Employee welfare -Activities - Statuary welfare benefits - Approaches to Employee Welfare

[International Labour Organization] ILO at its Asian Regional Conference, defined labour welfare as a term which is understood to include such services, facilities and amenities as may be established in or in the vicinity of undertakings to enable the persons employed in them to perform their work in healthy, congenial surroundings and to provide them with amenities conducive to good health and high morale.

Welfare includes anything that is done for the comfort and improvement of employees and is provided over and above the wages. Welfare helps in keeping the morale and motivation of the employees high so as to retain the employees for longer duration. The welfare measures need not be in monetary terms only but in any kind/forms. 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.

Labor welfare entails all those activities of employer which are directed towards providing the employees with certain facilities and services in addition to wages or salaries.

Labor welfare has the following objectives:

    • To provide better life and health to the workers

    • To make the workers happy and satisfied

    • To relieve workers from industrial fatigue and to improve intellectual, cultural and material conditions of living of the workers.

The basic features of labor welfare measures are as follows:

    • Labor welfare includes various facilities, services and amenities provided to workers for improving their health, efficiency, economic betterment and social status.

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

    • Labor welfare schemes are flexible and ever-changing. New welfare measures are added to the existing ones from time to time.

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

    • The purpose of labor welfare is to bring about the development of the whole personality of the workers to make a better workforce.

The very logic behind providing welfare schemes is to create efficient, healthy, loyal and satisfied labor force for the organization. The purpose of providing such facilities is to make their work life better and also to raise their standard of living.

The important benefits of welfare measures can be summarized as follows:

    • They provide better physical and mental health to workers and thus promote a healthy work environment

    • Facilities like housing schemes, medical benefits, and education and recreation facilities for workers’ families help in raising their standards of living. This makes workers to pay more attention towards work and thus increases their productivity.

    • Employers get stable labor force by providing welfare facilities. Workers take active interest in their jobs and work with a feeling of involvement and participation.

    • Employee welfare measures increase the productivity of organization and promote healthy industrial relations thereby maintaining industrial peace.

    • The social evils prevalent among the labors such as substance abuse, etc are reduced to a greater extent by the welfare policies.

Facts [+]

India. The Factories act >> was enacted in the year 1948. The main objective of this law is to maintain healthy, safety and welfare of every employee at workplace in factory . According to this law any factory with above 500 workers should have separate welfare officer, factory with 1000 above workers should have separate safety officer, for 500 workers should have ambulance facility and for above 250 workers canteen facility with concession should be provided.

Big Business, Bad Suppliers


Walmart workers in some supplier companies in Bangladesh, China, Indonesia, Nicaragua and Swaziland were denied minimum wages and mandated health care and they were forced to work overtime without compensation.

Apple Inc.

March, 2002: and Apple Company commissioned audit at Foxconn Electronics, with a big presence in China, had documented violations like unpaid wages, excessive over time and low salaries.

Sports goods major

the report said Adidas, Reebok, Nike and Puma were sourcing from companies whose workers suffered seven working days a week, 16 to 18 working hours a day, sexual harassment of women, and forced to do overtime without payment for over time.

Nestlé USA

Its suppliers have been accused of child labour, repression of workers rights, and violation of National health and in government the laws. In 2006, the International labour rights fund and Birmingham-based law firm filed a class action suit against Nestlé and some of its suppliers on behalf of former child slaves. source: the economic times

Employee Welfare Benefits Schemes

Organizations provide welfare facilities to their employees to keep their motivation levels high. The employee welfare schemes can be classified into two categories viz. statutory and non-statutory welfare schemes. The statutory schemes are those schemes that are compulsory to provide by an organization as compliance to the laws governing employee health and safety. These include provisions provided in industrial acts like Factories Act 1948, Dock Workers Act (safety, health and welfare) 1986, Mines Act 1962. The non-statutory schemes differ from organization to organization and from industry to industry.

Some of the employee welfare Laws in India

Statuary welfare benefits

The statutory welfare benefits schemes include the following provisions:

  • Drinking Water: At all the working places safe hygienic drinking water should be provided.

  • Facilities for sitting: In every organization, especially factories, suitable seating arrangements are to be provided.

