SOCIAL SECURITY AND

EMPLOYEE WELFARE

Module ONE

CONCEPT OF WELFARE
Welfare is the provision of a minimal level of well-being and social support for all
citizens. In most of the countries welfare is provided by the government. Welfare can take
variety of forms, such as monetary payments, subsidies and vouchers or housing assistance.
Welfare systems differ from country to country, but welfare is commonly provided to
individuals who are unemployed, those with illness or disability, the elderly, those with
dependent children, and veterans.

Welfare is provided by governments or their agencies, by private organizations, or a

combination of both. Funding for welfare usually comes from general government revenue,
but when dealing with charities or NGOs, donations may be used. Some countries
run conditional cash transfer welfare programs where payment is conditional on behaviour of
the recipients

EMPLOYEE WELFARE

Meaning & Definition:

Employee welfare means the efforts to make life worth living for workmen. According to Todd
“employee welfare means anything done for the comfort and improvement, intellectual or
social, of the employees over and above the wages paid which is not a necessity of the
industry”.

Features of Employee Welfare

 Employee welfare is a comprehensive term including various services, facilities and
amenities provided to employees for their betterment.
 It is a dynamic concept.
 Welfare measures may be both voluntary and statutory.
 Employee welfare measures are also known as fringe benefits and services.

Objectives of Employee Welfare

 It helps to improve the loyalty and morale of the employees.
 It reduces labour turnover and absenteeism.
 It helps to improve the goodwill and public image of the enterprise.
 It helps to improve industrial relation and industrial peace.
 It helps to improve employee productivity.

Agencies of Employee Welfare

1. Central government:
The Central Government has made elaborate provisions for health, safety and
welfare under Factories Act 1948, and Mines Act 1952. These acts provide for canteens,
crèches, rest rooms, shelters etc.
2. State Government:
Government in different states and Union Territories provide welfare facilities to
workers. State government prescribes rules for the welfare of workers and ensures
compliance with the provisions under various labour laws.
3. Employers:
Employers in India in general looked upon welfare work as fruitless and barren
though some of them indeed had done pioneering work.
4. Trade unions:
In India, trade unions have done little for the welfare of workers. But few sound
and strong unions have been the pioneering in this respect.
5. Other agencies:
Some philanthropic charitable social service organisation like Seva Sadan
Society.

Principles of Employee Welfare

1) Principle of adequacy of wages- Labour welfare measures cannot be a substitute for wages.
Workers have a right to adequate wages. But high wage rates alone cannot create healthy
atmosphere, nor bring about a sense of commitment on the part of workers. A combination of
social welfare, emotional welfare and economic welfare together would achieve good results.

2) Principle of Social Liability of Industry: Industry, according to this principle, has an

obligation or duty towards its employees to look after their welfare. The constitution of India
also emphasizes this aspect of labour welfare.

3) Principle of Efficiency: This plays an important role in welfare services, and is based on the
relationship between welfare and efficiency, though it is difficult to measure this relationship.
Programmes for housing, education and training, the provision of balanced diet and family
planning measures are some of the important programmes of labour welfare which increases
the efficiency of the workers, especially in underdeveloped or developing countries.

4) Principle of Increase in Personality: The development of the human personality is given here
as the goal of industrial welfare which, according to this principle, should counteract the
baneful effects of the industrial system. Therefore, it is necessary to implement labour welfare
services. Both inside and outside the factory, that is, provide intra-mural and extra-mural labour
welfare services.

5) Principles of Totality of Welfare: This emphasizes that the concept of labour welfare must
spread throughout the hierarchy of an organization. Employees at all levels must accept this
total concept of labour welfare programme will never really get off the ground.

7) Principle Co-ordination or Integration: This plays an important role in the success of welfare
services. From this angle, a co-ordinated approach will promote a healthy development of the
worker in his work, home and community. This is essential for the sake of harmony and
continuity in labour welfare services.

8) Principle Democratic Values: This principle is based on the assumption that the worker is
"a mature and rational individual." Industrial democracy is the driving force here. Workers also
develop a sense of pride when they are made to feel that labour welfare programmes are created
by them and for them.

9) Principle Responsibility: This recognizes the fact that both employers and workers are
responsible for labour welfare. Trade unions, too, are involved in these programmes in healthy
manner, for basically labour welfare belongs to the domain of trade union activity. Further,
when responsibility is shared by different groups, labour welfare work becomes simpler and
easier.

10) Principle Accountability: This may also be called the Principle of Evaluation. Here, one
responsible person gives an assessment or evaluation of existing welfare services on a
periodical basis to a higher authority. This is very necessary, for then one can judge and analyse
the success of labour welfare programmes.
11) Principle Timeliness: The timeliness of any activity to identify the labour problem and to
discover what kind of help is necessary to solve it and when to provide this help are all very
necessary in planning labour welfare programmes. Timely action in the proper direction is
essential in any kind of social work.

