INTRODUCTION

The purpose of labor laws is to safeguard workers' rights and interests by guaranteeing equitable treatment, employment stability, and respectable working conditions. One of the main cornerstones of labor welfare is social security, which offers workers protection and financial support in the event of retirement, illness, accident, or death, among other situations. These policies are carried out through various Social Security programs, insurance, pension plans, and the Provident Fund (PF).

LEGAL FRAMEWORKS ON SOCIAL SECURITY TO WORKMEN/EMPLOYEES

PROVIDENT FUND

The Providend Fund or popularly known as PF is a mandatory retirement savings scheme that provides financial security to employees after retirement or during unemployment. The same is governed under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (EPF Act), now subsumed under the Code on Social Security, 2020. The Administrating Authority of the entire umbrella of PF and EPF is the EPFO I.e., Employees’ Provident Fund Organisation. The notion of application of EPF applies only to such establishments that has employed 20 or more people. Person who are eligible to be administered under the EPF scheme shall have a monthly income upto Rs. 15,000. People upto a monthly wage of Rs. 15,000 have to compulsorily opt in for the said scheme, however, people/ employees having an income of Rs.15,000 and above, may opt in voluntarily for the same.

The composition of capital distribution is as such:

• Employer’s Contribution- 12% of basic wages/salary + Dearness Allowance (DA).
• Employee’s Contribution- 12% of basic wages/salary + Dearness Allowance (DA).

However, out of employer’s share, 8.33% goes to the Employees' Pension Scheme (EPS) and 3.67% to EPF.

The concept of EPF is especially designed in such a way that the employees/ workers enjoy a lump some or reasonable amount after their retirement from workplace. However, partial withdrawals of EPFs are accorded for the purpose of housing, medical emergencies, education and as such. Furthermore, the same is also subject to tax exemptions u/s 80C and 10(12) of the Income Tax Act, 1961.

WORKMEN COMPENSATION ACT, 1923

The said act was later rephrased as the “Employees Compensation Act, 1923” for the sole reason in order to make the law more inclusive and gender-neutral, applying to all types of employees and not just those traditionally considered "workmen". This particular act was enacted with the motive to provide damages to the employee or their family with respect to the losses bearded by them during the course of their employment or arising out of their employment, whether by an accident or an occupational disease. The ambit of this provision also extends to the scenarios where death has been caused, or the person has incurred permanent total disability or permanent partial liability or temporary disability. However, the amount of compensation that is to be sanctioned, solely depends on the gravity of the injury.

EMPLOYEES STATE INSURANCE ACT, 1948 (ESI)

The said act is yet another legislation that provides social security to the employees and workmen by offering benefits like medical care/ facilities, sickness allowance, maternity benefits to women employees, damages for injuries causing during the course of employment or arising out of the employment and also compensating the families for the occurrence of death of the employee. However, the said act would be in force only in an establishment that has employed 10 or more workers/ employees.

THE PAYMENT OF GRATUITY ACT, 1972

The said Act was enacted as an important component of social security legislation aimed at protecting the financial interests of employees after retirement or cessation of employment. It plays a significant role in ensuring economic security and dignity for employees in their post-service life. The qunintessential thought and objective

behind formation and passing of this legislation was to provide a monetary benefit to employees as a gesture of gratitude for the services they have rendered to their employer over the years. It recognizes long-term service and ensures that employees are not left without financial support once their earning capacity ceases. The Act ensures that employees receive a lump-sum financial benefit upon retirement, resignation, or death, helping them manage basic needs and maintain a reasonable standard of living. It acts as a financial cushion in the absence of regular wages. The basic need for this act to be functional for an employee is that they must have completed 5 consecutive years of service at a particular institution/ organization/ establishment.

THE CODE ON SOCIAL SECURITY,2020

The said act consolidated and simplified nine pre-existing laws on the face of it, namely - The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, The Employees’ State Insurance Act, 1948, The Payment of Gratuity Act, 1972, The Maternity Benefit Act, 1961 etc. The Code brings all these legislation under one umbrella, creating a uniform, efficient, and accessible social security framework for both employers and employees. This particular code not only simplified the pre- existing laws but also extended the umbrella of hope towards workers employed in the unorganized sector, also providing retirement provisions, sickness allowances, paid parental leaves and many more. The sole objective of the code was to extend the ambit of social security to the unorganized as well as organized sector of employment so that maximum area of employees would be covered. This particular code has awarded the central as well as the state governments with the discretionary power to draw up several schemes and benefits for the gig workers, employees who are self employed and other several unorganized employees/workers.

PENSION SCHEMES

THE EMPLOYEES PENSION SCHEME, 1995

This is another part of the The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 which is now under the umbrella of the Code on Social Secrity 2020. The objective of the said scheme is to provide a monthly pension to employees post their retirement, or to provide pension to their family members in case of the

death of that particular employee. The essentials in order to be eligible for the same is that the employee must have complete minimum 10 years of continuous service. However, pension is easy to access naturally ranging from the age of 58-60. The simple composition of the pension is that the employer provides 12% to the Employees Providend Fund, out of which 8.33% is diverted to EPS, and additionally the Government contributes an additional 1.16% of the employee’s wages.

