Dr.

Namrata Gupta
Laws relating to Social Security
Social Security for employees is a concept which over time has gained importance
in the industrialized countries. Broadly, it can be defined as measures providing
protection to working class against contingencies like retirement, resignation,
retrenchment, maternity, old age, unemployment, death, disablement and other
similar conditions.

With reference to India, the Constitution levies responsibility on the State to

provide social security to citizens of the country. The State, here, discharges duty
as an agent of the society in order to help those who are in adverse situations or
otherwise needs protection owing to above mentioned contingencies. Article 41,
42 and 43 of the Constitution do talk about the same.
Drawing from the Constitution of India and ILO Convention on
Social Security1 (ratified by India in 1964), some of the legislations
that have been enacted for social security are Employees’ State
Insurance Act, 1948, Workmen’s Compensation Act, 1923,
Employees’ Provident Fund and Miscellaneous Provisions Act,
1952, Maternity Benefit Act, 1961, Payment of Gratuity Act, 1972,
etc. A social security division has also been set up under the
Ministry of Labour and Employment which mainly focuses on
framing policies for social security for the workers of organized
sector.
Workmen’s Compensation Act, 1923
The compensation act for workmen was formed after it came into notice that the
laborers were becoming exposed to the danger by using more sophisticated and
advanced machinery. According to the compensation act of 1884, the employer
would take responsibility for the compensation of its workmen only when some
major or fatal accidents occur on road. However, in 1885, the mining and factory
inspectors realized that this Fatal Act, 1885, is not sufficient.

The Government gave it a hearing ear, when the Legislative Assembly members,
representatives of employer, experts in medicine, workers, and insurance experts
formed a committee that provided a report that led to the Workmen's
Compensation Act, 1923.
Scope of Workmen's
Compensation Act
The workmen's compensation act, 1923, is
applicable for those workers who are
working with an industry that is mentioned
in the act. Under this act, the protection of
workmen from injuries and losses caused
through an accident in course of and
arising out of the employment subject to
specific expectations as mentioned in the
act.
AIMS AND OBJECTIVE OF LIABILITY’S OF
WORKMEN’S WORKMEN’S
COMPENSATION ACT COMPENSATION ACT
1923 1923
Applicability of
the Workmen's
Compensation
Act
This act is applicable across
India except for Jammu and
Kashmir. This act does not
apply to the areasthat are
covered by the Employees
State Insurance Act, 1948.
The Rules for Workmen's Compensation Have Changed in 2020

There is good news for the workers as the Central Government has changed the rules
for the calculation of the compensation of the employees under the Workmen's
Compensation Act, 1923. The notification for the same has sent on 3rd January 2020
in which the amount of the wages, which were considered previously for
compensation's calculation was Rs .8 000, are now increased to Rs. 15, 000 as per
the Ministry of Labour and Employment. Since 2010, the Workmen's Compensation
Act, 1923 was known as the Employee's Compensation Act. It offers compensation to
the employees who suffer or die total or partial disablement because of an accident
while on work. The compensation is paid by the employer and an employee who is
eligible to get compensation from ESIC cannot claim compensation under the
Employee's Compensation Act1923
 CONDITIONS WHEN
CALCULATION OF THE
EMPLOYER IS NOT LIABLE
COMPENSATION
TO PAY COMPENSATION
According to the workmen's compensation act, an The calculation of compensation as per the act
employer has to pay the compensation to its is performed according to the provisions under
employee when he/she encounters some personal Section four of the Workmen's Compensation
injury due to an accident that arose during Act:
anemploye's employment. An employer is not
liable for paying the compensation if • In Case of an Accident that Results in
Permanent Total Disablement: in this case,
• An injury that doesn't result in partial or total
an amount equal to 60% of injured
disablement of the employee for more than three
days employee's monthly wage into the relevant
factor or Rs.1,20,000, whichever is more is
• Any injury that does not result in permanent total given.
disability or death because of an accident in the
influence of drugs or drink. • When an Accident Results in Death: An
amount that is equal to 50% of the monthly
• If an employee meets with an accident that is
wage of the deceased employee into the
caused because of wilful disobedience of the rules
relevant factor or an amount equal to Rs.1,
byhim/her and wilful safety guard removal.
20, 000, whichever is more.
Employees’ The promulgation of Employees' State Insurance Act,
1948 (ESI Act), by the Parliament was the first major
State legislation on social Security for workers in
independent India.
Insurance Act, The ESI Act 1948, encompasses certain health related

