Benefits Under Employees State Insurance Act, 1948] LABOUR LAW - II

PROJECT REPORT ON TOPIC: Benifts Under Employees State Insurance Act, 1948

JAMIA MILLIA ISLAMIA FACULTY OF LAW SUBMITTED IN PARTIAL FULFILMENT OF B.A.LL.B. (HONS.) SIXTH SEMESTER

SUBMITTED TO: DR. ASAD MALIK

SUBMITTED FROM: S. ABBAS HAIDER

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ACKNOWLEDGEMENT Now that the project stands complete, I intend to place on record my gratitude towards all without whom completing the project would have been nothing but out of question.

In the first place, I thank our Lecturer of administrative laws I as he had time and again helped me, guided me throughout, and answered all the queries that encountered while my work relating to project was afoot.

Secondly, I thank the library staff who liaised with us in searching material relating to the project.

Thirdly and finally, I thank the almighty for the monumental tacit support, which boosted my morale and help me stay confident all through my work upon the project, placed forth by him.

SYED ABBAS HAIDER

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Introduction Many important social security scheme had been introduced in our country before Independence. The urgency of such schemes has been more badly felt after world war II. Social security to the workers of an industry can be provided by a self-balancing Scheme of Social Insurance or by public assistance or a combination of the two methods. Social security measures adopted in any country can be said to be a dependent upon a number of factors i.e. population, economic resources, standard of living, availability of technical experts and development of industry. The Workmens Compensation Act, though designed to protect and safeguard the interest of the labour was in the nature of social assistance and not social insurance. The Employees State Insurance Act was first of such measures adopted in India to provide for social insurance to the labourers. Many other fields of social insurance like health and unemployment are still left untouched. The question of providing sickness insurance first came for consideration by the government of India in 1928 when it considered to ratify the draft conventions and recommendations adopted at the Tenth International Labour Conference in 1927.But the Government did not consider it feasible to adopt the any such legislation. The royal commission on labour 1931 also suggested for early adoption of these measures. The question of insurance of invalids, widows , old age and orphans was considered by the government from time to time but no scheme providing for any such benefits was introduced for administrative and financial considerations. In the conference of Labour Ministers held in January 1940, it was decided to invite the views of the Provincial Government, employers and workers about compulsory contribution of the sickness insurance fund. The second Conference of Labour Ministers held in 1941 was of the opinion that any such legislation must be preceded by an actual examination of the problem in certain industries. A year after the Third Conference of Labour Ministers was called for to examine a tentative sickness scheme prepared by the Labour Department of the Goverenment of India.The conference agreed to introduce a scheme on a selective basis and recommended a sickness insurance scheme to workers in jute, cotton and heavy engineering industries.In March, 1943 the government of India appointed Prof. B.P. Adarkar as a special officer to report on health insurance of the industrial workers in India. The report submitted by Prof.Adarker in August, 1944 contained comprehensive contributory scheme of social insurance. Some
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improvement in the above scheme were suggested by Messrs. Maurice Stack and Ragunath Rao, members of I.L.O, who examined it at the invitation of the government of India. The Adarker Report and suggestions made by the two I.L.O., members were discussed by the Labour Committee in March,1945. The following recommendations were made: The central government should proceed with the preparation of a scheme of health insurance applicable to all the perennial factories and covering employment injuries and maternity benefits if possible, and That the scheme should be circulated to provincial governments and association of employers and workers before a bill was drafted The Employees State Insurance Bill providing for compulsory sickness, maternity and employment injury benefits for workers in perennial factories was introduced in the Central Legislature on 6th November, 1946. It was passed in 1948. History The scheme was inaugurated in Kanpur on 24th February 1952 (ESIC Day) by then Prime Minister Pandit Jawahar Lal Nehru. The venue was the Brijender Swarup Park, Kanpur and Panditji addressed a 70,000strong gathering in Hindi in the presence of Pt.Gobind Ballabh Pant, Chief Minister Uttar Pradesh; Babu Jagjivan Ram, Union Labour Minister; Raj Kumari Amrit Kaur, Union Health Minister; Sh. Chandrabhan Gupt, Union Food Minister and Dr.C.L.Katial, the first Director General of ESIC. The scheme was simultaneously launched at Delhi as well and the initial coverage for both the centres was 1,20,000 employees. Our first prime Minister was the first honorary insured person of the Scheme and the declaration form bearing his signature is a prized possession of the Corporation. It is important to mention here that it blossomed as the first social security scheme in 1944, when the Govt. of the day was still British. The first document on social insurance was "Report on Health Insurance" submitted to the Tripartite Labour Conference, headed by Prof. B.P.Adarkar, an eminent scholar an dvisionary. The Report was acclaimed as a worthy document and forerunner of the social security scheme in India and Prof. Adarkar was acknowledged as "Chhota Beveridge" by none other than Sardar Vallabh bhai Patel. Sir, William Beveridge, as all know, was one of the high priests of social insurance. The report was accepted and Prof. Adarkar continued to be actively associated
