EMPLOYEE
STATE INSURANCE ACT 1948
BY
SMART LEARNING WAY
— Introduction
The employee ‘ State insurance act extends to the whole of India,
including the state of Jammu and Kashmir. the insurance scheme contained in the
act has up till date, been applied to a
few selected localities. The act of 1948 was amended by the amendment acts of
1966,1975,1984,1989,and1997.
Exemption: a factory or
establishment or a class of factories establishments can be exempted from the
operation of the act. This can be done by the appropriate government by
notification for one year at a time(sec.87).
The following seasonal processes have secured
exemption under section 87 of the act: 1) salt manufacturing
2) rice milling
3)oil mils (provided the process of oiling is subsidiary to any other
manufacture process, and mill has
employed less than 50 employees,4) ice manufacture ,5) wool processing with or
without cotton pressing and ginning.etc.
DEFINITION OF ESI
• “appropriate government” means, in respect of
establishment under the control of the central government or (a railway
administration) or a major port or a mine or oilfield, the central government,
and in all other cases, the state government;
• “Contribution”
means the sum of money payable to the corporation by the principal
employer in respect of an employee and includes any amount payable by or on
behalf of the employee in accordance with the provisions of this Act;
• “Sickness” means a condition which requires
medical treatment and attendance and necessitates abstention from work on
medical ground;
— The Employees’ State Insurance Corporation
Administration :
The
administration of the scheme of insurance contained in the act is vested in the
employees’ state Insurance Corporation created by the act. The corporation is a
body corporate having perpetual succession and a common seal. It can sue be
sued by its name.
Members:
According to the Act, the corporation consists of the following members;
- A chairman
to be nominated by the Central Government ;
- A vice –
Chairman to be nominated by the Central government;
- Not more
than five person to be nominated by the Central Government ;
4)One person each representing each of states
in which this act is in force to be nominated by the central government;
5)One person to be nominated by the central
government to represent the Union territories;
6)Five person representing employers to be
nominated by the central government in consultation with such organization of
employees as may be recognized for the purpose by the central government;
7)Three members of Parliament of whom two
shall be members of the Lok sabha and one shall be a member of the rajya sabha
elected respectively by the two houses;
8)The director General of the corporation , ex
– officio;
The term of office of members is ordinarily four years but nominated
member holds office during the pleasure of the government nominating them.
AUTHENTICATION ;
Orders and decision of the
corporation are to be authenticated by the signature of the director general ;
other instrument by the signature of the director general or any other
authorized officer of the corporation.
PRINCIPAL OFFICERS :
The
principal officer of the corporation are (a) a Director general of employees’
state insurance ; (b) an insurance commissioner ; (c) a medical commissioner ;
(d) a chief account officer ; and (e) an actuary. The director general is the
chief executive officer of the corporation . The officer and whole time
officers cannot undertake any work unconnected with their office without the
sanction of the central govt. or of the corporation.
Meetings:
Meetings
of the members , the standing committee and the medical benefit council, must
be held according to the regulations. Sec- 20.
Supersession :
The
central govt. may supersede the corporation or the standing committee if it
persistently makes default in performing its duties or abuses its power. After
supersession the central govt. may appoint new members or create an agency to
exercise the powers and the functions of these bodies.
Delegation :
The
corporation may appoint regional boards , local committees and regional and
local medical benefit councils in such area and in such manner and delegate to
them such powers and functions may be provided by the regulation.
—
Power of the corporation
- STAFF:
(a)The
corporation may employee such other staff of officers and servant as may be
necessary for the efficient transaction of its business provided that the
sanction of the central government shall be obtained for the maximum monthly
salary of which exceeds Rs.3000
2)Measures for health
the
corporation may in, addition to the scheme of benefits specified in this act,
promote measures for the improvement of the health and welfare of insured
person and for the rehabilitation and re-employment of insured person who have
been disabled or injured and may incur in respect of such measures expenditure
from the funds of the corporation within such limits as may be prescribed by
the central govt.- sec.19.
3)Holding of property :
the
corporation may, subject to such condition as may be prescribed by the central
govt. acquire and hold property both movable and immovable , sell or otherwise
transfer any movable or immovable property which may have become vested in or
have been acquired by it and do all things necessary for the purposes for which
the corporation is established.
4)investment:
subject to such condition as may be prescribed by the central govt. the
corporation for may time to time invest
any money which are not immediately required for expenses properly defrayable
under this act and may , subject as aforesaid , from time to time re-invest or
realize such investment.
