EMPLOYEES’ STATE INSURANCE

ACT, 1948

JAIPURIA INSTITUTE OF

MANAGEMENT,LUCKNOW

INTRODUCTION

This Act came into being on 19th April, 1948.

An Act to provide for certain benefits to employees in case

of sickness, maternity and employment injury and to make

provision for certain other matters in relation thereto.

This Act covers a wider spectrum than the Factories Act.

Extensive regulations have been framed under the Act to

identify the employees who would be entitled to the benefits.

An elaborate machinery is provided for the effective

administration of the Act.

OBJECTIVES

The basic objective is to offer social insurance toworkers.

The ESI Act is a social welfare legislation enactedwith the object of providing certain benefits toemployees in case of sickness, maternity andemployment injury.

The objective of the act is to secure sickness,maternity and medical benefits to employees offactories and establishments and dependentsbenefits to the dependents of such employees.

OBJECTIVES CONTINUED….

To attain the goal of socio-economic justice for securing, the rightto work, to education and public assistance in cases ofunemployment, old age, sickness and disablement.

To make employee comfortable in the office by giving medicalrelief, cash benefits, maternity benefits, pension to dependents ofdeceased workers and compensation for fatal or other injuriesand diseases.

CONTINGENSIES

SICKNESS

EMPLOYMENT INJURY

CHILD BIRTH

COVERAGE

This act was applicable to all non-seasonal factories using

power and employing 20 or more workers.

But is now applicable to non-seasonal factories using power

and employing 10 or more workers and non power using

factories employing 20 or more workers.

It covers all type of workers whose wage limit does not

exceed Rs. 15000 per month.

EXEMPTIONS

The provisions of the ESI Act are not applicable to factoriesor establishments, run by the State Governments / CentralGovernment, whose employees are, otherwise, in receipt ofsocial security benefits substantially similar or superior tothe benefits provided under the ESI Act.

The "Appropriate Government", may grant or renewexemption under Section 87 of the ESI Act in respect of aFactory/Establishment or class of factories orestablishments in any specified area from the operation ofthe Act for a period not exceeding one year at a time.

EXEMPTIONS CONTINUED….

Exemption Under Section 88 of the Act is granted by the"Appropriate Government" to employees, or class of employees,who remain away from their Hqrs. for more than 7 months in ayear, and those employees who are posted in non-implemented

areas.

No exemption, under Section 87, or Section 88 can be grantedunless a reasonable opportunity has been given to theCorporation to make any representation and the same isconsidered by the "appropriate Government".

Exemption Under Section 90 can be granted to a factory /establishment belonging to any local authority such as aMunicipality / Corporation, etc. if employees in any suchfactory/establishment are otherwise in receipt of benefitssubstantially similar or superior to the benefit. provided under theAct.

ADMINISTRATION

The Employees’ State Insurance Scheme is administered by

a Corporate body called the Employees’ State Insurance

Corporation (ESIC), which has members representing

employers, employees, the Central Government, State

Governments, medical profession and the Parliament.

The Corporation, with its Central Headquarters at New

Delhi, operates through a network of 52 Regional, Sub-

Regional and Divisional Offices located in various States.

The medical benefit is taken care of by the respective state

government.

PROVISIONS

INSURED PERSON IN CASE OF SICKNESS

INSURED WOMAN IN CASE OF MISCARRIAGE OR CONFINEMENT

TO AN INSURED PERSON SUFFERING FROM DISABLEMENT DUE TO EMPLOYMENT INJURY

TO DEPENDANTS OF AN INSURED PERSON WHO DIES DUE TO EMPLOTMENT INJURY

PROVISIONS CONTINUED….

Sickness Benefit:

The qualification of a person to claim sickness benefit, the

conditions subject to which such benefit may be given, the

rate and period thereof shall be such as may be prescribed

by the Central Government.

ESI Scheme provides medical care via a network of ESI

dispensaries, hospitals, diagnostic centers, etc.

PROVISIONS CONTINUED….

Sickness Benefit (Eligibility):

MINIMUM 78 DAYS CONTRIBUTION IN ONE

CONTRIBUTION PERIOD.

DAILY RATE OF SICKNESS BENEFIT IS 50 % OF DAILY

WAGES.

EXTENDED SICKNESS BENEFIT (ESB) IS A CASH

BENEFIT PAID FOR PROLONGED ILLNESS DUE TO ANY

OF THE 34 DISEASES SPECIFIED IN ANNEXURE-A.

ESB REQUIRES CONTINUOUS EMPLOYMENT OF 2

YEARS AND CONTRIBUTION OF AT LEAST 156 DAYS IN

4 PRECEDING CONTRIBUTION PERIODS.

PROVISIONS CONTINUED….

Maternity Benefit:

The qualification of an insured woman to claim maternity

benefit, the conditions subject to which such benefit may be

given, the rates and period thereof shall be such as may be

prescribed by the Central Government.

The contribution condition is same as for sickness benefit.

Daily benefit rate is double of sickness benefit. Benefit is

paid for Sundays also.

PROVISIONS CONTINUED….

Maternity Benefit (Eligibility):

Delivery- A total period of 12 weeks beginning not more

than 6 weeks before the expected date of child birth.

Miscarriage- 6 weeks following miscarriage.

Sickness due to pregnancy, childbirth or miscarriage-

Additional period up to 4 weeks.

Medical bonus of Rs. 2500/- if the woman does not

avail medical facility from an ESI hospital at the time of

delivery.