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with it till 1946. On his disassociation he strongly advocated management of the Scheme by an expert from ILO. In 1948 Dr.C.L.Katial, an eminent Indian doctor from London took over as the 1st Director General of ESIC and hesteered the affairs of the fledgling Scheme till 1953.Since the red letter day of 24th February in the annals of social security in India, there has been no looking back. A lighted lamp which is the logo of ESIC truly symbolizes the spirit of the Scheme, lighting up lives of innumerable families of workers by replacing despair with hope and providing help in times of distress, both physical and financial. During the 60 years of its existence, ESIC has grown from strength to strength and the Corporation owes Promulgation The promulgation of Employees' State Insurance Act, 1948(ESI Act), by the Parliament was the first major legislation on social Security for workers in independent India. It was a time when the industry was still in a nascent stage and the country was heavily dependent on an assortment of imported goods from the developed or fast developing countries. The deployment of manpower in manufacturing processes was limited to a few select industries such as jute, textile, chemicals etc. The legislation on creation and development of a fool proof multi-dimensional Social Security system, when the country's economy was in a very fledgling state was obviously a remarkable gesture towards the socio economic amelioration of a work face though limited in number and geographic distribution. India, notwithstanding, thus, took the lead in providing organized social protection to the working class through statutory provisions. The ESI Act 1948, encompasses certain health related eventualities that the workers are generally exposed to; such as sickness, maternity, temporary or permanent disablement, Occupational disease or death due to employment injury, resulting in loss of wages or earning capacity-total or partial. Social security provision made in the Act to counterbalance or negate the resulting physical or financial distress in such contingencies, are thus, aimed at upholding human dignity in times of crises through protection from deprivation, destitution and social degradation while enabling the society the retention and continuity of a socially useful and productive manpower. Aims and Object The Employees State Insurance Act is a Legislation which aims at bringing about social and economic justice to the poor labour class of the land. It aims at the labour welfare . But labour
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welfare is an elastic term bearing somewhat different interpretation in one country from another according to different social customs, the degree of industrialization and the educational development of the workers.1Investigation Committee of the Government of India has preferred to include under welfare activities anything done for the intellectual, physical, moral and economic betterment of workers whether by employers, by government or by the other agencies, over and above what is laid down by law or what is normally expected as part of contractual benefits for which workers have bargained. Labour welfare is a very comprehensive term and includes everything undertaken by the state, employers and association of workers for the improvement of workers standard of living and promotion of their social and economic wellbeing. These welfare activities need to be considerably extended so as to cover workers of every factory, industry, mines, plants and communication, etc. A definite minimum standard of welfare should be laid down, which has to be observed by all employers. The main object of this act is to provide certain benefits to employees in case of sickness, maternity and employment injury and to make provisions for certain other matter in relation thereto. Short title, extent, commencement and application ( Section-1) (1) This Act may be called the Employees' State Insurance Act, 1948. (2) It extends to the whole of India. (3) It shall come into force on such date or dates as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act and for different States or for different parts thereof . (4) It shall apply, in the first instance, to all factories (including factories belonging to the government) other than seasonal factories:

Report of the Royal Commission on Labour, p. 261

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PROVIDED that nothing contained in this sub-section shall apply to a factory or establishment belonging to or under the control of the government whose employees are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act. (5) The appropriate government may, in consultation with the Corporation and where the appropriate government is a State Government, with the approval of the Central Government, after giving six months' notice of its intention of so doing by notification in the Official Gazette,extend the provisions of this Act or any of them, to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise : PROVIDED that where the provisions of this Act have been brought into force in any part of a State, the said provisions shall stand extended to any such establishment or class of establishments within that part if the provisions have already been extended to similar establishment or class of establishments in another part of that State. (6) A factory or an establishment to which this Act applies shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time falls below the Limit specified by or under this Act or the manufacturing process therein ceases to be carried on with the aid of power.

