Labour welfare in india

The economic development of a nation relies upon the production of commodities
and services. The production is the result of five factors of production; land, labour,
capital, organization or management and entrepreneurship. Out of these five factors,
the labour is the active factor of production. There have been differences of opinion
with regard to the importance of labour, and as to what is productive or unproductive
labour, but the fact is that no production is possible without an efficient labour force.
Labour, however, is manifestly different from other factors of production and has
got certain characteristics which give rise to various labour problems in all countries.
Labour is a living thing and that makes all the difference. Nowadays, the
productivity of labour has gained the greatest attention of industrial psychologists
and researchers in the field of economics and management. The productivity of
labour depends upon its efficiency. Quality of labour depends primarily upon its
health and nutrition, literacy and social values and customs. Poor diets, unhygienic
conditions, inadequate disease preventive measures and lack of medicines and
medical care have an adverse bearing on their efficiency. The happiness and the
efficiency of workers are the mirror of the prosperity of an industry. This prosperity
of an industry is the end result of productivity. To neglect the labour class is to
neglect the productivity. So labour welfare measures become crucial because of the
reasons like low level of wages, irregular working hours, inability of trade union to
undertake welfare work, to build up a stable labour force for creating a genuine
welfare state, to create good psychological feelings and to create good moral habits.
Under such conditions labour welfare can be only relief to labouring class.
1.2: Concept of Labour Welfare:
Labour welfare is basically an extension of the term welfare and to the larger
application to labour. The term workers, labour, labourer, workman or
employee are all used interchangeably to refer the wage-earning human
agents in the industrial set up. Labour is a form of physical or intellectual
activities applied in production process of industries and one who performs
all these activities are workers. Traditional economic theory defines labour
as, "A factor or agent of production which comprises of manual and
intellectual exercise for production and receives in return through wages,
salaries or professional fees".

"Labour is a kind of mental or physical activity conducted with purpose of
earning some monetary benefits in cash or in kind and labour performed by
human agent (man, woman or child) known as worker. A worker is
associated with a private or public firm and receives wages for the labour.
The Indian labour legislation [Industrial Law Section 2 (1)] defined the
worker as "a person employed directly or through any agency, whether for
wages or not, in any manufacturing process, or in clearing any part of the
machinery or premises used for manufacturing process, or in any other kind
of work incidental to, or connected with the manufacturing process or the
subject of manufacturing process. Labour is recognised as most fundamental
factor of industrial production. Labour is performed by human agent with its
own economic, social, political, and also cultural aspirations. According to
Ricardo and Marx, labour is valuable in the economic sense is a product of
labour.
The term ―Welfare‖ refers to a staff of living of an individual or a group in
the context of his physical, social and psychic environment. It is a broad
concept referring to a state of living of an individual or a group in a desirable
relationship with the total environment-ecological, economic and social.
Labour welfare includes both the social and economic contents of welfare.
Social welfare is primarily concerned with the solution of various problems
of the weaker sections of society like prevention of destitution, poverty, etc.
It aims at social development of such means as social legislation, social
reform, social services, social work, social action, etc. The goal of economic
welfare is to promote economic development by increasing production and
productivity and through equitable production conceptually and
operationally. It covers a broad field and connotes a state of well-being,
happiness, satisfaction, conservation and development of human resources.
So, labour welfare may be viewed as a total concept, as a social concept and
as a relative concept.
Labour welfare is an inclusive and comprehensive term with diverse benefits
and facilities given to labourers by employers. The amenities for labour
welfare are in addition to normal remuneration and rewards available for
employees as per the company policies and legal provisions. Labour welfare

is process of improving the health, safety, general well-being and the
development of skills and efficiency of the workers than the minimum set
standards (Bhatnagar, 1985). Labour Welfare measures can also be extended
by the government, trade unions and non-government agencies in addition to
the management or employer.
Labour welfare relates to taking care of the well-being of workers by
employers, trade unions, governmental and non-governmental institutions
and agencies. Welfare includes anything that is done for the comfort and
improvement of employees and is provided over and above the wages.
Labour welfare implies the setting up of minimum desirable standards and
the provision of facilities, like health, food, clothing, housing, security,
recreation, etc. Such facilities enable the worker and his family to lead a
good work life, family life and social life. Labour welfare also operates
neutralise the harmful effects of large-scale industrialisation and
urbanization.
Welfare helps in keeping the morale and motivation of the employees high
so as to retain the employees for longer duration. Employee welfare includes
monitoring of working conditions, creation of industrial harmony through
infrastructure for health, industrial relations and insurance against disease,
accident and unemployment for the workers and their families.
Labour welfare can be described in terms of three dimensions namely the
holistic welfare initiatives, social and relative welfare programs taken by the
organization.
1. Holistic Concept of Labour Welfare:
The ―holistic‖ concept of labour welfare can be described as the achievement
of desirable state of existence involving physical, mental, moral and
emotional well-being of the working class. These four elements together
constitute the structure of welfare, on which its totality is based.
It includes conducting special training and induction programs for workers
from various expertise and capabilities, counselling programs,
entrepreneurial development programs, providing financial assistance to sick
units and needy workers, extending insurance schemes and facilitating loans

to needy employees, improving the condition of the roads, drainage, lighting
of the roads, the preservation of the greenery of the area, etc.
2. Social Concept of Labour Welfare:
The social concept of labour welfare involves the wellbeing of an individual
and the harmonious relationship established with the community and even
his/her own family, working groups, superiors, subordinates etc.
3. Relative Concept of Labour Welfare:
The relative concept of welfare implies that welfare in relation to time and
place. It is a dynamic and flexible concept and hence its meaning and content
differ from time to time, region to region, industry to industry and country to
country, depending upon the value system, level of education social customs,
degree of industrialization and general standard of socio-economic
development of the people and the political ideologies prevailing at a
particular time. It is also moulded according to the age-group, sex socio-
cultural background, marital and economic status and educational level of the
workers in various industries. Accordingly, the concept cannot be very
precisely defined. A series of sharply diverse opinions exists on the motives
and merits of labour welfare as well. In its widest sense, it is more or less
synonymous with labour conditions and as a whole, including labour
legislation and social insurance.
Welfare in Indian industry implies the provision of medical and educational
services, a congenial work atmosphere, etc. The need for providing such
services and facilities arises from the social responsibility of industry, a
desire for upholding democratic values and a concern for employees. Labour
welfare implies providing better work conditions, such as proper lighting,
heat control, cleanliness, low noise level, toilet and drinking-water facilities,
canteen and rest rooms, health and safety measures, reasonable hours of
work and holidays, and welfare services, such as housing, education,
recreation, transportation and counselling.

The concept of labour welfare has undergone considerable change. Social
and economic development of the country has to be towards the enactment of
labour welfare and labour protective legislations. An individual‘s adjustment
to his environment is required for his existence in the industrial world.
A worker is paid for the types of his services but payment depends on nature
of work, his efficiency, capacity of the industry to pay and significance of his
work in that particular industry. A worker has to maintain balance at
workplace. He has to adjust with the physical working conditions as well as
with type of supervision, co-workers, etc.
The acceptance, respect, goodwill, attention and recognition, which a worker
gets from his work group, community, family and neighbourhood forms an
integral part of the modern concept of labour welfare. Capacity of the worker
to satisfy his physiological needs like food, clothing and shelter from his pay
packet refers to physical concept of labour welfare.
But economic status governs his social status in modern society; type of food
which he can afford, types and quality of dresses which he and his family
members wear and nature of house with types of comforts determine his
social status. Thus, welfare is a physical concept as well as a social concept.
Every society has its own moral codes and conduct. A worker has to adobe
by its ethical values. There are do‘s and don‘ts of the society. For example,
prohibition may be a state law but it may be a customary practice to provide
drinks to the guests on certain social occasions like marriage ceremony,
death ceremony, etc.
All these concepts of labour welfare physical, social and moral are inter-
related. Purchasing powers of money-wages determine a worker‘s social
status and morals of the society govern his day-to-day behaviour. Thus,
welfare is a total concept. Totalitarian concept on the other hand, concept of
labour welfare differs from society-to-society, country-to-country and it also
changes with changing time.
So, it is difficult to decide minimum and maximum condition of labour
welfare. Whatever are the minimum requirements for western workers might

be maximum for developing country‘s workers. Even for same workers
needs of welfare are different at different stages of their life. Thus, welfare is
a relative concept; it is related with time, age, and culture, social and moral
values, etc.
Labour welfare generally defined as "An efforts by the employers to enhance
the existing industrial mechanism and the conditions of working condition in
their factories".
Labour welfare is in itself a very broad term with several kind of meanings
and diversifications. And it has never measured in the same implication in
every other country. As a concept it is very wide and is more or less
synonymous with concept of working conditions of labour as a whole. It may
include not only the decent standard condition for work laid down in labour
legislation of state but also include aspects of working life as insurance
schemes, protection of women and young workers, specified hours of work,
paid vacations and other basic welfare measures. In many cases the
definition of labour welfare is limited and addition to general physical
welfare conditions it mainly deals with day- to- day problems of workers and
the industrial relation at the place of work (Kohli and Sharma, 1997). Desire
for a humanitarian approach gave birth to the concept of labour welfare to
improve the conditions of working class, later it developed as utilitarian
philosophy, which became motivating force for labour (Acharya, 2015).
1.3: Definitions of labour welfare:
Labour welfare has been defined by different authors in different ways but
every definition has its own significance.
The definitions given by different experts are as following:
According to Industrial Labour Organisation (ILO) – “Labour welfare may
be understood and including such services facilities and amenities which
may be established in vicinity of undertaking to perform their work in
healthy and congenial environment and to avail of facilities which improve
their health and bring high morale.”
Oxford dictionary defines ―Labour welfare is efforts to make life worth
living for workmen.‖