1948 eventualities that the workers are generally exposed

to; such as sickness, maternity, temporary or
permanent disablement, Occupational disease or
death due to employment injury, resulting in loss of
wages or earning capacity-total or partial. Social
security provision made in the Act to counterbalance
or negate the resulting physical or financial distress in
such contingencies, are thus, aimed at upholding
human dignity in times of crises through protection
from deprivation, destitution and social degradation
while enabling the society the retention and continuity
of a socially useful and productive manpower.
Employees’
State
Insurance:
Guidelines,
Features
and
Instructions
Employees’
State
Insurance
(ESI)
Scheme in
India
 WHO ARE ELIGIBLE
WHERE EMPLOYEES STATE INSURANCE ACT IS APPLICABLE?

WHERE EMPLOYEES STATE

INSURANCE ACT IS APPLICABLE?
FOR ESI ACT ?

The ESI Scheme applies The ESI scheme is applicable to all

to factories and other factories and other establishments
establishment's viz. Road as defined in the Act with 10 or
Transport, Hotels, Restaurants, more persons employed in such
Cinemas, Newspaper, Shops, and
establishment and the beneficiaries'
Educational/Medical Institutions
monthly wage does not exceed Rs
wherein 10 or more persons are
21,000 are covered under the
employed. However, in some States
scheme
threshold limit for coverage of
establishments is still 20
This is an Act to provide
for the institution of
provident funds, pension
fund, and deposit-linked
insurance fund for
employees. Employees'
Provident Fund
Organisation (EPFO) is
one of the largest social
security organisations in
India in terms of the
number of covered
beneficiaries and the
volume of financial
transactions undertaken
Applicability Of Employees’ Provident Funds and
Miscellaneous Provisions Act
The Employees’ Provident Funds and Miscellaneous Provisions Act provides for compulsory contributory
fund for the future of an employee after his/her retirement or for his/her dependents in case of the
employee's early death. It extends to the whole of India except the State of Jammu and Kashmir and is
applicable to:
• Every factory engaged in any industry specified in Schedule 1 in which 20 or more persons are
employed.
• Every other establishment employing 20 or more persons or class of such establishments that the
Central Govt. may notify.
• Any other establishment so notified by the Central Government even if employing less than 20 persons.

Every employee, including the one employed through a contractor (but excluding an apprentice
engaged under the Apprentices Act or under the standing orders of the establishment and casual
laborers), who is in receipt of wages up to Rs.15,000 p.m. shall be eligible for becoming a member of
the fund. The condition of three months continuous service or 60 days of actual work for membership
of the scheme has been removed.
TYPES OF EMPLOYEES PURPOSE OF THE
PROVIDENT FUND ACT EMPLOYEES PROVIDENT
FUND ACT 1952

What was the purpose of the

Employees Provident Fund Act 1952?

Employees' Provident Fund Scheme,

1952: Employees' Provident Fund
Scheme was set up under the Act for
the purpose of providing a post
retirement benefit for the
employees or a class of
employees or their legal heirs in
case of death, employed under an
establishment to which this Act
applies
SCHEME OF EMPLOYEES
CONTRIBUTION OF EPS
PROVIDENT FUND ACT
SCHEME
1952
Objectives of EPF India
The EPFO's primary goals are as follows :
To ensure that each employee only has one EPF account

Compliance must be made as simple as possible

Ensure that organizations follow all of the EPFO's rules and regulations on a regular
basis
To assure the dependability of internet services and to increase their facilities

All member accounts should be easily accessible online

Claim settlement times will be lowered from 20 to 3 days.

Encouragement and promotion of voluntary compliance.

An Act to regulate
the employment
of women in
certain
establishment for
certain period
before and
after child-
birth and to
provide for
maternity benefit
and certain other
benefits.
This Act may be
called the Maternity
Benefit Act, 1961.
 APPLICABILITY Maternity Benefit
Act, 1961
Under the scope of Section 2(1)(a), the Act applies to all establishments
including:
•factories,

•plantations,

•mines,

•shops or establishments covered under the ambit of law having 10 or more than
10 employees. (As provided by the 2017 amendment) This includes the private
sector as well.
In the case of Thomas John Muthoot v. Labour Officer (2014) it was held
that a firm with only 3 employees will not be covered under the Act.