Cases In Cricket Club of India v. ESI Corporation2 case, where by some club not only sporting facilities but a kitchen is also maintained, wherein a big number of members come, yet is not necessary that they are participating only in sports activities, they are also entertaining themselves and their guests by partaking beverages and tea served by the club. Activity in the kitchen has a direct connection with the activities carried on in the rest of the club premises. It is necessary that the

1994 (69) FLR 19.eh

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club be registered under ESI Act as regards all the employees engaged by the club irrespective of the fact in which department they are working. Cricket Club of India satisfies the definition of the term `factory' under s. 2(12) of the Act hence covered by it. In ESI Corpn. v. Fariyar Hotel (P) Ltd
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case, the scheme of the Act does not provide that the

provisions should be made applicable to all the areas and all the establishments at one stroke or to none at all. It would defeat beneficial scheme prescribed by the Act. The power conferred on the State Government under s. 1(5) of the Act can be exercised only with the approval of the Central Government, and therefore, it cannot be said that the limit of extension only to certain areas out of the areas covered under s. 1(3) of the Act would amount to encroachment of the powers of the Central Government. Sec. 1(5) does not indicate that the approval must be sought from the Central Government only after the expiry of the period mentioned in the notice of intention but there are circumstances to indicate that such approval must be secured beforehand. Requirement of s.1(5) is that State Government can extend the scheme provided Central Government gives approval and after consultation with the corporation Where in an establishment activities like that of clearing and forwarding is going on, it would fall within the expression "shop" even though clearing of documents is done in customs house meant for export and import of goods. Person involved in such business is catering to the needs of exporters and importers and others wanting to carry the goods further.-- AIR1993 SC 252 In Cochin Shipping Company v. Employees' State Insurance Corporation 4 case, Sec. 1(4) in the first instance is made applicable to all the factories. The Act envisages the extension of benefit to the employees in other establishments or class of establishments, industrial, commercial or otherwise. The extension of benefit is to be done by means of a notification by the appropriate government. Thus the benefits conferred by the Act cover a large area of employees than what the Factories Act and the akin legislation intended. In Cochin Shipping Co. v. ESI Corporation5 case, it is not actually necessary that the delivery of the goods to the purchaser should take place atthe premises in which the business of buying or

3 4

1989 (1) LLJ 356. 1992 (65) FCR 676. 5 1992 (65) FLR 676.

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selling is carried on to constitute the said premises into a shop. The delivery of the goods sold to the purchaser is only one aspect of trading activities. Negotiation of the terms of sale, carrying on the survey of the goods imported, arranging for the delivery of the goods sold, collection of the price of the goods sold, etc. are all trading activities. If orders are received at a place which ultimately fructify with sales and the resulting trading activity is directed from there, that place comes to be known as a "shop" In ESI Corporation v. R.K. Swamy6 case, anyone having product may approach advertising agency. The advertising agency will prepare an advertising campaign for him utilizing the services of the experts it employs in this behalf. It sells the campaign to the client and receives the price thereof. Indubitably, the price will depend upon the nature of the campaign but that does not make any great difference. Essentially, the advertising agency sells its expert services to a client to enable the client to launch an effective campaign of his products without staining the language, the premises of an advertising agency can be said to be a "shop".

Act does not apply to: Seasonal factories engaged exclusively in any of the activities like: cotton ginning, cotton or jute pressing, decoration of ground nuts, manufacturing coffee, indigo, lac, rubber, sugar, or tea or any manufacturing process incidental to or connected with any of the afore said activities, and including factories engaged for a period not exceeding seven months in a year in blending, packing or repackaging tea or coffee, or in such other processes as may be specified by the central govt. The factories exempted as seasonal from the provisions of the act. Mines Railway running sheds Govt. factories or establishments and Indian naval, military,or air force Other Govt. notified exempted establishments

1993 (67)FLR 1145 : 1993 (2) CLR 1068

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Standing committee empowered to1. Shall administer the affair of the corporation 2. Shall submit the consideration and decision of the corporations 3. Have discretion on other issues of corporation Medical Benefit Council 1. Advise to administration on Medical Benefit, purpose of grants and related matter 2. Have power and duties of INVESTIGATION on Empanelled Medical practitioner, its treatment and attendance 3. Perform other duties Inspectors- Duties- Powers Duties 1. Inquiring into the correctness in any return of contribution 2. Ascertaining Provision of the Act has been complied 3. Other authorized / specified duties by the corporation. Powers 1. To collect require and relevant information of employer / contractor or both 2. To enter org / contractor premises at reasonable time and examined relevant account books and relevant documents, payment of wages etc. 3. To examine employer, contractor, his agent / servant or IE in factory /office 4. To make copies of extracts from any registrar, account books and other books of maintenance of org.

