STUDY OF SOCIAL SECURITY SCHEMES IN INDIAN LABOUR LEGISLATION FOR WORKERS IN THE CONSTRUCTION INDUSTRY

STUDY OF SOCIAL SECURITY SCHEMES IN INDIAN LABOUR LEGISLATION FOR WORKERS IN THE CONSTRUCTION INDUSTRY

  • Gurpreet Kumar[1]

Abstract

Social Security means the measures of protection afforded to employees, workers and contractual workers to ensure access to health care and to provide income security particularly in cases of Old Age, Unemployment, Sickness, Invalidity, Work Injury, Maternity or Loss of a Breadwinner by means of rights conferred on them and schemes frames by the Government.

Availing benefits of social security is a basic human right. It is fundamental right covered under “Right to Life” provided in Article 21 of the Constitution of India. The right to life does not merely mean the continuance of a person’s animal existence, but a quality of life. It means right to live decently as a member of civilized society. The right implies a reasonable standard of comfort and decency. The Judiciary also pays attention to the same in various leading cases.

In Francis Coralie v. Union Territory of Delhi, the Supreme Court held that fundamental right of everyone to live with human dignity free from exploitation.

Secondly, in S.R. Kapoor v. Union of India, it was held that right to life must includes protection of health and strength of the workers both men and women and to develop children in a healthy manner and ensure just and humane conditions of work and maternity relief.

Right to life guaranteed under Article 21 includes within its ambit “the right to social security and protection of the family”. Social security and protection of the family were integral part of the right to life. Moreover, in Regional Director, ESI Corporation v. Francis De Costa, the Supreme Court held that security against sickness and disablement was a fundamental right under article 21 of the Constitution of India. Furthermore, in S.K. Mastan Bee v. G.M., South Central Railway, it was held by the Court that right to family pension has been held to be a forming part of the right to life guaranteed under Article 21.

Construction industry is a great employment provider and based on contractual labour. So, there is more exploitation of contract labour at the hands of labour contractors. So for saving the life and dignity of workers and contractual workers in the construction industry, the providing of social security benefits is necessary. Workers in the construction industry are entitled for following mentioned social security benefits.

  1. Employees Provident Fund Organization
  2. Employees State Insurance Corporation
  3. Maternity Benefit
  4. Work Injury
  5. Loss of Breadwinner
  6. Income Security especially in Old Age

Keywords: – Construction Workers, Contract Labour, Social Security Benefits, Right to Life and Dignity, Protection of workers from exploitation, Granting timely benefits to the eligible workers

Introduction

From the very beginning, Industry is playing an important role in the building and development of economic structure. Importance of labour & industrial laws can never be ignored and undervalued. In Constitution of India, we cherished economic as well as social justice. The importance of social security and economic, cultural and social rights indispensable for the dignity and free development of personality of each and every individual has been recognized by the Universal Declaration of Human Rights (UDHR). Different statutes deal with labour & industrial law for protection of workers and maintaining harmonious relations between employer and employee.

Labour legislation in any country should be based on the principles of social equity & social justice, international uniformity & national economy, because constitution of International Labour Organisation also favours for the same[2].

Social justice

Social justice implies two things. Firstly, equitable distribution of profits alongwith other benefits of industrial produce among owners and workers. Secondly, ensuring protection to the workers against factors affecting their health, safety and welfare. Before passing of Workmen’s Compensation Act, 1923 no compensation was available to be paid in case of an accident or injury arising out of and in the course of employment. But with the enactment of said Act of 1923, compensation made available for any injury caused by an accident arising out of and in the course of employment[3].

Social Security means protection afforded to employees, workers and contractual workers to ensure access to health care facilities and ensuring income security especially in times of Old Age, Sickness, Temporary Disablement, Unemployment, Maternity or Loss of a Breadwinner by means of rights and schemes frames by the Government.

Availing benefits of social security is a basic human right. It is fundamental right covered under “Right to Life” provided in Article 21 of the Constitution of India. The right to life includes a quality of life, but does not merely mean the continuance of a person’s animal existence[4].

It means right to live in a civilized society in a decent manner. The right includes a reasonable standard of decency and comfort. The Judiciary also pays attention to the same in various leading cases[5].

In Francis Coralie v. Union Territory of Delhi[6], the Supreme Court held that right to life is a fundamental right that guarantees right to live with dignity along-with clothing and shelter and move freely with fellow human beings.

