The Employees' State Insurance Act, 1948' - E-Learning System

‘The Employees’ State Insurance Act, 1948’

Learning ObjectivesUnderstand

@ The applicability of the Employees’ State

Insurance Scheme

@ The definition of ‘Employee’ under the act

@ The various benefits payable under the

scheme to the insured persons, their dependents,

and family members as per contributory

conditions, duration and rate.


Structure

17.1 Introduction17.2 Applicability17.3 Definitions17.4 Contributions17.5 Registration17.6 Maintenance of Registers17.7 Administration17.8 Benefits.


Structure

17.9 Restrictions

17.10 Protection

17.11 Penalties & Damages

17.12 Miscellaneous

17.13 Obligations of Employers

17.14 Obligations of Employees

17.15 Summary


17.1 Introduction

The Employees’ State Insurance Act came into force

from 19th April, 1948. The scheme framed under the

Act aims at providing for certain benefits to

employees in the event of sickness, maternity,

employment injury, and medical facilities in kind

The Act contains provisions for certain other matters

having bearing on medical assistance.


17.2 Applicability

In the first instance the Act applied to power using factories employing 10 or more employees and to non-power using factories employing 20 or more employees for wages.

Gradually the scheme was extended to shops, hotels & restaurants; cinemas including preview theatres; newspaper establishments and road motor transport undertakings employing 20 or more persons.


17.3 Definitions

Employee : refers to any person employed on wages in, or in connection with, the work of a factory or establishment to which this Act applies. It has a wide connotation and includes clerical, manual, technical, and supervisory functions. Persons whose monthly salary [excluding overtime] does not exceed Rs. 10,000/- are included under the Act.The contract workers, administrative, purchase or despatch department staff are covered as employees.


17.3 Definitions

Wages : means all remuneration paid in cash when the terms of the contract are fulfilled. Wages paid for leave period are included but

contribution paid to PF or Pension FundTravelling allowancesum paid top defray expensesgratuity paid on discharge

are excluded.


17.4 Contributions

The scheme is financed through

contributions from employees at 1.75% of their wagescontribution from employers at 4.75% of the wages payable one eighth share of the State Government towards medical care

The Act defines “contribution period” & “benefit period” for making payments and deriving benefits.


17.5 Registration

The registration of a factory / establishment with the ESIC is a statutory responsibility of the employer.

On registration the ESIC allots a code number to the employer.

The forms for the registration of employees are the declaration form and return of declaration forms.

The principal employer should get the declaration form filled by every employee covered under the scheme.


17.6 Maintenance of registers

Following registers to be maintained up to date :

Register of employeesAccident book to record each employment accidentInspection Book

Certain forms have been prescribed under the Act and these are to be filled up as & when required.


17.7 Administration

The scheme is administered by Employees State Insurance Corporation [ESIC] a corporation formed under the Act with membership from employees, employers, the parliament, the state and central governments and medical profession.

ESIC is responsible for policy planning, decision making and overseas the functioning of the scheme through a standing committee drawn from the main corporate body,

Central Minister of Labour is ESIC Chairman.


17.8 Benefits

[a] Sickness and Extended Sickness Benefit

[b] Maternity Benefit

[c] Disablement Benefit.

[d] Dependents’ Benefit

[e] Funeral Benefit

[f] Medical Benefit – Restricted, Extended and

Full Medical Care


17.9 Restrictions

When a person is entitled to avail of one benefit, he shall not be entitled to other benefits.

If an employee is entitled to two or more benefits, he has an option to select any one of them.

Thus sickness benefit & maternity benefit or sickness benefit and temporary disablement benefit or maternity & temporary disablement benefit cannot be received in the same period.


17.10 Protection

Employer cannot dismiss or discharge any employee who is in receipt of sickness or maternity benefit or disablement benefit or is absent from work as a result of treatment of illness arising out of pregnancy or confinement,

If an employee stays away from work for more than six months after completion of treatment then employer can discharge or punish the employee after due notice.


17.11 Penalties and Damages

The Act provides for penalties and damages for various offences. Stricter punishments are prescribed for repetitive offences.

Contributions not paid by the employer can be recovered as land revenue by the District Collector.

Interest is payable by the employer for each day of delay in payment of contributions to ESIC.

Such damages could be levied by ESIC after giving proper notice to the employer and through adjudication.


17.12 Miscellaneous

The Act provides for protection to cash benefits

available under the scheme from attachment or

sale in execution of any order of the court.

The disputes arising under the Act are to be

decided not by the civil court, but by Employees’

Insurance Court. Aggrieved party can appeal to

the High Court within 60 days.



1. Get the factory / establishment registered under the Act by supplying required information in the prescribed form and obtain employer’s code number which is to be used on all documents.

2. Arrange allotment of Insurance Number to all employees covered by the Act .

3. Assist employees in obtaining their identity certificates from ESIC



4. Not to punish , discharge or dismiss any employee during the period the employee is under medical assistance or is absent due to illness certified under the Act.

5. Maintain required registers and other records & offer them for inspection on demand.

6. Reimburse the ESIC the excess expenditure incurred due to unsanitary working & living conditions in the factory or establishment or housing colony.


17.14 Obligations of Employees

1. Assist employer in obtaining registration, insurance number and identity cards from ESIC.

2. Obtain necessary certificates from medical authorities for claiming benefits under the Act

3. Give notice of accident causing employment injury.

4. Repay to ESIC any benefit received for which he was not eligible.

5. Submit the claims for the benefits in prescribed forms and without delay.


17.15 Summary

The ESI Act applies to all power using factories

employing 10 or more persons and to all non-

power using factories employing 20 or more

persons.

Persons whose remuneration [including

overtime] per month does not exceed Rs. 10,000/-

are covered under the Act.


17.15 Summary

The scheme provides for sickness and extended

sickness benefit, maternity benefit, disablement,

dependents’ benefit, medical benefit , funeral

benefit and so on.

The scheme is administered by a corporate body

called Employees State Insurance Corporation. The

chief executive officer of the corporation is the

Director general.


The End!

In the next session we cover chapter eighteen on

‘’Equal Remuneration Act, 1976’

ZÉÉw _âv~4

Documents

The Employees' State Insurance Act, 1948' - E-Learning System