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COMPARISION OF AUTHORITIES UNDER SOCIAL SECURITY

LEGISLATION IN INDIA

A PROJECT REPORT

ON

COMPARISION OF AUTHORITIES UNDER SOCIAL


SECURITY LEGISLATIONS IN INDIA

PROJECT SUBMITTED TO: PROJECT SUBMITTED BY

Padma Aparajita Parija Akhil Gangesh


Assistant Professor Roll No. 14,Sec-C
Labour Law Semester 5 th Batch 2013

(2015-2016)

(DATE OF SUBMISSION- 24/08/2015)

HIDAYATULLAH NATIONAL LAW UNIVERSITY


UPARWARA, NEW RAIPUR (C.G.)
CERTIFICATE OF DECLARATION

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The researcher hereby declares that the project work entitled “Comparision of
authorities under social security legislations in India” submitted to Hidayatullah National
Law University, Raipur, is a record of an original work done by the researcher under the
guidance of Mrs. Padma Aparajita Parija, Assistant professor of Labour Law at
Hidayatullah National Law University Raipur.
The research done by the researcher is his own original work and wherever excerpts
from the works of different authors have been taken, they have been duly acknowledged.

Declared By:

Akhil Gangesh
Roll No. 14
Section-C
Semester- IV(Batch-13)
B.A., L.L.B (Hons.)

ACKNOWLEDGEMENTS

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I would like to take this opportunity to express my deep sense of gratitude towards my course
teacher, Mrs. Padma Aparajita Parija for her kind gesture in allotting me such a wonderful
and elucidating research topic and for giving me constant guidance and encouragement
throughout the course of the project.

I would also like to thank the University for providing me the internet and library facilities
which were indispensable for getting relevant content on the subject and were instrumental in
writing pertinent text.

Special thanks goes out to my seniors who have been relentless in their help and supporting
providing any material whenever required and my colleagues, who always stood by me,
irrespective of the decisions taken by me. Without their support this project would not have
seen the light of the day.

_____________________________________________________________

Akhil Gangesh

Fifth Semester

B.A. L.L.B (Hons.)

Hidayatullah National Law University

Raipur, Chhattisgarh

TABLE OF CONTENTS

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Certificate of Declaration………………………………......................................……………2
Acknowledgment ................................................................................................................3
List of Abbreviations…………………………….………….........................................…….4
Research Methodology………….........................................................................................5
Objectives of the study………..……..................................................................................6
Introduction……………………………………...….................................................………7
Workmen’s Compensation Act,1923…………………………………………..……………9

Employees’ State Insurance Act, 1948 …………………………………………..……......11


Employees’ Provident Fund 1952 ………………………………………………………….14
The Maternity Benefit Act 1961 ......................................................................................16
The Payment Of Gratuity Act 1972..................................................................................19
Conclusion.......................................................................................................................20

Bibliography…………...…………………………………………………………….………21

RESEARCH METHODOLOGY

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This research is descriptive and analytical in nature. Secondary and electronic resources have
been largely used to gather information and data about the topic.

Books and other reference as guided by the faculty have been primarily helpful in
giving this project a firm structure. Websites, dictionaries, articles and cases have also been
referred.

OBJECTIVES OF THE STUDY

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This project report seeks to give a brief idea about social security legislations in India.
Following are the objectives of the given project report:

 To study the objectives & scope of social security legislations in India

 To study the authorities under those acts.

Introduction

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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.
Labour protection for the working people in India is available under various laws enacted by
the Parliament as well as the State Legislatures. The Preamble of the Constitution of India
guarantees its citizens justice- social, economic and political; liberty of thought, expression,
belief, faith and worship; equality of status and opportunities and fraternity, dignity of
individual and dignity of nation. Part IV of the Constitution of India relating to Directive
Principles of State Policy, inter alia, call for provisions for right to work and education;
public assistance in cases of unemployment and of social security; just and humane
conditions of work; maternity relief; living wage and working conditions capable of ensuring
decent standard of life1 workers participation and management. Part III of the Constitution of
India “prohibits the forced labour and employment of children in factories or mines or in
hazardous occupations”2 Fundamental right to freedom of association and formation of
unions is also guaranteed under Article 19.
Before independence there was only one legislation which can be said that it provide social
security to the labours and that were Workmen’s Compensation Act,1923 and Fatal Accident
Act,1885. But after independence government of India took keen interest to provide social
security to the workers. The legislations enacted were:-

 Employees’ State Insurance Act, 1948;


 Employees’ Provident Fund Act, 1952;
 Maternity Benefit Act, 1961;
 Payment of Gratuity Act, 1972.

Along with employees compensation act 1923 above four legislations constitute to form
social security legislations in India.

