Statutory Measures for Employee Protection and Welfare in India

The preamble to our Indian Constitution promises justice – social, economic and political. It also stresses Equality of status and of opportunity. Article 23 of the Constitution prohibits traffic in human beings and forced labour. Article 24 prohibits employment of children in factories. The article 38 and 39 spelt under Directive Principles of State Policy are now enforceable as per the dictums laid by our Supreme Court.

Constitution of India, Article 38: State to secure a social order for the promotion of welfare of the people:

  • The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life.
  • The State shall, in particular, strive to minimize the inequalities in income, and endeavor to eliminate inequalities in status, facilities and opportunities, not only amongst individuals but also amongst groups of people residing in different areas or engaged in different vocations.

Constitution of India, Article 39: Certain principles of policy to be followed by the State. –

The State shall, in particular, direct its policy towards securing –

  • That the citizens, men and women equally, have the right to an adequate means to livelihood;
  • That the ownership and control of the material resources of the community are so distributed as best to sub serve the common good;
  • That the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment ;
  • That there is equal pay for equal work for both men and women;
  • That the health and strength of workers, men and women, and the tender age of children are not abused and that citizens are not forced by economic necessity to enter avocations unsuited to their age or strength
  • That children are given opportunities and facilities to develop in a healthy manner and in conditions of freedom and dignity and that childhood and youth are protected against exploitation and against moral and material abandonment.

Through social security and social justice are spelt in our Constitution, they are never put into practice thanks to our Executives who only pretend to implement the programmes of the State. Some of the important Statutory Welfare measures given by the government are as follows:

(i) The Factories Act of 1948

(ii) The Employees State Insurance Act 1948

(iii) The payment of Wages Act 1936

(iv) The Workmen’s Compensation Act 1923

(v) The Employees’ Provident Funds and Miscellaneous Provisions Act 1952.

(vi) The Payment of Gratuity Act, 1962

(vii) The Maternity Benefit Act, 1961


Purpose of this Act: An act to consolidate and amend the law regulating labour in factories.

The Factories Act is meant to provide protection to the workers from being exploited by the greedy business employments and provides for the improvement of working conditions within the factory premises. The main function of this act is to look after the welfare of the workers, to protect the workers from exploitations and unhygienic working conditions, to provide safety measurers and to ensure social justice.

Sections 11 to 20 of the Factories Act deal about Health.


  • Section 11: Cleanliness
  • Section 12: Disposal of wastes and effluents
  • Section 13: Providing proper ventilation and maintaining proper temperature
  • Section 14: Removal of Dust and fume
  • Section 15: Providing artificial humidification
  • Section 16: No Overcrowding
  • Section 17: Proper Lighting
  • Section 18: Providing pure Drinking water
  • Section 19: Providing Latrines and urinals
  • Section 20: Providing Spittoons


  • Section 21: Proper Fencing of machinery
  • Section 22: Precautions – Work on or near machinery in motion
  • Section 23: No Employment of young persons on dangerous machines
  • Section 24: Providing Striking gear and devices for cutting off power
  • Section 25: Precautions near Self-acting machines
  • Section 26: Casing of new machinery
  • Section 27: Prohibition of employment of women and children near cotton openers
  • Section 28: Providing Hoists and lifts
  • Section 29: Provision for Lifting machines, chains, ropes and lifting tackles
  • Section 30: Protection near revolving machinery
  • Section 31: Protection near Pressure plant
  • Section 32: Provision for Floors, stairs and means of access
  • Section 33: Providing and precautions near Pits, sumps openings in floors, etc.
  • Section 34: No Excessive weights
  • Section 35: Protection of eyes
  • Section 36: Precautions against dangerous fumes, gases, etc
  • Section 36A: Precautions regarding the use of portable electric light
  • Section 37: Explosive or inflammable dust, gas etc.
  • Section 38: Precautions in case of fire
  • Section 39: Power to require specifications of defective parts or tests of stability
  • Section 40: Safety of buildings and machinery.
  • Section 40A: Maintenance of buildings
  • Section 40B: Appointment of Safety Officers


  • Section 42: Providing Washing facilities
  • Section 43: Providing Facilities for storing and drying clothing
  • Section 44: Providing Facilities for sitting
  • Section 45: First-aid appliances to be kept.
  • Section 46: Canteens at subsidized rates.
  • Section 47: Shelters, rest rooms and lunch rooms for workmen.
  • Section 48: Crèches for babies of working women.
  • Section 49: Appointment of Welfare officers.

It is the duty of the Chief Inspector of Factories to ensure enforcement of all the above provisions of the Factories Act in respect of safety, health and welfare of employees.


