Unit - 4
Employees State Insurance Act
Constitution of Corporation (Section 4)
The Corporation shall consist of the following members, namely:
(a) a Chairman to be appointed by the Central Government;
(b) a Vice-Chairman to be appointed by the Central Government;
(c) not more than five persons to be appointed by the Central Government;
(d) one person each representing each of the States in which this Act is in force to be appointed by the State Government concerned;
(e) one person to be appointed by the Central Government to represent the Union territories;
(f) ten persons representing employers to be appointed by the Central Government in consultation with such organisations of employers as may be recognised for the purpose by the Central Government;
(g) ten persons representing employees to be appointed by the Central Government in consultation with such organisations of employees as may be recognised for the purpose by the Central Government;
(h) two persons representing the medical profession to be appointed by the Central Government in consultation with such organisations of medical practitioners as may be recognised for the purpose by the Central Government;
(i) three 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
(j) the Director-General of the Corporation, ex-officio.
Functions of ESIC
Some of the functions of ESIC are-
- The Corporation may employ such other staff of officers and servants as may be necessary for the efficient transaction of its business.
- It decides the method of recruitment, salary and allowances, discipline and other conditions of service of the members of the staff of the Corporation.
- It promote measures for the improvement of the health and welfare of insured persons and for the rehabilitation and re-employment of insured persons.
- It advises on matters relating to the administration of medical benefit.
- The Corporation may accept grants, donations and gifts from the Central or any State Government, Local authority, or any individual or body whether incorporated or not, for all or any of the purposes of this Act.
Key takeaways
- 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.
Constitution of Standing Committee (Section 8)
A 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 in the Official Gazette, specify from time to time ;
(c) eight members elected by the Corporation as follows: —
(ii) three members from among the members of the Corporation representing employers;
(iii) three members from among the members of the Corporation representing employees;
(iv) one member from among the members of the Corporation representing the medical profession; and
(v) one member from among the members of the Corporation elected by Parliament;
(d) the Director-General of the Corporation, ex-officio.
Term of office of members of Standing Committee (Section 9)
(1) Save as otherwise expressly provided in this Act, the term of office of a member of the Standing Committee, other than a member referred to in clause (a) or clause (b) or clause (bb) of section 8, shall be two years from the date on which his election is notified:
Provided that a member of the Standing Committee shall, notwithstanding the expiry of the said period of two years, continue to hold office until the election of his successor is notified:
Provided further that a member of the Standing Committee shall cease to hold office when he ceases to be a member of the Corporation.
(2) A member of the Standing Committee referred to in clause (a) or clause (b) or clause (bb) of section 8 shall hold office during the pleasure of the Central Government.
Powers of the Standing Committee (section 18)
(1) Subject to the general superintendence and control of the Corporation, the Standing Committee shall administer the affairs of the Corporation and may exercise any of the powers and perform any of the functions of the Corporation.
(2) The Standing Committee shall submit for the consideration and decision of the Corporation all such cases and matters as may be specified in the regulations made in this behalf.
(3) The Standing Committee may, in its discretion, submit any other case or matter for the decision of the Corporation.
Section 10 of the ESIC provides provisions of medical benefit council. Such provisions are-
(1) The Central Government shall constitute a Medical Benefit Council consisting of —
(a) the Director General, the Employees’ State Insurance Corporation, ex-officio as Chairman;
(b) the Director General, Health Services, ex-officio as Co-Chairman;
(c) the Medical Commissioner of the Corporation, ex-officio;
(d) one member each representing each of the States (other than Union territories) in which this Act is in force to be appointed by the State Government concerned;
(e) three members representing employers to be appointed by the Central Government in consultation with such organisations of employers as may be recognised for the purpose by the Central Government;
(f) three members representing employees to be appointed by the Central Government in consultation with such organisations of employees as may be recognised for the purpose by the Central Government; and
(g) three members, of whom not less than one shall be a woman, representing the medical profession, to be appointed by the Central Government in consultation with such organisations of medical practitioners as may be recognised for the purpose by the Central Government.