Again, there are various types of Pension. They are crisply penned down below.

• Superannuation Pension – On attaining 58-60 years of age.

• Early Pension – From age 50 to 57 with reduced benefits. This pension is for those employees who opt for Voluntary Retirement Scheme or VRS.
• Disability Pension – In case of permanent and total disablement.

• Widow/Widower Pension – Payable to the spouse of the deceased employee.

• Children’s Pension – Payable to surviving children (until 25 years of age in case

of a boy and until the time of marriage in case of a girl).

• Orphan Pension – Higher pension for orphans in absence of both parents.

EMPLOYEES STATE INSURANCE (ESI)

The said is governed under the ESI Act of 1948. This particular scheme calls for cash and medical benefits during the course of employment or service. However, employees who have attended retirement are covered and insured under the ESIC Medical Healthcare benefits for lifetime vide paying a nominal fee annually. The said ESIC benefits covers the employee, their spouse for lifetime, and upto 25 years of age in case of a son and until the marriage of in case of a daughter.

EMPLOYEES’ DEPOSIT LINKED INSURANCE (EDLI) SCHEME, 1976

The said scheme is a government-backed life insurance scheme offered under the umbrella of the Employees’ Provident Fund (EPF). It is designed to provide financial security to the family (nominee/legal heir) of an employee in the event of their

untimely death during the course of employment. The main attraction under the scheme is the employee does not contribute anything towards EDLI Scheme, however the employer contributes about 0.5% of the employee’s basic salary. All employees those who are covered under EPF are automatically enrolled in the EDLI scheme, which essentially means no separate registration of documents or any official work is required to be enrolled under the said scheme.

JUDICIAL INTERPRETATIONS

Regional Provident Fund Commissioner v. Shiv Kumar Joshi [(2000) 1 SCC 98]

The case primarily dealt with the obligation of establishments to deposit contributions under the EPF Act. The Hon’ble Apex Court noted that “EPF is a social welfare legislation, and it must be interpreted liberally in favor of the beneficiaries.” It further emphasized that retirement benefits like PF are not a gift or bounty, but a right of the employee who has contributed to the same fund for over years of his employment.

Union of India v. K. Devayanai [1991 Supp (2) SCC 689]

The very crux of the case was when a retired railway servant’s spouse was denied family pension benefits after the death of her husband who was a retired railway employee citing procedural grounds. To this, the Hon’ble Apex Court observed that “pension schemes must be interpreted with a humanistic approach”, and the right to pension cannot be denied on technicalities. Procedural lapses should not deprive dependents of their rightful dues.

D.S. Nakara v. Union of India (AIR 1983 SC 130)

This case is quintessentially on the notion of the discriminatory cut-off date for revised pension benefits for retired government employees. However, this was a landmark judgment pronounced by the Hon’ble Apex Court, noting that “pension is not a bounty but a deferred part of salary” and discriminatory rules causing to deny the pension revisions to pre-cut-off

retirees goes against the essentials of the Constitution of India and hence is considered as unconstitutional. The Hon;ble Court also added the notion of Pension also fits into the ambit of Article 14 i.e., Right to Equality and paved the way for equitable treatment of all retirees.

CONCLUSION

In conclusion, a safe, secure, and long-lasting workplace is greatly aided by the range of provident funds, pension plans, insurance, and other social securities that are permitted under Indian labor laws. In addition to being legislative requirements, these legal frameworks provide workers with vital financial security, particularly in the years after retirement or in the event of unanticipated hardships like sickness, incapacity, or death. In order to provide much-needed financial help during retirement or crises, the Provident Fund serves as a disciplined savings vehicle that guarantees employees build up a corpus during their working years. This is complemented by the Employees' Pension Scheme (EPS), which ensures a consistent monthly income after retirement, protecting the independence and dignity of those who have retired. Furthermore, gratuities reinforce the importance of dedication and loyalty in the workplace by acting as a reward for long-term service.

Insurance-based programs, such Employees' State Insurance (ESI) and Employees' Deposit Linked Insurance (EDLI), protect workers and their families against monetary hardship brought on by an unexpected illness, accident, or death. These programs, which are frequently free or inexpensive for the worker, guarantee that the financial effects of life's unforeseen events are lessened.

Significantly, India's labor policy has seen a progressive change with the Code on Social Security, 2020. It opens the door to universal social protection by combining many social security laws and providing benefits to gig workers, platform-based workers, and the unorganized sector. Through improved coverage and streamlined compliance, the Code empowers companies and employees alike, reflecting a more flexible and inclusive framework. In the end, these social security programs achieve the main goals of labor welfare, which are to guarantee income continuity, advance worker health and safety, and build long-term economic resilience. The premise that every worker, regardless of their industry or level, deserves a life of dignity, security, and support—not just during their service years, but far beyond—is supported by the Indian labor law system, which institutionalizes these advantages.

AUTHOR: Debashrita Manik. LLM, KIIT SCHOOL OF LAW