Employer/ Employees Contribution It is the principle employers responsibility to deposit his own as well as employees contribution in respect of all employees including the contract labour, into the E.S.I. Account. Non-availability of funds cannot be a ground for non-payment of contributions under the act. There is no provision to waive the contribution, damages and interest
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The employer is required to contribute at the rate of 4.75% of the wages paid/ payable in respect of every wage period. The employees are also required to contribute at the rate of 1.75% of their wages except when the average daily wages in a wage period are equal to or less than Rs.40. The employer should get his factory or establishments registered with the E.S.I. Corporation within 15 days after the Act becoming applicable to it, and obtain the employers Code Number. The regional officer will allot a code number to the employer, which must be quoted in all documents and correspondence.

Benefits available to insured employee The purpose of the Employee State Insurance Act is to provide benefits as detailed in the Act particularly in section 46, to the insured persons or their dependants. The following benefits are provided under section 46. 1. Sickness benefit 2. Maternity benefit 3. Disablement benefit 4. Dependents benefit 5. Medical benefit 6. Funeral expenses

1. SICKNESS BENEFIT Acc. To Sec 46(1)(a) of the ESI Act, 1948, Sickness benefit is a periodical payment to an insured person. Sickness has been defined under sec.2(20) of the ESI Act as follows: Sickness means a condition which requires medical treatment and attendance and necessitates abstention from work on medical grounds.

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Certification of sickness Acc. to Sec 49, for the claim of sickness benefit, the sickness of the injured person must be certified by a duly appointed medical practitioner. The qualification of a person to claim sickness benefit, the condition subject to which such =benefit may be given, the rates and period thereof shall be such as may be prescribed by the central Govt.

Conditions to be observed by recipient of sickness benefit 1.To remain under medical treatment at a dispensary, hospital, clinic or other institution provided under the Act. 2. To carry out instructions given by medical officer or medical attendant in charge of clinic. 3. Not to do anything which retard or prejudice the chances of recovery from the sickness. 4.Not to leave the area in which the medical treatment provided by the Act is given. The recipient can leave such area with the permission of the medical officer as may be specified by the regulation. 5.Receipient allows himself to be examined by any duly appointed medical officer. Examination may be done by other person authorized by the corporation in this behalf.

Disentitlement to sickness benefit (Sec 63) 1.On the day on which he works or remains on leave on a holiday in respect of which he receives wages. 2. On any day on which he remains on strike.

Cases M.L. Kuntarao v. Azam Johi Mills Ltd. Warangal7 In this case the court held that, where provision is made for sick leave by standing order, the employer cannot require the employee to seek sickness benefit provided under this sub-section.

1970 Lab IC 585 (AP)

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Management of Dioccsan Prees v. Labour Court Madras8 In this case it was held that it was not possible to accept the contention that since the employee has received sickness benefit under the act,he is not entitled to receive the wages for the period during which he was no sick leave. But the employer is entitled to deduct the benefit received by the employee from the leave salary payable to him. Employees' State Insurance v. P.S. Sreekantadatta9 Under the specific provisions of the Act, an employer is required to pay his contribution within the time stipulated and also to submit the return as required under the regulation. Section 85 of the Act provides for punishment for failure to pay the contributions, etc., as detailed in clauses (a) to (g) to Section 85 of the Act. Therefore, non-compliance of the statutory requirement is punishable under Section 85(i) of the ESI Act and enhanced punishment In this background, an offence under Section 85 (a) to (g) of the Act is a continuing offence. The offence is punishable under Section 85-A of the Act for his failure to submit his return as required under Section 85(e) of the Act for the second time. The punishment provided for the offence under Section 85-A of the Act is imprisonment for a term which may extend to two years and with fine of Rs. 5,000/-. Therefore, the complaint now filed by the appellant is well within time. The conclusion reached contrary by the Trial Judge, in my opinion, is wholly erroneous and is liable to be set aside. In the result, this appeal is allowed. The respondent-accused is convicted for the offence punishable under Section 85-A of the ESI Act of 1948. Section 85-A of the ESI Act provides for imprisonment for a term which may extend to two years and with fine of Rs. 5,000/. Heard the learned Counsel for the respondent-accused regarding sentence. He pleaded for taking a lenient view in the matter of punishment.

