credit | Employee's 12% + Employer's 3.67% goes to PF Account |
| Withdrawal | Full withdrawal on retirement, death, or 2 months unemployment; partial withdrawal for specific purposes |
| Interest Rate | Fixed annually by Central Government (8.1% for 2021-22) |
3.3 Employees' Pension Scheme, 1995
| Aspect | Details |
|---|---|
| Contribution | Employer's 8.33% of basic wages + DA (maximum pensionable salary ₹15,000) |
| Superannuation Pension | On attaining 58 years with 10 years service; reduced pension from 50 years |
| Widow/Widower Pension | On death of member; commutation of pension allowed |
| Children Pension | Two children eligible up to 25 years age |
| Orphan Pension | For children if both parents deceased |
| Nominee Pension | If no family, nominee receives pension |
3.4 Employees' Deposit Linked Insurance Scheme, 1976
| Aspect | Details |
|---|---|
| Contribution | Employer's 0.5% of basic wages + DA; no employee contribution |
| Benefit Amount | Average balance in PF account for preceding 12 months or ₹7,00,000 (whichever is less) |
| Payment | To nominee/legal heir on death of member during service |
| Bonus | Additional 25% bonus on insurance amount subject to limits |
3.5 Administration and Authorities
- Central Provident Fund Commissioner: Chief executive authority under Central Government
- Central Board of Trustees: Policy-making body; tripartite composition (government, employers, employees)
- Regional PF Commissioners: Administer Act in respective regions
- Appellate Tribunal: Hears appeals against orders of authorities
4. Payment of Gratuity Act, 1972
4.1 Basic Provisions
| Aspect | Details |
|---|---|
| Applicability | Factories, mines, oilfields, plantations, ports, railways, shops/establishments with 10+ employees |
| Eligibility | Completion of 5 years continuous service (waived in case of death/disablement) |
| Maximum Amount | ₹20,00,000 (as amended in 2018) |
| Payment Time | Within 30 days from date it becomes payable |
4.2 Calculation of Gratuity
| Category | Formula |
|---|---|
| Covered by Wages Act | (Last drawn wages × 15 days × completed years of service) ÷ 26 |
| Not Covered by Wages Act | (Last drawn wages × 15 days × completed years of service) ÷ 30 |
| Piece-rated Employee | Based on average wages of 3 months preceding termination |
4.3 Forfeiture of Gratuity
- Termination for riotous/disorderly conduct or violence: gratuity may be wholly/partially forfeited
- Termination for moral turpitude act causing loss to employer: gratuity forfeited to extent of damage/loss
- No forfeiture for simple misconduct; requires specific circumstances
4.4 Nomination and Payment
- Employee may nominate person(s) to receive gratuity in case of death
- If no nomination, payment to legal heirs in order: spouse, children, parents, other heirs
- Gratuity exempt from attachment in execution of decree/order of court
- Controlling authority may direct payment if employer fails to pay within 30 days
5. Workmen's Compensation Act, 1923
5.1 Basic Framework
| Aspect | Details |
|---|---|
| Objective | Provide compensation to workmen for injury by accident arising out of and in course of employment |
| Applicability | All employees earning up to ₹15,000 per month in specified industries |
| Employer's Liability | No-fault liability; employer liable regardless of negligence |
| Exclusions | Injury not disabling for 3+ days; self-inflicted injury; intoxication; willful disobedience |
5.2 Types of Compensation
| Injury Type | Compensation Amount |
|---|---|
| Death | 50% of monthly wages × relevant factor OR ₹1,20,000 (whichever is higher) |
| Permanent Total Disablement | 60% of monthly wages × relevant factor OR ₹1,40,000 (whichever is higher) |
| Permanent Partial Disablement | Proportionate to loss of earning capacity as per Schedule |
| Temporary Disablement | 25% of monthly wages during disablement period |
5.3 Relevant Factor Calculation
- Based on age of workman at time of injury/death
- Below 16 years: Factor 228.54
- 16-20 years: Factor 226.13 to 221.86
- 21-40 years: Factor 217.48 to 179.71
- 41-60 years: Factor 173.49 to 110.22
- Above 60 years: Factor 106.04 to 90.91
5.4 Procedure and Authorities
| Aspect | Details |
|---|---|
| Commissioner | State Government appoints Commissioner for settlement of disputes and registration of agreements |
| Notice of Accident | Employer must send notice to Commissioner if injury results in disablement for 3+ days |
| Claim Period | Within 2 years from occurrence of accident or death |