(2) Save as otherwise expressly provided in this Act, the term of office of a member of the Medical Benefit Council, other than a member referred to in any of the clauses (a) to (d) of sub-section (1), shall be four years from the date on which his appointment is notified:
Provided that a member of the Medical Benefit Council shall, notwithstanding the expiry of the said period of four years continue to hold office until the appointment of his successor is notified.
(3) A member of the Medical Benefit Council referred to in clauses (b) and (d) of sub-section (1) shall hold office during the pleasure of the Government appointing him.
Resignation of membership (Section 11)
A member of the Corporation, the Standing Committee or the Medical Benefit Council may resign his office by notice in writing to the Central Government and his seat shall fall vacant on the acceptance of the resignation by that Government.
Duties of Medical Benefit Council (Section 22)
The Medical Benefit Council shall —
(a) advise the Corporation and the Standing Committee on matters relating to the administration of medical benefit, the certification for purposes of the grant of benefits and other connected matters;
(b) have such powers and duties of investigation as may be prescribed in relation to complaints against medical practitioners in connection with medical treatment and attendance; and
(c) perform such other duties in connection with medical treatment and attendance as may be specified in the regulations.
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 —
(a) if he is declared to be of unsound mind by a competent Court; or
(b) if he is an undischarged insolvent; or
(c) if he has directly or indirectly by himself or by his partner any interest in subsisting contract with, or any work being done for, the Corporation except as a medical practitioner or as a share-holder (not being a Director) of a company; or
(d) if before or after the commencement of this Act, he has been convicted of an offence involving moral turpitude.
All employees to be insured (Section 38)
Subject to the provisions of this Act, all employees in factories or establishments to which this Act applies shall be insured in the manner provided by this Act.
Contributions (Section 39)
(1) The contribution payable under this Act in respect of an employee shall comprise contribution payable by the employer (hereinafter referred to as the employer’s contribution) and contribution payable by the employee (hereinafter referred to as the employee’s contribution) and shall be paid to the Corporation.
(2) The contributions shall be paid at such rates as may be prescribed by the Central Government:
Provided that the rates so prescribed shall not be more than the rates which were in force immediately before the commencement of the Employees’ State Insurance (Amendment) Act, 1989 (29 of 1989).
(3) The wage period in relation to an employee shall be the unit in respect of which all contributions shall be payable under this Act.
(4) The contributions payable in respect of each wage period shall ordinarily fall due on the last day of the wage period, and where an employee is employed for part of the wage period, or is employed under two or more employers during the same wage period the contributions shall fall due on such days as may be specified in the regulations.
(5) (a) If any contribution payable under this Act is not paid by the principal employer on the date on which such contribution has become due, he shall be liable to pay simple interest at the rate of twelve per cent. Per annum or at such higher rate as may be specified in the regulations till the date of its actual payment:
Provided that higher interest specified in the regulations shall not exceed the lending rate of interest charged by any scheduled bank.
(b) Any interest recoverable under clause (a) may be recovered as an arrear of land revenue or under section 45-C to section 45-I.
Principal employer to pay contributions in the first instance (Section 40)
(1) The principal employer shall pay in respect of every employee, whether directly employed by him or by or through an immediate employer, both the employer’s contribution and the employee’s contribution.
(2) Notwithstanding anything contained in any other enactment but subject to the provisions of this Act and the regulations, if any, made thereunder, the principal employer shall, in the case of an employee directly employed by him (not being an exempted employee), be entitled to recover from the employee the employee’s contribution by reduction from his wages and not otherwise :
Provided that no such deduction shall be made from any wages other than such as relate to the period or part of the period in respect of which the contribution is payable or in excess of the sum representing the employee’s contribution for the period.
(3) Notwithstanding any contract to the contrary, neither the principal employer nor the immediate employer shall be entitled to deduct the employer’s contribution from any wages payable to an employee or otherwise to recover it from him.
(4) Any sum deducted by the principal employer from wages under this Act shall be deemed to have been entrusted to him by the employee for the purpose of paying the contribution in respect of which it was deducted.
(5) The principal employer shall bear the expenses of remitting the contributions to the Corporation.
Recovery of contributions from immediate employer (Section 41)
(1) A principal employer, who has paid contribution in respect of an employee employed by or through an immediate employer, shall be entitled to recover the amount of the contribution so paid (that is to say the employer’s contribution as well as the employee’s contribution, if any,) from the immediate employer, either by deduction from any amount payable to him by the principal employer under any contract, or as a debt payable by the immediate employer.