1
Articles 41 and 43 Constitution of India

2
Articles 23 and 24 Constitution of India
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Workmen’s Compensation Act,1923

Objectives

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The main objective of the Act is to make provision for the payment of compensation in case
of injury caused by accident arising out and in course of employment. It provides a kind of
guarantee against the various hazards of employment.3
Second objective of the Act is to impose an obligation upon employers to pay compensation
to workers and make them satisfied that they will get necessary help at the time of problem.
The Act also ensures the dependents of the workers that financial help will be provided to
them as compensation after the death of bread winner.
So compensation is not the only benefit given through this Act but it also provides a greater
freedom to a workman from anxiety arise out of accidents which makes the industries more
attractive place to work.

Scope

The Act extends to whole of India except the state of Jammu and Kashmir. According to this
Act it is not necessary that accident should have been caused by some wrongful act of
employee but it is given to every employee who received any mishappaning. It applies to all
persons covered under the definition of the workmen given in section 2(1) of the Act.
It includes all persons employed in factories, railway, mines, plantation, mechanically
propelled vehicles, construction works and certain other hazardous occupations.

Authorities

Employee’s Compensation Act, 1923 is a central legislation but its administration and
implementation is the responsibility of State Government. State Government has full
authority to appoint Compensation Commissioner. One or more Compensation Commissioner
can be appointed as per the burden of work. To discharge the functions successfully
Compensation Commissioner has authorised to appoint one or more assistant. The
Compensation Commissioner has a wide range of powers. No Civil Court shall have
jurisdiction to deal with any question which is required to be settled by a Commissioner
according to this Act. Presently, Labour Court Presiding Officer is a Compensation
Commissioner as per the Act. At district level labour Officer acts as Compensation
Commissioner. In 2010, a new section 25A has been introduced in the Act, according to

3
Mishra, S.N., An Introduction to Labour & Industrial Laws, Allahabad Law Agency, Allahabad, 1979, p. 14.
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which the Commissioner has to dispose the case within the period of three months from the
date of reference.
Powers of Commissioner
(1) Compensation accruing in respect of workman whose injury has resulted into death shall
be deposited with the Commissioner by the employer. The Commissioner then disburses the
amount to the bonafide dependent after necessary deduction.4So there is no provision in the
Act to pay the compensation directly to employee.

(2) If the Compensation Commissioner find that compensation payable to a worker is not
sufficient or not even deposited at time then he can call employer to show causes.

(3) Compensation Commissioner is empowered to short out the question arisen between the
parties about the compensation and about the other matters related to this Act.

(4) If the compensation is not paid till the due date Commissioner can charge simple interest
at the rate of six per cent per annum on the amount and if he feels that delay is not justified,
further sum not exceeding fifty per cent of amount can be recovered from the employer by
way of penalty
(5) High Court of the State is the superior court for this Act and the Commissioner may refer
any question to the High Court for decision or he can seek guidance form it.

Employees’ State Insurance Act, 1948

Objective

4
Based on Section 8 of Employee’s Compensation Act, 1923.
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The main objective of the Act is to provide a feeling of security to industrial workers at the
time contingencies come. This Act is a major step in the direction of social insurance. In the
context of India where a vast segment of labour working in industrial establishments is still
unorganized resulting in neglected a lot subjected to exploitation due to poor bargaining
power, the Act has gone a long way to ameliorate the working conditions of labourers by
imposing a duty upon the employers and the government to provide medical aid and
assistance to the workers.

Scope

This Act covers whole of the India except Nagaland, Manipur, Tripura, Sikkim, Arunachal
Pardesh, Mizoram and J & K. It applies to perennial factories using power and employing ten
or more persons and non-power using factories providing job to twenty or more workers.
Every employee including casual and temporary, whether employed directly or through any
contractor, who is receipt of wages upto 15000 per month is entitled to be insured under the
ESI.

Authorities

The Employees’ State Insurance Act is administered by the Employees’ State Insurance
Corporation which was first organization in whole South-East Asia like itself. It is an
autonomous body. It bears necessary state intervention and avoids bureaucratic methods and
unnecessary delaying of work. For the proper implementation of the ESI Act the Corporation
makes policy and constitutes a Standing Committee among its members. A Medical Benefit
Council is also working which is constituted by Central Government.

The Corporation consists of:


 One Chairman

 One Vice-Chairman

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 One person each representing the each state in which it is in force

 Ten persons representing employers

 Ten persons representing employees

 Two persons from medical profession

 Three members of parliament two from Lok Sabha and one from Rajya Sabha

 Director General of the Corporation.5


All these members are appointed by Central Government. Except all the above members
Financial Commissioners are also appointed by the government. Director General and
Financial Commissioners are appointed for five years. Director General works as a chief
executive of the Corporation.

