Tag Archives: Corporation

Social Security in Europe: Warnings & Examples

Successful social security assures successful economy of a nation. West Germany’s economic miracle of the 1960s was, mainly, due to the successful implementation of social security measures.

Some interesting facts pertaining to the 1990s that highlight the important role played by social security measures in Europe and the manner in which the benefits are utilized or misused are given in this article. The relevant snippets are also made available as image files.

East Europe: 1994

Romania:

The dispensary conditions are not conducive and are very unhygienic.

Government was not ready to spend on hospitals and medicine, as they were “not productive”.

Financially strapped governments had neglected health care and this resulted in unprecedented crisis.

Health situation was so bad in much of Eastern Europe that it was beginning to affect the ability of some countries to compete effectively on the world market.

Patients bring basic medical equipments to the hospitals.

Bribe in single case is much more than salary.

Doctors must cope with run-down equipment.

Czech:

Attempts were made to change the medical system from communist model. But, it was basically free, in the communist era. One had only to bribe which was not more than a box of chocolates or flowers.

Poland:

The director of the hospital threatened that he would close it, as there was no essential facility to treat patients.

Doctors who treat patients privately get them operated in State hospitals and do not pay for the service and equipment.

Eastern Europe:

Entitlement of the people to wide range of medical services that was available in the communist era had begun to diminish and got eroded.

State-run medical institutions paid doctors less than bus drivers.

(Refer to the uploaded article, ‘Creaking Health Care’ –The Hindu: 3.12.1994)

West Europe: 1996

Social Security costs became enormous and the E.U. government exchequers were bleeding, because of unemployment benefits.

The reason was that because of the high economic growth and the generous social security benefits, the West European workers began to imagine that their services were costlier and starting demanding very heavy amount as wages.

The European goods had, thus, lost competitive edge.

Employers and Trade Unions could not agree on terms of revival.

West European manufacturers shifted their factories to east Europe.

Social security system encourages workers with less talent and large families to remain unemployed and live off social security hand-outs.

Foreign workers are seen as blocking jobs for indigenous workers.

High taxation affects the workers and they do not have access to common luxuries.

In smaller economies people set up their own businesses.

“Germany’s entry into the United States system of hire and fire” is described “as socially obscene”.

( Refer to the uploaded article ‘Germany, Belgium resist ‘Alliance for Jobs’ –The Hindu: 2.5.1996 )

2007

Malingering in Temporary Disablement Benefit in Germany.

One has to see to believe it.

( Refer to the uploaded news item with photo in the Times of India: 20.1.2007 )

This, in a country where the general level of honesty is admirable, as could be from one incident cited by Mr. Rahul Singh in the Outlook 27.08.2001.

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Inspection of factories

An article published in the Business Standard in December, 2010 brought out how the employees of the factories in Vellore felt that their legitimate rights would be protected only when the factories were inspected by the inspectors periodically. Long working hours, penalty for visit to toilets more than twice during a day, etc., were highlighted in that article.

As far as the ESIC is concerned, numerous cases of concealed employment are not detected because of absence of availability of information, lacunae in the Inspection Policy and lack of adequate number of Social Security Officers with reference to the actual work-load in such cases.

The ESIC has permitted the employers to register themselves online and get Employer’s Code Numbers generated. As a result, various kinds – repeat various kinds – of further problems have cropped up.

Monetary liability for the ESIC is, at present, created in respect of every TIC generated online by an employer or by a person posing as an employer even when the organisation is not sure whether the case is genuine and whether contribution as per rules would be forthcoming or not.

The EPFO is also facing only some of these problems. For more on this issue, please visit

http://www.business-standard.com/india/news/epfo-to-begin-endinspector-raj/466476/

But, the laxity in inspection does not  result in incorrect financial outgo as the EPFO pays benefits only with reference to the contribution paid, while the ESIC pays benefits not only on the basis of contribution paid but also on the basis of contribution payable but not paid.

The ESIC has not put in place adequate monitoring mechanism. The availability of man-power in the cadre of Social Security Officers is very very less when compared to the magnitude of the work in hand.

The government wants to do away with inspections, of course, for certain legitimate reasons. Please visit the following link:

http://www.thehindubusinessline.in/2002/12/14/stories/2002121402500100.htmB

But, controlling corruption and doing away with inspection are not synonymous. The government should also find a way and convince the working population how the problems faced by them would be located and solved.

Periodical and proper inspection of all factories and establishments will, alone, ensure coverage and protection of the workforce.

The very concept of compliance under the ESI Act is based on mutual trust and that was why the word ‘may’ is used instead of ‘shall’ in Sec. 45 (2) of the ESI Act, 1948.

But, the concept of Public Administration is “You do not get what you expect; you get only what you inspect’.

In other words, “Do not expect what you do not inspect”.

It would be helpful to the insured population if the inspection system of the ESI Corporation is streamlined to be ‘employee-friendly’ so that all employees are covered in time and contributions made to be paid on all items of wages as defined  under Sec. 2 (22) of the ESI Act, 1948.

ESI Corporation can ensure willing participation of labour in the making of the nation.

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