(1982) I L.L.J. 451 (Mad). on 27 January, 2000

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Associated Electrical Agencies v.Commissioner For Workmen'S10 Court held that Section 61 of ESI Act, specifically provides that when a person is entitled to any of the benefits provided by the act, then he shall not be entitled to receive any similar benefits admissible under the provisions of any other enactment. Alembic Glass Industries v. Workmen11 The workmen demanded sick leave. The Supreme Court held that the act does not deal with the question question of sickness leave. The benefit admissible under the act do not cover sick leave. 2.MATERNITY BENEFIT Acc. To Sec 46(1)(b), maternity benefit is paid to an insured woman in the form of periodical payment. The eligibility of insured woman to receive maternity benefit is certified by the insurance medical officer. Maternity benefit is paid to an insured woman in case of: (I) Confinement (ii) Miscarriage (iii) Sickness arising out of pregnancy, confinement or (iv) Premature birth of child Confinement (Sec 2(3)) Confinement means labour resulting in the issue of living child or labour after twenty six weeks of pregnancy resulting in the issue of a child whether alive or dead. Miscarriage (Sec 2(14B)) Miscarriage means expulsion of the contents of a pregnant uterus at any period prior to or during the 26weeks of pregnancy. Miscarriage for the purpose of ESI Act does not include any miscarriage the causing of which is punishable under the Indian penal code.

10

on 4 August, 1994

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AIR 1976 SC 2091.

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Condition for and rate of maternity benefit (Sec 50) The qualification of a person to claim maternity benefit, the condition subject to which such benefit may be given, the rates & periods thereof shall be such as may be prescribed by the central Govt.

3. DISABLEMENT BENEFIT Acc. to Sec(46)(1)(c) and Sec(51), an insured person is entitled to disablement benefit if he: a) Suffers employment injury b) Such employment injury causes; i. temporary disablement for not less than three days ii. Permanent disablement whether total or partial iii. Fulfils the other eligibility condition specified in the regulations of the ESI Act. A. EMPLOYEMENT INJURY Sec 2(8) of the ESI Act.1948 define employment injury as follows: 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. Acc to Sec2(8), employment injury means personal injury caused to the employee: I. By an accident arising out of & in the course of employment II. By an occupational disease arising out of & in the course of employment III. Such employment is an insurable employment B.DISABLEMENT To claim disablement benefit under the ESI Act, the employment injury suffered by the insured employee must cause ; I. Temporary disablement for not less than three days(excluding the day of accident) II. Permanent disablement whether total or partial. TEMPORARY DISABLEMENT ( Sec 2(21)) Temporary disablement means a condition resulting from an employment injury which requires medical treatment and rendersan employee, as a result of such injury, temporarily incapable of doing the work which he was doing prior to or at the time of injury.
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PERMANENT DISABLEMENT Permanent partial disablement (Sec 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 under taking at the time of accident resulting in the disablement. Permanent total disablement (Sec 2(15 B) Permanent total disablement means such disablement of a permanent nature as in capacitates an employee for all work which he was capable of performing at the time of the accident resulting in such disablement Presumption as to accident arising in course of employment (Section-51A). For the purposes of this Act, an accident arising in the course of an insured person's employment shall be presumed, in the absence of evidence to the contrary, also to have arisen out of that employment. Accidents happening while acting in breach of regulations, etc (Section-51B). An accident shall be deemed to arise out of and in the course of an insured person's employment notwithstanding that he is at the time of the accident acting in contravention of the provisions of any law applicable to him, or of any orders given by or on behalf of his employer or that he is acting without instructions from his employer, if (a) the accident would have been deemed so to have arisen had the act not been done in contravention as aforesaid or on without instructions from his employer, as the case may be; and (b) the act is done for the purpose of and in connection with the employer's trade or business. Accidents happening while travelling in employer's transport (Section-5IC). (1) An accident happening while an insured person is, with the express or implied permission of his employer, travelling as a passenger by any vehicle to or from his place of work shall, notwithstanding that he is under no obligation to his employer to travel by that vehicle, be deemed to arise out of and in the course of his employment, if (a) the accident would have been deemed so to have arisen had he been under such obligation; (b) at the time of the accident, the vehicle (i) is being operated by or on behalf of his employer or some other person by whom it is
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provided in pursuance of arrangements made with his employer, and (ii) is not being operated in the ordinary course of public transport service. (2) In this section "vehicle" includes a vessel and an aircraft.

Accidents happening while meeting emergency ( Section-51D ) An accident happening to an insured person in or about any premises at which he is for the time being employed for the purpose of his employer's trade or business shall be deemed to arise out of and in the course of his employment, if it happens while he is taking steps, on an actual or supposed emergency at those premises, to rescue, succour or protect persons who are, or are thought to be or possibly to be, injured or imperilled, or to avert or minimise serious damage to property.