Chamber’s dictionary explains ―welfare as a state of faring or doing well;
freedom from calamity, enjoyment of health, prosperity, etc.‖
In the Encyclopedia of Social Sciences, welfare is defined as – ―the
voluntary efforts of the employers to establish, within the existing industrial
system working and sometimes living and a cultural condition of the
employees beyond what is required by law, the customs of the industry and
the conditions of die market.‖
According to Arthur James Todd, ―Labour welfare means anything done for
the comfort and improvement, intellectual and social, of the employees over
and above the wages paid which is not a necessity of the Industry.‖
According to S.T. Edwards (1953)- ―One can buy a man‘s time, his physical
presence at a particular space, even a few muscular movements, but
enthusiasm, initiative, loyalty and devotion to duty cannot be bought. They
will have to be created through right employer-employee relations, provision
of constructive opportunities for satisfying the major motivating desires of
human action.‖
According to the Report of National Commission of Labour (1969),
concept of labour welfare termed as dynamic, having a different
interpretation from country to country and from time to time and even in the
same country, according to its value system, social institution, and degree of
industrialization and general level of social and economic development. Even
within one country there may be variation from different region to different
states.
It is also well defined by the Hopkins (1955) as "Welfare is fundamentally an
attitude of mind on the part of management, influencing the method in which
management activities are undertaken. Employers concerned with introducing
or extending welfare programmes now or in the future must be concerned, not
only with the past and current experience, but with developing trends".
Royal Commission on Labour in year 1931 defined labour welfare as ―It
must be elastic, bearing a somewhat different interpretation from one country
to another, according to the different social customs, the degree for
industrialization and educational level of the workers".

According to Proud, welfare work refers to ―the efforts on the part of
employers to improve within the existing industrial system, the conditions of
employment in their own factors.‖
Prof. Richardson, on the other hand, includes under it, ―any arrangement of
working conditions, organization of social and sports club and establishment
of funds by a firm, which contribute to the worker‘s health and safety,
comfort, efficiency, economic security, education and recreation.‖
Dr. Panandikar defines it as, ―work for improving the health safety and
general wellbeing and the minimum standard laid down by labour
legislation.‖
After studying the above definitions, it may be concluded that the term
‗labour welfare measures‘ has been used in a ‗wide‘ as well as ‗narrow‘
sense. In the ‗broader sense‘, it may include not only the minimum statement
of hygienic and safety laid down in general labour legislation, but also such
aspects of working life as social insurance schemes, measures for the
protection of women and young workers limitation of hours of work, paid
vacations, etc. In the ‗narrow sense‘ welfare in addition to general physical
working conditions is mainly concerned with the day-today problems of the
workers and the social relationships at the place of work. In some countries,
the use of the welfare activities provided is confined to the workers employed
in the undertakings concerned, while in others, the workers‘ families are
allowed to share in many of the benefits which are made available. On the
basis of above definitions, 1.4: The prominent features of labour welfare
are as follows:
1. Broad Concept – ‗Labour Welfare‘ is a very broad term, covering social
security and such other activities as medical aid, crèches, canteens, recreation,
housing, adult education, arrangements for the transport of labour to and from
the work place.
2. Functions – Labour welfare programme includes various services,
facilities and amenities provided to workers for improving their health,
efficiency, economic betterment and to enhance social status of the
employees. The objective of providing welfare amenities is to bring about the

development of the whole personality of the worker- his social,
psychological, economic, moral, cultural and intellectual development to
make him a good worker, a good citizen and a good member of the family.
3. Dynamic – Labour welfare is dynamic in nature. It varies from country to
country, region to region and organisation to organisation. Labour welfare
activities depend upon the need of the workers, their social status, and social
class and so on.
4. Flexible – Labour welfare is a flexible and ever-changing concept as new
welfare measures are added from time to time to the existing measures. The
needs of work force changes with time and the changing social environment.
5. Voluntary and/or mandatory – Some labour welfare measures are
provided by laws and mandatory, while some are voluntarily provided by the
organisation for betterment of the employees. These amenities may be
provided voluntarily by the progressive and enlightened entrepreneurs at their
own accord out their realization of social responsibility towards labour, or
statutory provisions may compel them to make these facilities available; or
these may be undertaken by the government or trade unions, if they have the
necessary funds for the purpose.
6. Purpose – The basic purpose of labour welfare is to improve the social
life as well as work life of the work force.
7. Addition to wages and salaries – Welfare measures are undertaken in
addition to regular wages and other economic benefits provided to the
workers under legal provisions and collective bargaining.
1.5: Nature of Labour Welfare:
As any other aspect of developmental economics, it is same with Labour
welfare which has two aspects: negative and positive. M.V.Moorthy has
assessed the impact of labour welfare measures and hold that labour welfare
has two sides, negative and positive. On the one hand, it is associated with the
counteracting of the harmful effects of large-scale industrialization on the
personal, family and social life of the worker, while on the other hand, the
positive side , it deals with the provisions of opportunities for the worker and

his family for a socially and personally good life. The term ‗labour welfare‘ is
very comprehensive and includes various types of activities undertaken for
the economic, social, intellectual or moral benefit to the labour community.
The activities are so varied that the concept of labour welfare may vary from
country to country.
On the negative side, labour welfare is concerned with countering the harmful
impact of the industrial system of manufacturing, especially capitalistic
approach in context of India for working and social life of the worker. On the
positive side of welfare measures it provide opportunities to the worker and
family for a good social and working life as it can be taken as most
comprehensive sense.
1.6: Objectives of Labour Welfare:
The objectives of labour welfare have gradually transformed over the last few
decades. From the primitive policing theoretical approach and placating
philosophy of labour welfare, it progressively moved to the period of
paternalism with philanthropic based objectives. There has been attempt
made by some organisation to give a humanitarian perception to their labour
welfare programmes. The recent approach towards labour welfare, however,
has been aimed at increasing productivity and efficiency of workers.
Gradually labour welfare has developed as a comprehensive concept
concerned with the humanitarian approach embracing mental, physical,
psychological, social and spiritual aspect of the employees' well-being
(Sarma, 1996). The objectives of welfare activities can be observed as purely
humanitarian to facilitate workers to lead richer life - partially economic to
improve the productivity of the workers, and partly civic - to develop sense of
responsibility and dignity for organisation, society and country which leads to
development of worthy citizens of the nation.
Some of the early employers used philanthropic and paternalistic approach to
improve the working and living conditions of workers by taking several
welfare measures. Some of them facilitated welfare measures to win over
their employee's Loyalty and to combat trade union activities and socialistic

ideas. Some employers took the course of labour welfare measures to build
up a stable labour force, to reduce labour turnover and to promote better

employer-employee relationship. At present in modern outlook of industrial relations,
labour welfare has been taken as an incentive and good investment to secure, preserve and
cultivate greater efficiency and output among workers. Employers also utilise concept of
labour welfare measures to save themselves from heavy tax on surplus (Sarma, 1996). The
main goal of provision for welfare services for some employers is to enhance their image
to create an environment of goodwill between labour and organisation and also between
organisation and the public. Employers provide welfare facilities to workers to fulfil the
needs and aspirations, so they able to experience job satisfaction.
The Labour Welfare Work aims at providing such service and amenities as would enable
the workers employed in industries/factories to perform their work in healthy, congenial
surroundings conducive to good and high morale.
(1) It is partly humanistic for it enables the workers to enjoy a fuller and richer life.
(2) It is partly economic because it improves the efficiency of the worker, increases its
availability where it is scarce and keeps him contended. It, therefore minimizes the
inducement to form or join unions and to resort to strikes.
(3) The aim is partly civic because it develops a sense of responsibilities and dignity
among the workers and thus makes them worthy citizens of the nation.
Labour welfare aims at total development of workers personality based on humanitarian
grounds. It aims at helping the needy, the poor and the most deserving community. Major
objective of labour welfare is to minimize exploitation of workers. Management wants
efficient, productive, hardworking, sincere and law-abiding workmen, which can be
attracted by providing liberal welfare measures. Such measures also improve industrial
relations in the industry.
From various studies, the summarized objectives are to:
(a) Provides social comfort to employees.
(b) Support overall improvement of employees.
(c) Provide financial support indirectly to the employees.
(d) Contribute in developing sense of responsibility and belongingness among employees.