(2) In the case referred to in sub-section (1), the immediate employer shall be entitled to recover the employee’s contribution from the employee employed by or through him by deduction from wages and not otherwise, subject to the conditions specified in the proviso to sub-section (2) of section 40.
General provisions as to payment of contributions (Section 42)
(1) No employee’s contribution shall be payable by or on behalf of an employee whose average daily wages during a wage period are below such wages as may be prescribed by the Central Government.
(2) Contribution (both the employer’s contribution and the employee’s contribution) shall be payable by the principal employer for each wage period in respect of the whole or part of which wages are payable to the employee and not otherwise.
Method of payment of contribution (Section 43)
Subject to the provisions of this Act, the Corporation may make regulations for any matter relating or incidental to the payment and collection of contributions payable under this Act and without prejudice to the generality of the foregoing power such regulations may provide for —
(a) the manner and time of payment of contributions;
(b) the payment of contributions by means of adhesive or other stamp affixed to or impressed upon books, cards or otherwise and regulating the manner, times and conditions in, at and under which, such stamps are to be affixed or impressed
(c) the entry in or upon books or cards of particular of contributions paid and benefits distributed in the case of the insured persons to whom such books or cards relate; and
(d) the issue, sale custody, production, inspection and delivery of books or cards and the replacement of books or cards which have been lost, destroyed or defaced.
Determination of contributions in certain cases (Section 45 A)
(1) Where in respect of a factory or establishment no returns, particulars, registers or records are submitted, furnished or maintained in accordance with the provisions of section 44 or any Social Security Officer or other official of the Corporation referred to in sub-section
(2) of section 45 is prevented in any manner by the principal or immediate employer or any other person, in exercising his functions or discharging his duties under section 45, the Corporation may, on the basis of information available to it, by order, determine the amount of contributions payable in respect of the employees of that factory or establishment.
Provided that no such order shall be passed by the Corporation unless the principal or immediate employer or the person in charge of the factory or establishment has been given a reasonable opportunity of being heard.
Provided further that no such order shall be passed by the Corporation in respect of the period beyond five years from the date on which the contribution shall become payable.
(3) An order made by the Corporation under sub-section (1) shall be sufficient proof of the claim of the Corporation under section 75 or for recovery of the amount determined by such order as an arrear of land revenue under section 45-B or the recovery under section 45-C to section 45-I.
Key Takeaways
- The contribution payable under this act in respect of an employee shall comprise contribution payable by the employer (hereinafter referred to as the employer’s contribution) and contribution payable by the employee (hereinafter referred to as the employee’s contribution) and shall be paid to the corporation.
Benefits (Section 46)
(1) Subject to the provisions of this Act, the insured persons, their dependants or the persons hereinafter mentioned, as the case may be, shall be entitled to the following benefits, namely:
(a) periodical payments to any insured person in case of his sickness certified by a duly appointed medical practitioner or by any other person possessing such qualifications and experience as the Corporation may, by regulations, specify in this behalf;
(b) periodical payments to an insured woman in case of confinement or miscarriage or sickness arising out of pregnancy, confinement, premature birth of child or miscarriage, such woman being certified to be eligible for such payments by an authority specified in this behalf by the regulations (hereinafter referred to as maternity benefit) ;
(c) periodical payments to an insured person suffering from disablement as a result of an employment injury sustained as an employee under this Act and certified to be eligible for such payments by an authority specified in this behalf by the regulations (hereinafter referred to as disablement benefit) ;
(d) periodical payments to such dependants of an insured person who dies as a result of an employment injury sustained as an employee under this Act, as are entitled to compensation under this Act (hereinafter referred to as dependants’ benefit);
(e) medical treatment for and attendance on insured persons (hereinafter referred to as medical benefit); and
(f) payment to the eldest surviving member of the family of an insured person who has died, towards the expenditure on the funeral of the deceased insured person, or, where the insured person did not have a family or was not living with his family at the time of his death, to the person who actually incurs the expenditure on the funeral of the deceased insured person (to be known as funeral expenses.
