Labour Welfare Schemes

Arun Verma
Labour Welfare Schemes

LEGAL ASPECT OF BUSINESS:
The interests of employees and the
entrepreneurs are often contradictory and
conflicting. Due to continuously increasing cost of
living, the labour force expects higher wages,
allowances and other facilities etc. The employers
on other hand try to keep the cost of production
at the lowest possible level. They try to pay the
lowest possible wages to workers and get the
maximum possible work out of them. The result
is a clash of interests.
93
If the employer is not able to satisfy the needs of
the workers, the workers also dont perform at
the optimum level. Unsatisfied workers becomes
the cause of industrial unrest which may take the
form of a strike, ghereo, bandh etc.-

92
The entrepreneur on the other hand can be
forced to a lockout. Thus, the interests of both
the parties are put at stake. Industrial laws serve
to safeguard the interests of both and ensure
industrial peace and development.

91
HISTORY OF LABOUR LEGISLATION IN INDIA:
Upto 1881, there was no law related to labour
welfare in India. The Indian factories act was
passed in the year 1881. After this a number of
such laws were passed to regulate the working
conditions in industries. Prior to this law, the
workers were exploited for the following reasons:
(i) Labour was available in abundance. They badly
needed work to fulfil their requirements, basic
needs cant wait for their satisfaction. The
workers had no other source of livelihood. They
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only had their labour and skill to sell.
(ii) Labour was ill educated, too poor and
ignorant. They didn,t know about their
contribution to profit and their importance in the
process of production, nor could they think
because being poor they couldnt think of
anything other than earning for their basic needs.
(iii) Industrialization and employment in factories
was a comparatively new process for Indian
workers and so it didnt provide them with much
89
experience. Due to lack of contact with other
parts of the world, they didnt know what rights
their counterparts in other parts of the world
enjoy.
(iv) Workers feared their employers. They were
compelled to work as directed by the employers
who sometimes even used physical force to
compel them. Even greater was the fear of
retrenchment.
88
(v) The entrepreneurs enjoyed greater proximity
to political power circles. They were financially
sound and so could twist the situation their way.
(vi) If work came to a halt, the entrepreneurs lost
only their profits where as the worker lost their
livelihood and had to suffer from hunger.
87
WORKING CONDITIONS:
The workers had to work under miserable
working conditions which can be termed as
inhuman.

1. The work places were insufficient, there was
no provision of drinking water, urinals,
bathrooms, waiting rooms, canteens etc.
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WORKING CONDITIONS:
2. There was no provision for overtime payment.
3. Leave facility was not provided to workers.
Deduction was made in their wages for the
amount of leave taken.
4. In case of worker met an accident in the
working hours, no compensation was paid to
him

85
WORKING CONDITIONS:
5. Women and children were made to work for
long hours under unsafe and unhygienic
conditions.

84
INDUSTRIAL LEGISLATION AND LAWS:
The laws framed by the Government for
providing economic and social justice to the
workers in industries are called Industrial laws
or labour laws.

Industrial legislation can be divided into two
categories:

1. General legislation.
2. Specific legislation.
83
INDUSTRIAL LEGISLATION AND LAWS:
1. General legislation:
General legislation takes care of the general
labour problems like social welfare, insurance
and industrial disputes.
2. Specific legislation :
Specific legislation looks after the work of
specific industries like transport, mines,
electricity generation, plantation, waste disposal
etc.
82
NEED OF INDUSTRIAL OR LABOUR LAWS:
In modern industrial organisation, labour laws
are necessary and their main aim is;
(i) To save the workers from exploitation and to
protect their rights: Government showed a
human concern in passing these laws so that
workers get their due rights and are not
exploited.

81
(ii) To minimize and settle industrial disputes:
These laws serve to improve relations among
management and workers so that a peaceful
atmosphere is created for maximum production.

80
(iii) To provide better and safe working
conditions for the workers: Laws make sure that
work, machines, equipment, tools and the
environment of an industry is safe for the
working of human beings.

79
(iv) To determine timely and justified payment
of wages, incentives and compensation :
Various labour laws provide that payment of
wages is on a fair basis and that the wages are
sufficient to meet the need of workers.