5)Loans:
The corporation may, with the previsions
sanction of the central govt. and on such term as may be prescribed by it,
raise loans and take measures for discharging such loan.
— Duties of the ESI corporation
1)Budget estimates :
the
corporation shall in each year frame a budget showing the probable receipts and
the expenditure which it proposes to incur during the following year and shall
submit a copy of the budget for the approval of the central govt. before such
date as may be fixed by it in that behalf.
2)accounts:
The corporation shall maintain correct accounts of its income and
expenditure in such from and in such manner as may be prescribed by the central
govt.
3) Audit :
The account of the corporation shall be audited , at such time and in
such manner as may be prescribed by the auditor by the central govt.
4) Annual report :
The corporation shall submit to the central govt. an annual report of
its work and activities .
5) placement to parliament:
The annual repot the audited accounts of the
corporation and the budget as finally adopted by the corporation shall be
placed before and published in the official gazettes.
Types of benefits under the act
The act provides for six types of benefit to
insured workmen: A) Sickness benefit
B)maternity benefit C)
disablement benefit D) dependent's benefit
E) medical benefit F) funeral benefit. Benefits are receivable during
the benefit period, which is defined as follows.
Benefit period means such period, being not less than 25 but not more
than 27 consecutive weeks or 6 consecutives
months corresponding period a s may be specified in the regulation
framed under the act. For the first benefit period a shorter or longer period
may be fixed.
1.Sickness benefit
Sickness benefit represents
periodical payments made to an insured
person for the period of certified sickness after completing nine months
insurable employment. To quality for this benefits, contribution should have
been paid for at least78 days in the relevant contribution period. The maximum
duration for availing sickness benefit is 91 days in two consecutive benefit
periods. There is waiting period of 2
days which I waived if the insured person is certified sic within 15 days of
the last spell for which sickness
benefit period was last paid. The daily rate of sickness benefit in respect of
a person during any benefit period shall be 20 percent more than “ standard
benefit rate”
2. Maternity benefit
maternity benefit implies cash payment
to an insured woman in case of confinement or miscarriage or sickness arising
out of pregnancy, premature birth of
child as certified by a duly appointed medical officer or midwife. For
entitlement to maternity benefit, the insured woman should have contributed for
not less than 70 days in the immediately preceding two consecutives
contribution periods corresponding to
the benefit period in which the confinement occurs or is expected to occur. The
daily rate of benefit double the
standard sickness benefit rate i.e full wages.
Maternity benefit is normally payable for a
maximum period of 12 weeks in case of confinement , 6weeks in case of
miscarriage or medical termination of pregnancy which can be extended up to one
additional month in case of sickness arising out of confinement and duly
certified by an authorized medical officer. Maternity benefit continues to be
payable even in the event of the death of an insured woman, during her confinement, or during the period of 6 weeks
immediately following her confinement leaving behind a child for the whole of that period , and in
case the child also dies, during the said period, until the death of the child.
3.Disablement benefit
In case of temporary disability arising out of an
employment injury, disablement benefit is admissible to an insured person for
the entire period so certified by an
insurance medical officer/ practitioner
for which the insured person does
not work for wages. the benefit is not subject to any contributory condition
and is payable at the daily rate of 15
percent more than the standard benefit rate. The benefit is, however, not
payable if the incapacity is less than 3 days excluding the rate date of
accident.
4.Dependent’s benefit
Periodical
pension is paid to the dependent of a deceased insured person where death
occurs as a result of an employment injury or occupational diseases. The daily rate of dependent’s shall be 15 percent
more than the standard benefit rate. The widow
receives monthly pension for life
or until remarriage, at a fixed rate equivalent to 3/5th of the disablement benefit rate and each dependent
child is paid an amount equivalent 2/5th
there of until he/she attains 18 years of ages, provides that , in case of infirmity, the benefit continues to be paid till infirmity.
However, it is subject to the condition that the total dependents’
benefit distributed among the widow and legitimate or adopted children of the
deceased insured persons, does not exceed , at any time, the full rate of
disablement benefit. In case it exceeds the given ceiling, the share of each of
the dependents is, proportionately reduced. The benefit is not payable to
married daughter.
In case the insured person does
not leave behind any widow or child, the benefit is payable to other dependents
including parents.
5.Medical benefit
An insured person and his family
member become entitled to medical care from the date he enters the insurable employment
and the entitlement continues as long as the insured person is in insurable
employment or is qualified to claim sickness, maternity, or disablement
benefit. The entitlement to medical care is extended up to two years to persons suffering from any
specified chronic or long-term diseases. medical treatment to persons , who go
out of coverage during the period of treatment, is not discontinued till the
spell of sickness ends. All insured persons and member of there are entitled to
free, full and comprehensive medical care
under the scheme.