Provided that the amount of such payment shall not exceed such amount as may be prescribed by the Central Government] and the claim for such payment shall be made within three months of the death of the insured person or within such extended period as the Corporation or any officer or authority authorised by it in this behalf may allow.
(2) The Corporation may, at the request of the appropriate Government, and subject to such conditions as may be laid down in the regulations, extend the medical benefits to the family of an insured person.
Sickness benefit (Section 49)
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.
Maternity Benefit (Section 50)
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
Disablement benefit (Section 51)
Subject to the provisions of this Act 4—
(a) a person who sustains temporary disablement for not less than three days (excluding the day of accident) shall be entitled to periodical payment 5[at such rates and for such periods and subject to such conditions as may be prescribed by the Central Government] ;
(b) a person who sustains permanent disablement, whether total or partial, shall be entitled to periodical payment 6[at such rates and for such periods and subject to such conditions as may be prescribed by the Central Government.
Dependants’ benefit (Section 52)
(1) If an insured person dies as a result of an employment injury sustained as an employee under this Act (whether or not he was in receipt of any periodical payment for temporary disablement in respect of the injury) dependants’ benefit shall be payable at such rates and for such periods and subject to such conditions as may be prescribed by the Central Government to his dependants specified in sub-clause (i), sub-clause (i-a) and sub-clause (ii) of clause (6-A) of section 2.
(2) In case the insured person dies without leaving behind him the dependants as aforesaid, the dependants’ benefit shall be paid to the other dependants of the deceased at such rates and for such periods and subject to such conditions as may be prescribed by the Central Government.
Review of dependants’ benefit (Section 55A)
(1) Any decision awarding dependants’ benefit under this Act may be reviewed at any time by the Corporation if it is satisfied by fresh evidence that the decision was given in consequence of non-disclosure or misrepresentation by the claim-ant or any other person of a material fact (whether the non-disclosure or misrepresentation was or was not fraudulent) or that the decision is no longer in accordance with this Act due to any birth or death or due to the marriage, re-marriage, or cessor or infirmity of, or attainment of the age of eighteen years by, a claimant.
(2) Subject to the provisions of this Act, the Corporation may, on such review as aforesaid, direct that the dependants’ benefit be continued, increased, reduced or discontinued.
Medical Benefit (Section 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 and attendance shall be entitled to receive medical benefit.
(2) 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.
(3) A person shall be entitled to medical benefit during any period for which contributions are payable in respect of him or in which he is qualified to claim sickness benefit or maternity benefit or is in receipt of such disablement benefit as does not disentitle him to medical benefit under the regulations:
Provided that a person in respect of whom contribution ceases to be payable under this Act may be allowed medical benefit for such period and of such nature as may be provided under the regulations:
Provided further that an insured person who ceases to be in insurable employment on account of permanent disablement shall continue, subject to payment of contribution and such other conditions as may be prescribed by the Central Government, to receive medical benefit till the date on which he would have vacated the employment on attaining the age of superannuation had he not sustained such permanent disablement:
Provided also that an insured person who has attained the age of superannuation, a person who retires under a Voluntary Retirement Scheme or takes premature retirement, and his spouse shall be eligible to receive medical benefits subject to payment of contribution and such other conditions as may be prescribed by the Central Government.
Scale of medical benefit (Section 57)
(1) An insured person and (where such medical benefit is extended to his family) his family shall be entitled to receive medical benefit only of such kind and on such scale as may be provided by the State Government or by the Corporation, and an insured person or, where such medical benefit is extended to his family, his family shall not have a right to claim any medical treatment except such as is provided by the dispensary, hospital, clinic or other institution to which he or his family is allotted, or as may be provided by the regulations.
(2) Nothing in this Act shall entitle an insured person and (where such medical benefit is extended to his family) his family to claim reimbursement from the Corporation of any expenses incurred in respect of any medical treatment, except as may be provided by the regulations.
Key Takeaways
- The medical benefit council shall advise the corporation and the standing committee on matters relating to the administration of medical benefit, the certification for purposes of the grant of benefits and other connected matters.
References:
1. Sexena, Sharma and Porwal: Industrial Law
2. Shukla, S.K. Industrial Labour Law, New Royal Publication, Lalbagh, Lucknow