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(iv) To provide security of job: In the service of
a worker are to be terminated, laws provide for
the compensation or any other monetarily
benefit to be paid by the employer, failing which
the worker can go in the court.

77
ORIGIN AND GROWTH OF LABOUR WELFARE
CONCEPT IN INDIA:
The transference of rural population to the
urban areas, as a result of industrialization,
brought with it certain sociological problems.
Having been up rooted from their rural
mornings, the new class of industrial workers
required welfare services to be provided to
them in their new surroundings so as to enable
them to adapt themselves to changing
situations.
76
CONCEPT IN INDIA:
Originally conceived as a humanitarian
approach, the employers realised the value of
providing better working and living conditions to
their employees. What was, therefore,
essentially a humanitarian approach in the
initial stages, gave rise to utilitarian philosophy
as motivating force for providing welfare
amenities to the working population.
75
CONCEPT IN INDIA:
Mahatma Gandhi, through his general
programme for upliftment of the toiling masses
of the country made a considerable impact upon
the concept of Labour welfare in India. I do not
want any thing more for the workers and farmer
class then enough to eat and house and clothes
themselves and live in ordinary comfort as self
respecting human beings.
74
Labour Welfare Schemes:
Organization provide welfare facilities to their
employees to keep their motivation level high.
Welfare means the comfort and improvement of
employees and is provided over and above the
wages. Welfare keeps the morale and
motivation of the employees high so as to retain
the employees for longer duration. It is not
necessary that the welfare measures to be in
monetary terms but in any kind/forms.
Employee welfare includes monitoring of -
73
Labour Welfare Schemes:
- working conditions, creation of industrial
harmony through infrastructure for health,
industrial relations and insurance against
disease, accident and unemployement for the
workers and their families. Labour welfare
entails all those activities of employer which are
directed towards providing the employees with
certain facilities and services in addition to
wages of salaries.
72
Labour Welfare has the following objectives:
1) Labour welfare provides social comfort to
employees.
2) It provides intellectual improvement of
employees.
3) To develop sense of responsibility and
belongingness among employees.
4) To ensures that the working conditions for
employees are of higher standard.
5) To build stable work force.
71
Labour Welfare has the following objectives:
6) To reduce absenteeism and labour turnover.
7) To make employees lives good and worth
living.
8) To boost productivity and efficiency at the
workplace.
9) To provide healthy and proper working
conditions.
10) To ensure well being of employees and
families.

70
IMPORTANCE OF LABOUR WELFARE:
In India, industrial workers get the benefit of
various welfare facilities. The purpose is to
provide them better life and to make them
happy. The important benefit of welfare services
are given below:
1) Welfare facilities provide scope for better
physical and mental health to the workers.
2) Labour welfare brings industrial peace and
cordial relations between labour and
management.
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IMPORTANCE OF LABOUR WELFARE:
3) The social evil in the labour force such as
gambling, drinking etc. are reduced.
4) Employer gets stable labour force due to
provision of welfare facilities.
5) Workers take active interest in their jobs.
6) Employer secures the benefits of high
efficiency and low labour absenteeism and
minimum employee turnover. Facilities like
housing, medical benefits and education
facilities help to increase productivity of workers
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PROVISIONS OF THE FACTORIES ACT, 1948
REGARDING LABOUR WELFARE:
Factories Act, 1948, contains specific provisions
relating to welfare of labour in factories. These
provisions are discussed below:
(1) Washing facility: In every factory, suitable
facilities for working shall be provided for the
use of workers. Such facilities shall be kept
clean.

67
PROVISIONS OF THE FACTORIES ACT, 1948 REGARDING LABOUR WELFARE:
(2) Facility for storing clothes/uniforms: A
suitable place should be provided to the workers
for keeping clothes during the time of work and
uniforms overnight.

66
(3) Facilities for sitting: In every factory, suitable
arrangement for sitting shall be provided and
maintained, for all workers.

65
(4) First Aid Facility: The arrangement for first-
aid shall be made in every factory. One first-aid
box is to be provided for every 150 workers.
First-aid facility has always to be made available
during the working hours of the factory.

