Q1: What is the economic & social importance of health & safety programs & the role

of management in these programs?

The health & safety of the industrial workers traces a violent & painful
path through the decades with the management taking a carless & indifferent attitude
towards the workers safety. Many managements, following the traditional approach
have actually blamed the workers for the accidents.

However, during the 1960’s, nearly 5,00,000 of the workers either died or were
seriously injured for every year of that decade leading to a loss of nearly 23 million
working days annually on account of industrial injury and disease. This led
investigators to argue for both humanitarian as well as economic reasons, published
by Robins in 1972. Since Robins report, many employers have started taking an
interest in Occupational Health & Safety & the benefits it accords them.

The Occupational health & Safety model provides a new approach to workplace
safety “Shared responsibility Model” wherein the assumption is that the best way to
reduce levels of occupational accidents and disease relies on the cooperation of both
employers and employees.

Social importance of health & safety programs :

No industry can live deprived from the society. Industries have & will
always be a part of society as it both receives as well as gives products & services to it.
Therefore, any adverse decisions made by the company with regards to the workers
will have major implications as poor workplace health & safety standards will lead
to,viz;

1. Loss of life or injury on part of worker & loss of mandays to the employer.
2. Heavy labour turnover & absenteeism
3. Loss of brand name among customers, society & competitors
4. Loss in profits
5. Loss of trust in Company by stakeholders.

All these factors , having heavy implications have forced managements to

provide for health & safety programs by which their employees can live a
healthy life while contributing to the success of the company.

Economic importance of health & safety programs:

The economic cost of occupational health and safety to the organization is always
double-edged. On the one hand, health and safety measures which protect employees
from the hazards of the workplace are in conflict with the management’s objective of
containing production costs. On the other hand, the effective health and safety policies
can improve the performance of employees and the organization, by reducing costs
associated with accidents, disabilities, absenteeism, or illness & the indirect costs
associated with them such as overtime pay, costs due to work related accidents etc.
As such fear for loss of potential income, mandays and brand name have made
employers to design safe and health workplace for their employees in their plants as
only a healthy and safe work environment helps to reduce costs and improve
organizational effectiveness.

Such safe workplaces are created by the Occupational health and safety specialists
and technicians, also known as safety and health professionals oroccupational health
and safety inspectors. They help prevent harm to workers, property, the environment,
and the general public. For example, they might design safe work spaces, inspect
machines, or test air quality. In addition to making workplace safer, these specialists
aim to increase worker productivity by reducing absenteeism and equipment
downtime—and to save money by lowering insurance premiums and workers’
compensation payments. Some specialists and technicians even work for governments,
conducting safety inspections and imposing fines. The ultimate goal of these specialists
is to ensure a safe & healthy working environment thereby reducing the risks of
accidents & work related injuries.

ROLE OF MANAGEMENT IN THESE PROGRAMS :

Perhaps more than any other HR activity, health and safety are the more important
functions of a HR or IR manager as they have an opportunity to be more proactive
than reactive and as such have to be designed & provided properly.
There are a number of strategies that are being used by organizations today to
ensure a healthy and safe workplace and ensure compliance with legal requirements.

Some of these programs are:

 Design Safe and healthy systems of work

 Exhibit Strong management commitment
 Inspect Workplace for health and safety problems
 Establish Procedures and controls for dealing with
 health and safety issues
 Develop Training programs
 Set up Health and safety committees
 Monitor Safety policies
 Draw up Action plan and checklist

Statistics have shown that managements which have taken a proactive role in such
programs have achieved 26% more profits as well as more productivity & lesser
labour turnover & absenteeism than other competitors in the same field.

Q2: Social Security & various legislations covering social security.

SOCIAL SECURITY:
Social security is primarily a social insurance program providing social protection,
or protection against socially recognized conditions, including poverty, old age,
disability, unemployment and others. Social security may refer to:

 social insurance, where people receive benefits or services in recognition of

contributions to an insurance scheme. These services typically include provision for
retirement pensions ,disability insurance, survivor benefits and unemployment
insurance.
 income maintenance—mainly the distribution of cash in the event of
interruption of employment, including retirement, disability and unemployment
 services provided by administrations responsible for social security. In
different countries this may include medical care, aspects of social work and even
industrial relations.