- government organizations

- organizations centered by the central government or

- an establishment wherein persons are employed for the exhibition of

equestrian, acrobatics, and other performances

NOTE: The Maternity benefit Act shall be applied to any and all establishments
having 10 or more than 10 employees.
ELIGIBILITY Of Maternity Benefit Act

In Section 5(2) of the Act, it is mentioned that a

woman, to be eligible for the maternity benefits
under the Act, has to be employed in the
establishment for not less than 80 days in the
twelve months immediately preceding the
expected delivery of the woman. (The period has
been reduced from 160 days to 80 days by the
virtue of 2017 amendment)

(Note: This period of 80 days does not apply to

any woman who has immigrated to the state of
Assam and was pregnant during the immigration)
DURATION OF LEAVE
As per the provisions mentioned in the Act, the duration of the maternity leave in different cases is
as follows:
• 26 weeks, for a woman with up to 2 surviving children. The woman, at discretion, can take up to 8
weeks of maternity leave before the delivery and the remaining 18 weeks after the delivery.
• 12 weeks, for a woman already having 2 or more children. Herein, the woman, at discretion, can
take up to 6 weeks of leave before the delivery and the remaining 6 weeks after the delivery of the
child.
• 12 weeks, for a woman who has adopted a child below the age of 3 months from the date of
handover of the child.
• 12 weeks, for a commissioning mother, i.e., a mother who puts her embryo in another woman
(another woman is called the host/surrogate) from the day of handover of such child.
• 6 weeks, for a woman who has gone through miscarriage from the date of termination of
pregnancy, on the production of proof, as mentioned in Section 6 of the Act.
KIND OF WORK WOMEN EMPLOYEE
AVOID
The women employee cannot be employed to complete tasks of the following nature under
the ambit of Section 4 of the Act:

• Work of arduous nature

• Work involving long hours of standing

• Work that is likely to intervene with the pregnancy or the normal growth of the fetus

• Work which is likely to cause her miscarriage

• Work can adversely affect her health

It was held by the court in the case of MCD v. Female Workers (2000), that pregnant
women employees can be compelled to undertake tasks involving hard labor at the time of
advanced pregnancy.
 BENEFITS PROVIDED
• Monetary Benefits: Under the ambit of Section 5 (1), every woman is entitled to receive maternity benefits calculated at the
rate of average daily wage for the period of her actual absence i.e., for the whole of the maternity leave (including the period
preceding the delivery, the actual delivery date, and the period post-delivery)
• Nursing Breaks: As per Section 11 of the Act, every woman is entitled to 2 nursing breaks of the prescribed duration for nursing
the child until the child turns 15 months old, apart from the rest interval allowed, through her daily course of work.
• Creche Facility: As per Section 11(A) of the Act (added via 2017 amendment) every establishment with more than 50
employees is prescribed to have a creche facility for the baby and the mother should be allowed 4 visits to the creche in a day
which shall include the nursing breaks and the rest intervals allowed to her.
• Work From Home: As per Section 5 (5) of the Act (as inserted by the 2017 amendment) if the job profile of the women
facilitates, the employer may allow the provision of work from home to such women after the completion of the maternity break.
The period and conditions of such work can be mutually decided between the employer and the employee.
• Medical Bonus: The woman is entitled to receive an amount of Rs. 1000 from the employer in case the pre-natal and post-natal
care is not provided by the employer at zero cost as mentioned in Section 8(1) of the Act.
• Prevention from dismissal: The Act under the provision of Section 12 makes it unlawful for the employer to dismiss or deprive
an employee of claiming maternity benefits as prescribed by the Act. Except in the cases of gross misconduct by the woman
employee.

The women employee on being dismissed or deprived of such benefits may, within 60 days from the date of the order being
received, file an appeal to the prescribed authority.
 Analysis of important provisions of
the legislation
 Duration of maternity leave [S. 5(3)]
 Maternity leave for adoptive and commissioning mothers: [S.5(4)]

 Option to work from home: [S.5 (5)]

 Crèche Facilities: [S.11A-(1)]

 Informing women employees of the right to maternity leave: [S.11-A (2)]

 Leave for Miscarriage [S.9]

 Leave with wages for tubectomy operation [S.9-A]

 Prohibition of dismissal during absence or pregnancy [S.12]

 Appointment of inspectors [S.14]

 Power of Inspector to direct payments to be made [S.17]

 Power of Inspector to direct payments to be made [S.17]

 PAYMENT OF MATERNITY BENEFITS
UNDER DIFFERENT CIRCUMSTANCES

As per the provisions of the act, in cases of death, the maternity benefit will be provided accordingly:
• Wherein both, the mother and child survive then, the maternity benefits will be provided as per 26
weeks.
• In case the woman survives but the child doesn’t even then the maternity benefit of the duration of
leave shall be provided. Herein as per Section 7 of the Act, the maternity benefit will be provided
to the legal representative or nominee.
• If the mother dies and the child survives, the maternity benefit will still be provided for the child.

