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EMPLOYEES STATE INSURANCE ACT, 1948

1. It applies to all factories (including Government factories but excluding seasonalfactories) employing 10 or more persons and carrying on a manufacturingprocess with the aid of power or employing 20 or more persons and carrying on amanufacturing process without the aid of power and such other establishmentsas the Government may specify.

2. A factory or other establishment to which this Act applies, shall continue to begoverned by its provisions even if the number of workers employed therein fallsbelow the specified limit or the manufacturing process therein ceases to becarried on with the aid of power, subsequently.

3. Every employee (including casual and temporary employees), whether employeddirectly or through a contractor, who is in receipt of wages upto Rs. 6,500 p.m. isentitled to be insured under the E.S.I. Act. However, apprentices engaged underthe Apprentices Act are not entitled to the E.S.I. benefits. Coverage of part timeemployees under the ESI Act will depend on whether they have contract ofservice or contract for service with the employer. The former is covered whereasthe latter are not covered under the E.S.I Act.

4. An employer/establishments covered under the E.S.I. Act is exempt from theprovisions of Maternity Benefit Act and Workmens Compensation Act.

5. The employer is required to contribute at the rate of 4.75% of the wagespaid/payable in respect of every wage period. The employees are also requiredto contribute at the rate of 1.75% of their wages, except when the "average dailywages in a wage period" are equal to or less than Rs. 50. Employees earningless than and upto Rs. 50 per day are exempted from payment of contribution.

"wages" means all remuneration paid or payable, in cash to an employee, if theterms of the contract of employment, express or implied, were fulfilled andincludes any payment to an employee in respect of any period of authorisedleave, lock-out, strike which is not illegal or lay -off and other additionalremuneration, if any, paid at intervals not exceeding two months, but does notinclude-

(a) any contribution paid by the employer to any pension fund or provident fund,or under this Act;

(b) any traveling allowance or the value of any traveling concession;

(c) any sum paid to the person employed to defray special expenses entailed onhim by the nature of his employment; or

(d) any gratuity payable on discharge.

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6. It is the employers responsibility to deposit his own as well as employeescontributions in respect of all employees including the contract labour, into theE.S.I. Account up to 21st of the next month.

The employer shall be liable to pay simple interest at the rate of twelve per centper annum or at such higher rate as may be specified in the Scheme in case ofdelay.

Provided that higher rate of interest specified in the Scheme shall not exceed thelending rate of interest charged by any scheduled bank.

A. OBLIGATIONS OF EMPLOYERS

The employer should get his factory or establishments registered with theE.S.I. Corporation within 15 days after the Act becomes applicable to it, andobtain the employers Code Number.

The employer should obtain the declaration form from the employees coveredunder the Act and submit the same along with the return of declaration forms,to the E.S.I. office. He should arrange for the allotment of Insurance Numbersto the employees and their Identity Cards.

The employer should furnish a Return of Contributions along with thechallans of monthly payment, within 30 days of the end of each contributionperiod.

The employer should cause to be maintained the prescribed records/registersnamely the register of employees, the inspection book and the accident book.

The employer should report to the E.S.I. authorities of any accident in theplace of employment, within 24 hours or immediately in case of serious orfatal accidents. He should make arrangements for first aid and transportationof the employee to the hospital. He should also furnish to the authorities suchfurther information and particulars of an accident as may be required.

The employer should inform the local office and the nearest E.S.I.dispensary/hospital, in case of death of any employee, immediately.

The employer must not put to work any sick employee and allow him leave, ifhe has been issued the prescribed certificate.

The employer should not dismiss or discharge any employee during theperiod he/she is in receipt of sickness/maternity/temporary disablementbenefit, or is under medical treatment, or is absent from work as a result ofillness duly certified or due to pregnancy or confinement.

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B. DUTIES OF EMPLOYERS

To pay compensation for an accident suffered by an employee, inaccordance with the Act.

To submit a statement to the Commissioner (within 30 days of receiving thenotice) in the prescribed form, giving the circumstances attending the deathof a workman as result of an accident and indicating whether he is liable todeposit any compensation for the same.

