Category: University of Mumbai BMS Notes

The following are generally given as the principles to be followed in setting up a employee welfare programme:

1. The programme should satisfy real needs of the workers:

This means that the manager must first determine what the employees’ real needs are. Extreme care and serious research should go into the decision of whether or not to offer a particular employee service. More evidence is required than a mere unfounded bias of the manager.

2. The programme should be such as can be handled best by a group approach:

For example, life insurance purchased as a group can be obtained at a significantly lower price than some insurance purchased by the individual. But it is argued that depending upon the differences in sex, age, marital status, number of children, type of job and the income level of employees, there are large differences in their choice of a particular benefit.

As a result, it is suggested that a package total value of benefits should be determined and the selection of the mix of benefits should be left to the choice of each individual employee. This is known as the ‘cafeteria approach’. Such an approach individualizes the benefit system though it may be difficult to operate and administer.

3. The employer should not assume a benevolent posture:

Some employers foster dependency on employees which is counter-productive. The paternalistic and benevolent approach has fallen in disrepute as a result of the employee’s desire to gain independence and dignity.

4. The cost of the programme should be calculable and its financing established on a sound basis:

There are several employee services such as pension, provident fund, insurance, etc., which are not cheap to administer. The cost of such benefits can hardly be termed a fringe. It is, therefore, essential that before conceding any such service over the collective bargaining table sound actuarial estimates of costs are made and adequate provisions for financing it are established.

5. The management should ensure cooperation and active participation of unions and workers in formulating and implementing the programme.
6. There should be a periodical assessment or evaluation of the programme and necessary timely improvement on the basis of feedback.

Labour welfare has emerged as a professional discipline.

Just like any other applied profession, it has specific aims and objectives based upon certain principles:

(a) Principle of Integration or Coordination: Welfare programmes cannot be segregated. They cannot be taken up part-by-part. It is a whole programme. For example, health and welfare should cover up all the aspects of health and hygiene, physical, social and moral hygiene.

(b) Principle of Association: Any welfare programme meant for the development of workers’ community should associate workers with the planning and execution of the programme. Workers should be associated for conducting activities.

(c) Principle of Responsibility: Workers should be incorporated and they should be hold responsible for the activities aiming at workers’ welfare. For example, workers participate in safety committees, sports committees, canteen committees, etc.

(d) Principle of Accountability: Every programme, every person and every activity should be answerable. Welfare programme are socially audited and evaluated. Successful programme is retained Weaker programme are straightened.

(e) Principle of Timeliness: Timely help is a valuable help. A stick in time saves nine. When a worker needs economic assistance for trading a sick child or for building a house, there should be reasonable lapse of time but beyond a limit he can’t wait. Appropriate action begins taken for welfare might serve the purpose. In certain circumstances of emergency, delay in assistance means denial of human value and justice.

During the early period of industrial development, efforts towards workers’ welfare was made largely by social workers, philanthropists and other religious leaders, mostly on humanitarian grounds. Before the introduction of welfare and other legislation in India, the conditions of labour were miserable. Exploitation of child labour, long hours of work, bad sanitation, absence of safety measures etc., were the regular features of the factory life. The earliest legislative approach could be tracked back to the passing of the Apprentices Act of 1850. This act was enacted with the objective of helping poor and orphaned children to learn various trades and crafts. The next act was the Fatal Accidents Act of 1853 which aimed at providing compensation to the families of workmen who lost their life as a result of “actionable wrong”. Earlier attempts at legislation in this country were mainly aimed at regulation of employment.

Pre- Independence Era

The movement to improve the working conditions of Indian labour started with the passing of the first Indian Factories Act in 1881. The deplorable conditions in which labour worked in the textile mills in Bombay during those days, as testified by the factory commission of 1875 was the immediate cause for the passing of the Act. Adult labour, however, was not protected in any manner. It was found inadequate in many respects. Any how, it recognized the right of the government to safeguard the interests of the workers by means of a suitable legislation. Therefore, the Mulock Commission was appointed by the Government of Bombay in 1884 to review the working of the Factories Act of 1881.

