Labour Investigation Committee (1946)||
The whole problem of provision against old age or death of bread winners legitimately falls within the sphere of Social Security and it is a matter for consideration whether either the initiation or management of schemes of Provident Fund, Gratuities and Pensions should be left to employers themselves. Of course, so long as there are no schemes of social security introduced in a particular industry or area, the existing private schemes of provident fund, etc., should be allowed to continue under the management of employers. The existing schemes in this connection do not appear to be very liberal, and especially in regard to the employers' contribution to provident funds of workers; the restrictions on withdrawal of employers' contribution seem to be somewhat unsatisfactory. If provision against old age or death of bread-winner is intended to stabilise the industrial worker in employment, the employers' contribution, which is really in consideration for permanent service by the worker, should as far as possible be made available to him on early retirement, etc. The absence of social security measures like provident funds, gratuities and pensions in most concerns has largely contributed to the migratory character of Indian labour, and is one of the most important causes of the large labour turnover in factories. Though some of the larger employers have instituted tolerably good schemes, the number of such employers is very small. During the last few years, however, some progress has been achieved in this direction. Generally speaking, provident funds are most common, gratuities are given only in some cases and pensions are rather rare. Only some of the Provident Funds are registered, while most are not. As regards eligibility, there are very wide variations: in some cases, the clerical and office staff only are covered; in others only permanent workers (and the definition of permanency itself varies from concern to concern), and in others still, all employees except casual labour are covered. Some employers impose income qualifications and here also there are numerous variations. Broadly speaking, the range of income limits lies between Rs. 30 and Rs. 150 or so per month. The amount of total contribution also varies widely, generally ranging between 5 per cent. and 12 1/2 per cent. with equal monthly contributions from the employer and the worker. In almost all cases, however, the worker must have served for at least 15 years (or more in some cases) and to the entire satisfaction of the employer, before he is eligible to receive the employer's contribution to the Provident Fund; and it must be remembered that it is the employer himself who decides whether the worker has been of good behaviour or not. The funds are generally deposited in Government securities. In the case of unregistered funds, the amount outstanding to the worker's credit is attachable, but not so in the case of registered funds. We are of the opinion that all Provident Funds, wherever they exist, should be compulsorily registered and treated as trusts.
F.N. Report of Royal Commission on Labour, p. 65 * Indian Labour Gazette, October 194, p. 105.
29—2 Lab. 56.
A few employers have instituted Gratuity and Pension Schemes. The amount of gratuity generally amounts to half a month's wages for every complete year of service put in. In almost all the cases gratuity is payable only to deserving workers of proved good behaviour,—the sole judge of the deservedness being the employer himself. Hence there is always scope for discrimination, and the trade unions bitterly complain that their members are discriminated against. The rate of the gratuity is progressively reduced if the period of service is less than 20 years. Pension schemes are operated by a very few concerns. The grant of pensions is entirely at the discretion of the employer and the amount is generally small.