Purpose of the Act: An Act to provide for the payment of certain classes of employers to their workmen of compensation for injury by accident. The workmen’s compensation Act 1923 is one of the earliest pieces of labour legislation. This act encompasses all cases of accidents arising out of and in course of employment. The rate of Compensation to be paid in a lump sum is determined by a schedule provided in the act proportionate to the extent of injury and the loss of earning capacity. The younger the age of he worker and higher the wage the greater is the compensation. The Act provides the formula for calculating the compensation. The injured person can claim compensation and in the case of death, the compensation is claimed by dependents of the deceased. This law applies to the organized as well as unorganized sectors that are not covered by the E.S.I. scheme. The following definitions and the sections of law are presented for the students to take note of them.

Administration: The act is administered by the State Governments which appoint Commissioners for this purpose under Sec.20 of the Act.

Benefits: Under the Act, compensation is payable by the employer to workman for all personal injuries caused to him by accident arising out of and in the course of his employment which disable him for more than 3 days. If the workman dies, the compensation is to be paid to his dependants. The Act distinguishes among three types of injuries: permanent total disablement, permanent partial disablement and temporary disablement. The amount of compensation to be paid on the death or disablement of workman is given in Fourth Schedule of the Act and varies according to his wages, the type of injury and age. It is an obligation upon the employer to make the payment of compensation within one month from the date on which it falls due.

Sources of Funds: All compensation under the act is payable by the employer.


The Payment of Wages Act was enacted as early as 1936 during the colonial rule. The purpose of this act is to regulate payment of wages. This insists on the payment of wages by the seventh day or the tenth day of the succeeding month and in case of weekly payment the last day of the week.

Section 3: Responsibility for payment of wages. – Every employer shall be responsible for the payment to person employed by him of all wages required to be paid under this Act. Provided that, in the case of persons employed (otherwise than by a contractor) –

  • In factories, if a person has been named as the manager of the factory under clause of sub-section (1) of section 7 of the Factories Act, 1948 (63 of 1948)
  • In industrial or other establishments, if there is a person responsible to the employer for the supervision and control of the industrial or other establishments
  • Upon railways (otherwise that in factories), if the employer is the railway administration and the railway administration has nominated a person in this behalf for the local area concerned, the person so named, the person so responsible to the employer, or the person so nominated, as the case may be (shall also be responsible) for such payment.

Section 4: Fixation of wage-periods:

  • Every person responsible for the payment of wages under section 3 shall fix periods (in this Act referred to as wage-periods) in respect of which such wages shall be payable.
  • No wage-period shall exceed one month.

Section 5: Time of payment of wages. —

(1) The wages of every person employed upon or in

  • Any railway, factory or {industrial or other establishment} upon or in which less than one thousand persons are employed, shall be paid before the expiry of the seventh day.
  • Any other railway, factory or {industrial or other establishment}, shall be paid before the expiry of the tenth day, after the last day of the wage-period in respect of which the wages are payable:

(2) Where the employment of any person is terminated by or on behalf of the employer, the wages, earned by him shall be paid before the expiry of the second working day from the day on which his employment is terminated.

(3) The State Government may, by general or special order, exempt, to such extent and subject to such conditions as may be specified in the order, the person responsible for the payment of wages to persons employed upon any railway (otherwise than in a factory) from the operation of this section in respect of the wages of any such persons or class of such persons.

(4) Save as otherwise provided in sub-section (2), all payments of wages shall be made on a working day.


The purpose of this Act: An Act to provide for the institution of Provident Funds, pension funds and deposit linked fund for employees in factories and other establishments. Contributions of 10% of the wages are paid by the employer and another 10% by the employees. This amount is deposited with the government which pays an interest. This Act also now has provisions for pension scheme.

Administration: The employees Provident Funds, Pension and Insurance Schemes framed under the Act are administered by a tripartite Central Board of trustee, consisting of representatives of employers and employees and persons nominated by the Central and State Governments.

Benefits: The act has made schemes for 3 types of benefits, provident fund, family pension and deposit linked insurance. Family pension is payable to the widow or widower up to the date of death or re-marriage whichever is earlier. In the absence of the widow or the widower it is payable to the eldest surviving unmarried daughter until she attains the age of 21 years or marries whichever is earlier. The dependents of the employee also receive an additional amount known as the deposit linked insurance which is equivalent to the average balance lying to the credit of the employee on his provident fund during the preceding 3 years, subject to a maximum of Rs 10000 provided that such employee has kept a minimum average balance of Rs. 1000 in the provident fund.

Source of Funds: Here both the employer and the employee are required to contribute the provident fund every month at 8.33% of the basic wages, dearness allowance and retaining allowance. An employee can make a larger contribution up to 10% but there is no compulsion for the employer to make a matching contribution.