64
(5) Canteens: A canteen shall be provided in
each factory employing over 250 workers.
Suitable shelter, lunch room and rest room shall
be provided for the use of the workers where
more than 150 workers are employed.

63
(6) Creches: Every factory shall provide clean,
well lighted creches (room) for the use of
children of women workers.

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(7) Welfare Officer: In every factory where 500
or more workers are employed, the employer
shall employ Welfare Officer in the factory.

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CLASSIFICATION OF LABOUR WELFARE
FACILITIES:
The Study appointed by the Government of
India in 1959 to examine labour welfare
activities then existing, divided the entire range
of these activities into three groups, i.e.
(1) Welfare work within the boundary of an
establishment- medical aid, creches, canteens,
supply of drinking water etc. It means that the
welfare activities are undertaken within
boundary of an establishment.
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FACILITIES:
(2) Welfare work outside the boundary of an
establishment- provision for indoor and outdoor
recreation, housing, adult education, visual
instructions, etc. and;
(3) Social Security measures etc.
59
FACILITIES:
The committee of experts on Welfare Facilities
for Industrial Workers called meeting by ILO in
1963 had divided welfare services into following
groups:
(a) Intra-Mural Activities.
(b) Extra-Mural Activities.
(c) Statutory, voluntary and Mutual Welfare
Facilities.
58
FACILITIES:
(a) Intra-Mural Activities: The labour welfare
activities that are provided inside the
industry are known as Intra-Mural activities.
According to the recommendations of the ILO,
the welfare activities within the boundary of the
establishment includes the facilities such as;
(1) Latrines and Urinals,
(2) Washing and bathing facilities.
(3) Creches,
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CLASSIFICATION OF LABOUR WELFARE FACILITIES:
(a) Intra-Mural Activities:
(4) Rests shelters and Canteens,
(5) Arrangement for drinking water,
(6) Arrangement for prevention of fatigue,
(7) Health services including occupational safety,
(8) Administrative arrangement within a plant to
look after welfare,
(9) Uniform and protective clothing and,
(10) Shifting allowance.
56
FACILITIES:
(b) Extra-Mural Activities: The welfare activities
that are provided outside the establishment are
known as extra-mural activities.
According to the recommendations of the ILO,
the welfare activities outside the establishment
include facilities such as :
(1) Maternity benefits,
(2) Social Insurance measures including gratuity,
pension, provident fund and rehabilitation,
55
FACILITIES:
(b) Extra-Mural Activities:
(3) Benevolent fund,
(4) Medical facilities including programmes for
physical fitness and efficiency, family planning
and child-welfare,
(5) Educational facilities including adult
education,
(6) Housing facilities,

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(7) Recreation facilities, including sports, cultural
activities, library and reading room,
(8) Holiday homes and leave and travel facilities,
(9) Workers cooperatives including consumer
cooperative stores, fair price shops and co-
operative thrift and credit societies.
(10) Vocational training for dependents of
workers,
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(11) Other programmes for the welfare of
women, youth and children and
(12) Transport to and from the place of work.

52
FACILITIES:
(b) Statutory, Voluntary and Mutual Welfare
Facilities:
Labour welfare work may also be divided into
three categories:
(1) Statutory ;
(2) Voluntary and
(3) Mutual.

51
FACILITIES:
(b) Statutory, Voluntary and Mutual Welfare
Facilities:
(1) Statutory: Statutory welfare work constitute
those provisions of welfare work which are
provided in different factory Acts and it is
obligatory on the part of the employers to
observe these provisions.