Claim forms- 09 and 19.

PROVISIONS CONTINUED….

Disablement Benefit:

Subject to the provisions of this Act :

a person who sustains temporary disablement for not less

than three days (excluding the day of accident) shall be

entitled to periodical payment [at such rates and for such

periods and subject to such conditions as may be

prescribed by the Central Government.

a person who sustains permanent disablement, whether

total or partial, shall be entitled to periodical payment [at

such rates and for such periods and subject to such

conditions as may be prescribed by the Central

Government.

PROVISIONS CONTINUED….

Disablement Benefit:

Daily benefit for both temporary and permanent illness is

roughly equivalent to 100% of the wage rate.

The rate of benefit is proportional to the percentage of loss

of earning capacity. Benefit is paid for Sundays also.

Forms: (a) Permanent disablement- Form 14

(b) Temporary- Form 09.

ACCIDENTS- SEC 51

ACCIDENT

Arising in course of

employment

Acting in breach of

regulations

While meeting

emergency

While travelling in employer’s transport

While commuting to the place of work and vice versa

PROVISIONS CONTINUED….

Medical Benefit:Government shall provide for insured persons and theirfamilies in the , reasonable medical, surgical and obstetrictreatment.

Where the incidence of sickness benefit payment to insuredpersons is found to exceed the all-India average, the amountof such excess shall be shared between the Corporation andthe Government in such proportion as may be fixed byagreement between them.

The Corporation may enter into an agreement with aGovernment in regard to the nature and scale of the medicaltreatment that should be provided to insured persons and theirfamilies and for the sharing of the cost thereof and of anyexcess in the incidence of sickness benefit to insured personsbetween the Corporation and the Government.

PROVISIONS CONTINUED….

Medical Benefit:

In default of agreement between the Corporation and anyGovernment as aforesaid, the nature and extent of the medicaltreatment to be provided by the Government and theproportion in which the cost thereof and of the excess in theincidence of sickness benefit shall be shared between theCorporation and that Government.

The State Government may, in addition to the Corporationunder this Act, with the previous approval of the CentralGovernment, establish such organization (by whatever namecalled) to provide for certain benefits to employees in case ofsickness, maternity and employment injury .

PROVISIONS CONTINUED….

Medical Benefit:

An insured person or (where such medical benefit is

extended to his family) a member of his family whose

condition requires medical treatment and attendance shall

be entitled to receive medical benefit.

Such medical benefit may be given either in the form of out-

patient treatment and attendance in a hospital or

dispensary, clinic or other institution or by visits to the home

of the insured person or treatment as in-patient in a hospital

or other institution.

PROVISIONS CONTINUED….

Medical Benefit:

A person shall be entitled to medical benefit during any

1[period] for which contributions are payable in respect of

him or in which he is qualified to claim sickness benefit or

maternity benefit 2 [or is in receipt of such disablement

benefit as does not disentitle him to medical benefit under

the regulations

PROVISIONS CONTINUED….

Dependant Benefit:

A widow can receive this benefit on a monthly basis for life

or till her re-marriage.

A son or daughter can receive this benefit till twenty five

years of age.

Other dependants like parents including a widowed mother

etc. can also receive this benefit under certain conditions.

The first instalment is payable within a maximum of three

months following the death of an insured person and

therefore, on a regular monthly basis.

PROVISIONS CONTINUED….

Other Benefit:

Funeral expenses on death of an IP subject to a maximum

of Rs.5000/- payable at the Branch Office..

Free supply of physical aids and appliances

Preventive health care services such as immunization,

family welfare services, HIV/AIDS detection, treatment etc.

Confinement expenses @ Rs. 2500/- is paid to an insured

woman or in respect of the wife of an insured person in case

the confinement occurs at a place where ESI medical

facilities are not available.

Rajiv Gandhi Shramik Kalyan Yojana -

PENALTIES

Fails to pay contribution due:

Not less than one year imprisonment in case of failure to

pay the employees’ contribution deducted from employees’

wages and/ or fine of Rs. 10000/-.

Not less than six months imprisonment, in any other case

and/ or fine of Rs. 5000/-.

Enhanced punishment (in certain cases after previous

conviction by Court):

Punishment with imprisonment for a term which may extend

to 2 years and with fine of Rs. 5,000/- .

If subsequent offence is for failure to pay contribution which

under the Act is liable to pay for every such subsequent

offence, be punishable with imprisonment for a term which

may extend to 5 years but which shall not be less than 2

years and also liable to fine of Rs. 25,000/- .

EVALUATION

The ESI Scheme has been criticized on following

grounds:

Even within the organized sector, the coverage is low.

The Scheme has not been popular among the employees

and union. The State Governments , too, have not shown

much interest to implement the provisions.

Employees complained about the inappropriateness of

facilities and benefits provided.

Additional funds had to be spend by employees for

medicines which were not available in ESI dispensaries.

Delay in transfer of benefits to insured workers.

Presented By:

Anjali Saxena (JL13PGDM068)

Krati Gupta (JL13PGDM087)

Riya Panjwani (JL13RM51)

Nasar Ashraf (JL13PGDM030)

Anita Sareen (JL13PGDM067)

Rashi Kevlani (JL13PGDM098)

Neelanshi Sachan (JL13PGDM031)

Netri Agarwal (JL13PGDM092)

Anvita Tiwari (JL13FS14)

Ankita Mishra (JL13FS12)

Kashish Khan (JL13PGDM024)

Vipul Sinha (JL13FS63)