  • First aid appliances: First aid appliances are to be provided and should be readily assessable so that in case of any minor accident initial medication can be provided to the needed employee.

  • Latrines and Urinals: A sufficient number of latrines and urinals are to be provided in the office and factory premises and are also to be maintained in a neat and clean condition.

  • Canteen facilities: Cafeteria or canteens are to be provided by the employer so as to provide hygienic and nutritious food to the employees.

  • Spittoons: In every work place, such as ware houses, store places, in the dock area and office premises spittoons are to be provided in convenient places and same are to be maintained in a hygienic condition.

  • Lighting: Proper and sufficient lights are to be provided for employees so that they can work safely during the night shifts.

  • Washing places: Adequate washing places such as bathrooms, wash basins with tap and tap on the stand pipe are provided in the port area in the vicinity of the work places.

  • Changing rooms: Adequate changing rooms are to be provided for workers to change their cloth in the factory area and office premises. Adequate lockers are also provided to the workers to keep their clothes and belongings.

  • Rest rooms: Adequate numbers of restrooms are provided to the workers with provisions of water supply, wash basins, toilets, bathrooms, etc.

  • Maternity & Adoption Leave – Employees can avail maternity or adoption leaves. Paternity leave policies have also been introduced by various companies.

  • Medi-claim Insurance Scheme: This insurance scheme provides adequate insurance coverage of employees for expenses related to hospitalization due to illness, disease or injury or pregnancy.

  • Sexual Harassment Policy: To protect an employee from harassment of any kind, guidelines are provided for proper action and also for protecting the aggrieved employee. For more information go through - Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Non Statutory welfare benefits

Many non-statutory welfare benefits may include the following schemes:

  • Personal Health Care (Regular medical check-ups): Some of the companies provide the facility for extensive health check-up

  • Flexi-time: The main objective of the flexitime policy is to provide opportunity to employees to work with flexible working schedules. Flexible work schedules are initiated by employees and approved by management to meet business commitments while supporting employee personal life needs

  • Employee Assistance Programs: Various assistant programs are arranged like external counselling service so that employees or members of their immediate family can get counselling on various matters.

  • Employee Referral Scheme: In several companies employee referral scheme is implemented to encourage employees to refer friends and relatives for employment in the organization.

Approaches to Employee Welfare

Approaches to employee welfare refer to the beliefs and attitudes held by agencies which provide welfare facilities. Some agencies provide welfare facilities inspired by religious faith, others as a philanthropic duty and the like.

The various approaches to labour welfare reflect the attitudes and beliefs of the agen­cies which are engaged in welfare activities. Welfare facilities may be provided on religious, philanthropic or some other grounds. Moreover, the different approaches to labour welfare reflect the evolution of the concept of welfare. In bygone days, the government of the land had to compel the owner of an industrial establishment to provide such basic amenities as canteens, rest rooms, drinking water, good working conditions, and so forth, for their employees. Such compulsion was necessary because the employer believed in exploiting labour and treating it in an unfair manner. But times have changed, and the concept of welfare, too, has undergone changes.

Many progressive managements today provide welfare facilities, voluntarily and with enlight­ened willingness and enthusiasm. In fact, welfare facilities are not restricted to the workers alone. They have now been extended to the society in general. In other words, labour welfare has been extended to include social welfare. Tata Steel Works at Jamshedpur, for example, spends Rs 10 crore each year on social welfare. Brooke Bond have set up a free animal welfare clinic at Gevrai, Aurangabad, under the direct charge of a qualified veterinary doctor. Jindal Aluminium, Bangalore, maintains the famous Naturopathy and Yogic Sciences Centre and a public school for the benefit of the public. The Jindal Scholarship Trust has been set up, under which deserving students are given scholarships. The Hindustan Machine Tools has a big playground and a community hall, which are let out for competitions and functions.

A study of the approaches to labour welfare is desirable for the management, the workers and the general reader. For the general reader, a study of approaches is essential because his/her knowledge of the subject is incomplete without a knowledge of these approaches, and a knowledge of approaches enables the manager and the worker to have a better perspective on welfare work.