| Medical Examination | Commissioner may require injured workman to undergo medical examination |
| Review/Appeal | Review by Commissioner on new evidence; appeal to High Court on substantial question of law |
5.5 Contracting Out and Distribution
- No contracting out: any agreement to waive rights under Act is void
- Distribution of compensation: Commissioner determines distribution among dependents in case of death
- Deposit with Commissioner: employer may deposit compensation amount with Commissioner for distribution
- Compensation not assignable or liable to attachment
6. Maternity Benefit Act, 1961
6.1 Basic Provisions
| Aspect | Details |
|---|---|
| Applicability | Establishments with 10+ employees; all factories, mines, plantations, shops, establishments |
| Eligibility | Woman employed for 80+ days in 12 months immediately preceding expected delivery date |
| Benefit Period | 26 weeks (8 weeks before + 18 weeks after delivery); 12 weeks for adoption/commissioning mother |
| Rate of Payment | Average daily wage for period of actual absence |
6.2 Maternity Benefit Provisions (2017 Amendment)
| Provision | Details |
|---|---|
| Extended Leave | 26 weeks for first 2 children; 12 weeks for 3rd child onwards |
| Adoption Leave | 12 weeks from date of adoption for child below 3 months |
| Commissioning Mother | 12 weeks from date child is handed over in surrogacy arrangement |
| Work From Home | Employer may allow after exhausting leave period, subject to nature of work |
| Crèche Facility | Mandatory in establishments with 50+ employees; 4 visits per day allowed including rest interval |
| Awareness | Employer to inform woman employee about maternity benefits at time of appointment |
6.3 Other Benefits
- Medical Bonus: ₹3,500 if no pre-natal/post-natal care provided by employer
- Nursing Breaks: Two breaks of prescribed duration until child attains 15 months
- No discharge during pregnancy or maternity leave period
- No adverse changes in service conditions during absence
- Leave for miscarriage: 6 weeks paid leave
- Leave for tubectomy: 2 weeks paid leave
- Leave for illness arising from pregnancy: 1 month maximum in addition to maternity benefit
7. Other Social Security Legislations
7.1 Building and Other Construction Workers Acts
| Act | Key Provisions |
|---|---|
| Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 | Regulates employment and service conditions; establishments with 10+ workers in preceding 12 months |
| Building and Other Construction Workers Welfare Cess Act, 1996 | Levies cess up to 2% of construction cost; collected by State Welfare Boards |
| Welfare Board Functions | Provide medical, housing, education, pension, insurance benefits to registered construction workers |
| Registration | Worker must register with Welfare Board; engaged 90+ days in preceding 12 months |
7.2 Unorganised Workers' Social Security Act, 2008
| Aspect | Details |
|---|---|
| Definition | Unorganised worker: home-based, self-employed, or wage worker in unorganised sector |
| Unorganised Sector | Enterprises owned by individuals/self-employed; employs less than 10 workers |
| Schemes | Life and disability cover, health and maternity benefits, old age protection, other welfare schemes |
| National Social Security Board | Recommends schemes for different sections of unorganised workers |
7.3 Payment of Bonus Act, 1965
| Aspect | Details |
|---|---|
| Applicability | Establishments with 20+ employees; employees drawing up to ₹21,000 per month |
| Minimum Bonus | 8.33% of salary/wage OR ₹100 (whichever is higher) |
| Maximum Bonus | 20% of salary/wage |
| Calculation Ceiling | Salary/wage up to ₹7,000 per month OR minimum wage (whichever is higher) |
| Eligibility | Worked 30+ days in accounting year |
| Payment Time | Within 8 months from close of accounting year |
7.4 Employees' Compensation (Amendment) Act, 2009
- Renamed Workmen's Compensation Act to Employees' Compensation Act
- Enhanced compensation amounts for death and disablement
- Updated wage ceiling from ₹8,000 to ₹15,000 per month
- Simplified procedures for claim settlement
8. Labour Welfare Measures
8.1 Statutory Welfare Provisions
| Measure | Details |
|---|---|
| Drinking Water | Wholesome drinking water at convenient points; cooling arrangements in hot weather |
| Washing Facilities | Adequate washing facilities separately for male and female workers |
| Latrines and Urinals | Sufficient number with separate accommodation for males and females |
| Canteen | Mandatory in establishments with 250+ workers; subsidized food |