The package covers all aspects of health care
from comprehensive medical care
facilities, such as
- Out- patient
treatment.
- X- ray and
laboratory investigation.
- Ambulance
service or conveyance.
- Family
welfare services and other national health programmes services.
- Medical
certification and
- Special
provision including super-specialty treatment
6.funeral
benefit:
funeral expenses are in the nature of a lump
sum payment up to three thousand rupees made to defray the expenditure of the
funeral of deceased insured person. The amount is paid either to the eldest
surviving member of the family or, in his absence , to the person who actually
incurs the expenditure on the funeral
Salient Features of Employees’ State Insurance Act-1948
Introduction ESI Act 1948
The Employees’ State Insurance Act was enacted in 1948 with the object,
as stated in its preamble, “ to provide for certain benefits to employees in
case of sickness, maternity and “employment injury” and to make provisions for
certain other matters in relation thereto.”
The act introduced an integrated social insurance scheme covering
health, maternity and accident insurance. The scheme was introduced as
compulsory state insurance scheme for the benefit of the workers working in
Indian industries.
Origin
The Employee State Insurance act was promulgated by the Parliament of
India in the year 1948. To begin with the ESI scheme was initially launched on
2nd February 1952 at just two industrial centers in the country
namely Kanpur and Delhi with a total coverage of about 1.20 lakh workers. There
after the scheme was implemented in a phased manner across the country with the
active involvement of the state governments.
Salient Features of ESI Act 1948
- Facilitating coverage of smaller factories;
- Enhancing
age limit of dependant children for eligibility to dependants benefit;
- Extending
medical benefit to dependant minor brother/sister in case of not having own family and whose parents
are also not alive;
- Streamlining
the procedure for assessment of dues from defaulting employers;
- Providing an Appellate Authority within the Corporation against assessment to avoid unnecessary litigation;
- Continuing medical benefit to insured persons retiring under VRS scheme or taking premature retirement;
- Treating
commuting accidents as employment injury;
- Streamlining
the procedure for grant of exemptions;
- Third party
participation in commissioning and running of the Hospitals;
- Opening of
medical/dental/paramedical/nursing colleges to improve quality of medical
care;
11. Making an enabling provision for extending
medical care to other beneficiaries against payment of user charges to
facilitate providing of medical care from under-utilised ESI Hospitals to the
BPL families covered under the Rashtriya Swasthaya Bima Yojana introduced by
the Ministry of Labour & Employment.
12. Empowering State governments to set up
autonomous Corporations for administering medical benefit in the States for
bringing autonomy and efficiency in the working.
Definition:
1) appropriate Government:
As per section 2(1) " appropriate
Government" means, in respect of establishments under the control of the
Central Government or [ a railway administration] or a major port or a mine or
oilfield, the Central Government, and in all other cases, the State Government.
2) confinement:
As per section 2(3) " confinement"
means labour resulting in the issue of a living child, or labour after
twenty-six weeks of pregnancy resulting in the issue of a child whether alive
or dead.
3) Contribution:
As per section 2(4) " contribution"
means the sum of money payable to the Corporation by the principal employer in
respect of an employee and includes any amount payable by or on behalf of the
employee in accordance with the provisions of this Act.
4) Dependent:
As per section 2(6A) " dependant"
means any of the following relatives of a deceased insured person, namely:-
(i) a
widow, a minor legitimate or adopted son, an unmarried legitimate and
adopted daughter;
(a) a widowed mother;
(ii) if
wholly dependent on the earnings of the insured person at the time of his
death, a legitimate or adopted son or daughter who has attained the age of
eighteen years and is infirm;
(iii)if
wholly or in part dependent on the earnings of the insured person at the time
of his death,-
(a)a parent other than a widowed mother,
(b)a minor illegitimate son, an unmarried
illegitimate daughter or a daughter legitimate or adopted or illegitimate if
married and a minor or if widowed and a minor,
(c) a minor brother or an unmarried
sister or a widowed sister if a minor,
(d) a widowed daughter- in- law,
(e) a minor child of a pre- deceased son,
(f) a minor child of a pre- deceased
daughter where no parent of the child is alive, or
(g) a paternal grand- parent if no parent
of the insured person is alive
5) Employment injury:
As per secton 2(8)" employment
injury" means a personal injury to an employee caused by accident or an
occupational disease arising out of and in the course of his employment, being
an insurable employment, whether the accident occurs or the occupational
disease is contracted within or outside the territorial limits of India;
6) Employee:
As per section 2(9) " employee"
means any person employed for wages in or in connection with the work of a
factory or establishment to which this Act applies and
(i)who is directly employed by the principal
employer on any work of, or incidental or preliminary to or connected with the
work of, the factory or establishment, whether such work is done by the
employee in the factory or establishment or elsewhere; or
(ii)who is employed by or through an immediate
employer on the premises of the factory or establishment or under the
supervision of the principal employer or his agent on work which is ordinarily
part of the work of the factory or establishment or which is preliminary to the
work carried on in or incidental to the purpose of the factory or
establishment; or
(iii) whose services are temporarily lent or
let on hire to the principal employer by the person with whom the person whose
services are so lent or let on hire has entered into a contract of
service.
