Unit 4 of 4 · MBA Sem 3

Unit 4: Labour welfare

Employee Relations notes · PTU syllabus (MBA 932-18)

3 min read7 topics10 exam questions
On this page
  1. Unit summary
  2. Maternity Benefit Act, 1961
  3. Employees' State Insurance Act, 1948
  4. Employees' Provident Funds and Miscellaneous Provisions Act, 1952
  5. The ILO and social security
  6. Labour welfare: concept, scope and objectives
  7. Theories and classification of welfare work
  8. Agencies administering labour welfare in India
  9. Key terms
  10. Quick revision
  11. 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
ClassificationLabour welfare measures
Labour welfare
  • Statutory

    Required by law: canteens, crèches, safety

  • Voluntary

    Employer's own: housing, education

  • Mutual

    Run by workers themselves

  • Social insurance

    ESI, maternity benefit

1

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.
2

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).
ClassificationESI benefits
ESI benefits
  • 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.
3

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.
ClassificationSchemes under the Act
EPF and MP Act
  • 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.

4

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.
5

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.

6

Topic 6

Theories and classification of welfare work

ComparisonTheories of labour welfare
Key idea
Motive

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).

7

Topic 7

Agencies administering labour welfare in India

ClassificationLabour welfare agencies
Agencies
  • 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

  1. Q1.What is the duration of maternity leave under the 2017 amendment?
  2. Q2.State the ESI contribution rates.
  3. Q3.Name the benefits under the ESI Act.
  4. Q4.How is the employer's EPF contribution split?
  5. Q5.What is ILO Convention 102?
  6. Q6.Distinguish intramural and extramural welfare.

Long-answer questions

  1. Q1.Explain the provisions of the Maternity Benefit Act, 1961.
  2. Q2.Explain the benefits and administration of the ESI Act, 1948.
  3. Q3.Explain the schemes under the EPF and MP Act, 1952.
  4. Q4.Explain the concept, classification and agencies of labour welfare in India.

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