(e) Improve working conditions at the workplace for employees.
(f) Maintain and retain the existing workforce.
(g) Reduce rate of absenteeism from work and labour turnover from job.
(h) Improve lives of employees comfortable and happy.
(i) Improve productivity and efficiency of employees at workplace.
(j) Provide healthy and proper working conditions.
(k) Ensure betterment of employees and families and society as a whole.
1.7: Kinds of Labour Welfare Measures:
The labour welfare measures may be studied from different angles, such as:
 The location, where these amenities are provided, within and outside the industrial
undertakings;
 The nature of amenities such as those concerned with ―conditions of employment‖ and
―living conditions of work place.‖
 The welfare activities termed as ‗statutory‘, ‗voluntary‘ and ‗mutual‘,
 The agency which provides these amenities.
On the basis of the location of welfare activities, labour welfare work has been classified
by Dr. G.M. Broughton in two specific categories namely,
(a) intramural and (b) extra-murral.
It was also supported by the committee of experts on welfare facilities for industrial
workers constituted by ILO in 1963,
(a) Intra mural activities: The labour welfare measures or activities or schemes that are
provided within the premises of the industry are called intra-mural activities. These
include medical facilities, compensation for accidents, provision of safety measures such
as fencing and covering of machines, good lay-out of the machinery and plant, sufficient
lighting, first aid appliances, fire extinguishers, activities relating to improving conditions
of employment, recruitment and discipline and provision of provident fund, pension and
gratuity, maternity benefits etc along with latrines, urinals, rest shelters, arrangements for
prevention of fatigue, health service including occupational safety, administrative
arrangements within a plant to look after welfare, uniforms and protective clothing and
shift allowances.

(b) Extra-mural Activities: The labour welfare activities that are provided outside the
premises of the industry are termed as extra-mural activities or measures. These cover
housing accommodation, indoor and outdoor recreation facilities, amusement and sports,
educational facilities for adults and children, provision of libraries and reading rooms,
social insurance measures including cultural activities, holiday, homes and leave travel
facility, workers cooperatives including consumer‘ cooperative stores, fair price shops and
cooperatives, thrift and credit societies, vocational training for dependents of workers,
other programmes for the welfare the women, youth & children and transport to and from
the place of work.
The other classification of labour welfare measures is given as under:
(a) Welfare Activities concerned with Conditions of Employment: In the welfare
activities concerned with conditions for the management of problems arising out of
hours of work, wages, holidays with pay, rest intervals, sanitations and safety,
continuity of employment, control over the recruitment of female and juvenile labour.
(b) Welfare Activities concerned with Conditions of Workers: All such schemes of
benefits as co-operative societies, legal and medical aid, and housing are included in
the category of activities concerned with ―Conditions of workers.‖
Some experts have classified welfare facilities into three categories given as under:
(a) Statutory Labour Welfare Measures: It is statutory when such activities have to
be undertaken in furtherance of the legislation enacted by the government. It
comprises those provisions of welfare whose observance is binding on the employers
seen with a view to maintain minimum standards of health and safety etc. of the
worker. The Governments enacts certain rules under various Acts or Ordinances
which have to be followed by the employees.
(b) Voluntary Labour Welfare Measures: It is voluntary when the activities are
undertaken at their own accord by the employers or some philanthropic bodies or
when a labour organization undertakes such activities for the welfare of their
members. This includes all activities which are conducive to the welfare of the
workers. These facilities are provided by the employers of their own free will. The
idea is apparently philanthropic, but when observed separately, it is sound investment

because they not only increase the efficiency of the workers but also reduce the
chances of conflicts.
(c) Mutual Labour Welfare Measures: It is mutual when all parties join hands to
bring about the social and economic uplift of the workers. It is cooperative enterprise
of the workers. The workers and employers sometimes help each other by mutually
agreed manner. For example, activities of trade unions which are conducive to the
welfare of their members are included under this category.
The National Commission on Labour (1966) has classified various labour welfare
measures under the following two distinct classes given as under: -
(i) those which have to be provided, irrespective of the size of the establishment or
the number of the persons employed therein such as facilities relating to washing,
storing, drinking, the clothing, first-aid, drinking water, latrines and urinals; and
(ii) those which are to be provided subject to the employment of specified number of
persons, such as canteen, rest shelter, crèche, ambulance etc.
Encyclopedia of Social Sciences has put in labour welfare measures in the
following three categories: -
(a)Those dealing with immediate working conditions It includes special provisions
for adequate light, heat, ventilation, toilet facilities, accident and occupational disease
prevention, lunch rooms, rest room, maximum hours, minimum wages etc.‘ (b)Those
concerned with less immediate working condition and group interests. It includes
gymnasiums, club rooms, playgrounds, gardens, dancing, music, house organs,
mutual aid societies, vacation with pay, profit-sharing, stock ownership, disability
and unemployment funds, pensions, savings banks, provisions for conciliation and
arbitration, shop committees and workers‘ councils.,
(c) Those designed to improve community conditions These are housing, retail stores,
schools, libraries, kindergartens, lectures on domestic sciences, day nurseries,
dispensary and dental service screening of motion pictures, arranging athletic
contests and picnics and summer camps.
1.8: Labour Welfare Scope and Services:
The scope of Labour Welfare is very broad because it covers different industries and
activities.

Broadly labour welfare services can be classified into two categories:
(i) Within the Organization Services (Intra-mural). The services provided within the
organization include medical aid, recreational facilities, libraries, canteens, rest
rooms, washing and bathing facilities, etc.
(ii) Outside the Organization Services (Extra-mural). Outside the organization,
welfare arrangements include housing accommodation, transport, children‘s
education, sports fields, holiday homes, leave travel facilities, interest free loans, etc.
The welfare facilities may further be classified into three basic categories:
Category # 1. Economic Services:
Economic services provide for some additional economic security over and above wages
or salaries. Examples of economic services are pension, life insurance, credit facilities
etc. Proper pension programme reduces dissatisfaction in the area of economic security.
Some establishments have a scheme of family pension also, which provides for payment
of pension to the family members of the employee in case of his death.
The employer may also pay the premium on the life insurance policies of the employees.
The employers can give loans to the employees for purchase of consumer goods, or at the
time of any marriage or other functions in the family of the employees. The loans to be
repaid by the employees is in the form of monthly instalments to be deducted from their
salaries. Some organizations help the employees to start cooperative credit societies to
meet the urgent financial needs of employees.
Category # 2. Recreational Services:
Management may provide recreational facilities to the employees. Recreation in the form
of music, sports, games, art and theatre can play a very important role in the physical and
mental development of employees. The employees generally get bored by the routine and
monotonous jobs which they perform every day. Their attitude improves when the
routine is broken occasionally.
This will improve the cooperation and understanding among the employees. Management
can provide reading rooms, libraries, TV‘s, etc., for the recreation of employees. There
can be provision for indoor games like Table Tennis, Carrom, etc. Big organizations can

also make arrangements for outdoor games and can induce the workers to prepare teams
to play matches with other similar teams.
Category # 3. Facilitative Services:
These are facilities which are generally required by employees and provided by
employers:
(i) Housing Facilities:
Housing is an important part of employee welfare in India. Some organizations construct
houses/fiats for the employees and provide the same to them either free of cost or at
nominal rents. Some organizations give house rent allowances to the employees, so that
they can get houses on rental basis. Some organizations provide loans to the employees at
concessional rates to enable them to construct their own houses/flats.
(ii) Medical Facilities:
Health is a very important for employees. Within the factory premises, the employees
must make provision for first aid facilities. In addition, medical schemes are generally in
operation, which provide for the reimbursement of actual medical expenditure incurred
by the employees. The organizations may also prescribe some doctors from whom the
employees may get services in case of need. Large organizations can have their own
dispensaries or hospitals for providing medical facilities to the employees.
(iii) Education:
The National Commission on Labour and the committee on labour welfare has
recommended that facilities should be provided for educating the worker and in running
schools for children of the workers. Instead of starting a school, the organization may
give education allowance for the children to the employees or reimburse the educational
expenditure of the children of the employees.
(iv) Transportation:
Some organization provide transport facilities to employees. With the growth of
industries, the distance between work place and residence of workers has increased
considerably. This facility has, therefore, become very important, as it will help in
reducing strain and absenteeism. The committee on labour welfare recommended the
provision of adequate transport facilities to workers to enable them to reach their work
place without loss of much time and without fatigue.