7)Exempted employee:
As per section 2(10) " exempted
employee" means an employee who is not liable under this Act to pay the
employee' s contribution;
8) Family:
As per section 2(11)" family" means
all or any of the following relatives of an insured person, namely:--
(i)a spouse;
(ii)a minor legitimate or adopted child
dependent upon the insured person;
(iii)a child who is wholly dependent on the
earnings of the insured person and who is
(a)receiving education, till he or she attains the age of twenty- one
years,
(b) an unmarried daughter;
(iv)a child who is infirm by reason of any
physical or mental abnormality or injury and is wholly dependent on the
earnings of the insured person, so long as the infirmity continues;
(v)dependent parents;
9) Factory:
According to Section 2 (12) of Factories Act,
1948, Factory means any premises including the precints thereof –
(a)
whereon ten or more persons are employed or were employed for wages on any day
of the preceding twelve months, and in any part of which a manufacturing
process is being carried on with the aid of power or is ordinarily so carried
on, or
(b) whereon twenty or more persons are
employed or were employed for wages on any day of the preceding twelve months,
and in any part of which a manufacturing process is being carried on without
the aid of power or is ordinarily so carried on. But does not include a mine
subject to the operation of Mines Act, 1952 or a railway running shed.
10) Immediate Employer:
As per section 2(13 )" immediate
employer", in relation to employees employed by or through him, means a
person who has undertaken the execution, on the premises of a factory or an
establishment to which this Act applies or under the supervision of the
principal employer or his agent, of the whole or any part of any work which is
ordinarily part of the work of the factory or establishment of the principal
employer or is preliminary to the work carried on in, or incidental to the
purpose of, any such factory or establishment, and includes a person by whom
the services of an employee who has entered into a contract of service with him
are temporarily lent or let on hire to the principal employer; [ and includes a
contractor];
11)Insurable employment:
As per section 2(13A)" insurable
employment" means an employment in a factory or establishment to which
this Act applies;
12) Insured person:
As per section 2(14)" insured
person" means a person who is or was an employee in respect of whom
contributions are or were payable under this Act and who is, by reason thereof,
entitled to any of the benefits provided by this Act;
13) Managing Agent:
As per section 2(14A)" managing
agent" means any person appointed or acting as the representative of
another person for the purpose of carrying on such other person' s trade or
business, but does not include an individual manager subordinate to an
employer.
14) Manufacturing process:
According to Section 2 (14AA) of Factories
Act, "manufacturing process" means any process for –
(i)
making, altering,
repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking
up, demolishing, or otherwise treating or adapting any article or substance
with a view to its use, sale, transport, delivery or disposal, or
(ii) pumping oil, water, sewage or any other
substance; or;
(iii) generating, transforming or transmitting
power; or
(iv) composing types for printing, printing by
letter press, lithography, photogravure or other similar process or book
binding;
(v) constructing, reconstructing, repairing,
refitting, finishing or breaking up ships or vessels;
(vi) preserving or storing any article in cold
storage;
15) Mis-carriage:
As per section 2(14B)" mis-
carriage" means expulsion of the contents of a pregnant uterus at any
period prior to or during the twenty sixth week of pregnancy but does not
include any miscarriage, the causing of which is punishable under the Indian
Penal Code (45 of 1860 );
16) permanent partial disablement:
As per section 2(15A)" permanent partial
disablement" means such disablement of a permanent nature, as reduces the
earning capacity of an employee in every employment which he was capable of
undertaking at the time of the accident resulting in the disablement.
17) permanent total disablement:
As per section 2(15B) " permanent total
disablement" means such disablement of a permanent nature as incapacitates
an employee for all work which he was capable of performing at the time of the
accident resulting in such disablement.