The Factories (Amendment) Act 1891 applied to all factories employing 50 persons or more. Provisions relating to better ventilation, cleanliness and for preventing over crowding in factories were also made. The hours of work for children were reduced to six per day. Employment of women between 7.00 pm and 5.00 am was prohibited. Women were allowed to work for eleven hours in a day with one and a half hours rest. Certain provisions were also made for the health and safety of the Industrial workers.

The outbreak of First World War in 1914 let to a number of new developments. During the war years (1914 to 1918) the number of factories and the number of persons employed wherein increased. Wages did not keep pace with the rising prices and profits. The establishment of the International Labour Organization (ILO) in 1919 was another important land mark in the history of Labour Welfare Movement in our Country. The formation of AITUC (1920), the first central trade union organization in our country, also helped in furthering the cause of welfare movement.

Another milestone in the field of labour welfare was reached with the appointment of Labour Investigation Committee (Rege Committee) in 1944. The committee was asked to investigate problems relating to wages and earnings, employment, housing and social conditions of workers. It covered different areas in labour welfare such as housing policy, rest and recreation, occupational diseases, relief in the case of old age and death, crushes, canteens, medical aid, washing and bathing facilities , educational facilities etc. For the first time in India, this committee highlighted the importance of welfare measures for workers in improving their social and economic life.

Post Independence Period

After independence, the labour welfare movement acquired new dimensions. It was realized that labour welfare had a positive role to play in the increasing productivity and reducing industrial tensions. The emergence of different central trade union organizations – INTUC (1947), HMS (1943), BMS (1955), CITU (1970), NLO etc. gave a further fillip to the growth of labour welfare movement. Mainly on the basis of the recommendations of the Rege Committee, the Government of India enacted the Factories Act 1948. To draft this important piece of legislation the services of Sir Wilfred Garrett were utilized. Thus, the Factories Act of 1948 came into effect from 1^st April 1949.

Various Labour Welfare Activities were incorporated in different five year plans. The First Five Year plan (1951 to 1956) paid considerable attention to the welfare of working classes. It laid emphasis on the development of welfare facilities, for avoidance of Industrial Disputes and for creating mutual goodwill and understanding. During this period, the Plantations Labour Act, 1951, the Mines Act, 1951, and the Employees’ Provident Fund Act, 1952 were enacted.

The Second Five Year plan (1956 to 1961) saw further developments in the field of labour welfare. New enactments were made to cover seamen and motor transport workers. A comprehensive scheme known as Dock Workers (safety health and welfare) scheme was drawn up in 1951. In 1959, the Government of Assam passed an Act called The Assam Tea Plantations Employees’ Welfare Fund Act. This period also saw number of enactments in the field of industrial housing by various state governments.

The Third Five Year plan (1961 to 1966) stressed the need for effective implementation of various statutory welfare provisions. It recommended improvement in working conditions and emphasized greater productivity on the part of workers. Some of the legislative measures during this period include the Maternity Benefit Act 1961, Apprentices Act 1961, and Payment of Bonus Act 1965.

The Fifth five year plan (1974 to 1979) also laid down programmes for labour welfare. For promoting industrial safety in increasing measure, the plan provided for setting up of safety cells in various states. An amount of Rs.57 crores was provided for labour welfare including craftsmen training and employment service.

The Sixth Five Year plan (1980 to 1985) decided to promote special programmes which would also need to be undertaken by the state governments for the benefit of Agricultural Labour, Artisans, Handloom Weavers, Fishermen, Leather workers and other unorganized workers in the rural and urban areas. An outlay of Rs.161.7 crores was proposed for the labour welfare programmes during this year.

In spite of all these efforts, the welfare work in India is still considerably below the standard setup in other countries. However, it has come to stay as an accepted feature of employment conditions and is bound to make rapid progress in the years to come, especially when the Indian Republic is wedded to the ideal of a welfare state with socialistic objectives.

Paternalism is action that limits a person’s or group’s liberty or autonomy and is intended to promote their own good. Paternalism can also imply that the behavior is against or regardless of the will of a person, or also that the behavior expresses an attitude of superiority. Paternalism, paternalistic and paternalist have all been used as a pejorative.

The word paternalism is from the Latin pater “father” via the adjective paternus “fatherly”, which in Medieval Latin became paternalis. Some such as John Stuart Mill think paternalism to be appropriate towards children, saying: “It is, perhaps, hardly necessary to say that this doctrine is meant to apply only to human beings in the maturity of their faculties. We are not speaking of children, or of young persons below the age which the law may fix as that of manhood or womanhood. “Paternalism towards adults is sometimes thought of as treating them as if they were children.