Welfare as HR function
The HR officer or the welfare officer must make sure the employees are provided with better
life and health to the workers, motivate the employees, and relieve workers from industrial
fatigue and also to improve the living condition of the employees. It is important for the HR
department to ensure that the employees perform their work in healthy, congenial
surroundings and also provide them with amenities conducive to good health and high
morale. Welfare is nothing but making employees comfort and improvement of employees. It
is also important to motivate the employees and keeping the morale of the employees so high
as to retain the employees for longer duration. Welfare can be in both terms monetary as well
as in kind/form. HR carries the responsibility to monitor the working condition, industrial
relation and insurance against disease etc.

Historical Development of Labour Welfare in India

During the early period of industrial development, efforts towards workers’ welfare were made
largely by social workers, philanthropists and other religious leaders. These all are done mostly
on humanitarian grounds. Before the introduction of welfare and other legislation in India, the
conditions of labour were miserable. Exploitation of child labour, long hours of work, bad
sanitation, absence of safety measures etc., were the regular features of the factory life.

The earliest legislative approach could be tracked back to the passing of the Apprentices Act
of 1850. This act was enacted with the objective of helping poor and orphaned children to learn
various trades and crafts. The next act was the Fatal Accidents Act of 1853 which aimed at
providing compensation to the families of workmen who lost their life as a result of “actionable
wrong”. Earlier attempts at legislation in our country were mainly aimed at regulation of
employment.

Pre- Independence Era

The movement to improve the working conditions of Indian labour started with the passing of
the first Indian Factories Act in 1881. The deplorable conditions in which labour worked in the
textile mills in Bombay during those days, as testified by the factory commission of 1875 was
the immediate cause for the passing of the Act. It recognized the right of the government to
safeguard the interests of the workers by means of a suitable legislation. Therefore, the Mulock
Commission was appointed by the Government of Bombay in 1884 to review the working of
the Factories Act of 1881.
The outbreak of First World War in 1914 led to a number of new developments. During the
war years (1914 to 1918) the number of factories and the number of persons employed wherein
increased. Wages did not keep pace with the rising prices and profits. The establishment of
the International Labour Organization (ILO) in 1919 was another important land mark in the
history of Labour Welfare Movement in our Country. The formation of AITUC (1920), the
first central trade union organization in our country, also helped in furthering the cause of
welfare movement.

Another milestone in the field of labour welfare was reached with the appointment of Labour
Investigation Committee in 1944 which was asked to investigate problems relating to wages
and earnings, employment, housing and social conditions of workers. For the first time in India,
this committee highlighted the importance of welfare measures for workers in improving their
social and economic life.

Post Independence Period

The emergence of different central trade union organizations like INTUC (1947), HMS (1943),
BMS (1955), CITU (1970), NLO etc. gave a further fillip to the growth of labour welfare
movement. Mainly on the basis of the recommendations of the Rege Committee, the
Government of India enacted the Factories Act 1948. To draft this important piece of legislation
the services of Sir Wilfred Garrett were utilized. Thus, the Factories Act of 1948 came into
effect from 1stApril 1949.

Various Labour Welfare Activities were incorporated in different five year plans. The First
Five Year plan (1951 to 1956) paid considerable attention to the welfare of working classes. It
laid emphasis on the development of welfare facilities, for avoidance of Industrial Disputes
and for creating mutual goodwill and understanding. During this period, the Plantations Labour
Act, 1951, the Mines Act, 1951, and the Employees’ Provident Fund Act, 1952 were enacted.

In the Second Five Year plan (1956 to 1961) new enactments were made to cover seamen and
motor transport workers. The Dock Workers (safety health and welfare) scheme was drawn up
in 1951. In 1959, the Government of Assam passed an Act called The Assam Tea Plantations
Employees’ Welfare Fund Act. This period also saw number of enactments in the field of
industrial housing by various state governments.

The Third Five Year plan (1961 to 1966) stressed the need for effective implementation of
various statutory welfare provisions. Some of the legislative measures during this period
include the Maternity Benefit Act 1961, Apprentices Act 1961, and Payment of Bonus Act
1965.

The Fifth five year plan (1974 to 1979) provided for setting up of safety cells in various states.
An amount of Rs.57 crores was provided for labour welfare including craftsmen training and
employment service.
The Sixth Five Year plan (1980 to 1985) decided to promote special programmes which would
also need to be undertaken by the state governments for the benefit of Agricultural Labour,
Artisans, Handloom Weavers, Fishermen, Leather workers and other unorganized workers in
the rural and urban areas. An outlay of Rs.161.7 crores was proposed for the labour welfare
programmes during this year.

