Social Security for Tata Steel Contract Workers
An Exemplary Scheme Provides Social Security
Contract workers are among the most neglected workers in India. But Tata Steel cares for them by implementing Social Security Scheme of their own. This was my discovery when I visited Tata Steel in July this year. I will not hide my feelings – I was shocked, it was a pleasant and unbelievable shock. They have a unique scheme running since 2012 and it is sad that the industrial world has not copied it.
(Disclaimer: I would like to clarify that this is not a paid blog-post, and Tata Steel authorities have not asked me – nor even suggested – that I should blog about it. I have been covering good work of employers and workmen or unions alike, and this is one of them.)
I have covered the predicament of the contract workers in many of my blogs. ‘The Contracts of Exploitation’, ‘The Tragic Life of Contract Workers at BPCL’, ‘The Terrible Life of Temporary Workers’, ‘Fear Hope and Issues in Industrial Relations Today’ are some of them which you may like to read.
In the industry contract workers are often engaged in hazardous work. (I am not speaking here about Tata Steel.) And very often without safety gear. One look at the building construction sites will tell us the precarious situation of contract workers. While many contract workers may not have heard the word ‘social security,’ they raise questions which point to their concerns about their safety and security. Contract workers are usually unaware of their rights and that sets them up for exploitation.
The tragic story of how IIT Bombay denied gratuity to contract workers and that one of them committed suicide is heart rending.
All the above blogs and news report point out that ‘social security’ is the biggest concern for the contract workers. Very often contract workers are not even covered under ESIS and PF Scheme using devious methods. Injured contract workers often bear the financial burden of medical treatment. Disabled contract workers find it impossible to get a job. Death of a contract worker is perhaps the only occasion when the employing organization feels pangs of conscience, and pays the statutory compensation. But it is always inadequate.
The significance of the Tata Steel’s generous Suraksha Scheme is to be appreciated against this backdrop of unfortunate facts!
The Suraksha Scheme For Contract Workers of Tata Steel
Tata Steel introduced this scheme in 2012. This was the scheme which was launched as a result of proactive and progressive thought of the Leadership team. The Suraksha Scheme applies to all locations of Tata Steel. All the subsidiary companies of Tata Steel have also introduced this scheme. And it covers all contract workers of Indian Nationality. Guess how many contract workers it covers? More than one lakh today, but this number will vary depending on construction and other project activities.
The objective of the scheme is ‘To enable the contractor labour/ family of contract workers a dignified living, post death/ permanent total disablement/ partial permanent disablement resulting in loss of earning capacity of 50% or more of the contract labour arising out of accident on duty.’
Benefit in case of death– Monthly pension to beneficiary till notional 60 years of contract workers. Calculated based on average of last months rated earnings of the contractor worker + Retirals (PF, & Gratuity) + Annual Bonus in case of death + 1000 Rs for Medical and education.
In case of disablement resulting in loss of earning capacity of 50% and above, the pension amount calculated above will be proportionate to the extent of loss of earning capacity.
Pension escalates @ Rs 1000/- every year.
Mode of payment – The Suraksha Trust purchases an annuity from an Insurance Company for payment of monthly pension to the beneficiary.
These benefits are in addition to the statutory benefits a contract worker or his heirs may get.
Fund for Annuity – For Contractors having total business volume >= Rs 1 Cr, 50% of annuity is recovered from such contractor. For Contractors having total business volume < Rs 1 Cr, 10% of business volume or 50% of annuity, whichever is lower, is recovered from such contractor.
Acceptance of the Suraksha Scheme is an essential condition in every contract. All contractors must accept it.
Several communication meetings were held to inform all concerned about the details of the scheme.
The Tata Group has been a leader in the social security matters. The two photographs (of proud display at Russi Mody Centre of Excellence) tell us how Tata Steel has launched the schemes and law has adopted them decades later.
But does it prevent other employers to adopt similar schemes? Will they be inspired by the progressive ways of Tata Steel and formulate social security schemes for contract workers on their own? Will ‘exceeding expectations’ of employees – direct or indirect – become essential and best practice? Will the employers respect the invaluable human life or calculate contingent liability?
Let us hope that in this era of ‘People First’ and ‘Employee First’ changes will happen speedily. And in the right direction!
Vivek S Patwardhan
What you leave behind is not what is engraved in stone monuments, but what is woven into the lives of others/ All work copyrighted.
Learning and doing never stops. How refreshingly shared by you!
This heartwarming story does not cause me surprise even in the least.When it comes to employees/families welfare Tatas can teach many industrial giants in the world and it all emanates from their founders.There are lapses occasionally but do we need to get into those?No,not when the overall picture is so praiseworthy.