Criteria for effective paternalism

Thomas Pogge argues that there are a number of criteria for paternalism.

• The concept should work within human flourishing. Generally accepted items such as nutrition, clothing, shelter, certain basic freedoms may be acceptable by a range of religious and social backgrounds.
• The criteria should be minimally intrusive.
• The requirements of the criteria should not be understood as exhaustive; leaving societies the ability to modify the criteria based on their own needs.
• The supplementary considerations introduced by such more ambitious criteria of justice must not be allowed to outweigh the modest considerations.

Types

Soft and hard

Soft paternalism is the view that paternalism is justified only if an action to be committed is involuntary. John Stuart Mill gives the example of a person about to walk across a damaged bridge. We can’t tell the person the bridge is damaged as he doesn’t speak our language. According to soft paternalism, we would be justified in forcing him to not cross the bridge so we could find out whether he knows about the damage. If he knows and wants to jump off the bridge and commit suicide then we should allow him to. Hard paternalists say that at least sometimes we are entitled to prevent him from crossing the bridge and committing suicide.

Pure and impure

Pure paternalism is paternalism where the persons having their liberty or autonomy taken away are those being protected. Impure paternalism occurs when the class of people whose liberty or autonomy is violated by some measure is wider than the group of persons thereby protected.

Moral and welfare

Moral paternalism is where paternalism is justified to promote the moral wellbeing of a person(s) even if their welfare wouldn’t improve. For example, it could be argued that someone should be prevented from prostitution even if they make a decent living off it and their health is protected. A moral paternalist would argue that it is ethical considering they believe prostitution to be morally corrupting.

Employee welfare means anything done for the comfort and (intellectual or social) improvement of the employees, over and above the wages paid.

In simple words, it means “the efforts to make life worth living for workmen.” It includes various services, facilities and amenities provided to employees for their betterment. These facilities may be provided voluntarily by progressive entrepreneurs, or statutory provisions may compel them to provide these amenities; or these may be undertaken by the government or trade unions, if they have the required funds.

According to ILO, “Employee welfare should be understood as such service, facilities and amenities which may be established in or in the vicinity of undertakings to enable the persons employed in them to perform their work in healthy and peaceful surroundings and to avail of facilities which improve their health and bring high morale”.

The objectives of employee welfare are to improve the life of the working class, to bring about holistic development of the worker’s personality and so on. Employee welfare is in the interest of employee, employer and the society as a whole. It enables workers to perform their work in healthy and favorable environment.

Hence, it improves efficiency of workers and keeps them content, thereby contributing to high employee morale. It also develops a sense of responsibility and dignity amongst the workers and thus makes them good citizens of the nation.

Apart from the wages and salary, anything done by the organization to improve the living standard of employees and keep them contented comes under the realm of employee welfare. All those services, benefits and facilities offered to employees by the employer to make his life worth living, are included in employee welfare.

According to ILO, “Employee welfare should be understood as such service, facilities and amenities which may be established in or in the vicinity of undertakings to enable the persons employed in them to perform their work in healthy and peaceful surroundings and to avail of facilities which improve their health and bring high morale”.

Employee welfare is for the betterment of the workers. It involves adjustment of an employee’s work life and family life to the community and social life. Welfare measures may be both voluntary and statutory (prescribed under labour laws).

The need and importance of employee welfare is being increasingly appreciated throughout the civi­lized world. The concept of welfare is a dynamic one and has different connotations in different countries and at different times in the same country, according to the prevailing value system, social institution, degree of industrialization, and the general level of social and economic development.

Some describe employee welfare or labour welfare as ‘an attitude of mind’ while others merely catalogue the schemes and measures which should be included in labour welfare. There are some who emphasize the voluntary nature of measures and include the measures that are undertaken by the employers beyond what is required by law. Some interpret labour/employee welfare measures to mean only measures which are legally obligatory.

International Labour Organization (ILO) defines welfare as:

According to the ILO, ’employees’ welfare should be understood to mean such services, facilities, and amenities which may be estab­lished in or in the vicinity of undertakings to enable the persons employed in them to perform their work in healthy and congenial surroundings, and provided with amenities conducive to the good health and morale.’