• In the case where both, the mother and the child die then the maternity benefit till the time of the
death will be provided, which will also include the day of the death.
• In the case where the mother died and the child survived but later died too, the maternity benefit
will be provided till the day of the child’s death.
PAYMENT OF THE MATERNITY BENEFIT
As per the provisions of Section 6(5) of the Act, the amount for maternity
benefits preceding the date of delivery shall be paid in advance and for the
period after the delivery, the payment shall be made within 48 hours of
production of proof.

COMBINING OF LEAVES
As per the CCS Rules, 1972, for the government servants, maternity leave
can be combined with any other kind of leave. Also, the maternity leave does
not disturb the course of leaves otherwise.
The Payment of
Gratuity Act, 1972 is
an Indian law that
makes certain
industries pay a one-
time gratuity to
retired employees.
The law applies to
railways, ports,
factories, oilfields,
plantations, mines
and shops. The
gratuity is 15 days'
wages for every year
of employee service,
or partial year over six
months.
INTRODUCTION
The Payment of Gratuity Act is a genre of various statutes like the Minimum Wages Act, Employment
and Social Policy, etc. which is an extension of labour laws and it lays down the minimum benefits to be
provided to the employees. It is a social security enactment providing for the welfare benefits of the
employees working in industries, companies and organisations.
Scope and Objective
The Payment of Gratuity Act,1972 was enacted with sole objective of providing gratuity i.e., a monetary
award given for services rendered to the employees working in the factories, oilfields, mines,
plantations, railway companies, shops or other establishments upon their superannuation (ex- old age
retirement amount,etc.), retirement, resignation, death or disablement.
Payment of Gratuity Act, 1972
Continuous Service

According to this Act, the continuous service means an uninterrupted service during the
employment period. This includes the leave due to sickness, accident, lay off, strike,
etc. If the interruption is of six months or one year, then the employee is not entitled to
gratuity benefits. He/She should have worked for at least 190 days in mine or coalfield
like establishment(where duration of work is only for 6 months) and 240 days in other
areas.
Controlling Authority

The controlling authority shall be appointed by the appropriate government for the
proper administration of this Act. The government may appoint different controlling
authority for different areas also.
 Payment of Gratuity Act, 1972
 Payment of Gratuity

An employee is entitled for the payment of gratuity if he/she has rendered five years of continuous
service on his superannuation, retirement, resignation, death, disablement. However, the five years
of continuous service is not mandatory in the case where the termination is due to death or
disablement. A retired person is also entitled to gratuity amount along with his pension. This was held
in the case of
Allahabad Bank and others v. All India Allahabad Bank Retired Employees Association
, where the honorable court held that pensionary benefits may include both pension amount and
gratuity amount but gratuity amount is a must to be paid to the employees.

An employee holds a right to receive a gratuity for services rendered, however, this right of an
employee can be curtailed in two conditions:

1.If the termination is due to willful omission or negligence causing loss, or damage, or destruction of
property belonging to the employer.

2.If the termination is due to riotous or disorderly conduct or constitutes of an offence which is
immoral in nature
Payment of Gratuity Act, 1972
Compulsory Insurance

Section 4A of the Act provides for the compulsory insurance to every employer other than
those belonging to the Central Government or State Government through Life Insurance
Corporation. However, those employers are exempted from this provision who have an
established and registered gratuity fund in their company. The government may also make
rules for the enforcement of this section as and when necessary. Violation of this provision by
anyone may lead to penalty.
Power to Exempt

The Act provides the power to exempt to the appropriate government by notification to
declare any establishment, factory, mine, oilfield, plantation, port, railway company or shop
exempted from gratuity if the government is of the opinion that the establishment has
favourable benefits not less than what this Act has been providing. The same law applies to
any employee or class of employees.
Payment of Gratuity Act, 1972
Nomination

