Employee State Insurance Act, [ESI] 1948

The Employees* Slate Insurance Act (ESI Act) was enacted with the object of introducing a scheme of health insurance for industrial workers. The scheme envisaged by it is one of compulsory State Insurance providing for certain benefits in the event of sickness, maternity and employment injury to workmen employed in or in connection with the work in factories other than seasonal factories. The ESI Act, which has replaced the Workmen's Compensation



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1. Employee State Insurance Act, [ESI] 1948 Presented by: Sneha Rosalio Minj Srinath Banerjee Sunny Mervyne Baa Vikas kumar

2. OBJECT OF THE ACT The Employees* Slate Insurance Act (ESI Act) was enacted with the object of introducing a scheme of health insurance for industrial workers . The scheme envisaged by it is one of compulsory State Insurance providing for certain benefits in the event of sickness, maternity and employment injury to workmen employed in or in connection with the work in factories other than seasonal factories. The ESI Act, which has replaced the Workmen's Compensation

3. DEFINITIONS . [Section 2] (3) "confinement" means labour resulting in the issue of a living child or labour after 26 weeks of pregnancy resulting in the issue of a child whether alive or dead; (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; (6) "Corporation" means the Employees' State Insurance Corporation set up under this Act;

4. DEFINITIONS . [Section 2] ( 6A) " dependant " (6A) " dependant " means any of the following relatives of a deceased insured person, namely,- (i) a widow, a legitimate or adopted son who has not attained the age of 25 years, an unmarried legitimate or adopted daughter. (2010 amendment) ( ia ) 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 25 years and is infirm; (2010 amendment)

5. DEFINITIONS . [Section 2] (6A) " dependant " 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,

6. DEFINITIONS . [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) Dependant parents, whose income from all sources does not exceed such income as may be prescribed by the Central Government; (vi) in case the insured person is unmarried and his or her parents are not alive, a minor brother or sister wholly dependent upon the earnings of the insured person. (2010 amendment) (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;

7. DEFINITIONS . [Section 2]

8. DEFINITIONS . [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, were fulfilled and includes any payment to an employee in respect of any period of authorized 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- (a) any contribution paid by the employer to any pension fund or provident fund, or under this Act; (b) (any travelling allowance or the value of any travelling concession; (c) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or (d) any gratuity payable on discharge.

9. CHAPTER II: CORPORATION, STANDING COMMITTEE AND MEDICAL BENEFIT COUNCIL

10. ESTABLISHMENT OF EMPLOYEES’ STATE INSURANCE CORPORATION. [ Section 3 ] Central government establishes the corporation to be known as the employees' state insurance corporation. This corporation will be having following characteristics Separate corporate body. Having perpetual succession. (No death) Have a common seal. Employees' state insurance corporation can sue. (File a suit in court on other) Other can sue employees' state insurance corporation.

11. CHAPTER II: CORPORATION, STANDING COMMITTEE AND MEDICAL BENEFIT COUNCIL (a) Chairman, Vice-Chairman to be appointed by the Central Government; (b) not more than 5 persons to be appointed by the Central Government; (c) one person each representing each of the States in which this Act is in force to be appointed by the State Government concerned; (d) one person to be appointed by the Central Government to represent the 3Union Territories; (e) 10 persons representing employers to be appointed by the Central Government in consultation with such organisations of employers. (f) 10 persons representing employees to be appointed by the Central Government in consultation with such organisations of employees. (g) 2 persons representing the medical profession to be appointed by the Central Government in consultation with such organisation of medical practitioners. (h) 3 members of Parliament of whom two shall be members of the House of the People ( Lok Sabha) and one shall be a member of the Council of States ( Rajya Sabha) elected respectively by the members of the House of the People and the members of the Council of States; and (i) The Director-General of the Corporation ex-officio. THE CORPORATION SHALL CONSIST OF THE FOLLOWING MEMBERS. [Section 4]

12. TERM OF OFFICE OF MEMBERS OF THE CORPORATION . [Section 5] Members referred to in clauses (f), (g), (h) shall be four years, commencing from the date on which their appointment or election. The members of the Corporation referred to in clauses (a),(b),(c) and (e)of Sectiontion 4 shall hold office during the pleasure of the government appointing them.