Conditions to be specified or observed by the recipient of temporary disablement benefit (Sec 64) i. To remain under medical treatment at a dispensary, hospital, clinic or other institution provided under the Act. To carry out the instruction given by the medical attendant in charge of that dispensary, hospital, clinic or other institution ,as the case may be. ii. While under treatment not to do anything which might retard or prejudice his chances of recovery. iii. To allow himself to be examined by any duly appointed medical officer or other person authorized by the corporation in this behalf. iv. Not to leave the area in which medical treatment provided by the Act is being given, without the permission of the medical officer, medical attendant or such other authority as may be specified in this behalf by the regulations. In Krishnan Kutty Nair v. P.B.V. Regional Director, E.S.I. Corporation and Another12 The appellant who was a covered employee under the E.S.I scheme ,met with an accident in the course of his employment on June 15, 1990. The claimant suffered injury after he had ceased to be an employee. Dismissing the appeal it was held that section-46(c) of E.S.I. Act, 1948

12

2008 II L.L.J. 997 (S.C).

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specifically provides for two cumulative conditions for its applicability: (i) first the claimant must be an insured person; and (ii) second that such an injury must be sustained when he was an employee. Hence, when the injury had been sustained by the employee when he ceased to be an employee, he would not be entitled to the benefit of disablement though his contribution period and his status as insured person continues.

4. MEDICAL BENEFIT Acc. To Sec 46(1)(e) of the ESI Act, the medical benefit refers to medical treatment for and attendance on insured treatment person. The medical benefit may be extended to the family of the insured person by the corporation at the request of the appropriate Govt.

Acc. To Sec 46(2), the extension of medical benefit to the family of the insured person is subject to such conditions as may be laid down in the regulation under the ESI Act,1948. Acc. To Sec 56(1), an insured person or where such medical benefit is extended to his family, a member of his family whose condition requires medical treatment& attendance shall be entitled to receive medical benefit Acc. to Sec 56(2), medical benefit to the insured person or to his family may be given in the form of ; i. Out-patient treatment & attendance in a hospital or dispensary, clinic or other institution. ii. Treatment as in-patient in a hospital or other institution. iii.Visits to the home of the insured persons. Sec-2(11) of the ESI Act,1948 defines family as follows : 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 injured person iii. a child who is wholly dependent on the earning of the injured person and who is: a) Receiving education, till he or she attains the age of 21years 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 infirmity continues. v. dependent parents
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5. DEPENDENT BENEFIT Acc. to Sec 46(1)(d), dependents benefit is paid in the form of periodical payment to the dependent of an insured person who has died as a result of an employment injury. To claim dependents benefit according to Sec 52, following conditions must be satisfied by the dependents: i. The insured person must have died as a result of an employment injury. ii. The insured person must have sustained employment injury as an employee under the ESI Act,1948. iii. The dependents of the insured persons must fall within the definition of dependents under Sec 2(6 A) of ESI Act,1948. Dependent-The definition of dependent under Sec 2(6A) of the ESI Act divides dependents of the deceased insured employees into three categories: i. First Category: The dependants of the first category are widow, a minor legitimate son, or unmarried daughter, a widowed mother of the deceased injured employee. ii.Second Category: The dependants of the second category are a legitimate or adopted son or daughter who has attained the age of 18 years and is infirm. iii.Third category : [Sec2(6A(iii))] The third category of dependents of the insured decease person are: a) a parent other than a widowed mother b) a minor illegitimate son, an unmarried illegitimate daughter or adopted or illegitimate if married and a minor or if widowed and a minor. c) a minor brother or unmarried sister or widow sister (minor) d) a minor child of a pre-deceased son e) a minor child of pre-deceased daughter where no parent of the child is alive, or f) a paternal grand parent if no parent of the insured person is alive. In E.S.I Corporation v. Sayeeda Khatoon Donawala and others13 A workmen waiting in the queue waiting for a bus provided by the employer to reach the factory was runover by the same bus. It has held that the workman sustained employment injury and the doctrine of notional extension was applicable. Recovery of compensation from the owner of

13

(1995) I L..L.J. 173 (Bom).