Other plans to be added

Need and Scope of Labour Welfare

 It is necessary for an industry system.

 Role in the economic development.

 Increases employee belonging towards an organization.

 Maintains an healthy relationship

 It helps an employee to develop

 Improves the quality of work life

Scope:

Working environment

 Proper Ventilation , lightening , temperature , cleanliness

 Safety measures

 Pure drinking water should be available

 Canteen services must be there

Health Facilities:

 Health centre should be provided

 Ambulance services must be offered

 Free medical check-ups of workers should be there.

 Recreation facilities should be offered

General Welfare Programs

 Housing Facilities for workers

  Family counselling programme

Economic Welfare programs

 Banking services

 Health insurance scheme

 Transportation services

Labour Welfare Programme

 Factory council

 Labour welfare departments

ROLE OF GOVERNMENT IN EMPLOYEE WELFARE

Government has stipulated some statutory and non-statutory welfare schemes for all the
employees.

Some of the statutory welfare schemes include:

 Drinking water
 Facilities for sitting
 First aid appliances
 Canteen facilities
 Spittoons
 Lighting

Some of the non-statutory welfare schemes are:

 Personal Health Care (Regular medical check-ups)

 Flexi-time
 Employee Assistance Programme: Such as external counselling service so that
employees or members of their immediate family can get counselling on various
matters.

Employee Welfare Work by Central Government

The Government started taking interest in the field of employee welfare during the Second
World War. It extended the schemes of labour welfare in ordinance and ammunition factories.

A labour welfare advisor was appointed in 1942 for promoting the labour welfare work. A
labour welfare fund was constituted in the year 1946 for financing the labour welfare measures
outside the purview of statutory provisions in public sector undertakings.

The Government of India favoured the idea of ‘welfare state’. The government passed certain
Acts, viz. Factories Act, 1948, the Coal Mines Labour Welfare Fund Act, 1947, the Iron Ore
Mines Welfare Cess Act, 1961 and the Limestone and Dolomite Mines Labour Welfare Act,
1972, etc., are important Acts, covering the welfare of the workers.

Employee Welfare Work by State Governments

Various State Governments and Union Territories have established different welfare centres
which are providing educational, health, recreational and other facilities to the workers.
Different cultural activities, games, sports, training in handicrafts, library, gymnasium and
tailoring classes for women workers are being provided by different State Governments.

Some of the important Acts passed by the State Governments are the Bombay Labour Welfare
Fund Act (1953); the Mysore Labour Welfare Fund Act (1965) etc. The main sources of
finances for these funds are (i) fines realised from the employees, (ii) unpaid wages, bonus,
gratuity and all unpaid arrears, (iii) fines imposed on the employers by courts for defaults; (iv)
Voluntary donations, (v) any fund transferred from any other labour welfare fund; (vi) all grants
from the Central/State Governments; (vii) unclaimed and forfeited sums in Provident Fund
Accounts and (viii) Any sum borrowed, etc

ROLE OF MANAGEMENT AND TRADE UNION IN LABOUR

WELFARE
Trade or labour unions have been around since the 1930s to resist through equal bargaining
power the domination of employers over employees and to represent workers’ interests in the
employment relationship. It is through union efforts that workers benefit from better pay and
working conditions, and that they are treated with dignity and respect at work. The importance
of trade unions cannot be overstated even though membership has been on a steady decline.

VALUE ADDED FUNCTIONS OF TRADE UNION

Many unions are engaged in a number of welfare activities, such as providing housing and
organising cooperative societies to improve the quality of workers' lives. The Textile Labour
Association (TLA), Ahmedabad, for example, has ventured to organise self-employed women
(in the Self Employed Women's Association [SEWA]) and has even started banking activities
for this purpose.

Unions make efforts to launch educational programs for workers to enhance their knowledge
of the work environment and to inform them about issues concerning them, particularly those
regarding their rights and responsibilities and regarding procedures and systems that exist in
the workplace for redressing grievances.

Other activities of the trade union are

Collective Bargaining: To improve the conditions and to force the management into
formulating better welfare policies, they can go for collective bargaining with the management.

Employee Welfare: Unions have successfully fought for better terms and conditions for
workers. They represent workers’ interests and have secured a variety of benefits, such as
higher wages for unionized employees, work-life balance characterized by reasonable work
schedules, job security and protection from arbitrary action by employers. Unions not only
have given workers dignity in the workplace, but they also consistently facilitate enhanced
welfare and standards of living for American workers.