50
(b) Statutory, Voluntary and Mutual Welfare Facilities:
(2) Voluntary Welfare: Voluntary Welfare works
includes those activities which are undertaken
by employers for their workers voluntarily.
(3) Mutual Welfare: Mutual Welfare is a
corporate enterprise of the workers themselves.
For instance, if workers decide to improve their
lot on the basis of mutual help, it may be called
a mutual welfare work. Trade unions for this
purpose undertake many provisions for the
welfare of the workers.
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IMPORTANCE OF LABOUR WELFARE WORK:
The usefulness of welfare work in India can not
be over emphasized. Welfare activities influence
the sentiments of the workers. When worker
feels that the employers and the State are
interested in their happiness, his tendency to
grouse and grumble will steadily disappear. The
development of such a feeling makes the way
for industrial peace.
48
Secondly, the provision of various welfare
measures such as good housing, canteens,
medical and sickness benefits etc. makes them
realise that they also stake in the undertaking in
which they are engaged and so they think thrice
before taking any reckless action.
Thirdly, welfare measures, such as cheap food in
canteens, free medical and educational facilities,
etc. indirectly increase the real income of the -
47
workers. If the workers go on strike they will be
deprived of all these facilities. Hence they try to
avoid industrial disputes as possible and do not
go strike on flimsy grounds.
Fourthly, welfare activities will reduce labour
turnover and absenteesim and create
permanent settled labour force by making
service attractive to the labour.
Fifthly, welfare activities will go a long way to
better the mental and moral health of workers-
46
by reducing the incidence of vices of
industrialisation. Removed from native village
and thrust into a strange and unfavourable
environment the workers are liable to fall a prey
to drinking, gambling and prostitution.
Congenial environment as a result of welfare
measures will act as deterrent against such
social vices.
Lastly, welfare measures will improve the
physique, intelligence, morality and standard of-
45
- efficiency can be expected only from persons
who are persons, who are properly trained,
properly housed, properly fed and properly
clothed.
44
LABOUR WELFARE PRACTICES IN INDIA
A) INTRA-MURAL LABOUR WELFARE ACTIVITIES:
1. SANITARY AND HYGIENE FACILITIES:
The maintenance of a clean, sanitary and
hygienic work environment is now taken for
granted as an important basic welfare amenity.
These include toilets, water for drinking and
washing. Sanitary and hygienic conditions were
extremely poor when Labour investigation, 1946
reported. The committee observed that, apart
from making the minimum arrangement which-
43
- get away with, service and maintenance
appeared to be so poor that if they existed at all,
the workers felt it impossible to make use of the
so called facilities.
The Factories Act, 1948 requires that every
factory must be kept clean. A sufficient supply of
wholesome drinking water an enterprise could -
42
-must be made available at suitable and
convenient points; that separate latrines and
urinals for male and female workers must be
provided; that spittons must be kept at
convenient places in a clean and hygienic
condition; and that adequate, suitable, clean,
conveniently accessible and separately screened
washing facilities must be provided for male -
41
-and female workers. More or less similar
facilities are provided in Plantation Labour Act
1951 and Coal Mines Act 1952.

40
2. WASHING FACILITIES:
The Labour Investigation Committee (1946)
observed that, barring exceptions of tanneries,
printing presses and sugar factories, bathing and
washing facilities were totally absent, and
where they did exist, other accessories for
bathing were missing. The committee after
explaining the imperative necessity for a coal
miner to wash himself at the end of the days-
39
-work, observed that special arrangements for
washing or bathing in coal mines were an
exception. Workers washed or bathed in an
adjoining tank from an open surface hydrant
which drew out the mine water.
Bathing and washing facilities are now provided
by every employer where Factory Act, 1948,
Coal Mines Act, 1952 and Plantation Labour -
38
-Act, 1951 is applicable, irrespective of the
number of works employed therein.
37
3. DRINKING WATER:
The Labour Investigation Committee pointed out
that most factories made some provision for
drinking water, but the arrangements neither
uniform nor satisfactory. In textile mills,
factories, bidi works, tanneries, printing presses,
glass and sugar factories, mines and plantation,
no arrangements generally existed; where they
did, they altogether unsatisfactory. However, it-
36
3. DRINKING WATER:
-was only in cement factories that there were
satisfactory arrangements for supply of drinking
water.
Now, it is statutory obligation upon the
employers to make satisfactory arrangements of
drinking water for their works. All employers are
required to make satisfactory arrangements for
drinking water under the Factories Act, 1948, -
35
3. DRINKING WATER:
-Coal Mines Act, 1952, Plantation Labour Act,
1951, irrespective of the size of establishment.
At present, almost all large scale industries have
made satisfactory arrangements for drinking
water.
34
4. First-Aid Box:
Maintenance of first aid box for every factory
employing 150 workers is a minimum must
which can not be allowed to be ignored by any
occupier of a factory establishment.