Welfare work is the task to be done by the employer voluntarily for the intellectual, physical, moral, and economic betterment of employees, over and above which is laid down by law, or what is expected as a part of contractual benefits for which the employee may have bargained.

Thus, under this definition we may include housing, medical and educational facilities, nutrition, facilities for rest and recreation, cooperative societies, day nurseries and creches, provision for sanitary, accommodation, holidays with pay, social insurance measures undertaken voluntarily by the employers, and would also include schemes like provident fund, gratuity, and pension etc. The term welfare is thus very flexible.

In India, which has embarked upon a vast programme of industrialization, the need for labour welfare is all the more important because it creates a healthy atmosphere in the work place, keeps the labour force stable and contended, and helps in maintaining industrial peace, thereby improving productive efficiency of the workers.

It is in recognition of this need that under successive five year plans, and also in the industrial policy statements, welfare measures had been accorded a due place. The agencies responsible for administering welfare measures are the Central Government, State Government, employers and their organizations, work­ers’ organizations, and Statutory Welfare Funds.

To supplement the efforts of the employees and the State Governments in providing welfare amenities to the workers, welfare funds have been set up in coal, mica, iron ore, manganese ore, limestone and dolomite mines, and in the beedi industry.

The principal activities financed out of the fund include general welfare such as medical facilities, water supply, education and recreation, and housing. The funds have been created by the levy of the cess on production or consumption or export of the minerals and, in the case of beedi, on the manufactured beedis.

Employee welfare concept

The terms ’employees’ welfare’ and ‘workers’ welfare’ are used interchangeably to denote various services provided by the employers to the employees in addition to wages. According to Arthur James Todd, “Employee welfare means anything done for the comfort and improvement, intellectual or social of the employees over and above the wages paid which is not a necessity of the industry”.

According to a publication of ILO, Employee welfare should be understood as meaning with services, facilities and amenities which may be established in or in the vicinity of undertakings to enable the persons employed in them to perform their work in healthy and peaceful surroundings and to avail of facilities which improve their health and bring high morale”.

Employee welfare is a dynamic concept as new welfare measures are added to the existing ones along with social changes. It is also a comprehensive concept. The modern concept of employee welfare entails all those activities of the employers which are directed towards providing the employees with certain facilities and services in addition to wages or salaries.

These are not a form of employers’ goodwill or charity to the workers, but are facilitative services to build and maintain the morale of the workers to achieve the objectives of the organisation. It is not only in the interest of the employees to provide them with necessary medical benefits, recreation facilities, retirement benefits, etc., but also in the interest of the organisation itself.

The employees feel satisfied if they are provided with such services and they also feel committed to the organisation. Though welfare services are merely maintenance factors and not motivators, yet they are necessary for the health of the organisation since they bear close connection with the productivity of the employees.

The basic features of employees’ or labour welfare are as follows:

(i) Labour welfare includes various facilities, services and amenities provided to workers for improving their health, efficiency, economic betterment and social status.

(ii) Welfare measures are in addition to regular wages and other economic benefits available to workers due to legal provisions and collective bargaining.

(iii) Labour welfare measures are flexible and ever-changing. New welfare measures are added to the existing ones from time to time.

(iv) Welfare measures may be introduced by the employers, government, employees or by any social or charitable agency.

(v) The purpose of labour welfare is to bring about the development of the whole personality of the worker to make him a good worker and a good citizen.

Employee Welfare Objectives

The objectives of employee welfare are discussed below:

(i) To enhance the level of morale of employees.

(ii) To create a loyal, contented workforce in organization.

(iii) To develop a better image of the company in the minds of the employees.

(iv) To enable the workers to live comfortably and happily.

(v) To develop efficiency of the workers.

(vi) To reduce influence of trade unions over the workers.

(vii) To expose philanthropic and benevolent activities of the company.

(viii) To make the workers know that the company takes care of them.

(ix) To develop positive attitude towards job, company and management.

(x) To reduce tax burden.

(xi) To develop a feeling of satisfaction of employees with the company.

(xii) To develop a sense of belonging to the company.

(xiii) To retain skilled and talented workers.

(xiv) To develop better human relation.

(xv) To prevent social evils like drinking, gambling through improvement of working conditions, cultural activities and social conditions.