Incidentally,if anyone thinks that Vivek Patwardhan has been paid to write this that person (s) clearly don’t know him.
The Companies I have worked in have been scrupulously law abiding but that’s about all.Tragically the permanent workers union’s have not taken kindly to any major changes and have at times been rather negative towards non permanent workers,but perfectly happy to get them to do backbreaking work
So very true Vivek. The Tata group have been humanistic and have been path breaking in these areas. Where there is a will there is a way. However the sad state of affairs today is that forget about being progressive, at least ensure that they comply with the minimum requirements of the law and not engage expensive lawyers to find ways to evade the law. That too is not done. Look at the no. of fires in companies. Safety measures are non existent. I met a CEO of a Rs 200 crore company who proudly said that they met the requirement of all quality audits but failed the audit on minimum wages as if they paid minimum wages, they would be out of business !!!! Do you even have a right to do business if you cannot pay your employees? Sadly, todays HR folks have taken this as a given and that they have no role to play in this. The government machinery seems non existent. So the HR folks who are the last of the conscience keepers have forgotten the origins of their profession – what started as ” Welfare Officers”. The trade unions take care of ‘permanent ” workmen who are the elite now and therefore there is no focus on the plight of such workmen. A sad state of affairs.
Thanks for writing this piece. Tatas were, are and sadly, will remain exceptional. (Other employers will make sure that Tatas remain exceptional).
Indeed very encouraging story of Tata…but unfortunately corporates still treat contract workers as commodity or input cost but not as head count or human resource while designing incentive scheme…as nation we have to understand that contract workers are major contributor to Business and as corporates we should look after them as resource and not as liability…I have seen contract workers giving presentation in Hindi on Kaizen, Small Group Activity , 5S , Behaviour Based Safety…every company must have social security support as well as proper reward and recognition programme for them…we have basic teaching from Vedas … सर्वे सुखिनः सन्तु, सर्वे सन्तु निरामया….must be adopted as part of business practice
Dear Vivek ji,
As always you have come out with another candid and thought provoking blog. What Tata Steel has been doing for more than a decade is unfortunately much less known in the industrial world. Tatas employee oriented policies are also not readily emulated by others, though in certain professional conferences they are lauded and it just ends there, however certain other people practices like Outsourcing, Employee Cost cutting and other dubious tricks shared by peers are aped with great reverence, with HR personnel scoring brownie points from their bosses.
Tata Steel is really living up to their tag line popular some decades back that
” We also make Steel”. I was part of Tata Group for more than a dozen years but cannot say with confidence that the Tata Steel spirit governs People Policies of all the Group Companies.
Grateful to you for this eyeopener.
I want to express my sincere appreciation. Your detailed account of Tata Steel’s progressive approach to social security is both enlightening and inspiring. It’s heartening to see a company taking such significant steps to ensure the well-being of its contract workers. Your dedication to highlighting these critical issues and sharing positive examples like Tata Steel’s scheme is truly commendable. Thank you for bringing this important topic to light and for advocating for better conditions for contract workers.
“WE ALSO MAKE STEEL” TISCO iconic adv tagline which they LIVE and BREATH….Thanks Sir for sharing your feelings and more importantly the disclaimer which makes it so authentic and appealing.
Guess that’s why we say TATA’s are industrialist the rest are business houses…mute point is despite obvious sustained results from the Bombay House (100yrs just completed) why and what more proof is needed for other to simply follow. That truly would be DEVELOPED nations foundation for dignity of labour.
Nice blog. Even PSUs don’t think paying beyond what is statutorily payable . Tatas have always displayed their employees friendly measures.Thank you sir for sharing your experience during Tata steel visit.
Regards
Dear Vivek,
Kudos for writing on this path breaking Social Security scheme for Contract workmen at Tata Steel. Must admit that I was not aware of the existence of this scheme .
Yes, Tata Steel has been a forerunner in terms of Employee welfare and we have learnt from them. They have been proactive in Employee well being .
When I read that around 1 Lac contract employees are covered here , I sincerely hope and pray that these contract workers are used in clearly non-core and areas permitted under the law. I say this because many Leading companies ( including some from the Tata Group) go overboard in using contract employees in their Operations.
Thanks again for this blog
Thank you very much for sharing your valuable views about an organization that goes beyond its brief to look after its employees. TATAS is a perfect example of a “caring” or “employee-centric” organization. It demonstrates a commitment to the well-being, professional development, and satisfaction of its staff.
TATAS have demonstrated to us how values can be laden with a spirit of philanthropy and a supportive culture.
They have shown by this example that safety, security, and welk-being of employees and their families is paramount in the sustainability of an organisation.
TATAS bring meaning and purpose to the pursuit of making money.
Enjoyed reading your blog.