Purpose of the Act: An act to provide for scheme for the payment of gratuity to employees engaged in factories, mines, oil fields, plantations, ports, railway companies, shops or other establishments and matters connected therewith or incidental thereto. 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.

(a) On his superannuation

(b) On his retirement or resignation

(c) On his death or disablement

For every completed year of service or part thereof in excess of six months the employer shall pay gratuity to an employee at the rate of 15 days’ wages based on the rate of wages last drawn by the employee concerned.

Section 4: Payment of gratuity. —

(1) 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:

(a) On his superannuation, or

(b) On his retirement or resignation, or

(c) On his death or disablement due to accident or disease;

Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement;

provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.

(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days’ wages based on the rate of wages last drawn by the employee concerned; provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for the purpose, the wages paid for any overtime work shall not be taken into account; provided further that that in the case of {an employee who is employed in a seasonal establishment and who is not so employed throughout the year} the employer shall pay the gratuity at the rate of seven days’ wages for each season.

(3) The amount of gratuity payable to an employee shall not exceed {three lakhs and fifty thousand} rupees.

(4) For he purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.

(5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.

(6) Notwithstanding anything contained in sub-section

(a) The gratuity of an employee, whose services have been terminated for any act, willful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer’ shall be forfeited to the extent of the damage or loss so caused.

(b) The gratuity payable to an employee {may be wholly or partially forfeited} –

(i) If the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or

(ii) If the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.


Purpose of the Act: An Act to regulate the employment of women in certain establishments for certain period before and after child-birth and to provide for maternity benefit and certain other benefits.

Section 4: Employment of or work by, women, prohibited during certain periods

(1) No employer shall knowingly employ a woman in any establishment during the six weeks immediately following the day of her delivery, (miscarriage or medical termination of pregnancy).

(2) No women shall work in any establishment during the six weeks immediately following the day of her delivery (miscarriage or medical termination of pregnancy).

(3) Without prejudice to the provisions of section 6, no pregnant women hall, on a request being made by her in his behalf, is required by her employer to do during the period specified in sub-section

(4) Any work which is of an arduous nature or which involves long hours of standing, or which in any way is likely to interfere with her pregnancy or the normal development of the foetus, or is likely to cause her miscarriage or otherwise to adversely after her health.

(4) The period referred to in sub-section (3) shall be –

(a) The period of one month immediately proceeding the period of six weeks, before the date of her expected delivery;

(b) Any period during the said period of six weeks for which the pregnant woman does not avail of leave of absence under section 6.

Section 5: Right to payment of maternity benefits:

(1) Subject to the provisions of this Act, every woman shall be entitled to, and her employer shall be liable for, the payment of maternity benefit at the rate of the average daily wage for the period of her actual absence, that is to say, the period immediately preceding the day of her delivery, the actual day of her delivery and any period immediately following that day.

(2) No woman shall be entitled to maternity benefit unless she has actually worked in an establishment of the employer from whom she claims maternity benefit, for a period of not less than {eighty days} in the twelve months immediately preceding the date of her expected delivery. Provided that the qualifying period of {eighty days} aforesaid shall not apply to a woman who has immigrated into the State of Assam and was pregnant at the time of the immigration.

(3) The maximum period for which any woman shall be entitled to maternity benefit shall be twelve weeks of which not more than six weeks shall precede the date of her expected delivery. Provided that where a woman dies during this period, the maternity benefit shall be payable only for the days up to and including the day of her death ; Provided further that where a woman, having been delivered of a child, dies during her delivery or during the period immediately following the date of her delivery for which she is entitled for the maternity benefit, leaving behind in either case the child, the employer shall be liable for the maternity benefit for that entire period but if the child also dies during the said period, then, for the days up to and including the date of the death of the child.


Purpose of the Act: This Act covers all workers whose wages do not exceed Rs 1600 per month and who are working in factories, other than seasonal factories, run with power and employing 20 or more workers. The coverage can be extended by the State Government with the approval of the Central Government.

Administration: The Act is administered by the E.S.I Corporation, an autonomous body consisting of representatives of the Central and State Governments, employers, employees, medical profession and Parliament.

Benefits: The Act, which provides for a system of compulsory insurance, is a landmark in the history of social security legislation in India. An insured person is entitled to receive the following types of benefits:

  • Medical Benefit
  • Sickness Benefit
  • Maternity Benefit
  • Disablement benefit
  • Dependant’s Benefit
  • Funeral benefit

Sources of Funds: the Act provides for the setting up of the Employees State Insurance fund from the contributors received from employers and employees and various grants, donations and gifts received from Central or State Governments, local authorities and individuals. The rate of employer’s contribution is 5% of the wage bill and that of the employee’s contribution is 2.25%.

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