Functions of the Corporation, Standing Committee and Medical Benefit Council

The Corporation mainly look after the proper implementation of the provisions of the ESI Act
but in addition to it the Corporation promotes measures for the improvement of the health and
welfare of insured persons and also works for the re-habilitation and re-employment of the
insured persons who have become disabled or injured during the job. The Corporation did all
the work from the Employees’ State Insurance Fund at the prescribed rate of the Central
Government. This body also prepares the annual budget and reports and sends them to the
Central Government.

Standing Committee is chief executive of the Corporation and bears the responsibility of
actual administration of the scheme. Medical Benefit Council advises the Corporation about
the proper administration of medical benefits and also do the certification for the purpose of
grant the benefits. The Council also investigates the complaints make about medical
treatment and approves attendance with wages regard the sickness period. The Corporation

5
Section 4 of ESI Act 1948
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can also establish Regional Boards, Local Committees, and Regional and Local Medical
Benefit Councils to provide and assess the benefits at local level.

Except all the above bodies, the Employees’ Insurance Courts are also established under the
ESI Act to settle the disputes of compensation and other matters regarding the Act’s
provisions. Any state according to its geographical conditions or workload, one or more court
can establish. Its Judge should be from legal profession with five years experience. These
Courts have all authorities like Civil Courts.

Presently, the Corporation is running 677 implementation centers that covers 2.38 lack
employers, 1.43 crore employees and total 5.55 crore beneficiaries and 183 hospitals and
1453 dispensaries are working under the Act.

Employees Provident Fund Act,1952

Objective of the Act

The chief objective of the Act is to provide an employee financial security after retirement or
during his old age. Not only after retirement but this Act also gives monetary assistance before
the retirement for specific work. Prior, Family Pension Scheme but now Employees’ Pension
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Scheme is constituted to provide financial security as pension to the family of worker after his
death.
Scope
The Act extended to whole of the India except the state of Jammu & Kashmir. It applies to every
establishment specified in schedule I in which twenty or more persons are employed. But the
cinema and theaters employing 5 or more persons can be covered under the Act.

Authorities
The administration of Provident Fund Act is handled by the Employees’ Provident Fund
Organization (EPFO) or Central Board of Trustees which is a tripartite organization having
the representative of Central and State Governments, employees and employers. Central
Board of trustees consists of –
a) A Chairman

b) A Vice-Chairman

c) Five Central Government Representatives

d) Fifteen State Government Representatives

e) Ten from Each Employers and Employees

Hon’ble Union Labour Minister is the chairman and Minister of State for Labour is the Vice-
Chairman of the Board. Central Provident Fund Commissioner is a chief executive of the
Board and works as a whole time member.6 A Executive Committee is also constituted to
dispose day to day work. Central Government is authorized to constituted the State Board
with consultation of state government and exercise such powers and duties as the Central
Government may assign to it.
As a measure of decentralization so that the service can provide nearer to doors of the
members regional, sub-regional and sub accounts offices are opened by the EPFO. There are
32 Regional, 75 Sub Regional Offices. Besides these offices 12 service centers are
functioning in all over the country to provide education and guidance to members.

6
India, 2009, Ministry of Broadcasting, Government of India, p. 623.
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Apart from all these officers Central Government may appoints Financial Advisers and Chief
Accounts Officers to assist Central Provident Fund Commissioner. Appellate Tribunals can be
established to hear the complaints. This administrative staff works hard to implement the Act
properly.

Maternity Benifit Act , 1961

Nature has made woman to bear child in order to keep the generations going on. Bearing of a
child is also a family as well as social obligation of married woman and an employed married
woman cannot be an exception, or immuned from this obligation. Thus maternity is
unavoidable.

Objective of the Act

The objective of the Maternity Benefit Act is to protect the dignity of motherhood by
providing for the full and healthy maintenance of women and her child. It regulates
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employment of women in certain establishments for a certain period before and after child
birth and provide for maternity and other benefits7 If the Act will not in force it become
difficult for poor woman workers to survive during pregnancy period and they can also be
discharged from job being absent for delivery. So it also provides a feeling of security to
female workers. The Act is also enacted to fulfil the social obligation towards women
workers during the period of reproduction.