Employee welfare work assumes great importance because of the following reasons:

1. Lack of strong trade union movement: In the absence of strong trade unions and effective leaders, welfare work helps the workers in the industry to stand on their own feet, think properly and systematically of their interests, progress hand in hand and participate in the nation’s development.
2. Poverty: Poverty is one of the main reasons behind the provisions of labour welfare activities. Indian workers in majority are poor, and are, therefore, unable to provide a healthy living for their families and good education for their children.
3. Illiteracy: In India, the number of educated workers is low. Being illiterate, they are unable to receive advanced industrial training, understand the problems in industries, and understand their own interests and those of nations.
4. Low level of health and nutrition: Due to poverty and illiteracy, the Indian workers remain unhealthy and ill fed. This reduces their productivity and efficiency.
5. Lack of healthy recreation: Due to lack of healthy recreation, the workers indulge in crime and other wrong activities. The employer should provide means of healthy recreation in order to maintain their efficiency.
6. Lack of training: The number of trained workers in India is very low. Thus, it is necessary to have training facilities for such a vast workforce.

The Humanistic approach was advocated by Australian sociologist Elton Mayo. He finds that most important thing is to treat labour as a human element of production. Therefore, it became necessary to take a new, modern and sympathetic view of labour welfare measures. Humanistic approach comprises of human values and relationships, which was missing in the other approaches of labour welfare. The human factor was absent in management of the industrial units and Mayo found the significance of informal relations among groups of workers and stressed relief for man. This approach considers attitudes, human personality and feelings of workers, while introducing labour welfare. Therefore it is evident that the humanistic approach to labour, welfare takes a progressive view about labour welfare.

This approach says that every individual should be left as free as he can attain his own best interest if they are left free. Therefore, it was opposed by the state as welfare promoting activities undertaken by the government or any social or public agency contradict with this approach. This approach emphasis that scope of labour welfare activities should be as small as possible. This hypothesis is based on following important principles:

• Society in its natural environment form is comprised of individuals. They are highly unorganized and uncoordinated group. Under such an environment every individual is self-cantered and motivated by self- interest.
• That kind of person will always act in a calculated manner. An individual person always looking for a secure life. This kind of individual person mostly engaged and motivated by activities of self- interest. Therefore, he will act in a manner that leads to maximisation of his self-interest.
• Each and every individual person supposed to act throughout the life which will promote his self-interest. He is always trying to achieve the goal with best of his ability.

The Atomistic approach was established on the independence, individualistic and rationality concept of the early 19th century. This approach did draw strong criticism in the 19^th century mainly due to extreme atomistic views has almost disappeared now. This approach led to perception that there is need of increasingly more liberal and progressive view of welfare activities for labour.

According to an ILO Manual in 1960, the Collective Bargaining is defined as:

“Negotiations about working conditions and terms of employment between an employer, a group of employees or one or more employers organization on the other, with a view to reaching an agreement.”

It is also asserted that “the terms of agreement serve as a code defining the rights and obligations of each party in their employment relations with one another, if fixes large number of detailed conditions of employees and during its validity none of the matters it deals with, internal circumstances give grounds for a dispute counselling and individual workers”.

The collective bargaining reached has been of three types:

(1) Agreement arrived at after voluntary direct negotiations between the parties concerned. Its implementation is purely voluntary;

(2) Agreements between the two parties, though voluntary in nature, are compulsory when registered as settlement before a conciliator; and

(3) Agreement which have legal status negotiated after successful discussion between the parties when the matter of dispute is under reference to industrial tribunal/courts.

The Collective Bargaining is the process wherein the unions (representatives of employees or workers), and the employer (or their representative) meet to discuss the issues related to wage, the number of working hours, work environment and the other terms of the employment.

• Conjunctive or Distributive Bargaining: In this form of collective bargaining, both the parties viz. The employee and the employer try to maximize their respective gains. It is based on the principle, “my gain is your loss, and your gain is my loss” i.e. one party wins over the other.

The economic issues such as wages, bonus, other benefits are discussed, where the employee wishes to have an increased wage or bonus for his work done, whereas the employer wishes to increase the workload and reduce the wages.

