Social Security

Concept Of Social Security

The International Labour Organisation (ILO) defines Social Security as "the security
that society furnishes through appropriate organization against certain risks to which its
members are perennially exposed. These risks are essentially contingencies against which an
individual of small means cannot effectively provide by his own ability or foresight alone or
even in private combination with his fellows. The mechanics of social security therefore
consists in counteracting the blind injustice of nature and economic activities by rational
planned justice with a touch of benevolence to temper it.”

Indian Social Security System

The social security system in India has evolved in obedience to the impact of Western
influence and of the modern urban industrial system. Though the non-industrial classes also
are in urgent need of social security, their needs have been more acutely felt after the advent
of industrialization in the 19th century. Social reformers, labor welfare organizations and
many progressive employers persuaded the government to undertake social security measures
as a protection for the workers at least against a few contingencies. “Social security is a major
aspect of public policy today and the extent of its prevalence is a measure of the progress
made by a country towards the idea of a welfare state”.

Article 43 of the Indian Constitution speaks of state's responsibility to provide social

security to the citizens of this country.

The social security strategies in India include the following:

Social insurance with the participation of the beneficiary pooling risks and resources.

Social assistance financed from general revenues and granting benefits on the basis of
means test.

· Employers liability schemes where there is an identifiable employer and within the
economic capacity of the employer.

· National Provident Funds.

· Universal schemes for social security.

The following few legislative measures have been adopted by the Government of
India to promote social security schemes for industrial workers.

· Workmen’s Compensation Act, 1923: The Workmen’s Compensation Act was

passed in March 1923, and was put into effect on 1st July 1924. This Act followed the British
model, but was adapted to suit Indian conditions. Was-time injuries were also covered by the
Act. The 1962 Amendment raised the wage limit covered under the Act to Rs.500 per month.
It also amended the clauses bearing on industrial diseases, and revised the rates of
compensation. With effect from 1st October 1975, the wage limit coverage under this Act has
been raised from Rs.500 to Rs.1000 per month.

· Employees’ State Insurance Act, 1948: Two conventions on health of workers in

industry, commerce and agriculture were adopted in 1927 by International Labor Conference.
The question about health insurance was also discussed by the Royal Commission on Labor,
and a tentative scheme of health insurance was proposed in its comprehensive report in 1931.
Its recommendations on the adoption of a health insurance scheme were not accepted by the
Government of India because of financial difficulties. All these built up a lot of pressure on
the government.

The one-man committee of Professor B.P. Adarkar, set up in March 1943, submitted
its report on a scheme of health insurance for industrial workers in August 1944. It
recommended a compulsory and contributory health insurance scheme for workers in
perennial factories in three groups of industries, namely textiles, engineering and minerals
and metals. Bearing all these modifications and recommendations in mind, the Government
of India passed the Employee’s State Insurance Act in April 1943, which provides cash
benefit in contingencies of sickness, maternity and employment injury, but did not provide
security in such contingencies as unemployment and old age. The dependents of workers who
died as a result of any employment injury were paid compensation in the form of a pension.

The E.S.I. Scheme stated with coverage of about 1.20 lakh industrial workers in
Kanpur and Delhi on 24th February 1952. It has continued to progress over all these years.
By the end of March 1976, there were 388 centers covering nearly 22 million beneficiaries
under this scheme. The total number of employees and insured persons under the scheme at
the end of 1995-96 was respectively 66.13 and 73.03 lakh insured persons.

The ESI Scheme offer both direct and indirect medical care. The direct method is
called the “Service System” by which the ESI Corporation provides medical care, either
through its own Employees’ State Insurance Hospital or through reservation of beds in State
Government hospitals. The indirect method is known as the “Panel System”, under which
medical care is provided through private doctors selected by the State Government with the
approval of the ESI Corporation.

The benefits provided by the Act are:

· Sickness Benefits; · Maternity Benefits; · Disablement Benefit; · Dependents’

Benefit; · Funeral Benefit; and · Medical Benefit.

All workers, earning less than Rs.3000 per month and employed in power-run
factories employing 20 or more persons are covered by this scheme. However, it does not
cover workers employed by seasonal factories. An insured person under ESI Scheme is not
eligible for similar benefits under the Workmen’s Compensation Act and State Acts relating
to maternity benefits.

INTERNATIONAL LABOUR ORGANIZATION AND SOCIAL SECURITY

The International Labor Organization was founded in 1919 for the primary purpose of
promoting social justice and improving the living and working conditions of workers thought
out the world. It made a beginning in this field by emphasizing the importance of
comprehensive social security measures in the Preamble to its Constitution, in which it
promised “protection of the worker against sickness, disease and injury arising out of his
employment, the protection of children, young persons and women, provision for old age and
injury”

In order to implement these measures, the ILO took certain steps:

· It formulated international standards by way of recommendations regarding the

definition of social security.

· It collected and spread the information about social security schemes in various
countries.

· It’s provided technical assistance and guidance so that social security schemes might
be properly formulated by means of co-operation with other social organizations.

For this purpose, an International Social Security Association was established in

1927.

The 1952 ILO Convention on Social Security (Minimum Standard) divided social
security into nine components:

· Medical Care: This should cover pregnancy, confinement and its consequences and
any disease which may lead to a morbid condition. The need for pre-natal and post-natal care,
in addition to hospitalization was emphasized.

· Sickness Benefit: This should cover incapacity to work following morbid condition
resulting in a loss of earnings. This calls for periodical payments based on the convention
specification.

· Unemployment Benefit: This should cover the loss of earning during a worker’s
unemployment period when he is capable and available for work, but remains unemployed
because of lack of suitable employment.

· Old age Benefit: This benefit provides for the payment – the quantum depending
upon an individual’s working capacity during the period before retirement.
 · Employment Injury Benefit : This should cover the following contingencies
resulting from accident or disease during employment :

(a) Morbid condition;

(b) Inability of work following a morbid condition, leading to suspension of earnings;

(c) Total or partial loss of earning capacity which may become permanent; and

(d) Death of the breadwinner in the family, as a result of which the family is deprived
of financial support.

· Family Benefit: This should cover responsibility for the maintenance of children
during the entire period of a contingency.

· Maternity Benefit: This benefit should cover pregnancy, confinement and their
consequences resulting in the suspension of earnings. Provision should be for medical care,
including pre-natal confinement, post-natal care and hospitalization if necessary.

· Invalidism Benefit: This benefit, in the form of periodical payments should cover the
needs of workers who suffer from any disability arising out of sickness or accident and who
ware unable to engage in any gainful activity.

· Survivors’ Benefit: This should cover periodical payments to a family following the
death of its breadwinner and should continue during the entire period of contingency.

The ILO has suggested various methods of organizing, establishing and financing
various social security schemes. For the benefit of the less developed countries, it has fixed
the level of benefits fairly low, so that the schemes may be practicable.

CONCLUSION

Hence we see that social security is an indispensable factor for any labor scenario.

The purpose of any social security measure is to give individuals and families the
confidence that their level of living and quality of life will not erode by social or economic
eventuality. A worker works not only for the economic motivation but also for the sense of
belongingness and security within his workplace. Hence it is the duty of the employer to
ensure as best as he can that his workers have this psychological satisfaction that their as well
as their families lives are socially secure and cared for. Indian legislations have gone a long
way in strengthening this cause and because of this and many other factors, today in the
world of labour and employment, the employee and employers’ interest is at par with each
other and the principal focus is on the combined interest and satisfaction of both. If these
conditions are fulfilled with a joint effort and contribution from both the employer and the
employee then the workplace to a great extent will become a home of sorts.