Industrial Health and Social Security

The greatest activity over the past few decades, in so far as employees benefits are concerned, has occurred in the areas of health and social security. Industrial health is comparatively an new system of public health and preventive medicine practiced among industrial groups with the specific object of improving their health and preventing the occurrence of disease as well as injury to them. In the traditional sense, health implies “the mere absence of an ascertainable disease or infirmity”, but in its present connotation, health is “the outcome of the interaction between the individual and his environment”. According to such a dynamic approach, industrial health may comprise measures for (i) protecting the workers/employees against any health hazards arising our of their work or the condition under which it si carried on; (in) fostering the adaptation of workers to the jobs and work environment and thus contributing towards the employees’ physical as well as mental adjustments; and (iii) promoting the establishment and maintenance of the highest possible degree of physical mental and social well-being of the workers. A large segment of the adult male population and quite a number of adult females too, spend a considerable portion of their working time today in an industrial setting where they are employed. Industry exposes the employee to certain hazards the may affect his health adversely. It is with the intention of reducing such hazards and improving the employee’s health that the discipline of industrial health has come into being as a branch of public health. The introduction of industrial organisation may contribute effectively to a positive reduction in employee absenteeism and turnover as well as discontent and indiscipline among the employees and thus may improve their morale, work performance and productivity.

Obviously employees in the modern industrial setting are subject to various types of health hazards and occupational diseases. According to one view, the normal health hazards may be caused by-

• Chemical substances at the work place such as carbon monoxide, carbon dioxide, sulphur dioxide, sulphuric acid, acetic acid etc. When they are inhaled or absorbed by the skin which may result in acute or chronic sickness including respiratory or heart diseases, cancer and neurological disorders they may shorten life expectancy;

• Biological factors including sickness caused by bacteria, fungi, viruses, dietary deficiencies, allergies, emotional strains due to fear, anxiety etc. and

• Environmental factors including illness due to radiation, noise, vibrations and shocks or atmospheric conditions such as inadequate ventilation, lighting arrangement or very high or low temperature at the work place.

While exposure of workers to radiation may cause cataract, vibration and shocks may cause nerve injury and inflammation of tissues of he joints of the operative’s hands and improper lighting may impair the employee’s vision, it has been pointed out that many manufacturing processes are accompanied by such noise as is capable of not only impairing the hearing of a workers but also of making it difficult for him to hear any warning of an impending danger.

Besides such health hazards, various occupational diseases may also be caused as a result of the physical conditions and the presence of poisonous and non-poisonous dust and toxic substances in the atmosphere during the process of manufacturing or extraction. Such diseases are usually slow to develop and generally cumulative in their effects. Each diseases are usually slow to develop and generally cumulative in their effects. 

In India, a list of such diseases are appended to sections 89 and 90 of the Factories Act, 1948 as well as the Workmen’s Compensation Act, 1923 which includes lead poisoning, phosphorous poisoning, arsenic poisoning, chorome ulceration, anthrax silicosis, primarily cancers of skin, dermatitis due to action of mineral oil, asbestosis, toxic anemia, begassoise etc.

Social Security

Broadly speaking, financial and social insecurity means inability or lack of capacity of a person or individual to protect himself from the risks of unemployment, sickness, industrial accidents or disability, old age and other contingencies. Thus linked with problems of employees safety and industrial health of workers is the question of provision of security to them by the society or the government.

In industrial undertakings, workers are often subject to periodic unemployment due to sickness, industrial accidents, old age, or on account of financial sickness or not so-efficient condition of business. These may incapacitate a worker temporarily or permanently and lead to unemployment causing financial misery and other consequences. Ordinarily, workers do not have financial resources to cope up with these problems or alternative means of livelihood. In these circumstances it is obligatory on the part of industrial establishment and the government to help these workers and provide them security or what we call social security.

Social security is a system of protection or support provided by the society or government to workers and their families in time of sudden calamity, sickness, unemployment, injuries, industrial accidents, disablement, ole age or other contingencies.

Social security programmes include –

• Medicare and insurance benefits

• Medical help at the time of injury and accident and provision financial compensation and relief.

• Pension in case of disablement

• Unemployment insurance or allowance

• Maternity benefits

• Death payments and family pension

• Retirement benefits or old age relief etc.

Social Security Programmes in India

In pre-independence period, a beginning was made in social security with the passing of the Workmen’s Compensation Act, 1923. After independence, the government of India has enacted a number of laws and has introduced and implemented many schemes to provide social security to industrial workers. Some important acts and schemes in this context are discussed below.

Workmen’s compensation act, 1923

Workmen’s Compensation Act, passed by the Government of India in 1923, became effective from July 1, 1924. The act provided for payment of compensation to workmen and their dependents in case of injury, accident and some occupational diseases arising our of and in the course of employment and resulting in disablement and death. The act is applicable to railway men and persons working in factories, mines, plantations, mechanically propelled vehicles, construction works and certain other hazardous occupations. The rate of compensation ranges from Rs. 20,000 to Rs. 90,000 in case of death and from Rs. 24,000 to Rs. 1,14,000 in case of permanent disablement depending on wages of workmen. In case of partial disablements, the rate of compensation is 50 per cent of the wages of workmen and is to be paid for a maximum period of 5 years. The act, however, does not apply to workmen who are covered by the Employees State Insurance Act, 1948.

