INTRODUCTION

The government of Tamil Nadu came up with a notification dated 2.12.2022 wherein the Governor while exercising the powers conferred under Sec. 41(1) of the Tamil Nadu Labour Welfare Fund Act, 1972 made an amendment to the Rule 11A of Tamil Nadu Labour Welfare Fund Rules, 1973.

Rule 11A talks about the rate of contribution to the welfare fund by an employer and the employee. Earlier, the employer in Tamil Nadu use to contribute 20 rupees per year to the fund and the employee use to contribute 10 rupees, whereas the govt. use to contribute 10 rupees. However, this notification under the Tamil Nadu Labour Welfare Fund (Amendment) Act, 2021 has raised the limit and now the employer has to contribute 40 rupees, while the employee and the govt. needs to contribute 20 rupees.

WHAT IS LABOUR WELFARE FUND?

Labour Welfare Fund is a statutory contribution which is administered by the state and is a measure to improve the economic conditions of the unorganized sector. The employer contributes a certain amount on his behalf as well as on behalf of the employee. Several state legislatures have made an Act for creating such fund, however, at this juncture, only 16 out of the 36 states and union territories have this fund.

IMPLICATIONS FOR THE EMPLOYEE

  1. Better Working Conditions- The setting up of the labour welfare fund will starkly increase the working conditions of the workers in terms of transportation for commuting to work, vocational training programs, libraries and recreational amenities at the workplace.
  2. Enhanced Social Security- The increase in rate of contribution would entail better medical facilities for the unemployed persons and women in subsidiary operations.
  3. Better Housing Facilities- The industrial workers shall also get special privileges and concessions while availing house loans.

IMPLICATIONS FOR THE EMPLOYER

  1. Amelioration in Industrial Relations- The enhanced contribution would intrinsically lead to the refinement in the industrial relations which will pave a better outlook of employees towards the employers.
  2. Escalation in work efficiency- The morale of the workers will be increased which would lead to greater productivity.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.