Unfair Practices: If the employer does any prohibited acts such as discriminate against workers
engaged in union activity, victimize workers who file charges against them, the union can take
it up with the board on behalf of the employees.

Legislation: Unions also play a key role in developing labour laws and regulations for effective
worker protection. The unions initiate the push for regulation in areas that concern employees
in the workplace. They lobby for the creation of laws and regulations and disseminate
information to the employees about them. Measures such as the Social Security Act, the Family
Medical Leave Act and the Occupational Safety and Health Act exist as a result of union efforts
for better terms and conditions for workers. Unions monitor the status of implementation of
employee welfare laws and regulations to ensure they are properly enforced.

Welfare as a social responsibility of business

Industry has an obligation towards its employees to look after their wellbeing. The constitution
of India also emphasises this aspect of employee welfare. Welfare today aims at the overall
holistic development of the employees and this is the duty of the employers as they have the
obligation to ensure that the people who work for them are provided with the best of the
facilities inside and outside their work life. They have to see that the people who work for them
when faced with hardships in personal and professional lives have a support and they can
rebuild their lives through this support.

Also as a business, they have to provide various benefits to ensure the employees' welfare.
While this may increase the expenses for the business and negatively impact the bottom line,
looking after the employees will benefit the business in other ways. It is also necessary that for
companies that have a large number of employees working away from family and under
stressful conditions, it is important to look at fostering personal happiness along with
professional growth. By providing a well-planned welfare policy that's good for employees'
welfare, you show them that you value them. This can help make them feel welcome and happy
in your company, motivating them to work harder.

This can best reflected in the example of Lenovo which considers employee welfare to be their
responsibility. Lenovo is committed to creating and maintaining a workplace that provides for
employee health and safety. Every Corporate strategy, guidelines and policies support this
commitment to employee welfare. Every Lenovo organization supports this policy and each
manager and employee, as well as any contractor performing work on the behalf of Lenovo,
bears a personal responsibility for the same. Full support for employee health and safety
through education, prevention and controls is vital to the company’s productivity, innovation
and continual improvement.

Employee welfare audit

An employee Welfare audit is a very comprehensive and analytical survey of the affairs relating
to the affairs of the personnel or the employees working there, and is a crucial tool put into use
for results by the employers in order to verify the various human resource practices within the
enterprise. It can be also said to be as a consulting service that helps in enabling an employer
that in turn aid him to obtain a very comprehensive view about the personnel affairs from a
novel angle that is objective.

 With regard to the "human" aspect – in order to facilitate the selection of appropriate
staff members, and in the process, to verify the employees' skills, efficiency and
motivation.

 As well as in a more "formal" respect – to ensure that the human resource policies
observed and adhered by the company are consistent with the law and statutory
regulations of the land and a confirmation that, they ensure the proper treatment of
employees whilst in workplace.

Steps in conducting a welfare audit

 The preparation period where the welfare staff or the officers decide what, who and when the
audit should take place.

 The staff conducts field work, examines the opinions of the staff through interviews and the
physical conditions of the job getting orderly reviews from the employees and their personal
viewpoints regarding welfare measures adopted.

 Writing a report of audit

 Presenting the report for the approval from the organization and the employee representatives
including unions.

 Implementing the recommendations

 Reviewing and regularly backing and conducting follow – ups.

The report will also play a major role in pointing out the significant details to be addressed
and sorted out any shortcomings and presents the recommended modifications and
improvements to the existing solutions. On the basis of the report, the employer will able to
implement the recommended actions at his own discretion or with the assistance of the
welfare staff in general.

IMPACT OF WELFARE ON LABOUR PRODUCTIVITY

 Employee welfare benefits and services to have positive effects on labour productivity.
They are capable of attracting and holding employees, assisting employees in meeting
their needs, better helping in lowering unit cost of production, improving morale,
increasing employee security and blunting the sharp edges of managerial autocracy.
 Workers are the most essential resource for the achievement of the goals of any
organization and therefore they should be motivated through welfare schemes so as to
continue to perform their statutory duties. These welfare schemes are expected to be
inducing enough for the workers to be motivated to attain maximum productivity.
Human labour is enhanced through the provision of welfare schemes to motivate them
for improved performance. Moreover, in order for industries to provide consumers
befitting services, they must live up to the challenges of providing adequate welfare
packages for their workers so as to boost the egos of the workers. Inadequate welfare
schemes could cause industrial disputes, crises and a situation that would affect
productivity.
 Organizations being a social system, the people they engage as workers, need to be
treated well for them to be effective. Workers would be satisfied with the situations that
will assure them of their future. They look forward to situations that will promote their
ego and stabilize their financial standing in the society. The workers are bound to be
happy thereby putting more efforts in their workplace.