Maternity benefit act, 1961

The Government of Mumbai was the first one which passed Maternity Benefits Act in 1929. Now, such laws are in force in almost every state of the country. The Maternity Benefit Act, 1961 passed by Central Government regulates employment of women in certain establishments for certain period before and after child birth and provides for maternity and other benefits. The Act covers female works in mines, factories, circus industry, plantations, hotels, restaurants and shops and establishments employing ten or more persons. There is no wage limit for coverage under the Act. The act entitles the female workers to get about 3 months or 12 weeks maternity leave with full wages. However this act is not applicable to those female workers who are covered by Employees State Insurance Act, 1948.

Employees state insurance act, 1948 (ESI scheme)

The Employee State Insurance Act, 1948 is the most important comprehensive scheme for providing social security benefits. The scheme which was originally framed to cover perennial i.e. non-seasonal factories using power and employing 20 or more persons has been gradually extended to smaller factories, hotels, restaurants, cinemas, shops, etc. employing 20 or more persons. It covers employees drawing wages upto Rs. 1600 per month. The Act provides for medical care in kind and cash, benefits in the contingency of sickness, maternity employment injury and pension for dependents on the death of the worker because of employment injury. 

Full Medicare and hospitalization is also being progressively made to members of family of he injured persons. The act aims at providing compulsory and contributory health insurance coverage to workers, For the purpose, the government has set ups employees’ State Insurance fund administered by an autonomous Employees’ State Insurance Corporation. Finances for the fund come from the contribution from employers and employees and government grants. Employees have to contribute compulsorily a nominal sum, a small percentage of the wages towards this insurance coverage. Presently employers are required to contribute 1.25 per cent of their total wage bill towards the fund. There is a network of hospitals, annexes and dispensaries established at important industrial centers throughout the country to provide medical care and other facilities to workers. The scheme covers about 62 lakhs employees.

Employment provided fund

 The Employment Provident Fund and Miscellaneous Provision Act, 1952 provides retirements benefits such as provident fund, family pension and deposit-linked insurance. This act covers establishments employing 20 or more persons and is restricted to those drawing wages up to Rs. 3500 per month and is applicable to about 175 industries or classes of establishments. The minimum rate of contribution under the act presently is 8.33 per cent. However in respect of 98 industries or classes of establishment employing 50 or more persons, it has been enhanced to 10 per cent. Under the act, this contribution is deducted from the wages of employees and deposited in the Fund set up for the purpose. The employers have to make a matching contribution. The amount of provident fund held in employee’s name along with interest is paid to him at the time or his retirement.

Death relief 

A Death Relief Fund was established under the Employee Provident Fund Scheme in 1964 to provide financial assistance to nominees or heirs of deceased members of unexempted establishments getting maximum salary of Rs. 1500 per month at the time of death. The amount was restricted to the sum equal to the amount of PF balance falling short of Rs. 2000.

Employees deposit-linked insurance schemes, 1976 as amended in 1990

Under this scheme, in case of death of an employee, the person entitled to received his accumulated provident fund gets an additional insurance amount equal to average balance in PF account of the deceased during the preceding twelve months provided that such average balance was not less than Rs. 500 during the said period. The maximum amount to be paid is restricted to Rs. 25,000 and the employees are not required to make any contribution to it. 

Family pension scheme

This scheme was introduced in 1971. It provides long-term financial security to families of industrial workers in case of their premature death. It is made out of the Employees Provident Fund to which the government makes additional contribution for the purpose. Family pension ranges from Rs. 225 to Rs. 750 per month depending on the period of membership. Presently family pensioners are also entitled to assurance benefits of Rs. 500 to meet immediate expenses.

Retirement-cum-withdrawal benefit

A member is entitled to withdrawal benefit on retirement or superannuation at the rates ranging between Rs. 110 to Rs. 400 (for one years membership) and from Rs. 9000 to Rs. 19825 (for 40 years membership) depending upon the pay range of the members and length of his membership.

Payment of gratuity act, 1972

This Act is applicable to factories, mines, oil-fields, plantations, ports, railways, automobiles undertakings, companies, shops etc. The act covers employees receiven wages upto Rs. 2500 per month. The act provides for payment of gratuity at the rate of 15 days wages for each complete year of service subject to a maximum of Rs. 50,000. In such case of seasonal establishments gratuity is payable at the rate of seven days’ wages for each season.

Personnel departments can play an important role in ensuring safety, health, security and welfare of the workers engaged in the organisation. The first thing they can do is to make employees aware of the safety measures, rules and regulation, and their rights concerning compensation payable to them in case of accidents and injuries and about the provisions of various social security measure in force for their welfare. This can be done by organizing training courses. They can help in reducing accidents and thus, lower the cost of worker’s compensation by persuading the management to provide a safe working environment.

An important implication for the personnel department is that it should provide adequate the reasonable financial and security benefits and facilities. It should also comply with various legal rules and regulation honestly and faithfully.