Sometimes, if the employers do not provide transport facilities, they give conveyance
allowance to the employees. Some employers also give interest free or concessional loans
to employees for the purchase of vehicles.
(v) Consumer Cooperative Stores:
The National Cooperative Development Board set up a committee in 1961. The
committee suggested that employers should introduce consumer cooperative stores in
their labour welfare programmes.
The Indian Labour Conference in 1963 adopted schemes for setting up consumer
cooperative stores in all industrial establishments including plantations and mines
employing 300 or more workers. The Industrial Truce Resolution, 1962 aimed at keeping
prices of essential commodities through cooperative stores and fair price shops for
workers.
However, the researchers have summarized the scope and listed the following
facilities covered in the scope are:
Scope # 1. Working Environment:
Conducive working environment helps to improve efficiency of workers and includes
proper lighting, temperature, ventilation, safety, sanitation, transportation, cleanliness,
seating arrangement and canteen facilities. Workplace sanitation and cleanliness is very
important for making workplace helpful for workers to work.
Following activities are important to make it conducive for working:
a. Proper ventilation using cross windows and doors, adequate lighting, controlled
temperature, regular cleanliness, seating/standing arrangements for working, etc.
b. Proper safety measures for lift, elevators, ropes, cranes, electric and dangerous
operating.
c. Sufficient urinals separate for gents and ladies, lavatories and bathing facilities with
regular proper cleaning.
d. Proper gardening with watering facilities and cleanliness of surrounding regularly.

e. Pure drinking water facilities with purification and cooling facilities.
f. Well maintained canteen services with good quality of food at nominal rates.
Scope # 2. Health Facilities:
Health is wealth. To maintain good health of the workers, the required health facilities
should be maintained up to required standard.
It includes the following facilities:
a. Health centre for regular check-up for workers and their families should be provided
within factory or nearest place.
b. Availability of ambulance service at telephone call itself should be provided in case of
emergency.
c. Free and regular medical check-up of workers and counselling regarding health and
diet to workers.
d. Availability medical staff and of doctors inside the factory for emergency.
e. Welfare facilities for women and children such as – crèches, checking for pregnancy,
etc.
f. Suitable sports and recreation facilities in the premises.
g. Schooling, vocational training facilities and library services
Scope # 3. General Welfare Facilities:
a. Housing facilities for workers near to the work facilities.
b. Cleaning and sanitation facilities in housing facilities.
c. To and fro transportation facilities for workers and their children going for schools

d. Sports facilities of indoor and outdoor in the residential location.
e. Family planning and family care counselling.
f. Entertainment facilities in the campus for workers and their families.
g. Transport facilities for tours, picnics and festival celebration.
Scope # 4. Economic Welfare Facilities:
a. Subsidized consumer goods including grains, vegetables, milk, oil and other daily
requirements through cooperative stores.
b. Banking, postal, services and credit facilities through credit society.
c. Health insurance schemes by employers free of costs.
d. Regular basis bonus and profit-sharing schemes.
1.9: Agencies of Labour Welfare:
In India, the main agencies engaged in labour welfare include
(a) Central Government,
(b) State Government,
(c) Employers, and
(d) Workers organisations.
The contribution of these agencies can be stated as under.
(a) Central Government: A number of Acts have been passed by the Central
Government for the welfare of different types of workers. It also administers the
implementation of industrial and labour laws. The important Acts which incorporate
measures for the welfare of the workers are: Factories Act, Indian Mines Act,
Employment of Children Act, Maternity Benefits Act, Plantation Labour Act etc. Under
these Acts, employers are bound to provide certain basic welfare facilities to the workers.
For example, under the Factories Act, 1948, employer has to provide canteen, rest and

lunch rooms, creches, medical aid, proper lighting, ventilation, drinking water, etc. at the
work place. The Welfare Officer is compulsorily required to be appointed e.g. Coal
mines. The Coal Mines Labour Welfare Fund. This fund is to be utilised for providing
housing, medical, educational and recreation facilities to the workers in mines. Under the
Mica Mines Labour Welfare Fund Act, 1946. In the case of dock workers, the
Government also provides housing, medical care, canteens, educational aid to children
and workers. Similarly, under different statutes the workers of other industries are
provided with welfare facilities.
(b) State Governments: The State Governments have to implement many provisions of
various labour laws. The State Governments run health centres, educational centres, etc.
for the welfare of the workers. They also keep a vigil on the employers that they are
operating the welfare schemes made obligatory by the Central or State Government. The
State Government have been empowered to prescribe rules for the welfare of workers and
appoint appropriate authorities for the enforcement of welfare provisions under various
laws.
(c) Trade Unions: Trade unions have to look after the welfare of the workers and thus
they are expected to provide welfare facilities to their members. Unions can provide
educational, cultural and other facilities to their members. In Mumbai some unions
provide sport and educational facilities. Co-operative stores are also run by some
unions. Some trade unions like the Rastriya Mill Mazdoor Sangh are doing good
work in the field of labour welfare. In addition to this, Textile Labour Association,
Ahmedabad provide certain facilities like schools, social centres, libraries, legal aid,
etc. to the textile workers. Thus, Textile Labour Association of Ahmedabad is doing
remarkable work in the labour welfare field.
1.10: Welfare activities of Trade Unions:
Labour welfare activities of trade unions include the different types of services or
programmes developed by them for their members. Obviously, these services are
developed by unions out of their own resources and are administered by them.
The activities of trade unions include the following:
1. Consumer's co-operative, co-operative credit societies, producer's co-operatives
etc.

2. Health and Family Planning Programmes.
3. Literacy, adult education and social education classes.
4. Workers Education and Leadership training courses.
5. Social Cultural and Recreational activities.
6. Welfare centres / Workers Institutes.
7. Vocational guidance services.
8. Safety education.
9. Participating in or campaigning for civic social services for members such as
schooling of children and transport.
10. Building houses for workers through co-operatives.
11. National Savings Schemes.
12. Civil Defence, and campaigns for the national integration, communal
harmony etc.
1.11: The Role of Trade Union:
It seems that the role of the union in relation to the labour welfare activities emerges from
an acceptance of the fact that workers need welfare services apart from those available to
them as citizens and members of the community. The unions think that such services
should be provided by the Government either from its own resources or by further taxing
the employers.
This peculiar role of the Unions in the welfare activities has been influenced among other
things by the socio-political environment, the state of the economy and the legal
framework of the country.
It is often said that trade unions do not engage in labour welfare activities due to
inadequacy of funds. The argument is valid only to a certain extent. But that is only a part
of the story. The phenomenon of unequal interest in non-bargaining activities on the part
of different unions also has to be recognised. Two reasons seem to explain this situation.
First, the state of labour management relations is relevant to the Union's motivation or
lack of it to undertake non-bargaining activities. Secondly, the ideological commitment oi
a union also influences its desires to undertake non-bargaining activities.
The trade unions have not been able to do much mainly due to the fact that they are
concentrating their activities on the maintenance of industrial relations and agitating for

increase in wages, allowance and bonus etc. In the near future also, it is doubtful whether
they will be able to do much. Their indifference is also due to the paucity of funds. The
financial conditions of the majority of unions are quite deplorable and they do not have
adequate funds to take up welfare measures. But looking at the conditions prevailing in
the country, it is imperative that they must diversify their activities and confine to the
maintenance of industrial relations mainly. In the near future they will be required to
shoulder greater burdens and should not hesitate in accepting the challenge.
"Efforts are necessary to awaken the trade unions to the facts that unless they lay proper
stress on other factor besides industrial relations, all are doomed to a dismal failure ".
They should take up those measures which may be helpful in making the lives oi the
members happier and richer and should not merely look to the Government and the
employers.
For the time being they may take the following measures:
They should:
(i)Assist the employers and the Government in the formulation and administration of
welfare schemes.
(ii) Find out the needs of the workers and bring them to the notice of the employers and
the Government.
(iii) Educate different workers to avail of the facilities offered to them.
(iv) Organise simple and inexpensive programmes.
(v) Serve as a watch-dog of worker's interests and see that the statutory measures are duly
implemented.
Employers:
Many employers provide voluntarily welfare facilities along with the statutory welfare
facilities. These include residential accommodation to the employees medical and
transport facilities, reading rooms, scholarships to children of the workers, patronise
teams of the employees for hockey, football, etc. Employers can provide welfare facilities
individually or collectively i.e. through their associations. Employers have to play a
major role in providing welfare facilities to industrial workers. The welfare facilities
offered by the employers on their own are called voluntary welfare facilities. Some

associations of employers also provide welfare facilities collectively, for e.g. Indian Jute
Mills Association.
Charitable Trusts:
Charitable Trusts conduct social welfare activities which are useful to all sections of the
society including industrial workers. These agencies provide educational facilities
medical facilities, scholarships, etc. However, the contribution of such organization in
labour welfare is insignificant.
1.12: Labour Welfare: Evolution in India:
In India, labour welfare programmes are evolved through philanthropist, religious
leaders, social workers and voluntary organisations. With the inception of industrial
revolution, large-scale industries were established in big cities.
Workers migrated from villages to cities. They were attracted by higher wages, comforts
and recreation of city life; but they were exposed to bad working conditions, long hours
of work, low wages, health hazards, and absence of safety measures and unsatisfactory
working and living conditions.
First Factories Act was passed in 1981. At that time, it was applicable to factories
employing not less 100 workers using power. Today, the Act is implemented in factories
employing 10 or more workers with the aid of power and 20 or more workers without the
use of power.
The Government of India appointed a committee to review the conditions of industrial
labour in 1907. On the basis of the recommendations of the committee a more
comprehensive Act, the Indian factories Act of 1910 was introduced for all seasonal
factories. The hours of work for adult male workers were specified to 12 per day. Today
it is 8 hours a day.
Some voluntary efforts in the interest of welfare of workers were made by the
amalgamated society of Railway servants of India and Burma. The Printers Union,
Calcutta (1905) and the Bombay Postal Union (1907) introduced mutual insurance
schemes, night schools, educational stipends, funeral allowances, etc.
The First World War 1914 led to new developments. The number of factories and the
number of persons employed therein increased. Wages did not keep race with the rising
prices and profits.