33
4. First-Aid Box:
This is a provision which is not generally taken
seriously although the utility of it can hardly be
minimized or considered superfluous. However,
the labour welfare committee (1969)
recommended that , this provision should be
enforced strictly and sufficient number of
personnel be trained in all establishments in
consultation and cooperation with the -
32
4. First-Aid Box:
-respective authorities and trade unions.

31
5. Ambulance Room:
The Factories Act, 1948 lays down that, in every
factory where in more than 500 workers are
employed, there shall be provided and
maintained an ambulance room of the
prescribed size, containing the prescribed -

30
5. Ambulance Room:
-equipment and incharged of such medical
nursing staff as may be prescribed. However, the
Labour Welfare Committee (1969) felt that, the
limit of 500 workers was kept at a time when
country had only traditional and conventional
industries which are more labour intensive like-
textile and suger etc.

29
5. Ambulance Room:
-textile and suger etc., with the progressive
growth of capital intensive industries as well as
development of hazardous nature of industries
like petrochemicals, automation and the use of
nuclear energy in the near future, it is necessary
that ambulance rooms should also be provided
by establishments employing less than 500
workers.

28
6. Feeding Facilities (Canteens):
The Labour Investigation Committee realeased
the importance of as a welfare amenity. It said,
the workers canteen is increasingly recognised
all over the world as an essential part of the
industrial establishment, providing undeniable

27
-benefits from the point of view of health,
efficiency and well-being. To introduce and
element of nutritional balance into the
otherwise deficient and unbalanced dietry of
the workers, to provide cheap and clean food
and opportunity to relax in comfort near the
place of work, to save time and truble to
workers an account of exhausting journeys to -
26
-and from work after long hours in the factory:
These are some of the objects of industrial
canteen.

25
7. Creches:
It is a welfare facility which is provided for
women workers. A Creche is defined as a place
where babies of working mothers are taken care
of, while mothers are at work.

24
7. Creches:
The plantation Labour Act, 1951, provides that
all plantations where 50 or more women
workers are employed should provide and
maintain a suitable room for the use of children
of such women who are below the age of six
years. The room should have adequate
accommodation; adequately lighted and
ventilated; should be situated in a clean and -
23
7. Creches:
-sanitary conditions and it should be under the
charge of a women trained in the care of
children and infants.

22
B) EXTRA-MURAL LABOUR WELFARE FACILITIES:
1. Medical facilities:
The importance of industrial health and care in
general has been emphasised by the ILO since
1919. The Royal commission on Labour in 1931
and the Labour Investigation committee in 1946
also emphasised and necessity of providing-

21
- basic health and medical facilities to industrial
workers, since it will help to reduce the
incidence of sickness and, therefore,
absenteesim among them and increase
productivity. Prior to the medical facilities
provided through the Employees State Insurance

20
- Corporation, cement factories, sugar factories,
some large tanneries and several units in the
textile industry, had their own arrangements for
treatment of workers.

19
2. Educational facilities:
The Central Workers Educational Board has
helped to improve the standards of workers all
over the country. The Workers Education
Programme has been started with special
emphasis on trade unions methods and
philosophy.

18
Almost all public sector undertakings have
established primary and even higher secondary
schools in their townships.

17
Some of large scale private sector undertakings
have established colleges in their twonships
both for catering to the need of workers children
in general education as well as for technical
education.

16
3. Recreational facilities:
At present, in large establishment increasing
attention has been paid recreational activities.
Some establishments bear the capital cost of
construction of buildings design for recreation
and the cost of sports material and also make
available grant-in aid to meet day to day -

15
-recurring costs. Some employers give grants on
matching basis. However, the scale of facilities
offered varies from employer to employer and
from project to project.
In almost all the public sector undertakings,
provision of indoor and outdoor games has been

14
-made a part and parcel of the project plan
itself. Right from the initial construction stage
of the plant, budget provisions for amenities like
sports, club, reading rooms, games and athletics,
cultural activities etc., are made.

