Unit 4: Labour welfare
Employee Relations notes · PTU syllabus (MBA 932-18)
On this page
- Unit summary
- Maternity Benefit Act, 1961
- Employees' State Insurance Act, 1948
- Employees' Provident Funds and Miscellaneous Provisions Act, 1952
- The ILO and social security
- Labour welfare: concept, scope and objectives
- Theories and classification of welfare work
- Agencies administering labour welfare in India
- Key terms
- Quick revision
- Important questions
Unit summary
Welfare measures improve workers' lives beyond wages. This unit covers the Maternity Benefit Act 1961, the ESI Act 1948, the Employees' Provident Funds and Miscellaneous Provisions Act 1952, the ILO and social security, and the concept, scope and objectives of labour welfare, classification of welfare work and agencies administering labour welfare laws in India.
After this unit you can
- Explain the Maternity Benefit Act and ESI Act
- Explain the EPF and MP Act
- Explain the ILO's role in social security
- Explain the concept, classification and agencies of labour welfare
PTU syllabus topics
- Maternity Benefit Act 1961
- ESI Act 1948
- Provident Fund and Miscellaneous Provisions Act 1951
- ILO and social security
- concept/scope/objectives of labour welfare
- classification of welfare work
- agencies for administering labour welfare laws in India
Statutory
Required by law: canteens, crèches, safety
Voluntary
Employer's own: housing, education
Mutual
Run by workers themselves
Social insurance
ESI, maternity benefit
Topic 1
Maternity Benefit Act, 1961
- Applicability: factories, mines, plantations, shops and establishments with 10 or more employees.
- Eligibility: at least 80 days of work in the 12 months before expected delivery.
- Benefits (after the 2017 amendment): 26 weeks of paid leave (up to 8 weeks before delivery) for the first two children; 12 weeks for the third child onwards; 12 weeks for adopting mothers (child below 3 months) and commissioning mothers; medical bonus; nursing breaks; work from home where possible; crèche for establishments with 50+ employees.
- No dismissal during maternity leave.
Topic 2
Employees' State Insurance Act, 1948
- Coverage: non-seasonal factories and notified establishments with 10 or more employees; employees earning up to ₹21,000 a month.
- Contributions: employer 3.25%, employee 0.75% of wages (employees earning up to ₹176 a day are exempt from their share).
Medical
Full medical care for the insured person and family
Sickness
70% of wages for up to 91 days
Maternity
Full wages for 26 weeks
Disablement
Temporary (90% of wages) and permanent
Dependants'
Monthly payment to dependants on employment-injury death
Others
Funeral expenses, unemployment allowance (Rajiv Gandhi Shramik Kalyan Yojana)
- Administration: ESI Corporation (ESIC) through its hospitals and dispensaries.
Topic 3
Employees' Provident Funds and Miscellaneous Provisions Act, 1952
- Applicability: establishments with 20 or more employees; mandatory for employees earning up to ₹15,000 a month.
- Contributions: employee 12% of basic wages and DA; employer 12%, of which 8.33% (on wages up to ₹15,000) goes to the Employees' Pension Scheme, 1995 and the rest to the provident fund; employer also pays for EDLI.
Employees' Provident Fund Scheme 1952
Retirement savings with interest; partial withdrawals
Employees' Pension Scheme 1995
Monthly pension after 10 years of service, from age 58
Employees' Deposit Linked Insurance Scheme 1976
Life cover for members' families
- Administration: EPFO; Universal Account Number (UAN) makes accounts portable.
Exam tip
The syllabus lists this Act as 1951; it is the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.
Topic 4
The ILO and social security
The International Labour Organization (1919, UN agency since 1946) sets international labour standards through conventions and recommendations, promotes decent work and has a unique tripartite structure (governments, employers and workers). India is a founding member. Social audit is an independent review of an organisation's social performance — its impact on employees, community and environment — measured against stated social objectives, and reported to stakeholders.
- ILO Social Security (Minimum Standards) Convention No. 102 (1952) sets nine branches of social security: medical care, sickness, unemployment, old age, employment injury, family, maternity, invalidity and survivors' benefits.
Topic 5
Labour welfare: concept, scope and objectives
Labour welfare includes facilities and services provided to workers for their well-being, beyond wages — inside the workplace (canteens, rest rooms, safety) and outside it (housing, education, recreation). Evolution: from philanthropic efforts by employers to statutory provisions and modern employee well-being programmes. Objectives: improve living and working conditions, raise efficiency and morale, reduce absenteeism and turnover, and build good industrial relations.
Topic 6
Theories and classification of welfare work
Police theory
Law forces employers to provide welfare
Compulsion
Religion theory
Welfare as a religious duty
Atonement or investment for the hereafter
Philanthropic theory
Welfare out of compassion
Kindness
Trusteeship theory (Gandhi)
Employers hold wealth in trust for workers
Moral duty
Placating theory
Welfare to pacify workers
Avoid conflict
Public relations theory
Welfare builds image
Reputation
Functional theory
Welfare raises efficiency
Productivity
Types: statutory (required by law), voluntary (employers' initiative) and mutual (workers' own organisations); intramural (inside the factory) and extramural (outside).
Topic 7
Agencies administering labour welfare in India
Central government
Ministry of Labour and Employment, Chief Labour Commissioner, DGFASLI, EPFO, ESIC, welfare boards (e.g., for beedi, mine and building workers)
State governments
Labour departments, Chief Inspector of Factories, labour welfare boards and centres
Employers
Statutory and voluntary welfare — canteens, housing, education, health
Trade unions
Welfare funds, education, cooperatives
Voluntary agencies
NGOs, social service organisations
- Labour welfare officer: required in factories with 500 or more workers to advise management and promote welfare.
Key terms
- Maternity benefit
- Paid leave and benefits for women around childbirth
- ESIC
- Corporation administering the ESI scheme
- EPS
- Employees' Pension Scheme, 1995
- Convention 102
- ILO minimum standards of social security
- Labour welfare officer
- Officer promoting welfare in large factories
Quick revision
- Maternity: 80 days' work; 26 weeks; crèche 50+.
- ESI: 10+ employees; ₹21,000; 3.25% and 0.75%; six benefits.
- EPF: 20+ employees; ₹15,000; 12% + 12% (8.33% to EPS); EDLI; UAN.
- ILO: Convention 102; social audit.
- Welfare: concept, theories, intramural and extramural, statutory and voluntary; agencies.
Important exam questions
Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).
Short-answer questions
- Q1.What is the duration of maternity leave under the 2017 amendment?
- Q2.State the ESI contribution rates.
- Q3.Name the benefits under the ESI Act.
- Q4.How is the employer's EPF contribution split?
- Q5.What is ILO Convention 102?
- Q6.Distinguish intramural and extramural welfare.
Long-answer questions
- Q1.Explain the provisions of the Maternity Benefit Act, 1961.
- Q2.Explain the benefits and administration of the ESI Act, 1948.
- Q3.Explain the schemes under the EPF and MP Act, 1952.
- Q4.Explain the concept, classification and agencies of labour welfare in India.
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