The establishment of the International Labour organisation in 1919 was a landmark in the
history of labour movement. ILO created a conciseness and unity amongst workers. All
India Trade Union Congress (AITUC) was established in 1920. The Indian Factories
Amendment Act of 1922 was passed.
It was applicable to all factories employing not less than 20 persons. Children below the
age of 12 and 14 were not allowed to work for more than 6 hours a day. Children and
women were not employed between 7.00 p.m. and 5.30 a.m. The Royal Commission on
labour was appointed in 1929. It made on exhaustive survey of conditions of workers. Its
observation led to the enactment of a number of legislations like Payment of Wages Act,
Minimum Wages Act, etc. In 1949 Labour Investigation Committee (Rege Committee)
was appointed. The committee made a detailed survey of working conditions, housing,
slum, education of workers, etc.
In the meanwhile, Second World War had its own impact. After independence different
central trade unions were established AITUC (1949), HMS (1948), INTUC (1994), BMS
(1995), CITU (1990) and NLO. On the basis of the recommendations of Rege Committee
Governments of India enacted the present Factories Act, 1948. The directive principle of
state policy of the constitution of India also states that, ―The state shall strive to promote
the welfare of the people by securing and promoting as effectively as it may a social
order in which justice, social, economic and political shall inform all the institutions of
national life‖. All the Five-Year Plans have protected the interest of workers. The
National Commission on Labour was introduced in 1960-69. It has dealt with labour
problems most comprehensively.
1.13: Labour Welfare and Theories of Exploitation:
Exploitation talks about social relations where an "actor or character of actors uses others
for their own end because of a fundamentally asymmetric power relationship between
them". While speaking about exploitation, it reflects direct link with consumption in
social theory. Generally, it would denote exploitation as unethically taking advantage of
another person as he or she belongs to inferior position, providing the exploiter the
authority to exploit. Karl Marx, known as most classical and significant theorist of
exploitation, did not agree with traditional version of exploitation. Marx's theory

categorically dismisses the moral framing feature in notion of exploitation, and limits the
concept only toward labour relations.
In understanding the concept of exploitation, many political economists are often trapped
between the interpretation of the exploitation of labour given by Marx and Adam Smith.
Marxist Exploitation Theory
Marx's exploitation theory is one of the significant pillars of Marxian economics, and
most of social thinker considers it as keystone in Marxist thought. Marx acknowledged
the Scottish Enlightenment authors for proposing a materialist interpretation of history. In
his Critique of the Gotha Program, Marx proposed the set of principles to govern the
distribution of welfare under umbrella of socialism and communism; these principles
considered distribution to each person according to their work and needs. Marx says that,
exploitation is when these two principles are not met, when the agents are not receiving
according to their work or needs‟. This progression of exploitation is a part of the re-
distribution of labour in society, occurs when separate agents exchange their current
productive labour activity for social labour set in goods received. The labour put forth
toward production is embodied in the goods and exploitation occurs when someone
purchases a good, with their revenue or wages, for an amount unequal to the total labour
he or she has put forth. This labour performed by a people over the period is equal to the
labour personified to the product that leads to the Net National Product (NNP). The NNP
is later on distributed to the general population and it creates the two agencies, or agents,
involved in the exchange of goods, eventually there are exploiters and exploited.
The exploiters are the agents able to command authority on goods, creating revenue from
their wages that are in person with more labour than the exploiters themselves have put
forth. These agents often belong to upper strata of the society and control the ownership
of productive assets that lead to the exploitation. Meanwhile, the exploited are those
sections of society who receive far less than the average product he or she produces. But
one the other hand if workers receive the wage equal to their average product, then there
is no revenue left for the exploiter. It is not the case in general across commercial
industrial units anywhere. Thus, these workers cannot enjoy the fruits of their own
labours and the difference between what is made and what that can purchase cannot be

justified by redistribution according to need. Marx considers these exploited as
proletariat.
Surplus Labour and Labour Theory of Value
Exploiters as an agent appropriate another's surplus productive labour, which exceeding
the amount of labour necessary for the reproduction of a worker's labour capacity and
meets the basic living conditions. In other words, it is needed for worker to be able to
maintain living conditions adequate enough to be able to continue working. Marx does
not attempt to attach this only to capitalist institutions; he highlights historical pattern
with accounts reflects on appropriation of surplus labour in organisations with forced
labour, like those centred on slavery and feudality. However, he also observes the
difference, emphasizes that when appropriation of surplus labour occurs in capitalist
society, occurring in establishment having abolished forced labour and rest on the free
labour market. Origin of this argument is Marx's labour theory of value which says that
value is intrinsic in a product according to the amount of labour that has been spent on
producing the product.
In a capitalist economy, workers are paid according to their value of production and value
is the source of all wealth. Value is determined by the utility of the labour, if the
production take place from a person labour it must be considered as a product of workers
labour, qualitatively defined labour. Capitalists with authority able to purchase labour
from the workers, who only has their labour to offer in the market. Once capitalists pay
the worker less than the value produced by their labour, surplus labour forms and these
results in the capitalists' profits. This is what Marx meant by "surplus value", which he
saw as "an exact expression for the degree of exploitation of labour-power by capital, or
of the labourer by the capitalist". This profit and expansion of capital is used for overhead
and personal luxurious consumption by the exploiter (capitalist), but was mainly used to
speed up the growth and thus promote development of a greater system of exploitation.
The degree of exploitation of labour power is dictated by the rate of surplus value as the
proportion between surplus value/product, and necessary value/product. The surplus
value/product is the materialised surplus labour or surplus labour time, while the
necessary value/product is materialised necessary labour in regard to workers, like the
reproduction of the labour power. Marx called the rate of surplus value created as an

"exact expression of the degree of exploitation of labour by capital". These theories
ultimately demonstrate Marx's main issue with capitalism: it was not that capitalism was
not an institution where the labour exchange is coercive, but that in this institution one
class still becomes considerably rich while the other remain or becomes poor.
Critique and Rejection of Marxist Exploitation
Many capitalist critics have pointed out that Marx assumes that capital owners contribute
nothing to the process of production. They suggest that Marx should have considered
following two aspects to capital owners: a fair profit for taking the ownership of risk
through capital investment, and putting in efforts on management of activities. David
Ramsay Steele argues that marginal utility theory renders Marx's theory of exploitation
untenable. It says that theoretical structure and assumption of competitive market
conditions; a worker's wage is determined by his or her contribution to marginal output.
Similarly, owners of machines and real estate are compensated according to the marginal
productivity of their capital's contribution to marginal output. However, Steele also notes
that his explanation does not counter the ethical argument of socialists who consider non-
labour contributions to marginal output, but contend that it is illegitimate for a class of
passive owners to receive an unearned income from ownership of capital and land. The
theory of exploitation has been also opposed by Eugen von BöhmBawerk, as in his book
History and Critique of Interest Theories (1884). He argues that capitalists do not exploit
their workers; they actually help workers by providing them with an income well in
advance of the revenue from the goods they produced, stating "Labour cannot increase its
share at the expense of capital." In particular, he argues that the theory of exploitation
ignores the dimension of time in production. According to Böhm-Bawerk, the value of a
product is not produced by the worker, but that labour can only be paid at the present
value of any foreseeable output.
John Roemer studied and criticized Marx's theory by putting forth a model which deals
with exploitation in all modes of production, to lay the foundations for a study of the laws
of motion of socialism. Roemer (1980s) proposed a model of exploitation based upon
unequal ownership of human (physical labour capacity) and non-human property (land,
means of production). He states that this model of property rights has great superiority
over the conventional surplus labour model of exploitation, therefore rejecting the labour

theory of value. In his attempt to put forward a theory of exploitation that also includes
feudal, capitalist, and socialistmodes of production he defines exploitation in each of the
modes in terms of property rights. Roemer rejects the labour theory of value because he
sees that exploitation can exist in the absence of employment relations, like in a
subsistence economy, therefore backing the model of exploitation that is based on
property rights. He tests his theory of exploitation using game theory to construct
'contingently feasible alternative states' where the exploited agents could improve their
welfare by 'withdrawing' with their share of society's alienable and inalienable assets.
Feudal, capitalist, and socialist exploitation all come from the theory of exploitation on
the basis of inequitable distribution of property rights. There has been a range of
agreement and disagreement from various sections of economists. Generally neo-classical
economists favoured the model but majority of theorists criticize Roemer for his entire
rejection of the labour theory of value and the surplus labour approach to exploitation, as
they were the central aspects of Marxist thought in regard to exploitation.
Other Theories on Exploitation:
Liberal Theory of Exploitation
There is assumption that liberalism fundamentally lacks acceptable theory of exploitation
because its concept commits itself only to the primacy of personal rights and liberties and
to individual choice as the basic explanatory datum. Hillel Steiner provided an argument
to refute the claim that liberalism cannot supply an adequate theory of exploitation. He
discusses interpersonal transfers and how there are three types: donation, exchange, and
theft. Exchange is the only of the three that consists of a voluntary bilateral transfer were
the beneficiary receives something at a value greater than zero on the shared scale of
value, although at times there can be ambiguity between more complex types of transfer.
He describes the three dimensions of transfers as unilateral/bilateral,
voluntary/involuntary, and equal/unequal.
Despite these types of transfers being able to distinguish the differences in the four types
of transfers, it is not enough to provide with a distinguishing characterisation of
exploitation. Unlike theft an exploitative transfer is bilateral and the items are transferred
voluntarily at both of unequal and greater-than-zero value. The difference between a
benefit and exploitation despite their various shared features is a difference between their