13
4. Transport facilities:
The provision of adequate and cheap transport
facilities to workers residing at long distance is
essential as such facilities not only relieve the
workers from strain and anxiety but also provide
opportunity for greater relaxation and
recreation. Provision of transport facilities also-

12
4. Transport facilities:
Helps in reducing the rate of absentation
particularly when it is on account of late arrival.
Reduction of absenteeism on account of late
arrival of worker not only helps industry but also
reduces the tension and strain amongst the
workers.

11
4. Consumers Cooperative Stores and Fair Price
Shops:
The importance of consumers cooperative
stores and fair shops was highlighted by the
National Cooperative Development and
Warehousing Board Committee of 1961; by the
Indian Labour Conference in its 20
th
Session in
1962. The conference adopted a scheme for
setting up consumers cooperative stores in all-
10
4. Consumers Cooperative Stores and Fair Price
Shops:
-industrial establishments, including plantations
and mines, employing 300 or more workers.

9
4. Distress Relief and Cash Benifits:
Non-Statutory welfare amenities provided to
the workers cover a wide range depending upon
the importance that an empolyer attaches to
these benefits for the creation of goodwill
amongst his workers. One of these amenities is
in the nature of ex-gratia payments popularly
known as distress relief and cash benefits. The
Imperial Tabacco Company of India give a max.-
8
4. Distress Relief and Cash Benifits:
Sum of Rs. 100,000 to the dependents on the
death of a worker. The Delhi Cloth and General
Mills Ltd., has constituted as Employees Benefits
Fund to help the workers on the occasion of the
marriage of their dependents etc.
7
LABOUR WELFARE SCHEMES UNDER OTHER ACTS
1. EMPLOYEES PENSION SCHEME , 1995:
This scheme was introduced on 19
th
November,
1995 for the industrial workers. Under the
scheme, pension at the rate of 50% of pay is
payable to the employees on retirement. A
minimum 10 years service is required for
pension. The scheme also provides for grant of
family pension ranging from Rs. 450 per month
to Rs. 2500 per month.
6
2. THE WORKMENS COMPENSATION ACT,1923:
Workmens Compensation Act was passed in
1923. It provides for compensation to workmen
in case of industrial accidents and resulting in
death or disablement. The Act prescribes
separate scales of compensation for death,
permanent disablement and temporary
disablement. The object of the Act is to impose
an obligation on employers to pay
compensation to workers for accident during-
5
2. THE WORKMENS COMPENSATION ACT,1923:
-the employment. The Act covers all workmen
employed in railways, factories and mines, etc.

4
3. THE MATERNITY BENEFITS ACT, 1961:
Maternity Benefit Act, 1961 was made by the
Central Government. This act provides maternity
benefits to the women workers. Various objects
of this act are:
a. To regulate the employment of women for specified
period before and after child birth.
b. To provide maternity benefits to women workers at
the rate of average daily basis.
c. To provide for certain benefits in case illness arising
out of pregnancy.
3
4. THE PAYMENT OF GRATUITY ACT, 1972:
The Payment of Gratuity Act, 1972 is applicable
to factories, mines, plantations, railways, motor
transport companies and shops. The Act
provides for payment of gratuity at the rate of
15 days wages for each completed year of
service. The Act does not effect the right of an
employee to receive better terms of gratuity
under any contract with the employer.
2
5. THE PLANTATION LABOUR ACT, 1951:
The following welfare facilities are to be
provided to the plantation workers:
a. Housing facilities for every worker and his
family residing at the plantation.
b. Educational facilities for the children of
workers.
c. Canteen in plantation if there are 150 or
more workers.
d. Recreational facilities for the workers.
1
ASSIGNMENT
Q.1 Give the importance and necessity of
industrial legislation in India?
Q.2 What are the various labour welfare
schemes as applicable in Indian history?
Q.3 Write down the different types of labour
welfare schemes.
Q.4 Write down the objectives of labour
legislation.
Q.5 Write down the Non Statutory Schemes in
detail.

Labour Welfare Schemes

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Arun Verma

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