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motor vehicle or from the Insurance Company under the Motar Vehicle Act will not absolve the employer from the making payement under section 52 of the act. Occupational disease (Section-52A). (1) If an employee employed in any employment specified in Part A of the Third Schedule contracts any disease specified therein as an occupational disease peculiar to that employment or if an employee employed in the employment specified in Part B of that Schedule for a continuous period of not less than six months contracts any disease specified therein as an occupational disease peculiar to that employment or if an employee employed in any employment specified in Part C of that Schedule for such continuous period as the Corporation may specify in respect of each such employment, contracts any disease specified therein as an occupational disease peculiar to that employment, the contracting of the disease shall, unless the contrary is proved, be deemed to be an 'employment injury' arising out of and in the course of employment. (2)(i) Where the Central Government or a State Government, as the case may be, adds any description of employment to the employments specified in Schedule III to the Workmen's Compensation Act, 1923, by virtue of the powers vested in it under sub-section (3) of section 3 of the said Act, the said description of employment and the occupational diseases specified under that sub-section as peculiar to that description of employment shall be deemed to form part of the Third Schedule. (ii) Without prejudice to the provisions of clause (i), the Corporation after giving, by notification in the Official Gazette, not less than three months' notice of its intention so to do, may by a like notification add any description of employment to the employments specified in the Third Schedule and shall specify in the case of employments so added the diseases which shall be deemed for the purposes of this section to be occupational diseases peculiar to those employments respectively and thereupon the provisions of this Act shall apply, as if such diseases had been declared by this Act to be occupational diseases peculiar to those employments. (3) Save as provided by sub-sections (1) and (2) no benefit shall be payable to an employee in respect of any disease unless the disease is directly attributable to a specific injury by accident arising out of and in the course of his employment. (4) The provisions of section 51A shall not apply to the cases to which this section applies.]
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6. FUNERAL EXPENSES Funeral expenses is the expenditure incurred towards the funeral of the deceased insured person. Acc. To Sec 46(1)(f),funeral expenses are paid to the eldest surviving member of the insured person. The insured person may not have a family or may not be living with his family at the time of his death. In such case, the funeral expenses are paid to the person who actually incurs the expenditure on the funeral of the deceased person. AMOUNT OF FUNERAL EXPENSES Acc. to Sec 46(f), the amount of funeral expenses is prescribed by the central Govt. Acc to rule 59 of the ESI Central Rules, 1950, the amount of funeral expenses is one thousand rupees Claim for funeral expenses Acc. To Sec 46(1)(f), the claim for funeral expenses must be made within three months of the death of the insured person. The claim may be made with in an extended period. The period for claim may be extended by the corporation or by any officer or authority authorized by the corporation in this behalf. GENERAL PROVISIONS REGARDING ALL THE BENEFITS Benefits not assignable or attachable [Sec(60)] Cash benefits are not to be commuted [Sec(62)] Benefits not to be combined [Sec (65)]

Persons not entitled to receive benefit in certain cases [Sec (63)]An insured person is not entitled to SICKNESS BENEFIT AND DISABLEMENT BENEFIT for temporary disablement:

On the day on which he works, or remains on leave or is on holiday in respect of which he receive wages or, On the day on which he remains on strike Payment of benefit to the nominated person [Sec (71)]

Adjudication of dispute & claims Employees Insurance Court Institutions of proceedings, etc. Powers of employees Insurance Court Reference to High Court

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Appeal Stay of payment during pending of appeal

Offences and penalties Punishment for false statement :- In this case any false statement or false representation, shall be punishable with imprisonment up to Rs.2000 or with both Punishment for failure to pay contributions :- if any person fails to pay any contribution which under to this act he is liable to pay, he shall be punishable with imprisonment up to three years. Punishment for other contravention :- in contraventions like dismisses, discharges, reduces or otherwise punishes an employee, shall be punishable with imprisonment up to one year or with fine up to Rs.4000 or with both

Power to recover damages :- If employer fails to pay the amount of contribution then corporation may recover from the employer byway of penality. Power of court to make orders :- If court makes order for employer-if employer is not able to make this order within period then employer shall be punishable with imprisonment in respect thereof U/S.85 and shall also be liable to pay fine up to Rs.1000 for everyday.

Miscellaneous Provisions Exemption of a factory or establishment (sec.87 ) Exemption may be granted to any factory or establishment for maximum period of one year. Any exemption granted shall be notified by the notification in the Official Gazette. The appropriate Govt. while granting exemption can improve any terms and conditions upon the factory/establishment. If required any exemption can be renewed for max. one year Before granting any exemption Corp. must be given opportunity to make representation which has to be considered by the Govt.