To submit accident report to the Commissioner in the prescribed form within 7days of the accident, which results in death of a workman or a serious bodilyinjury to a workman.

To maintain a notice book in the prescribed from at a place where it is readilyaccessible to the workman.

To submit an annual return of accidents specifying the number of injuries forwhich compensation has been paid during the year, the amount of suchcompensation and other prescribed particulars.

C. EMPLOYEES BENEFITS :-

I) SICKNESS BENEFIT

Every insured employee is entitled to the cash benefit for the period of sicknessoccurring during any benefit period and certified by a duly appointed medicalpractitioner if the contributions in respect of him were payable for not less than(78 days) in the corresponding contribution period.

However, in the case of a newly appointed employee, eligible for the first timewho has got shorter contribution period of less than 156 days, he shall be entitledto claim sickness benefit if he pays contribution for not less than half the numberof days available for working in such contribution period. The benefit is payableat the standard benefit rate, corresponding to his daily average wages. Thebenefit is, however, not payable for any day on which the employee works,remains on leave, holiday or strike, in respect of which he receives wages.

Sickness benefit shall be allowed to an employee for any day on which heremains on strike, if: -

he is receiving medical treatment and attendance as an indoor patient in anyE.S.I. hospital or a hospital recognised by the E.S.I. Corporation for suchtreatment; or

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he is entitled to receive extended sickness benefit for any of the diseases forwhich such benefit is admissible; or

he is in receipt of sickness benefit immediately preceding the date ofcommencement of notice of the strike given by the Employees Union to theManagement of the factory/establishment.

No sickness benefit shall be payable for the first two days of sickness following,at an interval of not more than 15 days, after the sickness in respect of whichsickness benefits were last paid.

Further no sickness benefit shall be payable to any person for more than 91 daysin any two consecutive benefit periods.

CONDITIONS TO BE OBSERVED

Any person in receipt of sickness benefit:

shall remain under medical treatment at the ESI dispensary or hospital andcarry out the instructions of the medical officer;

shall not do anything which retards or reduces his chances of recovery;

shall not leave the area where medical treatment is provided without medicalofficers permission;

shall get himself examined by the medical officer.

II) MATERNITY BENEFIT

A periodical cash benefit is payable to an insured woman employee, in case ofconfinement, miscarriage, medical termination of pregnancy, premature birth of achild, or sickness arising from pregnancy, miscarriage, etc., occurring orexpected to occur in a benefit period, if the contributions, in respect of her werepayable for at least (70 days) in the two immediately preceding contributionperiods.

The benefit is payable at twice the standard benefit rate or Rs. 20, whichever ishigher, for all days on which the she does not work for remuneration during the

period prescribed as under.

III) MEDICAL BOUNS

Rs.250 on account of confinement expenses shall be paid to an insured womanand an insured person in respect of his wife, if confinement occurs at a placewhere necessary medical facilities under ESI Scheme are not available.

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IV) DISABLEMENT BENEFIT

Disablement benefit is payable in the form of cash installments, to an employeewho is injured in the course of his employment and is, permanently ortemporarily, disabled, or contacts any occupational disease. It is sufficient if it isproved that the injury was caused by an accident arising out of, and in the courseof employment, no matter when it occurred, and where it occurred.

The accident shall be deemed to have arisen out of and in the course ofemployment unless there is evidence to the contrary,

where an accident happens while the employee is travelling in employerstransport, to or from his place of work;

where an accident happens in or about any premises at which the employeeis employed for the purposes of his employers trade or business, while theemployee is taking steps, in an emergency, to rescue, secure or protectpersons who are injured or imperilled or to avert or minimize serious damageto property;

where the employee is at the time of the accident acting in contravention ofany law or any safety rules and instructions, if the employee is acting for thepurpose of, and in connection with, the employers trade or business.

The employee claiming any disablement benefit is required to furnish a medicalcertificate as prescribed under the regulations. The employee is also required toobserve certain conditions as to medical examination etc., as prescribed forsickness benefit.