Again, in S.R. Kapoor v. Union of India[7], it was held that right to life must includes protection of health and strength of the workers both men and women and to develop children in a healthy manner and ensure just and humane conditions of work and maternity relief.

Right to life available under Article 21 includes within its sphere “the right to social security and protection of the whole family”. Social security and protection of the family were essential part of the right to life. Moreover, in Regional Director, ESI Corporation v. Francis De Costa[8], the Supreme Court held that security of a person against sickness and disablement was a fundamental right guaranteed under article 21 of the Constitution of India. Furthermore, in S.K. Mastan Bee v. G.M., South Central Railway[9], it was held by the Court that right to family pension is a forming part of the right to life assured under Article 21.

Social security

There is always conflict between employer and the employees over the issue of social produce, the solution of which is collective bargaining. With the development of industry, workers are facing insecurities with regard to income and employment in addition to old age issues and permanent or temporary disablement from work. Social security is coverage of risks against the unemployment, old age, temporary disablement from work or permanent disablement[10].

The social security takes several forms according to the needs of the people and their level of social consciousness, the advancement of technology & economic development. Social security envisages workers should be protected by various actions against social risks causing undue hardships to them. It covers through an appropriate organization, certain risk to which a person is exposed[11]. These risks are such that an individual cannot himself regulate them[12].

The model of social security is based upon human dignity and social justice ideas. The prime idea behind social security is that a citizen who has contributed to his country’s welfare should be given protection against certain hazards in life like in old age, in maternity, during disablement and upon superannuation[13].

Social security constitutes an important step towards a welfare State and enabling workers to become more efficient and so that wastage arising from industrial disputes could be reduced[14]. As per the National Commission report on labour, social security introduced an element of stability and protection in times of stresses and strains of modern life.

Security against economic fear is the minimum requirement to be secured to individuals in the nation. Universal Declaration of Human Rights expressed its importance in the following words: –

“Every person has the right to social security and is entitled to realization through national efforts and international co-operation.”[15]

“Every individual has the right to a adequate standard of living including good health and well-being of himself & family. The facilities like food, clothing, housing, medical care and the right to security in the event of unemployment, sickness, disability, widowhood, old age also required.”[16]

The International Labour Organization (ILO) plays an important role in standards of social insurance. The Social Security (Minimum Standards) Convention, 1952 embodies universally accepted common standards of social security. The enforcement of these principles has been proved to be beneficial to the world at large.[17]

In every nation, a lot of social security legislations have been enacted from time to time. The Employees Provident Funds and Miscellaneous Provisions Act, 1952 provides for benefits after superannuation, pension and Insurance benefits. The most important legislation is the Employees State Insurance Act, 1948 which provides for medical, sickness, dependant, disablement and maternity benefits in addition to Maternity Benefit Act, 1961 and the Payment of Gratuity Act, 1972.[18]

Construction industry is a biggest employment provider to the individuals and its projects are mainly completed through employment of contractual labour. So, there is more exploitation of contractual workers at the hands of labour contractors. So for protecting the life and dignity of workers and contractual workers in the construction industry, social security benefits are mandatory to provide. Workers in the construction industry are entitled for following mentioned social security benefits.[19]

Social Security Benefits                                   

  1. The Employees Provident Funds and Miscellaneous Provisions Act, 1952

The Employees Provident Funds Act, 1952 is enacted to provide for the institution of provident funds, pension fund and deposit linked insurance funds for employees working in various establishments. It is the prime duty of principal employer to put the Provident Fund Scheme into operation and to make contribution of both the employee’s and employer’s share to the fund then and there and deduct the employee’s share from their wages[20]. The Act is applicable to such establishments where 10 or more workers are working[21].

  1. Employees Provident Fund Scheme[22] –

There is a scheme called Employees Provident Fund scheme U/s 5 of the Act, 1952. As per the scheme, 12% of basic pay + dearness allowance is deducted and credited into account of an employee on monthly basis. Similarly 13% contribution is paid by employer, out of which 8.33% is paid towards employees pension scheme and 3.67% towards employees provident fund. Rest 1% is paid towards administrative charges and employees deposited linked insurance scheme.

In R.P.F. Commissioner v. L.R.F. Works[23], it was held by the court that the power of the Central Government to frame a scheme is neither unrestricted nor unguided.

In Standard Cotton and Silk Weaving Co. Ltd., vs. Reg. P.F. Commr.[24], it was held that two distinct powers i.e. (i) to frame a scheme and (ii) to specify to which establishments the scheme shall apply; both these powers can be exercised through the medium of a single notification.