IMPORTANCE OF SOCIAL SECURITY:

The primary goal of financial planning is to maintain a consistent standard of living

during a person's lifetime. If Social Security were abolished tomorrow, all retirees
would experience an immediate reduction in their consumption. If younger workers
were notified in advance, they could adjust their saving and spending habits today to
avoid abrupt changes in their standard of living upon retirement. Yet only the highest
income workers have the ability to adjust so as to completely smooth their
consumption across their lifetime. Because low- and middle-income workers are
constrained by current obligations they cannot completely adjust. It is not only the
main source of income for superannuated retirees but also the families & dependants
of health, injured & deceased workmen who form the major part of the lower & lower
middle class families. Hence, any abolition or a reduction in any social security
schemes will lead to extreme poverty for such families. Hence, Social Security is very
important for industrial workers.

LEGISLATIONS COVERED UNDER SOCIAL SECURITY:

The Social Security schemes in India cover only a small segment of the organized work
force, which may be defined as workers who are having a direct regular employer-
employee relationship within an organization.

The principal social security laws enacted in India are the following:
· The Employees’ State Insurance Act, 1948
· The Employees’ Provident Funds & Miscellaneous Provisions Act, 1952
(Separate provident fund legislations exist for workers employed in Coal mines and
tea plantations in the state of Assam and for seamen).
· The Workmen’s Compensation Act, 1923
· The Maternity Benefit Act, 1961
· The Payment of Gratuity Act, 1972

 The Employees State Insurance Act, 1948:

1. Provides for certain benefits to employees in case of sickness, maternity, and

employment injury & to make provisions for certain other matters in relation
thereto.

2. Applicability : the act applies to all factories, including government factories,

excluding seasonal factories, using power in and Employing ten (10) or More
persons or in Non – seasonal and non- power using factories and
establishments employing twenty(20) or more persons .

3. The Act is applicable only in notified areas, it is not applicable in non –notified
areas. In such cases, the other related acts such as “Maternity benefit acts”….
Are applicable.
4. Contributions : The contribution payable under this Act in respect of an
employee shall comprise contribution payable by the employer and
contribution payable by the employee, paid to the ESI corporation. The
contribution at the rate of 1.75% and 4.75% respectively of the wages of the
employee, culminating to a total of 6.5% of the wages.
5. Benefits: Subject to the provisions of this Act, the insured persons & their
dependants are entitled to receive;

 Sickness Benefit
 Maternity Benefit
 Accident/ Disablement benefit
 Dependant benefit
 Medical Benefit
 Funeral Benefit

 The Employees Provident Fund & Miscellaneous Provisions Act, 1952:

1. An Act to provide for the institution of provident funds, pension fund and
deposit-linked insurance fund for employees in factories and other
establishments.

2. The Act aims at providing social security and timely monetary assistance to
industrial employees and their families when they are in distress and/or
unable to meet family and social obligations and to protect them in old age,
disablement, early death of the bread winner and in some other contingencies
 3. Applicability : The Act is applicable to factories and other classes of
establishments engaged in specific industries, classes of establishments
employing 20 or more persons. The Act,
however does not apply to cooperative societies employing less than 50 persons and
working without the aid of power .The Act also does not apply to employees of the
Central Government or State Government or local authority.

4. Coverage: extends to the whole of India, excluding the state of Jammu &
Kashmir.

5. Schemes under the Act:

• Employees’ Provident Funds Scheme, 1952
· Employees’ Deposit Linked Insurance Scheme, 1976
· Employees' Pension Scheme, 1995

6. Contributions:

7. Employees Provident Fund Scheme: The employees contribution arising out of

his basic pay and dearness allowance shall be 12% and the employers
contribution shall be equal to that of the employees. Ie 12% . Total – 24%.
8. the employees may by voluntary contribution contribute upto a ceiling of 20%
to the voluntary provident fund.

9. Employees Pension Scheme: Out of the contributions payable by the employer

in each month to the Provident Fund, a part of contribution representing 8.33%
of the employee’s pay is remitted to the Employee’s Pension Fund and The
Central Government contributes 1.16% of the pay of the employee to the
Employees’ Pension Fund.