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Exemption of persons or class of persons (sec.88) App. Govt. is authorized to exempt any person or class of person from the operation of the act Any exemption granted shall be notified by the notification in the Official Gazette. Such person or class of persons must be working in a factory/establishment Any exemption granted shall be accompanied with such conditions as the appropriate Govt. may think fit to impose

Exemption of a factory or establishment belonging to Govt./any local authority App.Govt. must consult the Corporation Any exemption granted shall be notified by the notification in the Official Gazette. Exemptions shall always be subj. to the conditions imposed by the Govt. Exemptions shall always be in order only if the employees in any such factory/establishment are already in receipt of benefits substantially similar or superior to the benefits provided under this act.

Exemption from one or more provisions of the act (sec.91) Exemption may be granted to any factory or establishment or Any person or class of person by App.Govt. Any exemption granted shall be notified by the notification in the Official Gazette. Any exemption granted under the sec.87,88,90 or 91 in respect of any person or class of person may be enforced either prospectively or retrospectively the date of its enforcement has to be specified(sec.91A)

Obligation of the Employers 1). Get your Factory / establishment registered with in 15 days after the Act becomes applicable. Submit Form 01 to the Regional office for this purpose. Obtain Employers code No. for use in all ESIC Forms / documents and correspondence with the offices of the ESI Corporation. 2). Fill up Declaration Forms in respect of all coverable employees and submit the same to the Regional Office/ Local Office of the corporation well before the Appointed Day and obtain
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insurance Numbers from the concerned Local Office/ Regional Office, In respect of newly appointed employees, fill up the declaration form soon after appointment of such employees and submit the same to the Local Office Concerned. 3). Pending receipt of identity cards/ identity certificates you may issue certificate of employment in Form86 to the covered employee(s) enabling them to avail cash/medical Benefits 4). Pay ESI contribution (Employee's Share @4.75% and the Employers share @ 1.75% of the wages) with in 21 days of the month following, in which the wages fall due. 5) .Maintain an Accident Book as prescribed under the Factory Act / ESI Act. 6). Submit an Accident Report to the Local Office / ESI Dispensary concerned immediately in respect of accidents that could result in death or disablement and within 24 hours of its occurrence otherwise. Minor accidents which do not cause absence from work need not be reported 7). Grant leave to insured employees on the basis of sickness certificates issued by any authorized ESId o c o t r .

Bar against receiving or recovery of compensation or damages under any other law (Section-53) An insured person or his dependants shall not be entitled to receive or recover, whether from the employer of the insured person or from any other person, any compensation or damages under the Workmen's Compensation Act, 1923 or any other law for the time being in force or otherwise, in respect of an employment injury sustained by the insured person as an employee under this Act. Bhajan Ram v. E.S.I. Corporation14 It was held that the right of the dependent to claim benefit under Section 53 is independent and the mere fact that some amount of compensation has been paid to him under the Workmens Compensation Act, 1923 would not disentitle him from realizing the dependents benefit under the act.

14

71 Punj LR 641.

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Deputy Genral Manager, Karnataka State Road Transport Corporation v. Gopal Mudaliar15 A workman while going on a bicycle met with an motor accident. This accident does not amount to an employment injury and therefore, no benefits are payable under section 53and so such remedy under the Motar Vehicle Act is not barred. But if a person is entitled to the benefits under the E.S.I Act he is debarred from claiming any compensation under the Motor Vehicle Act16 Ashokan v. Western India Plywoods Ltd.17 It was held that the scheme does not purport to deal with the tortuous liability of the employer. Therefore an employee covered by tha E.S.I Act can sue for damages in torts because a liability created under a statute and to be remedied under the statute does not extinguish an accident liability existing under common law or otherwise. The situation cannot be different even though the suit for damages has been filed by an indigent person.

15 16 17

(1983)I L.L.J. 340 (Karn). V.Thangappan v. Tamil Nadu Industrial Insurance Corpn., (1993) II L.L.J. 483 (Mad). (1987) II L.L.J. 183 (Kerala).

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Biblography 1. LABOUR INDUSTRIAL LAWS V.G. GOSWAMI 2. LABOUR AND INDUSTRIAL LAWS S.N.MISRA 3. INTRODUCTION TO LABOUR AND INDUSTRIAL LAWS -DR. AVTAR SINGH & DR. HARPREET KAUR 4. www.disabilitysecrets.com 5. www.sarkaritel.com 6. www.esic.nic 7. www.esickar.gov.in/esi_act.pdf

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Sickne s benefit
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Definition of sickness : Sickness signifies a state of health necessitating Medical

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treatment andattendance and abstention from work on Medical grounds.

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Condition for sickness benefit :The recipient of sickness and disablement benefit must observethe
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following condition.
Sickness benefit Sickness bebenefit

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