  • Employee’s Pension Scheme[25] –

There is a scheme for workers called Employees Pension Scheme (EPS) for the purpose of providing for[26] –

  1. Superannuation pension, retiring pension or permanent total disablement pension to the employees of any establishment
  2. Widow or widower’s pension, children pension or orphan pension payable to the beneficiaries of such employees

A pension fund is established into which contribution is paid from time to time @ 8.33% of Basic + Dearness Allowance of employee’s salary.

In Smt. Kamla Bai v. Secretary, M.P. Electricity Board & others[27], the deceased husband of the petitioner was an employee of the Electricity Board. Deductions were made towards pension fund from his wages and credited into account. It was held by the Court that the widow was entitled for family pension.

In Gitaben Arvind Kumar Seth v. Regional Provident Fund Commissioner & others[28], the Court held that contributions to the Provident Fund and Family Pension are not separate but correlated and co-existing. Hence, the legal heirs are entitled for family pension.

  • Employees Deposit-Linked Insurance Scheme[29] –

The employee’s deposit-linked insurance is established for the purpose of providing life insurance benefits to the employees of any establishment to which this Act applies. The contributions are paid into account on monthly basis after which employee is eligible for benefits of insurance[30]. The employee has to contribute 0.5% of his basic salary towards EDLI scheme and eligible for insurance of Rs. 7 Lakh maximum.

  • Employees State Insurance[31]

In addition to other social security schemes, Employees State Insurance Scheme is also an important one. This scheme is providing various medical benefits to the workers and his/her dependants. The benefits available are listed below[32]: –

  1. Sickness Benefit[33]

Sickness benefit is a periodical payment to insured person, with the condition that his sickness is certified by a duly appointed Medical Practitioner. Where provision is made for sick leave by standing order, the employer cannot require the employee to seek sickness benefit provided under this sub section[34]. Only one benefit will be granted.

In Management of Dioccsan Press v. Labour Court, Madras[35], it was held that it was not possible to accept the contention that since the employee has received sickness benefit under the Act, he is not entitled to receive the wages for the period during which he was on sick leave. But the employer is entitled to deduct the benefit received by the employee from the leave salary payable to him.

  1. Maternity Benefit[36]

This benefit in the form of periodical payment is available to an insured woman. It is payable in case of –

  • Confinement; or
  • Miscarriage; or
  • Sickness arising out of pregnancy; or
  • Premature birth of a child.

The ground of eligibility of an insured woman to such payments must be certified by an Insurance Medical Officer as provided by the regulations[37].

  1. Disablement benefit[38]

Any insured person shall be entitled to periodical payments if:

  • He suffers from disablement
  • The disablement results from an employment injury; and
  • He sustained the employment injury as an employee under condition mentioned in the Act.

The disablement benefit is payable only when the injury is duly certified by an Insurance Medical Officer[39].

In Krishnan Kutty Nair v. P.B.V. Regional Director, ESI Corporation and Another[40], the appellant was covered under the E.S.I. Scheme and met with an accident in the course of his employment on June 15, 1990. The claimant suffered injury after he had ceased to be an employee. Dismissing the appeal it was held that Section 46(c) of Employees State Insurance Act, 1948 specifically provides for two cumulative conditions for its applicability; (i) first the claimant must be an insured person; and (ii) second that such an injury must be sustained when he was an employee. Hence, when the injury had been sustained by the employee when he ceased to be an employee, he would not be entitled to the benefit of disablement though his contribution period and his status as insured person continues.

  1. Dependents benefit[41]

This benefit is available to such dependants, when an insured person dies as a result of an employment injury sustained as an employee, entitled to compensation under the ESIC Act[42].

Under ESI Act, 1948 Medical benefit is available to an injured person or to a member of his family. Such benefit is extended to the members of his family. This benefit is in the following forms: –

  • Out-patient treatment and attachment in the hospital or dispensary; or
  • By visits of the home of the insured; or
  • As an in-patient in a hospital or other institution[44].

Section 65 of the ESIC Act prohibits receiving of two benefits at a time. An insured person shall not be entitled to receive for the same period the following combination of benefits simultaneously[45]:

  • Sickness benefit and maternity benefit
  • Sickness benefit and disablement benefit for temporary disablement; or
  • Both maternity benefits and disablement benefit for temporary disablement

The insured person entitled to more than one benefits shall have an option to choose one of the two benefits.