counterfactual presuppositions, meaning that in an exploitation there's a voluntary
bilateral transfer of unequally valued items because the possessors of both items would
voluntarily make the transfer if the items to be transferred were of equal value, but in a
benefit the possessor of the higher-value item would not voluntarily make the transfer if
the items were at equal value. Put simply the exploitation can be converted to an
exchange, both exploiters and exploiter would voluntarily become exchangers when
benefactors would not. In exploitation both transfers are voluntary, but part of one of the
two transfers is unnecessary. The circumstances that bring out exploitation are not the
same as what brings about exploitative transfers. Exploitative circumstance is due to the
factors other than what motivates individuals to engage in no altruistic bilateral transfers
(exchanges and exploitations), they are not sufficient circumstances to bring about
exploitative transfers. To further explain the occurrence of exploitative circumstances
certain generalisations about social relations must be included, to supply generalisations
about social institutions. He says 'if
i. certain things are true of the institutions within which interpersonal transfers
occur, and
ii. at least some of these transfers are non-altruistic bilateral ones, then at least some
of these transfers are exploitative. Steiner looks at the institutional conditions of
exploitation and finds that in general exploitation is considered unjust, and to
understand why it is necessary to look at the concept of a right, an inviolable
domain of practical choice, and the way rights are established to form social
institutions. Institutional exploitation can be illustrated by schematized forms of
exploitation to reach two points:
Despite the mode of deprivation in exploitation isn't the same as the mode involved in a
violation of rights, it does result from such violations and the two deprivations may be of
the same value.
Rights violation (theft) is a bilateral relation, but exploitation is trilateral one. There are at
least three persons needed for exploitation.
On a liberal view exploitation can be described as a quadrilateral relation between four
relevantly distinct parties; the state, the exploited, the exploiter, and those who suffer
rights violations. However, it can be argued that the state's interests with the exploiters

action can be viewed as unimpeachable because you cannot imply that the exploiter
would ever withhold consent from exploiting due to altruistic concerns. So this trilateral
conception of exploitation identifies exploited, exploiters, and sufferers of rights
violations.
In terms of ridding exploitation, the standard liberal view holds that a regime of laissez-
faire is a necessary condition. Natural rights thinkers Henry George and Herbert Spencer
reject this view and claim that property rights belong to everyone, all land to be valid
must belong to everyone. Their argument aims to show that traditional liberalism is
mistaken in holding that non-intervention in commerce is the key to non-exploitation,
they argue it is necessary but not sufficient.
Neo-classical Notions of Exploitation
Majority of neo-classical economists only would view exploitation existing as an abstract
deduction of the classic school and of Ricardo's theory of surplus-value. However, in
some neo-classical economic theories‘ exploitation is defined by the unequal marginal
productivity of workers and wages, such that wages are lower. Exploitation is sometimes
viewed to occur when a necessary agent of production receives less wages than its
marginal product. Neo-classical theorists also identify the need for some type of
redistribution of income to the poor, disable, to the farmers and peasants, or whatever
socially alienated group from the 'social welfare function.' However, it is not true that
neoclassical economists would accept the marginal productivity theory of just income as
a general principle like other theorists do when addressing exploitation. The general neo-
classical view sees that all factors can be simultaneously rewarded according to their
marginal productivity, this means that factors of production should be awarded according
to their marginal productivity as well.
1.14: Concept of Exploitation in Developing Nations:
Developing nations are the focus of much debate over the issue of exploitation,
particularly in the context of the global economy.
Critics of foreign companies allege, for instance, that many multinationals from western
countries resort to child labour and sweatshops in developing nations, paying their
workers‘ wages far lower than those that prevail in developed nations (where the
products are sold). This, it is argued, is insufficient to allow workers to attain the local

subsistence standard of living if working hours common in the first world are observed,
so that working hours much longer than in the first world are necessary. It is also argued
that work conditions in these developing-world factories are more unsafe and much
unhealthier than in the first world.
Others argue that, in the absence of compulsion, the only way that corporations are able
to secure adequate supplies of labour is to offer wages and benefits superior to pre-
existing options, and that the presence of workers in corporate factories indicates that the
factories present options which are seen as better by the workers themselves, than the
other options available to them (see principle of revealed preference).
A common response is that this is disingenuous, as the companies are in fact exploiting
people by the terms of unequal human standards (applying lower standards to their third
world workers than to their first world ones). Furthermore, the argument goes, if people
choose to work for low wages and in unsafe conditions because it is their only alternative
to starvation or scavenging from garbage dumps (the "pre-existing options"), this cannot
be seen as any kind of "free choice" on their part. It also argued that if a company intends
to sell its products in the first world, it should pay its workers by first world standards.
They believe that such standards would improve the quality of life in less developed
nations. According to others, however, this would harm the economies of less developed
nations by discouraging the developed nations from investing in them. Milton Friedman
was an economist who thought that such a policy would have that effect. According to
this argument, the result of ending perceived 'exploitation' would therefore be the
corporation pulling back to its developed nation, leaving their former workers out of a
job.
Groups who see themselves as fighting against global exploitation also point to secondary
effects such as the dumping of government-subsidized corn on developing world markets
which forces subsistence farmers off of their lands, sending them into the cities or across
borders in order to survive. More generally, some sort of international regulation of
transnational corporations is called for, such as the enforcement of the International
Labour Organization's labour standards.
The Fair-Trade Movement seeks to ensure a more equitable treatment of producers and
workers, thus minimizing exploitation of labour forces in developing countries. The

exploitation of labour is not limited to the aforementioned large-scale corporate
outsourcing, but it can also be found within the inherent structure of local markets in
developing countries.
Industrial workers contribute significant part of the production process and also
contribute considerably to the economy. If a survey to be conducted on living and
working conditions of workers in industries, the necessity of labour welfare measure
implementation in India would be evident. These labour welfare measure have been
compulsory to counteract the problems which workers are exposed, both in their working
life and social life and to provide scope and facilities for overall development of the
workers.
1.15: Social Security for Labour Welfare:
Social Security demonstrates the ―natural aspiration of people for protection from life‘s
difficulties, from illness and deprivation. It is the security which society provides to its
members through number of welfare measures against the economic and social problems
that usually caused by the stoppage or substantial reduction in earnings due to
unemployment, sickness, maternity, injury, invalidity, old age and death; the provision of
medical care; and the provision of subsidies for families with children‖ (ILO, 1998).
The philosophy of cradle-to-grave‟ visualises social protection for the needy from pre-
natal to death benefits. Workers in general have two facets in their life: one is social life
and other one is work life. There is a mutual effect between these two components in
significant level. Social life enhances work life, while a decent social life strengthens the
productivity of the workers. A civilized society is expected to balance a decent work with
decent social and family life through economic and social elements of social security
measures (International Labour Organisation, 1998). It has been recognised that
management of companies do provide facilities to reduce imbalance and resultant stress
and strain for the stakeholders. The amalgamation of welfare state, democratic politics
and recognised social security mechanism established by the government or the
management has affected the current status with its merits as well as its demerits (Harika,
2010).
ILO Convention, 1952 talks about minimum standards for social security which covers
nine branches of social security: health benefits, injury, family, maternity, invalidity and

widowhood. India has not ratified ILO convention (1952) on social security till now.
However, social security, in its larger sense, is envisioned by the Indian constitution in its
directive principles of state policy. India has also enacted several legislations and welfare
measures that give compulsory benefits in respect of certain kind of employment. Such
benefits include health care, security against work injury, maternity, supervisors‟
benefits, and welfare funds. These welfare measures are applicable to workers of
organized sector in general.
The directive principles of the Indian policy from our constitution, refers to the
encouragement and empowerment of the people. Application of these principles on
workers for securing decent working conditions has been the objective but the actual
implications cannot be specified in definite. Labour welfare measures and social security
programme are very significant for the worker. Adequate welfare measure should be
taken to improve the working conditions to help workers to be able to deal with adversity
of life. This assertion of welfare measures makes him or her more productive and
efficient.
A welfare measure, in broader way means 'welfare of the whole society'. However, the
welfare measure as a term generally used by employer for security of functional
economic activity under government establishment. Labour welfare measures in
developing countries like India does not cover larger section of society but only to some
restricted classes of people in organised sector, government workers etc.
There have been many steps taken during post-independence period to provide welfare
measure and social security to workers. However, it is still in nascent stage and much
need to be done as these measures must address the problems. Insufficient coverage of
social security measures, lack of job security, exit policy, overlapping of various
legislation and inadequate decent working facilities creates insecure environment for
workers.
Industrial workers contribute significant part of the production process and also
contribute considerably to the economy. If a survey to be conducted on living and
working conditions of workers in industries, the necessity of labour welfare measure
implementation in India would be evident. These labour welfare measure have been
compulsory to counteract the problems which workers are exposed, both in their working