The benefit for temporary disablement is, however, not payable for any day onwhich the employee works, remains on lease, holiday or strike, in respect ofwhich he receives wages.

However, disablement benefit for temporary disablement shall be allowed to anemployee for any day on which he remains on strike, if:

he is receiving medical treatment and attendance as an indoor patient in any

ESI hospital or a hospital recognised by the ESI corporation, for suchtreatment; or

he is in receipt of such disablement benefit immediately preceding the date ofcommencement of notice of the strike given by the Employees Union to themanagement of the factory/establishment.

NOTICE OF INJURY

The insured employee who sustains an employment injury should give a notice ofthe same to the employer or manager or supervisor or foreman, etc., by means

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of entry in the Accident Book or otherwise in writing or even orally. This notice isvery important for claiming the disablement benefit.

ACCIDENT REPORT BY THE EMPLOYER

In case of an accident in the establishment, the employer should prepare anAccident Report in Form 16 (in triplicate) and submit to the local office and theInsurance Medical Officer. The third copy is the office copy. The reports are to besubmitted within 48 hours in ordinary cases and immediately in death cases.

EMPLOYER TO ARRANGE FIRST AID

The employer shall make arrangements for the first aid and medical treatmentand transport as an insured person may require, in case of an accident.

BENEFITS NOT TO BE COMBINED

An employee shall not be entitled to receive for the same period-

both sickness benefit and maternity benefit; or

both sickness benefit and disablement benefit for temporary disablement;or

both maternity benefit and disablement benefit for temporary disablement.

The employee shall be entitled to choose any one of the aforesaid benefits, at hisoption.

ABSTENTION VERIFICATION

The employer should furnish and verify the particulars in Form 28, in respect ofthe abstention of an employee from work, for which sickness/maternity/temporarydisablement benefit has been claimed.

D. PAYMENT OF BENEFIT IN CASE OF DEATH

If an employee dies during any period for which he is entitled to a cash benefit,the amount of such benefit shall be payable up to and including the day of hisdeath. The amount of benefit shall be paid to the nominee or, where there is nonomination, to the heir or legal representative of the deceased employee.

FUNERAL EXPENSES

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If an insured employee dies, the eldest surviving member of his family or theperson who incurs the expenditure of funeral of the deceased employee, isentitled to reimbursement of such expenditure subject to a maximum of Rs.1,500. The claim for the payment of funeral expenses should be submitted in theprescribed form along with prescribed documents within 3 months of the death ofthe insured employee.

DEATH REPORT

In case of the death of an insured employee at the place of employment, theemployer should immediately report to the local office and to the nearest E.S.Idispensary or hospital.

E. DISPUTES & REMEDIES

Any dispute arising under the Act shall be decided by the Employees InsuranceCourt and not by a Civil Court. It is constituted by the State Government for suchlocal areas as may be specified and consists of such number of judges, as theGovernment may think fit. It shall adjudicate on the following disputes and claims.

Disputes as to

Whether an employee is covered by the Act or whether he is liable to pay the

contribution, or

The rate of wages or average daily wages of an employee, or

The rate of contribution payable by the employer in respect of any employee,

or The person who is or was the principle employer in respect of any employee,

or

The right to any benefit an the amount and duration thereof, or

Any direction issued by the Corporation on a review of any payment of

dependents benefit, or

Any other matter in respect of any contribution or benefit or other due payable

or recoverable under the Act.

Claims as to

Recovery of contributions from the principle employer, Recovery of contributions from a contractor,

Recovery for short payment or non-payment of any contribution under section

68,

Recovery of the value or amount of benefits received improperly under

section 70,

Recovery of any benefit admissible under the Act

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No dispute shall be admitted unless the employer deposits with the Court 50% ofthe amount due from him as claimed by the Corporation.

APPEAL

An appeal shall lie to the High Court within 60 against an order of the EmployeesInsurance Court if it involves a substantial question of law.

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