| Rest Rooms | Adequate seating arrangements; separate for male and female workers |
| Crèches | For establishments with 50+ female workers; facilities for children below 6 years |
8.2 Non-Statutory Welfare Measures
- Housing facilities: subsidized housing, house rent allowance
- Educational facilities: schools for workers' children, scholarships, adult education
- Recreation facilities: sports, cultural activities, libraries, reading rooms
- Medical facilities: hospitals, dispensaries, health insurance schemes
- Consumer cooperative societies: fair price shops, credit facilities
- Transportation facilities: bus services, transport allowance
- Provident fund beyond statutory requirements
- Pension schemes, group insurance schemes
8.3 Labour Welfare Funds
| Aspect | Details |
|---|---|
| State Legislation | Labour Welfare Fund Acts enacted by various states (not uniform Central law) |
| Contribution | Employer and employee contributions; rates vary by state (e.g., ₹20-100 per year) |
| Utilization | Medical aid, education, recreation, housing, financial assistance in distress |
| Administration | State Labour Welfare Boards; tripartite bodies |
8.4 Welfare Officers
- Mandatory appointment in establishments with 500+ workers
- Qualifications prescribed by State Government
- Functions: advise on welfare measures, assist in administration of welfare activities, maintain grievance redressal
- Report to management on welfare matters
9. Recent Developments and Schemes
9.1 Code on Social Security, 2020
| Aspect | Details |
|---|---|
| Consolidation | Amalgamates 9 Central labour laws including ESI, EPF, Gratuity, Maternity Benefit Acts |
| Universal Social Security | Extends social security to unorganised workers, gig workers, platform workers |
| Aggregator Coverage | Aggregators to contribute 1-2% of annual turnover for gig and platform workers |
| Fixed Term Employment | Gratuity eligibility after 1 year for fixed-term employees |
| Women Workers | 26 weeks maternity benefit applicable to all establishments |
| Aadhaar Integration | Aadhaar-based registration for workers and beneficiaries |
9.2 Government Welfare Schemes
| Scheme | Details |
|---|---|
| Pradhan Mantri Shram Yogi Maandhan (PM-SYM) | Pension scheme for unorganised workers; ₹3,000 monthly pension after 60 years; age 18-40 entry |
| Atal Pension Yojana | Pension scheme for unorganised sector; ₹1,000-5,000 monthly pension based on contribution |
| Pradhan Mantri Suraksha Bima Yojana | Accidental insurance: ₹2 lakh for death/total disability; annual premium ₹12 |
| Pradhan Mantri Jeevan Jyoti Bima Yojana | Life insurance: ₹2 lakh on death; annual premium ₹330 |
| Ayushman Bharat (PM-JAY) | Health insurance: ₹5 lakh per family per year for secondary/tertiary hospitalization |
| e-Shram Portal | National database of unorganised workers; registration for social security benefits |
9.3 COVID-19 Welfare Measures
- Pradhan Mantri Garib Kalyan Yojana: financial assistance to EPF subscribers
- Government contributed 24% EPF (employer + employee share) for eligible establishments for 3 months
- EPF advance withdrawal facility: non-refundable advance up to 3 months wage or 75% of PF balance
- Extended insurance coverage under ESIC for COVID-19 treatment
- Free vaccination for workers through government programs
10. International Labour Standards
10.1 ILO Conventions on Social Security
| Convention | Subject |
|---|---|
| Convention 102 (1952) | Social Security (Minimum Standards); 9 branches of social security |
| Convention 121 (1964) | Employment Injury Benefits; work-related accidents and diseases |
| Convention 128 (1967) | Invalidity, Old-Age and Survivors' Benefits |
| Convention 130 (1969) | Medical Care and Sickness Benefits |
| Convention 183 (2000) | Maternity Protection; 14 weeks minimum leave |
10.2 Nine Branches of Social Security (ILO Convention 102)
- Medical care
- Sickness benefit
- Unemployment benefit
- Old-age benefit
- Employment injury benefit
- Family benefit
- Maternity benefit
- Invalidity benefit
- Survivors' benefit
10.3 India's Ratification Status
- India has not ratified Convention 102 (Social Security Minimum Standards)
- Ratified Convention 19 (Equality of Treatment - Accident Compensation)
- Ratified Convention 81 (Labour Inspection)
- Domestic laws incorporate many ILO principles despite non-ratification
- Progressive alignment with international standards through legislative reforms
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