  • The Maternity Benefit Act, 1961

The Act is enacted with an objective to achieve the object of doing social justice to women workers. By this, woman not only subsists, but also nurses her child, preserve her efficiency as a worker and also maintain her previous efficiency level and output[46].

Employer is prohibited from employing any woman in his establishment during the six weeks immediately following the day of her delivery, miscarriage or medical termination of pregnancy. No woman shall work in any establishment during the six weeks immediately following the day of her delivery, miscarriage or medical termination pregnancy[47].

No pregnant woman shall be required by her employer to do any work of the following nature during the period one month immediately preceding the period of six weeks before the date of her expected delivery and during the period of six weeks for which the pregnant woman does not avail of the leave of absence under Section 6[48]:

  • Any work of arduous nature;
  • Any work involves long hours standing;
  • Any work likely to interfere with her pregnancy or likely to cause her miscarriage or adversely affect her health;
  1. Right to payment of maternity benefit[49] –

Maternity benefit is a payment to a woman worker at the rate of average daily wages for the period of her actual absence from service immediately preceding and including the day of her delivery and for eight weeks immediately following that day[50].

No woman shall be entitled to maternity benefit unless worked for a period of not less than one hundred and sixty days in the twelve months immediately preceding the date of her expected delivery. A woman expecting a child is entitled to maternity benefit for a maximum period of twenty six weeks split into periods viz., pre-natal and post-natal[51].

  • Forfeiture of maternity benefit[52] –

Employer can forfeit maternity benefit of woman if she work with another employer during the period of maternity leave[53].

  • The payment of gratuity act, 1972

The Payment of Gratuity Act, 1972 passed as Act No. 30 of 1972 and enforced w.e.f. 16.09.1972 and is applicable to the establishments in which ten or more persons are employed[54]. In Delhi Cloth and General Mills Co. Ltd., v. their Workmen[55], it was observed by the Court that gratuity scheme is retiring benefits to the workmen who rendered long and unblemished service to the employer and thereby worked towards to the prosperity of the employer.

Payment of Gratuity: –

Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years[56] –

  • On his superannuation
  • On his retirement or resignation, or
  • On his death or disablement due to accident or disease

The completion of continuous service of five years is not necessary where the termination of the employment of any employee is due to death or disablement. In case of death of employee, gratuity is payable to his nominee or heirs[57].

Recovery of gratuity –

An application for recovery of gratuity amount can be filed with the office of Labour commissioner concerned by the aggrieved employee / worker. The Labour Commissioner can issue directions to the employer for the release of the amount at the earliest.[58]

Gratuity cannot be attached in execution of any decree or order of any civil revenue or criminal court.[59]

Conclusion

Hence, it is concluded that social security benefits are necessary for safe future of workers. Social Security legislations are proved to be helpful in protecting the rights of workers, but more is still required. Loopholes are required to be filled out for better results. A good social security measure related to higher amount of pension benefit for worker after their superannuation/retirement is still required. Social security legislation i.e. Employees State Insurance Corporation Act is still required amendments, whereby a big amount could be paid to workers during total / temporary disablement from work.

[1] Department of laws, Punjab University, Chandigarh.

[2] 27 S.N. Misra Labour & Industrial Laws 2 (Central Law Publications 2013).

[3] 27 S.N. Misra Labour & Industrial Laws 9 (Central Law Publications 2013).

[4] 8 PROF. NARENDER KUMAR, CONSTITUTIONAL LAW OF INDIA  307 (Allahabad Law Agency 2011).

[5] 8 PROF. NARENDER KUMAR, CONSTITUTIONAL LAW OF INDIA  307 (Allahabad Law Agency 2011).

[6] AIR 1981 SC 746.

[7] AIR 1990 SC 752.

[8] (1993) Supp 4 SCC 100

[9] JT 2002 (10) SC 50.

[10] 27 S.N. Misra Labour & Industrial Laws 11 (Central Law Publications 2013).

[11] Report of the National Commission on Labour, 1969, Page 162.

[12] International labour Organisation (ILO) Approaches to Social Security, 1942, p. 80 quoted in Report of the National Commission on Labour (1969), p. 162.

[13] International labour Organisation (ILO) Approaches to Social Security, 1942, p. 80 quoted in Report of the National Commission on Labour (1969), p. 162.

[14] V.V. Giri, Labour Problems in Indian Industry, Page 248.

[15] Article 22 of the Universal Declaration of Human Rights.