18) principal employer:
As per section 2(17)" principal
employer" means
(i) in a factory, the owner or occupier of the
factory and includes the managing agent of such owner or occupier, the legal
representative of a deceased owner or occupier, and where a person has been
named as the manager of the factory under
the Factories Act, 1948 the
person so named;
(ii) in any establishment under the control of
any department of any Government in India, the authority appointed by such
Government in this behalf or where no authority is so appointed, the head of
the department;
(iii) in any other establishment, any person
responsible for the supervision and control of the establishment;
19) Seasonal Factory:
As per section 2(19A)" seasonal
factory" means a factory which is exclusively engaged in one or more of
the following manufacturing processes, namely, cotton ginning, cotton or jute
pressing, decorticating of ground nuts, the manufacture of coffee, indigo, lac,
rubber, sugar (including gur) or tea or any manufacturing process which is
incidental to or connected with any of the aforesaid processes and includes a
factory which is engaged for a period not exceeding seven months in a year
(a) in any process of blending, packing
or repacking of tea or coffee; or
(b) in such other manufacturing process
as the Central Government may, by notification in the Official Gazette,
specify.
20) Sickness:
As per section 2(20) "
sickness" means a condition which requires medical treatment and
attendance and necessitates abstention from work on medical grounds;
21) Temporary Disablement:
As per section 2(21)" temporary
disablement" means a condition resulting from an employment injury which
requires medical treatment and renders an employee, as a result of such injury,
temporarily incapable of doing the work
which he was doing prior to or at the time of the injury.
22) Wages:
According to Section 2
(22) "wages"- means all remuneration paid or payable, in
cash to an employee, if the terms of the contract of employment, express or
implied, where fulfilled and includes any payment to an employee in respect of
any period of authorised leave, lock-out, strike which is not illegal or
lay-off and other additional remuneration, if any paid at intervals not
exceeding two months, but does not include –
(i) any contribution paid by the employer to
any person fund or provident fund or under any scheme of social insurance;
(ii) any traveling allowance or the value of
any traveling concession;
(iii) any sum paid to the person employed to
defray special expenses entailed on him by the nature of his employment; or
(iv) any gratuity payable on discharge.
23)Wage period:
As per section 2(23)" wage period"
in relation to an employee means the period in respect of which wages are
ordinarily payable to him whether in terms of the contract of employment,
express or implied or otherwise.
Constitution And Function Of Employees State
Insurance Corporation.
The said corporation shall be responsible for
the administration of the scheme of Employees’ State Insurance in accordance
with the provisions of this Act.
Section 4 provides that the corporation shall
consist of the following members, namely:--
• A chairman to be appointed by the Central Government;
• A vice – chairman to be appointed by the
central Government;
• Not more than five persons to be appointed by
the Central Government;
• One person each representing each of the
States in which this Act is in force to be appointed by the State Government
concerned;
• One person to be appointed by the Central
Government to represent the union territories;
• Ten persons representing employers to be
appointed by the Central Government in consultation with such organisations of
employers as may be recognised for the purpose by the Central Government;
• Two persons representing the medical
profession to be appointed by the Central Government in consultation with such
organisations of medical practitioners as may be recognised for the purpose by
the Central Government;
• Three member of parliament of whom two shall
be members of the house of the people and one shall be a member of the council
of the states elected respectively by the members of the house of the people
and the members of the council of states;
BIBLIOGRAPHY
P. SARAVANAVEL,S. SUMATHI ”LEGAL SYSTEMS IN
BUSINESS “
HIMALAYA PUBLISHING HOUSE
A.M.SHARMA “INDUSTRIAL RELATION & LABOUR
LAWS”
HIMALAYA PUBLISHING HOUSE
A.M.SHARMA “INDUSTRIAL JUSISPRUDENCE AND
LABOUR LEGISLATION”
HIMALAYA PUBLISHING HOUSE
TAXMANN’S 2003 EDITION “LABOUR LAWS”
HIMALAYA
PUBLISHING HOUSE
SANJEEV KAPOOR “INDUSTRY & LABOUR LAW”
HIMALAYA PUBLISHING HOUSE
N.D.KAPOOR “HANDBOOK OF INDUSTRIAL LAW”
HIMALAYA
PUBLISHING HOUSE
DR. SANJEEV KUMAR,D.C. JAIN “BHARATS’
INDUSTRIAL & LABOUR LAW”
BHARAT PUBLICATION HOUSE
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