13. CONSTITUTION OF STANDING COMMITTEE. [Section 8] Standing Committee of the Corporation shall be constituted from among its members, consisting of (a) A chairman, appointed by the central government; (b) Three members of the corporation appointed by the central government; (bb) Three members of the corporation representing such three state governments thereon as the central government may, by notification gazette, specify from time to time; (c) eIght members elected by the corporation as follows- (d) the Director General of the Corporation, ex officio

14. TERM OF OFFICE OF MEMBERS OF STANDING COMMITTEE. [Section 9]

15. MEDICAL BENEFIT COUNCIL. [Section 10](2010 AMENDMENT)

16. DUTIES OF MEDICAL BENEFIT COUNCIL. [Section 22]

17. CESSATION OF MEMBERSHIP. [Section 12]

18. Disqualification. [Section 13] A person shall be disqualified for being chosen as or for being a member of the Corporation, the Standing Committee or the Medical Benefit Council-

19. FEES AND ALLOWANCES. [Section 15] 3 Members of the Corporation, the Standing Committee and the Medical Benefit Council shall receive such fees and allowances as may from time to time be prescribed by the Central Government.3 PRINCIPAL OFFICERS. [Section 16] The Central Government may, in consultation with the Corporation, appoint a director general and a financial commissioner.

20. CHAPTER III: FINANCE AND AUDIT

21. EMPLOYEES’ STATE INSURANCE FUND . [Section 26]

22. THE EMPLOYEES’ STATE INSURANCE FUND SHALL BE EXPENDED ONLY FOR THE FOLLOWING PURPOSES . [Section 28]

23. THE EMPLOYEES’ STATE INSURANCE FUND SHALL BE EXPENDED ONLY FOR THE FOLLOWING PURPOSES . [Section 28]

24. HOLDING OF PROPERTY. [Section 29]

25. ACCOUNTS. [Section 33] The Corporation should maintain correct accounts of its income and expenditure in such form and in such manner as may be prescribed by the Central Government. The accounts of the Corporation should be audited annually by the Comptroller and Auditor-General of India and any expenditure incurred by him in connection with such audit shall be payable by the Corporation to the Comptroller and Auditor-General of India. AUDIT. [Section 34]

26. ANNUAL REPORT. [Section 35] The Corporation shall submit to the Central Government an annual report of its work and activities. The corporation should make valuation of its assets and liabilities for every 3 years of period. (2010 amendment) VALUATION OF ASSETS AND LIABILITIES . [ Section 37]

27. CHAPTER IV: CONTRIBUTIONS

28. ALL EMPLOYEES TO BE INSURED. [Section 38] Factory or establishment having more than 10 employees should be insured under the Employee State Insurance Act CONTRIBUTION. [Section 39]

29. PRINCIPAL EMPLOYER TO PAY CONTRIBUTIONS IN THE FIRST INSTANCE. [Section 40]

30. GENERAL PROVISIONS AS TO PAYMENT OF CONTRIBUTIONS. [Section 42] For Andhra Pradesh Employees in receipt of a daily average wage up to Rs.70/- are exempted from payment of contribution.

31. METHOD OF PAYMENT OF CONTRIBUTION. [Section 43] The ESI Corporation can make following rules and regulation in payment and collection of contributions payable under this Act.

32. EMPLOYERS TO FURNISH RETURNS AND MAINTAIN REGISTERS IN CERTAIN CASES. [Section 44] Every principal and immediate employer should submit to the Corporation or to such officer of the Corporation as it may direct such returns in such form and containing such particulars relating to persons employed by him. Every principal and immediate employer shall maintain such registers or records in respect of his factory or establishment [Section 45A] (2010 amendment) If no records or particular of employed persons are not maintain as required under this act by the his employer, social Security officer by order, determine the amount of contributions payable in respect of the employees of that factory or establishment. No order shall be passed by the Corporation in respect of the period beyond 5 years from the date on which the contribution shall become payable.

33. SOCIAL SECRITY OFFICERS, THEIR FUNCTIONS AND DUTIES. [SECTION 45] (2010 amendment) The Corporation may appoint such person as Social Security Officers, as it thinks fit, for the purposes of this Act. The following are his functions and duties.

34. CHAPTER V BENEFITS

35. The following benefits will be paid to insured persons or to their dependents [Section 46]

36. FUNERAL BENEFIT. [Section 46] As prescribed by the central government, an amount of Rs. 5000/- is payable to the dependents or to the person who performs last rites from day one of entering insurable employment. SICKNESS BENEFIT. [Section 49] As prescribed by the central government, Sickness Benefit represents periodical cash payments made to an IP during the period of certified sickness occurring in a benefit period when IP requires medical treatment and attendance with abstention from work on medical grounds. Sickness benefit is roughly 60% of the average daily wages and is payable for 91 days during 2 consecutive benefit periods. Qualifying Conditions