According to this Act, it is necessary for the employee to prescribe for the name/names of
the nominee soon after completing one year of service. In case of a family, the nominee
should be one among the family members of the employee and other nominees shall be
void. Any alteration or fresh nomination must be conveyed by the employee to the
employer who shall keep the same in his safe custody.
Determination of the Amount of Gratuity

The person entitled to receive the gratuity amount shall send an application in writing to
the employer. The employer shall calculate the gratuity amount and provide notice in
writing to the concerned employee and the controlling authority. The payment should be
made within 30 days from the date payable to the employee. Failure of payment within the
prescribed limit will result in payment of simple interests. However, if the delayed payment
is because of the employee then the employer is not entitled to pay the simple interests.
 Inspectors Appointed for
the Purpose of this Act and
their Powers
The government may appoint an inspector or
inspectors who are deemed to be a public
servant under Section 21 of Indian Penal
Code for the purpose of ascertaining whether
any of the provisions of this Act are being
violated or not complied with and take
necessary measures to ensure the fulfilment
of all the provisions of this Act.
Recovery of Gratuity

If the employer delays in the payment of gratuity amount under the prescribed
time limit, then the controlling authority shall issue the certificate to the collector
on behalf of the aggrieved party and recover the amount including the compound
interest decided by the central government and pay the same to the person.
However, these provisions are under two conditions:

1.The controlling authority should give the employer a reasonable opportunity to

show the cause of such an Act.

2.The amount of interest to be paid should not exceed the amount of gratuity
under this Act.
 Penalties Of Act

Violation of the provisions of the Act shall entail certain penalties. They are:

1.For avoiding any payment, if someone makes a false representation or false

statement shall be punishable with imprisonment for 6 months or fine up to Rs.
10,000 or both.

2.Failure to comply with the provisions of this Act shall be punishable for a
minimum of 3 months which may extend upto 1 year or a fine of Rs. 10,000
which may extend upto 20,000.

3.Non-payment of gratuity under the Act will lead to offence and the employer
shall be punishable with imprisonment for at least 6 months and which may
extend upto 2 years unless the court provides for the sufficient reason for less
payment.
EXEMPTION OF EMPLOYER COGNIZANCE OF
FROM LIABILITY OFFENCES

An employer if charged with any The court cannot take cognizance of the
offence punishable under this Act, offences punishable under this Act
shall be exempted from any liability, unless the amount of gratuity to be paid
has not been paid or recovered within 6
if he provides sufficient reasons for
months from the expiry of the
his conduct of the act or some other
prescribed time. In such cases, the
person doing that act without his government shall authorise the
knowledge. The other person if found controlling authority to make a
guilty will be charged with the same complaint where the authority has to
punishment as an employer shall be make a complaint to the metropolitan
charged. magistrate or judicial magistrate of first
class within 15 days of the
authorisation.
PROTECTION OF ACTION PROTECTION OF
TAKEN IN GOOD FAITH GRATUITY

The controlling authority No exempted gratuity which

shall not be under any legal is payable under this Act to
proceeding if the acts done the employee by the
by him is in good faith or employer shall be liable to
under any rule or any order. the attachment of any order
or decree by any court.
ACT TO OVERRIDE OTHER VALIDATION OF AMENDMENTS
ENACTMENTS MADE IN THIS ACT

Since the Payment of Gratuity Act is The rules made has to be presented
complete in itself, therefore, this Act before both the houses of the
has an overriding effect on all parliament when in session. If both
provisions, regulations and statutes the houses are in conformity for the
relating to gratuity. annulments or the modifications,
then it shall be applicable
which states that any provision
immediately otherwise such
which is more beneficial for the
modifications will have no effect.
employees should be considered to
be having overriding effect.
Conclusion of Payment Of Gratuity

The Payment of Gratuity Act, 1927, is a welfare statute provided for the welfare
of the employees who are the backbone of any organization, company or
startups. The gratuity amount encourages the employee to work efficiently and
improve productivity. Recently, by the Payment of Gratuity (Amendment)
Act, 2018, the central government has tried to promote social welfare by
providing leverage to the female employees who are on maternity leave from
‘twelve weeks’ to ‘twenty six weeks’.

However, the scope of this Act is limited to large scale companies or organizations
and is not applicable to organizations where the number of employees is less
than 10. Yet, the Act in its entirety is complete and therefore it overrides other
Acts and statues in relation to gratuity. The only need of the hour is to change or
modify the implementation of the Act as this Act is still not followed by many
companies or corporations.