• Co-operative or Integrative Bargaining: Both the employee and the employer sit together and try to resolve the problems of their common interest and reach to an amicable solution. In the case of economic crisis, such as recession, which is beyond the control of either party, may enter into a mutual agreement with respect to the working terms.

    For example, the workers may agree for the low wages or the management may agree to adopt the modernized methods, so as to have an increased production.

• Productivity Bargaining: This type of bargaining is done by the management, where the workers are given the incentives or the bonus for the increased productivity. The workers get encouraged and work very hard to reach beyond the standard level of productivity to gain the additional benefits.

    Through this form of collective bargaining, both the employer and the employee enjoy the benefits in the form of increased production and the increased pay respectively.

• Composite Bargaining: In this type of collective bargaining, along with the demand for increased wages the workers also express their concern over the working conditions, recruitment and training policies, environmental issues, mergers and amalgamations with other firms, pricing policies, etc. with the intention to safeguard their interest and protect the dilution of their powers.

Thus, the purpose of the Collective Bargaining is to reach a mutual agreement between the employee and the employer with respect to the employment terms and enjoy a long term relationship with each other.

Need:

The basic need of collective bargaining is to arrive at an agreement between the management and the employees determining mutually beneficial terms and conditions of employment.

1. To foster and maintain cordial and harmonious relations between the employer/management and the employees.
2. To protect the interests of both the employer and the employees.
3. To keep the outside, i.e., the government interventions at bay.
4. To promote industrial democracy.

Importance:

The need for and importance of collective bargaining is felt due to the advantages it offers to an organisation.

The chief ones are as follows:

1. Collective bargaining develops better understanding between the employer and the employ­ees:

It provides a platform to the management and the employees to be at par on negotiation table. As such, while the management gains a better and deep insight into the problems and the aspirations of die employees, on the one hand, die employees do also become better informed about the organisational problems and limitations, on the other. This, in turn, develops better understanding between the two parties.

2. It promotes industrial democracy:

Both the employer and the employees who best know their problems, participate in the negotiation process. Such participation breeds the democratic process in the organisation.

3. It benefits the both-employer and employees:

The negotiation arrived at is acceptable to both parties the employer and the employees.

4. It is adjustable to the changing conditions:

A dynamic environment leads to changes in employment conditions. This requires changes in organisational processes to match with the changed conditions. Among other alternatives available, collective bargaining is found as a better approach to bring changes more amicably.

5. It facilitates the speedy implementation of decisions arrived at collective negotiation:

The direct participation of both parties the employer and the employees in collective decision making process provides an in-built mechanism for speedy implementation of decisions arrived at collective bargaining.

1. Favourable Political and Social Climate:

That existence of a favourable political and social climate is a necessary condition for effective collective bargaining, is well confirmed by the his­tory of collective bargaining worldwide. Collective bargaining has made headways in settling industrial disputes in the countries where it has been duly supported by the government and favoured by the public. From this point of view, the political climate has not been much favourable for collective bargaining in India.

The reason is not far to seek. There has been a multiplicity of trade unions in the country sponsored by different political parties. These trade unions favour employees not based on the merit of issues involved in disputes but based on their differing political considerations. Added to these is a plethora of legal laws also creating unfavourable climate for collective bargaining in the country.

2. Trade Unions:

Like in a democratic country like ours, employees should have fundamental rights to form trade unions for protecting their interests. More the stronger the trade union f lie effective collective bargaining and vice versa. The employer should also recognize a trade union and its representatives.

3. Problem Solving Attitude:

Both the parties while negotiating should adopt a problem solving, or say compromising attitude to reach an agreement. Neither party should adopt an adamant or fighting aide. The negotiating teams should follow give and take approach. It means that one party may win concessions over the other depending upon their relative strengths.

4. Availability of Data:

Data and information serve as inputs for decision-making. Hence, the availability of required data serves as a pre-requisite tor successful collective bargaining. While the employer Ike available data required for collective discussion, their union representatives also must accept and trust on data supplied by the employer.

5. Continuous Dialogue:

Collective bargaining sometimes may not reach to an agreement. In- stead, there may be deadlock, or say bargaining impasse. In such case, dialogue must not end but continue with problem solving approach. Keeping the controversial issues aside for the time being may help narrow down disagreement and continue the dialogue. Possibility for agreement may increase with continuation of dialogue.