The approaches and their brief descriptions are:

    1. The policing theory of labour welfare.

    2. The religion theory of labour welfare.

    3. The philanthropic theory of labour welfare.

    4. The paternalistic theory of labour welfare.

    5. The placating theory of labour welfare.

    6. The public relations theory of labour welfare.

    7. The functional theory of labour welfare.

    8. The social theory of labour welfare.

Policing Theory

According to this view, the factory and other industrial workplaces provide ample opportunities for owners and managers of capital to exploit workers in an unfair manner. This could be done by making the labour work for long hours, by paying workers low wages, by keeping the workplaces in an unhygienic condition, by neglecting safety and health provisions, and by ignoring the provision of elementary human amenities, such as drinking water, latrines, rest rooms and canteens. Clearly, a welfare state cannot remain a passive spectator of this limitless exploitation. It enacts legislation under which managements are compelled to provide basic amenities to the workers. In short, the state assumes the role of a policeman, and compels the managers of industrial establishments to provide welfare facilities, and punishes the non-complier. This is the policing theory of labour welfare.

Religion Theory

The religion theory has two connotations, namely, the investment and atonement aspects. The investment aspect of the religion theory implies that the fruits of today's deeds will be reaped tomorrow. Any action, good or bad. is therefore treated as an investment. Inspired by this belief, some employers plan and organise canteens and creches. The atonement aspect of the religion theory implies that the present disabilities of a person are the result of the sins committed by him/her previously. He/she should undertake to do good deeds now to atone or compensate for his/her sins. There is the story of a big Jain employer who firmly held the belief that the provision of welfare facilities for workers was outside the duties of the management. Whatever he did provide was under government compulsion and supervision. It so happened, however, that the children born to him died as soon as they were born. Later, his own health suffered. He felt that, as a compensation, or expiration or even as an investment in a good deed (punyam), he should liberally contribute to the creche in the factory (as well as to other child-welfare institutions), and also to medical services for his workers. Consequently, in this particular factory, there came to exist an excellent creche and a well-organised dispensary.9

Philanthropic Theory

Philanthropy means affection for mankind. The philanthropic theory of labour welfare refers to the provi­sion of good working conditions, creches and canteens out of pity on the part of the employers who want to remove the disabilities of the workers. Robert Owen of England was a philanthropic employer, who worked for the welfare of his workers. The philanthropic theory is more common in social welfare. Student hostels, drinking water facilities, the rehabilitation of crippled persons, donations to religious and educational institutions, and so forth are examples of philanthropic deeds.

Paternalistic Theory

According to the paternalistic theory, also called the trusteeship theory, of labour welfare, the industrialist or the employer holds the total industrial estate, properties and the profits accruing from them, in trust. The property which he/she can use or abuse as he/she likes is not entirely his/her own. He/she holds it for his/her use, no doubt, but also for the benefit of his/her workers, if not for the whole society. For several reasons, such as low wages, lack of education, and so forth the workers are at present unable to take care of themselves. They are, therefore, like minors, and the employers should provide for their well-being out of funds in their control. The trusteeship is not actual and legal, but it is moral and, therefore, not less real.

Placating Theory

This theory is based on the assumption that appeasement pays when the workers are organised and are militant. Peace can be bought by welfare measures. Workers are like children who are intelligent, but not fully so. As crying children are pacified by sweets, workers should be pleased by welfare works.

Public Relations Theory

According to this theory, welfare activities are provided to create a good impression on the minds of the workers and the public, particularly the latter. Clean and safe working conditions, a good canteen, creche and other amenities, make a good impression on the workers, visitors and the public. Some employers proudly take their visitors round the plant to show how well they have organised their welfare activities.

Functional Theory

Also known as the efficiency theory of labour welfare, the functional theory implies that welfare facilities are provided to make the workers more efficient. If workers are fed properly, clothed adequately and treated kindly, and if the conditions of their work are congenial, they will work efficiently. Welfare work is a means of securing, preserving and increasing the efficiency of labour.

Social Theory

The social obligation of an industrial establishment has been assuming great significance these days. The social theory implies that a factory is morally bound to improve the conditions of the society besides improving the condition of its employees. Labour welfare, as mentioned earlier, is gradually becoming social welfare.