EMPLOYEES OF STATE INSURANCE
ACT,1948
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;
1.
A chairman to be nominated by the Central Government ;
2.
A vice – Chairman to be nominated by the Central government;
3.
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
1.
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
I.Out- patient treatment.
II.X- ray and laboratory investigation.
III.Ambulance service or conveyance.
IV.Family welfare services and other national health
programmes services.
V.Medical certification and
VI.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
1.
Facilitating coverage of smaller factories;
2.
Enhancing age limit of dependant children for eligibility to dependants
benefit;
3.
Extending medical benefit to dependant minor brother/sister in case
of not having own family and whose parents are also not alive;
4.
Streamlining the procedure for assessment of dues from defaulting
employers;
5.
Providing an Appellate Authority within the Corporation against
assessment to avoid unnecessary litigation;
6.
Continuing medical benefit to insured persons retiring under VRS
scheme or taking premature retirement;
7.
Treating commuting accidents as employment injury;
8.
Streamlining the procedure for grant of exemptions;
9.
Third party participation in commissioning and running of the Hospitals;
10.
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;