life and social life and to provide scope and facilities for overall development of the
workers.
In general working life of industrial workers is comprised of long hours hard work in
unhealthy and unsafe environment. The slog of the industrial work remains to have
adverse effects on workers even after working hours. These workers are also far away
from their native place. As most of workers have migrated from countryside areas, they
are compelled to work in an incompatible environment, which is alien to them. Such an
unfriendly environment developed by the industrial system makes it essential to introduce
various labour welfare measures.
In most of developing countries where low level of socio-economic conditions prevail
despite the schemes for economic development undertaken in planning manner, the
provision of adequate labour welfare benefits framed to meet the requirements of workers
can lead to ensuring the efficiency and commitment of the workers. An appropriate
management of welfare facilities can facilitate better working and living condition for
workers in industries and also enhances productivity in developing countries (Kohli and
Sharma, 1997).
After independence the idea of establishment of socialism in India promoted the aspect of
taking up welfare measures for wellbeing and social security. India is not only a welfare
state but also an entrepreneurial state as it has taken the responsibility of initiating and
promoting socio-economic development. It had to provide the framework for the private
entrepreneurial activities in the country and also to ensure that these new enterprises must
follow the given framework and model. The assumption of this responsibility by the State
in post-independence era, and the world war-time experiences are responsible for labour
welfare for the social recognition and for some steps were taken towards their
implementation through labour legislations. It is visible that labour welfare as a function
of State has been part of the characteristics of the twentieth century welfare. By
definition, a welfare state is not just spectators or a judge in a dispute, but an active
participant in the daily working and social life of the society by addressing the interests
and issues.
1.16: Need of labour Welfare Measures:

Historically employee welfare measures were meant to reduce absenteeism, increase
efficiency and productivity. However, today labour welfare programme taken a broader
scope and they include almost all aspects of workers welfare and development in the
industrial establishment (Manzini and Gwandure, 2011).
Rationally, the mandate of welfare measures is to generate an efficient, healthy, satisfied
and productive labour force for the organization. The objective of providing these
facilities is to make working life better experience and also to improve their living
standard (Priti, 2009).
The need for the labour welfare arises from the very nature of the industrial system,
which is characterized by two basic factors; one, the conditions under which work is
carried on are not congenial for health; and second, when a labourer joins an industry, he
has to work in an entirely strange atmosphere, which create problems of adjustments. L.S
Kudchelkar calls these two factors ―the long arm of the job,‖ and ―the social invasion of
the factory.‖ It is noteworthy that working-environment in industries/mines is such as
adversely affects the workers‘, health because of the excessive heat or cold, noise odours,
fumes, dust and lack or inadequacy of sanitation and pure air etc., All these lead to
occupational hazards. These have, therefore, to be held in check by providing
ameliorative services, protective devices and compensatory benefits following of accident
or injury or disablement. This has been referred to as ―the long arm of the job which
stretches out its adverse effects on to the worker long after his normal 8 hour.‖ Hence, the
need for provision of welfare services within the premises of the factory, mine or
plantation arises. When a worker, who is in fact a ruralite, comes to work in a factory, has
to work and live in unhealthy, congested factories and slum areas, with no outdoor
recreation facilities. To escape from the tiring conditions of his tedious and tiresome job,
he absents himself, become irregular and often undisciplined. Hence, the need for
providing welfare services arises. For whatever improvements in the condition of work
and life of the employees, whatever leads to increasing adaptation of the worker to this
job, and whatever make him fully contented lessen his desire or need to the burden of this
social invasion of the factory. There is a social reason also as pointed out by the Labour
Investigation Committee, ―the provision of canteens improves the physic, entertainment
reduce the incidence of vices; medical aid and maternity and child welfare services

improve the health of the workers and bring down the rates of general, maternal and
infantile morality; and education facilities increase their mental efficiency and economic
productivity.‖ The need for labour welfare was strongly felt by the Royal Commission on
Labour as far back as in 1931, primarily because of lack of commitment to industrial
work among factory workers and also the harsh treatment they received from their
employers. This need was emphasized in independent India by the Constitution in the
chapter on the 1.17: Directive Principles of State Policy which contains the following
Articles in this regard:
Article 41 of the Constitution of India. ―The State shall, within the limit of its economic
capacity and development, make effective provisions for securing the right to work, to
education and to public assistance in cases of unemployment, old age, sickness and
disablement and in other cases of undeserved want.‖
Article 42 of the Constitution of India ―The State shall make provision for securing the
just and humane conditions of work and for maternity relief.‖
Article 43 of the Constitution of India ―The State shall endeavour to secure, by suitable
legislation or economic organization or in any other way, to all workers, agricultural,
industrial or otherwise, work, a wage, conditions of work ensuring a decent standard of
life and full enjoyment of leisure and social and cultural opportunities; and in particular,
the State shall endeavour to promote cottage industries on an individual or co-operative
basis in rural areas.‖
According to Labour Investigation Committee, the need of labour welfare measures
arises as these have following benefits: -
(a) Educational facilities, sports, entertainment etc., make the workers feel that the
employer is interested in their day-to-day life.
(b)Housing, canteens, sickness and maternity benefits, provident fund, gratuity,
pensions, etc make the workers feel that they have a stake in the industry as much as
anyone else has.

(c) Provisions of good and clean food in the canteens improve their health, entertainment
reduces the incidence of vices, medical and maternity benefits free the workers of
worries.
The labour welfare measures in present day scenario do play a crucial role resulting in
not only increase in labour productivity but also increase in the efficiency of the
enterprise as a whole. By improving industrial relations, labour welfare measures
contribute immensely towards creating an environment in which management with the
full co-operation of workers can execute the plans and programmes of the organisation
for realisation of its ultimate goals.
1.18: The importance of labour welfare are as follows:
Importance # 1. Improvement of Industrial Relations:
Labour Welfare measures are so comprehensive that they satisfy workers, if properly
implemented. This satisfaction on the part of workers is a great stimulus for the industrial
relations to improve. When workers are convinced that adequate measures have been
taken to improve their work environment and their conditions of service, then they
naturally repose confidence in the management and thus it helps maintenance of
industrial peace.
Importance # 2. Creation of Permanent Labour Force:
Well- adopted labour welfare measures restrict labour mobility. Workers generally feel
reluctant to leave an organisation where their welfare is sincerely looked after. This
attitude that welfare measures create helps the creation of permanent labour force which
is important for an organisation to pursue plans and programmes on a continuous basis.
Importance # 3. Increase in General Efficiency and Income of Workers:
The comprehensive welfare measures assuring workers good accommodation, proper
health-care, suitable work environment make the workers contented. Their contentment is
a great inducement for them to work more. They become more efficient as they are not
worried about their primary needs. Since their productivity increases, they earn more;
their income increases.
Importance # 4. Enhancement of the Morale of Workers:

Labour welfare measures act as a booster to the morale of the workers. Workers with
better amenities of life shun many of their vices and offer willing co-operation to
management. This is a great benefit for the organisation.
Importance # 5. Development of the Sense of Belonging:
Labour Welfare measures make the workers feel that they are one with the organisation.
Management thinks so much for them, does so much for their welfare that they cannot
isolate themselves from the organisation – they feel oneness with the organisation. This
feeling that they have some stake in the organisation will help restore industrial peace. It
will enhance their devotion to the job and thus the enterprise, as a whole, will be
benefitted.
Importance # 6. Change in Outlook of Employers:
The change in the dealings of the workers consequent upon the introduction of labour
welfare measures make the employers satisfied with them. Thus, there is a change in the
outlook of the employers towards labour; a cordial relation is set up and the work
environment improves considerably. When the employers find the workers willing to
work and devote themselves to the development of the organisation, they do not even
hesitate to allow them to participate in management.
Importance # 7. Improvement of the Moral and Mental Health of Workers:
Welfare measures include such measures as would prevent the workers from indulging in
vices such as drinking, gambling etc. and thus their moral and mental health improves
contributing overall improvement in the health of the organisation and society.
Importance # 8. Benefit to the Society:
Besides providing economic benefits to workers, labour welfare measures extend to
workers various facilities that have direct bearing on their better mode of living. Because
of medical benefits extended to them, the workers enjoy better health and infant mortality
among the workers declines.
The workers feel happier and the society as a whole is benefitted with people having
better standards of living and better equipped with more purchasing power to contribute
to the general welfare of the country in general and the society in particular.
1.19: Approaches to Labour Welfare:

All the stakeholders involved in establishment of labour welfare measures are led by the
mutual interest based on different approaches. The study of these approaches is desirable
for government, employers, the workers and the general reader. Insight and knowledge of
these approaches of labour welfare enables the employers and the workers to have a
better perspective on welfare measures. Moreover, the several approaches to labour
welfare reflect the outlooks and principles of the agencies, which are engaged in
establishment welfare activities. These different approaches also reflect the evolution of
the concept of labour welfare.
Paternalistic Approach
The Paternalistic Approach towards labour for their welfare can be drawn from the
beginning of the modern industrial system where management and ownership use to be
very much same. Owners of the firm do have the first-hand experience and information
of the living and working conditions of the workers in industrial premises. This approach
talks about the employer‘s sense of responsibility and morality for well-being of persons
employed by them as worker. This approach assumes that the workers belong to inferior
social category, always in need of help and charity. This assumption reflects the nature
and motives of labour welfare services. These services are formulated and imposed from
higher level of authority (with assumption that managers being wiser and more
knowledgeable than workers) and these activities reflects the attitudinal perception of
employer that they have done so much for workers, now labour class should be loyal to
the employers. This particular approach may work in the initial stages of the industrial
revolution where the workers come from the interiors of the state. But with the time
changes in the attitudes of the public in general and industrial workers in particular, will
protest as welfare measures cannot accepted as charity.
Atomistic Approach
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 19th 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.
Mechanistic Approach
Since the beginning of the 20th century labour welfare measures and labour relations
have moved and adopted more sympathetic approach. Working towards the increase in
the efficiency of labour has been taken as matter of fundamental significance. It is
evident that if labour administration in the state needs to be scientifically managed which
can significantly improve the scope for efficiency of labour. Such approach of scientific
management of labour welfare measures and the industry establishment leads to the
development of mechanical approach. This approach assume worker as, labour performed
as some 'mechanical units' in as 'man days', 'hours of work', `man hours'. Its emphasis is
on the scientific mean of production with increase in efficiency of workers. Such kind of
approach is generally preferred by the employers and management for consistent and
higher production. However, it is intensely protested by the trade union institutions in
industry establishment. Scientific management and mechanistic approach are based on

the theory of `stimulus and response' relationship and 'carrot and stick' method that it
advocates less for employee (International Trade Union Confederation, 2007).
Mechanistic approach takes welfare services as social security measures, economic
justice, health services and hygienic work place are not necessary for overall
development of the workers. Therefore, this approach takes a highly restrictive
methodology for introduction of Labour welfare activities.
Humanistic Approach
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.
1.20: Theories and Models of Labour Welfare:
There are various theoretical explanations advocated which may encourage the employers
to introduce different labour welfare activities. The following are the theories and models
that provide conceptual frame work to labour welfare activities:
Religious Theory
This is based on the concept that man is essentially ―a religious animal.‖ Even today,
many acts of man are related to religious sentiments and beliefs. The Religion theory
constitute of element such as investment and atonement for welfare of workers. Concept
of investment says that the benefit of today's work will be reaped tomorrow. It is also
widely believed that because of this belief many companies provide facilities such as
canteens and crèches to the workers. Atonement says that the existing disabilities of an
individual are mainly due to sins committed by him earlier part of life. Therefore, the

employers provide benefits and facilities to worker compensate for the sins. Welfare
activities are considered to be an effort to appeal to the religious values of the owner of
firm by suggesting that welfare act can purified him from his sinful activities of
exploitation and profit making. Religious theory demands sharing progress and profit
partly with your fellow workers and it says that even God will not forgive too much self-
centred and acquisitive act. Therefore, sharing wealth and acting for welfare of working
class is part of religious duty of every employer.
Philanthropic Theory
Philanthropy is the inclination to do or practice of doing well to one‘s fellow men. This
theory is based on man‘s love for mankind. Philanthropy means ―Loving mankind.‖ Man
is believed to have an instinctive urge by which he strives to remove the suffering of
others and promote their well-being. In fact, the labour welfare movement began in the
early years of the industrial revolution with the support of philanthropists. According to
philanthropic theory the companies provide good quality working conditions, facilities
such as crèches, rest room and canteens etc. to show kindness in order to improve the
working condition for workers. The philanthropic theory is very common as social
welfare measure rather than in industrial establishment. This theory is closely related to
religious theory‘s principle of charity. This theory further emphasis that every member of
industrial system should have harmonious relations with the rest of stakeholders. It is a
duty and responsibility of the wealthy people to help the underprivileged (Mishra &
Bhagat, 2010). Mutual harmony and brotherly relations within the society is important to
promote a peaceful and cooperative environment.
Paternalistic or Trusteeship Theory
In this theory it is held that the industrialists or employers hold the total industrial estate,
properties and profits accruing form them in trust for the workmen, for him, and for
society. It assumes that the workmen are like minors and are not able to look after their
own interests that they are ignorant because of lack of education. Employers therefore
have the moral responsibility to look after the interests of their wards, who are the
workers.

Paternalistic theory assumes that the labour is not being able to look after them.
Therefore, the employer provides with various benefits and facilities for their well-being.
As they establish enterprise in trust for the benefit of the employees, this theory is also
called trusteeship theory. It takes a paternalistic approach towards industrial production
system and proprietorship of resources. According to this theory, owner is not only a
trustee but he also looks after the productive activities. It is the duty of the owner to share
the wealth and use it wisely for the larger interest of workers who equally contributed in
production of wealth. Thus, owner is like a big brother or elderly member and in charge
of family for overall welfare of all the workers. Mahatma Gandhi was a strong supporter
of the trusteeship theory for labour welfare measures.
Policing Theory
The policing theory is based on assumption that Human Being is so much selfish and
always tries for own benefits whether on the cost of others welfare. Any of the employers
will not work for the welfare of employees until he is forced to do so. This theory is
based on the contention that a minimum standard of welfare is necessary for workers.
The assumption on which the theory is based is the without compulsion, supervision and
fear of punishment, no employer will provide even the barest minimum of welfare
facilities for workers this theory is based on the assumption that man is selfish and self-
centred, and always tries to achieve his own ends, even at the cost of the welfare of
others. This is based on the contention that a minimum standard of welfare is necessary
for labourers. Here the assumption is that without policing, that is, without compulsion,
employers do not provide even the minimum facilities for workers.
According to this theory, owners and managers of industrial undertakings get many
opportunities for exploitation of labour. Hence, the state has to intervene to provide
minimum standard of welfare to the working class.
Placating Theory
According to this theory management endorse welfare measures not as charity, but as a
reward effort on the part of the worker (Kohli and Sharma, 1997). It is right of the labour
class to organize itself into association or unions, to plan protest activities and force the
management to provide more welfare facilities to the workers. Therefore, it is evident

that stronger the labour class, greater welfare services to conceded for welfare provisions.
The industry and employers are worried not by the legislations framed by the State, but
by the labour union which compels management to placate or satisfy the workers need.
This theory is based on the fact that the labour groups are becoming demanding and
militant and are more conscious of their rights and privileges than ever before. Their
demand for higher wages and better standards of living cannot be ignored. According to
this theory, timely and periodical acts of labour welfare can appease the workers. They
are some kind of pacifiers which come with a friendly gesture.
Efficiency/Functional Theory
Functional theory implies by saying that the facilities and benefits are being provided to
worker to make them more efficient and productive. According to functional theory,
welfare measures to be provided on the grounds of efficiency and productivity (Mishra &
Bhagat, 2010). There is an effort going on to correlate labour welfare facilities and
resultant increases in the efficiency of the workers. It is debated that introduction of
welfare promoting activities do pay rich dividends in terms of higher productivity.
Therefore, the theory applies a commercial approach towards labour welfare activities to
make it more economically viable.
The concept behind this theory is that a happy and healthy person is a better, more
productive worker. Here, welfare is used as a means to secure, preserve and develop the
efficiency and productivity of labour. This also called the efficiency theory.
This theory is a reflection of contemporary support for labour welfare. It can work well if
both the parties have an identical aim in view; that is, higher production through better
welfare. This will encourage labour‘s participation in welfare programmes.
Public Relations Theory
According to Public Relations theory, welfare facilities are provided to create goodwill
and to generate a good image on the minds of workers and the society. This theory
provides the basis for an atmosphere of goodwill between labour and management, and
also between management and the public, labour welfare programmes under this theory,

work as a sort of an advertisement and help an organization to project its good image and
build up and promote good and healthy public relations.
Good working conditions such as clean and safe premises, decent canteen, crèche and
other amenities, creates a pacifying impression on the labour class and the public.
Social Theory
Social theory implies that an industry establishment is morally bound to provide decent
working condition for the employees in addition to improve environment and condition
of the society. The social responsibility of an industrial establishment has been
acknowledged as great significance at the present time. This theory implies that an
industrial establishment is ethically bound to provide the decent conditions for society in
addition to enhancing the conditions of its workers.
Labour welfare should progressively develop in to social welfare. It is evident with
theoretical explanations on labour welfare practices and its evolution over the years, that
none of the single theory can explain the dynamic nature and variety of welfare measures
that can be provided to working class for their development and decent living. Therefore,
the objective and spirit of all these theories and model is to provide maximum welfare
facilities to the workers to maintain and increase industrial productivity by enhancing
labour productivity. Overall, most of labour welfare programmes in modern times can be
said to be a product of a combined effect of various theoretical reflections.
1.21: Principles of Labour Welfare:
Labour welfare has emerged as a professional discipline.
Just like any other applied profession, it has specific aims and objectives based upon
certain principles:
Principle of Social Responsibility
Industries have a sense of social responsibility towards the upliftment of society. Social
responsibility mainly means the commitments of the industry to pursue those policies, to
take such decisions and to act which are desirable and requisite for the prevailing
conditions in the society. This principle is based on the social perception of industry and
its functionality in the society, that is, the social responsibility through industry

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