If the pay of the employee exceeds Rs.6500/- per month, the contribution
payable by the employer and the Central Contribution will be limited to the amount
payable on his pay
of Rs.6500/-.

Benefits under the pension Scheme:

• Superannuation pension.
· Early pension
· Permanent total disablement
· Widow or Widower’s pension
· Children pension or Orphan pension
· Nominee pension / dependent parents pension.
 10. EMPLOYEES’ DEPOSIT LINKED INSURANCE SCHEME, 1976:
11. Employees’ Deposit linked Insurance Scheme, 1976 is applicable to
all factories/establishments with effect from August 01, 1976.
12. All the members of the Employees’ Provident Fund are required to become
members of this Scheme.

13. Contributions: Employers are required to pay contributions to the Insurance

Fund at the rate of 0.5 per cent of pay i.e. basic wages, dearness allowance
including cash value of food concession and retaining allowance, if any.

 Workmen’s Compensation Act, 1923 :

1. The main objective of the Act is to impose an obligation upon the employers to
pay compensation to workers for accidents arising out of and in course of
employment.

2. Applicability :The Act applies to any person who is employed otherwise than
in a clerical capacity, in railways factories, mines, plantations, mechanically
propelled vehicles, loading and unloading work on
a ship, construction, maintenance and repairs of roads and bridges, electricity
generation, cinemas, catching or trading of wild elephants, circus, and other
hazardous occupations and other employment specified in Schedule II to the Act. D

3. Benefits:

i. The compensation has to be paid by the employer to a workman for any

personal injury caused by an accident arising out of and in the course of his
employment (Section 3).
ii. The employer will not be liable to pay compensation for any kind of
disablement (except
death) which does not continue for more than three days.

iii. The rate of compensation in case of death is an amount equal to 50 per cent of
the monthly wages of the deceased workman multiplied by the relevant factor
or an amount of Rs.80,000 whichever is more.
iv. Where permanent total disablement results from the injury, the compensation
will be an amount equal to 60 per cent of the monthly wages of the injured
workman multiplied by the relevant factor or an amount of Rs. 90,000,
whichever is more.
v. Where the monthly wages of a workman exceed four thousand rupees, his
monthly wages for the above purposes will be deemed to be four thousand
rupees only.
  Maternity Benefits Act, 1961:

1. The Maternity Benefit Act, 1961 is a piece of social legislation enacted to

promote the welfare of working women. The Act prohibits the working of
pregnant women for a specified period before and after delivery.
2. It also provides for maternity leave and payment of certain monetary benefits
for women workers subject to fulfillment certain conditions during the period
when they are out of employment on account of their pregnancy.
3. The services of a woman worker cannot be terminated during the period of her
absence on account of pregnancy except for gross misconduct.
4. Maximum period for which a woman can get maternity benefit is twelve weeks.
Of this, six weeks must be taken prior to the date of delivery of the child and six
weeks immediately following that date.

 Payment of Gratuity Act,1972:

1. An Act to provide for a scheme for the payment of gratuity to employees

engaged in factories, mines, oilfields, plantations, ports, railway companies,
shops or other establishments
2. ‘Gratuity’ is a retrial benefit. This act envisages in providing a retirement
benefit to the workman who have rendered long and unblemished service to the
employer. Gratuity is a reward for long and meritorious service.
3. APPLICABLITY: Every factory ,mine, oilfield, plantation ,port, railways,
company, shop, establishment or educational institutions employing ten or
more employees.
4. Entitlement : Every employee, other than apprentice irrespective of his wages
is entitled to receive gratuity after he has rendered continuous service for five
years or more.
5. . It is payable at the time of termination of his services either
(i) on superannuation or (ii) on retirement or resignation or (iii) on death or
disablement due to accident or disease. Termination of services includes retrenchment.
However, the condition
of 5 years continuous service is not necessary if services are terminated due to death
or disablement.

6. In case of death of the employee, the gratuity payable to him is to be paid to his
nominee, and if no nomination has been made then to his heirs.
7. Amount of Gratuity Payable – Method of Calculation:
In case of non –seasonal establishment:
Gratuity Payable = 15/26 days wages x No of completed years of service X Rate
of wages..
8. The maximum limit is 3.5 lacks.

Thus, these are the various acts which have provisions regarding to the social security
in INDIA.