37. IPs suffering from long term diseases was experiencing great hardship on expiry of 91 days Sickness benefit. Often they, though not fit for duty, pressed for a Final certificate. Hence, a provision for paying Sickness Benefit for an extended period (Extended Sickness Benefit)of up to 2 years in a ESB period of 3 years. An Insured Person suffering from certain long term diseases is entitled to ESB, only after exhausting Sickness Benefit to which he may be eligible. A common list of these long term diseases for which ESB is payable, is reviewed by the Corporation from time to time. The list was last reviewed on 5.12.99 and revised provisions of ESB became effective from 1.1.2000 and at present this list includes 34 diseases which are grouped in 11 groups as per International Classification of diseases and the names of many existing diseases have been changed as under :- Extended Sickness Benefit (ESB)

38. In addition to the above list, Director General/Medical Commissioner are authorised to sanction ESB for a maximum period up to 730 in cases of rare but treatable diseases or under special circumstances, such as, adverse reaction to drugs which have not been included in the above list, depending on the merits of each case, on the recommendations of RDMC/AMO or either authorised officers running the medical scheme. To be entitled to the Extended Sickness Benefit an Insured Persons should have been in continuous employment for 2 years or more at the beginning of a spell of sickness in which the disease is diagnosed and should also satisfy other contributory conditions. According to Section 69, employer shall be liable for payment of excess sickness benefit, if the sickness to the insured person/ employee is caused by the negligence and improper maintenance & no cleanliness of factory or establishment. Extended Sickness Benefit (ESB)

39. 50. MATERNITY BENEFIT. As prescribed by the central government, Maternity Benefit is payable to an Insured Woman in the following cases subject to contributory conditions:-

40. 51. DISABLEMENT BENEFIT. As prescribed by the central government •Temporary disablement benefit (TDB) Eligibility for TDB: •The benefit is not subject to any contributory conditions. An Insured Person is eligible from the day he joins the insurable employment. •TDB Rate is 40% over and above the normal sickness benefit rate. This works out to nearly 85% of the average daily wages. Duration of TDB: There is no prescribed limit for the duration of TDB. This is payable as long as temporary disablement lasts and significant improvement by treatment is possible. If a Temporary Disablement spell lasts for less than 3 days (excluding day of accident), IP will be paid sickness benefit, if otherwise eligible.

41. 51. DISABLEMENT BENEFIT. Permanent Disablement Benefit (PDB) PDB is payable to an Insured Person who suffers permanent residual disablement as a result of EI (including Occupational Diseases) and results in loss of earning capacity. The PDB rate is calculated as percentage of loss of earning capacity as assessed by the Medical Board. Employer will be liable for the accidents caused to his employer in the following circumstance

42. RECIPIENTS OF SICKNESS OR DISABLEMENT BENEFIT TO OBSERVE CONDITIONS. [Section 64] A person who is in receipt of sickness benefit or disablement benefit (other than benefit granted on permanent disablement)-

43. BENEFITS NOT TO BE COMBINED . [Section 65] (1) An insured person shall not be entitled to receive for the same period- (a) both sickness benefit and maternity benefit; (b) both sickness benefit and disablement benefit for temporary disablement; or (c) both maternity benefit and disablement benefit for temporary disablement. (2) Where a person is entitled to more than one of the benefits mentioned in sub-Section (1), he shall be entitled to choose which benefit he shall receive.

44. EMPLOYER NOT TO DISMISS OR PUNISH EMPLOYEE DURING PERIOD OF SICKNESS, ETC. [Section 73] No employer shall dismiss, discharge, or reduce or otherwise punish an employee during the following circumstances

45. CHAPTER VI ADJUDICATION OF DISPUTES AND CLAIMS

46. CONSTITUTION OF EMPLOYEES' INSURANCE COURT. [Sec 74] •The Court shall consist of such number of Judges as the State Government may think fit . •Any person who is or has been a judicial officer or is a legal practitioner of 5 years' standing shall be qualified to be a Judge of the Employees' Insurance Court. •The State Government may appoint the same Court for two or more local areas or 2 or more Courts for the same local area. •Where more than one Court has been appointed for the same local area, the State Government may by general or special order regulate the distribution of business between them.

47. 75. MATTERS TO BE DECIDED BY EMPLOYEES' INSURANCE COURT. If any question or dispute arises as to-

48. 75. MATTERS TO BE DECIDED BY EMPLOYEES' INSURANCE COURT.

49. CHAPTER VII : PENALTIES

50. POWER OF STATE GOVERNMENT TO MAKE RULES. [Section 96] The State Government may, after consultation with the Corporation, subject to the condition of previous publication, make rules not inconsistent with this Act in regard to all or any of the following matters, namely-

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