Scope

The Act is extended to whole of the India and applies to every factory, mine, plantation,
establishment, for the exhibition of equestrian, acrobatic and other performance employing
ten and more persons, except employees covered under the Employees' State Insurance Act,
1948. The state government can extend it to any other establishment or class of
establishments which are not covered yet. There is no wage limit for the coverage under Act
however, a woman shall be entitled to maternity benefit only when she has actually worked
for a period not less than eighty days in twelve months immediately proceeding the day of her
expected delivery.8

Authorities

The administration of Maternity Benefit Act is not handled by any specialized agency or
autonomous body like other social security enactments rather it is handled departmentally.
The administration of this Act in various states is a responsibility of Factory Inspectors. In
connection of coal mines the administration of it, is total responsibility of coal mines Welfare
Commissioners. The Director General of Mines Safety administers the Act in mines and other
than coal mines.
Any claim due under this Act may file to the inspector. If any woman want to appeal against
the decision of Inspector it can be preferred to Deputy Labour Commissioner,who works as
prescribed Appellate Authority under Maternity Act.
7
India, 2009, Ministry of Broadcasting, Government of India, p. 623.

8
Sharma, A.M., Aspects of Labour Welfare and Social Security, Himalaya Publishing House, New Delhi, 1988, p.
219.
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Appointment of Inspector

Section 14 talks about the appointment of inspector. The appropriate government may by
notification in the Official Gazzate appoint such officer as it thinks fit as inspector for the
purpose of this act and may define the local limits of the jurisdiction within which they shall
exercise their function under this act.
Powers of the inspector
Section 15 confers the following powers upon an inspector. The exercise of any such power
by the inspector is subject to the prescribed restrictions or conditions:
1. An inspector may enter at all reasonable time with such assistants if any, being
persons in the Government of any local other public authority; as he thinks fit,any
premises or place where women are employed or work is given to them in an
establishment for the purpose of examining any registers,records and notices required
to kept or exhibited by or under this act and require production for inspection.
2. He may examine any person whom he finds in any premises or place and who, has
reason to believe, and is employed in the establishment. But he cannot compel any
person to answer any question or give any evidence tending to incriminate himself.
3. He may require the employer to give information regarding the names and address of
women employed or notices received from them under this act.
4. He may take copies of any registers and records or any portion thereof.

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Payment of Gratuity Act, 1972

The payment of gratuity is a type of retirement benefit which provides financial assistance to
an employee to secure his old age. It is an additional benefit order than provident fund and
pension.
Objective
The aim of the Act is to provide benefit to those workers who rendered long but now they are
retired or unable to work however, financial necessity is still before them. At that time
economic assistance is given through this Act so that aged workers can survive in a better
manner in the society and be self-dependent.
Scope and Coverage
The Act is applicable to whole of India but so far as it relates to plantation or ports, it shall
not extended to the State of Jammu & Kashmir. It shall applicable to every shop, plantation,
port, and oilfield, Railway Company, motor transport undertakings or other establishment
employing ten or more persons but in the amendment in 2010, it can also cover the
educational institution.
Authorities

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The Payment of Gratuity Act is not administered by any autonomous and independent body
like ESI, EPF but any appropriate government can appoint Controlling Authority9 to
administer the Act. Different controlling authorities can also be appointed for different areas.
Appropriate government can appoint inspectors for the proper implementation of Gratuity
Act. If more than one inspector has been appointed for any area then appropriate government
can distribute areas and allocate work to them. Every inspector is considered as a public
servant under Indian Penal Code, 1860 (45 of 1860).
An inspector can ask for proper information to employer. He can inspect any establishment
with any public authority or assistant to check the necessary registers and records which is
required to maintain for the Gratuity Act. An inspector is powered to examine any matter took
in his notice by employee or employer of any factory. Controlling Authority also handles all
the disputes raised in the matter of gratuity payment.
Conclusion

Social security is as old as man itself but in India it started very late. It can be said that non
institutional measures of social security were working since time immemorial. They are in
fact the backbone of present social security programmes and schemes. Such measures had
been provided by joint families, community, creed, caste panchayats, orphan ages, widow
homes and religious institutions. Then in 19th century industrialization started in India and
this modern industrialization developed a new class of industrial proletariat. Due to the start
of industries, new problems arose and with the growth of modern factory system, various
safety and health problems raised a demand for institutionalization of protection measures.
Union activities increased to pressurized government to enact some social security
legislations.
The authorities under social security legislations are appointed by the central government and
they have certain powers from which they can put regular check and balance to the
implementation of statutory laws. There are various procedure for the appointment of
commissioners, inspectors etc. which are different for different legislations.

9
Section 3, The Payment of Gratuity Act,
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Bibliography
Books
 Labour and Industrial Laws, S.L Mishra, 27th Edition.
 India, 2009, Ministry of Broadcasting, Government of India.
 Sharma, A.M., Aspects of Labour Welfare and Social Security, Himalaya
Publishing House, New Delhi, 1988.

Websites
 http://shodhganga.inflibnet.ac.in/bitstream/10603/8792/10/11_chapter
%203.pdf
 http://www.vakilno1.com/bareacts/wrkmnscompensation/workmenscompensat
ionact.html#19_Reference_to_Commissioners

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