[16] Article 25 of the Universal Declaration of Human Rights.

[17] Report of the National Commission on Labour, (1969), p. 162.

[18] 27 S.N. Misra Labour & Industrial Laws 13 (Central Law Publications 2013).

[19] INDIAN CONSTRUCTION INDUSTRY, https://www.indianconstructionindustry.com/overview.html (last visited Jul. 10, 2021).

[20] Kumar Brothers (Bidi) Private Ltd., v. Regional Provident Funds Commissioner, Bihar (198) Lab IC 1578 (Pat) .

[21] The Employees Provident Funds and Miscellaneous Provisions Act, 1952, § 1(3)(b), No. 19, Acts of Parliament, 1952 (India).

[22] The Employees Provident Funds and Miscellaneous Provisions Act, 1952, § 5, No. 19, Acts of Parliament, 1952 (India).

[23] AIR 1962 Punj 507.

[24] 9 FJR 50.

[25] The Employees Provident Funds and Miscellaneous Provisions Act, 1952, § 6-A, No. 19, Acts of Parliament, 1952 (India).

[26] 27 S.N. Misra Labour & Industrial Laws 651 (Central Law Publications 2013).

[27] (1992) I LL.J. 362 (MP).

[28] (1995) II L.L.J. 978 (Guj).

[29] The Employees Provident Funds and Miscellaneous Provisions Act, 1952, § 6-C, No. 19, Acts of Parliament, 1952 (India).

[30] 27 S.N. Misra Labour & Industrial Laws 651 (Central Law Publications 2013).

[31] 27 S.N. Misra Labour & Industrial Laws 572 (Central Law Publications 2013).

[32] The Employees State Insurance Act, 1948, § 46, No. 34, Acts of Parliament, 1948 (India).

[33] The Employees State Insurance Act, 1948, § 49, No. 34, Acts of Parliament, 1948 (India).

[34] M.L. Kuntarao v. Azam Johi Mills Ltd., Warangal, (1970) Lab IC 585 (AP).

[35] (1982) I LL.J. 451 (Mad).

[36] The Employees State Insurance Act, 1948, § 50, No. 34, Acts of Parliament, 1948 (India).

[37] 27 S.N. Misra Labour & Industrial Laws 573 (Central Law Publications 2013).

[38] The Employees State Insurance Act, 1948, § 51, No. 34, Acts of Parliament, 1948 (India).

[39] 27 S.N. Misra Labour & Industrial Laws 573 (Central Law Publications 2013).

[40] 2008 II LL.J. 997 (S.C.).

[41] The Employees State Insurance Act, 1948, § 52, No. 34, Acts of Parliament, 1948 (India).

[42] 27 S.N. Misra Labour & Industrial Laws 573 (Central Law Publications 2013).

[43] The Employees State Insurance Act, 1948, § 56, No. 34, Acts of Parliament, 1948 (India).

[44] 27 S.N. Misra Labour & Industrial Laws 579 (Central Law Publications 2013).

[45] 27 S.N. Misra Labour & Industrial Laws 583 (Central Law Publications 2013).

[46] B. Shah v. Labour Court, Coimbatore, AIR 1978 SC 12.

[47] The Maternity Benefit Act, 1961, § 4, No. 53, Acts of Parliament, 1961 (India).

[48] The Maternity Benefit Act, 1961, § 6, No. 53, Acts of Parliament, 1961 (India).

[49] The Maternity Benefit Act, 1961, § 5, No. 53, Acts of Parliament, 1961 (India).

[50] Id.

[51] 27 S.N. Misra Labour & Industrial Laws 1006 (Central Law Publications 2013).

[52] The Maternity Benefit Act, 1961, § 18, No. 53, Acts of Parliament, 1961 (India).

[53] 27 S.N. Misra Labour & Industrial Laws 1009 (Central Law Publications 2013).

[54] 27 S.N. Misra Labour & Industrial Laws 1012 (Central Law Publications 2013).

[55] (1968) 36 FJR 247.

[56] The Payment of Gratuity Act, 1972, § 4, No. 39, Acts of Parliament, 1972 (India).

[57] 27 S.N. Misra Labour & Industrial Laws 1024 (Central Law Publications 2013).

[58] The Payment of Gratuity Act, 1972, § 8, No. 39, Acts of Parliament, 1972 (India).

[59] The Payment of Gratuity Act, 1972, § 13, No. 39, Acts of Parliament, 1972 (India).