Employees State Insurance Act: An Overview

The Employees State Insurance Act, 1948, is a pioneering measure in the field of social insurance in our country. When the Government of India first evaluated the applicability of the Conventions approved by the International Labour Conference in 1927, the question of health insurance for industrial employees was first brought up in the Indian Legislature. The Royal Commission on Labour emphasized the importance of health insurance for Indian workers in its report (1931). One of the first choices made by the Labour Ministers' Conferences in the years between 1940 and 1942 was to enlist a specialist to develop a plan for worker health insurance. As a result, Prof. B.P. Adarkar was given the task of creating a comprehensive plan for health insurance for industrial employees in March 1943. He sent in his report in December 1944.

The Indian government, state governments, and other interested parties all gave this some thought. The Workmen's State Insurance Bill of 1946, which was subsequently presented to a Select Committee on November 12, 1947, was the vehicle through which the Adarkar Plan and numerous other recommendations were ultimately realized. The Workmen's State Insurance Bill was renamed the Employees' State Insurance Bill by the Select Committee, which also expanded coverage to all factory workers. On April 19, 1948, the Employees' State Insurance Act became operative.

What Exactly the meaning of the Employees State Insurance Act Defines?

The Employees State Insurance Act (ESI) contains provisions that cover insurance and medical benefits for any workers employed by factories that are members of the ESI Corporation. The introduction of a formal social security program in India is a promising development from the viewpoints of both the employee and the law.

Applicability under the Act

Section 1(4) of the Act, specifies that the scheme's implementation is regional. First and foremost, the Act is applicable to all factories that use electricity and provide wages to at least 20 people. In accordance with Section 1(5) of the Act, the following sections have also been added to or are progressively being added to the Act's provisions:

However, the Act does not include some seasonal enterprises, mines, and railroad operating sheds. After giving six months' notice in the Official Gazette and consulting with the Corporation and receiving approval from the Central Government, the State Government may expand the Act's provisions to cover additional establishments or classes of establishments, whether they are industrial, commercial, agricultural, or other.

Provisions under the Act

The act contains 100 sections divided into 8 chapter and has three schedules in the following way:

Section	Chapter	Content
Section 1 - Section 2A	Chapter I	Preliminary
Section 3 – Section 25	Chapter II	Corporation, Standing Committee and Medical Benefit Council
Section 26 – Section 37	Chapter III	Finance and Audit
Section 38 – Section 45 I	Chapter IV	Contributions
Section 46 – Section 73	Chapter V	Benefits
Section 73 E – Section 73 F	Chapter V	Scheme for other Beneficiaries
Section 74 – Section 83	Chapter VI	Adjudication of Dispute and Claims
Section 84 – Section 86 A	Chapter VII	Penalties
Section 87 – Section 100	Chapter VIII	Miscellaneous

Important Definition under the Act

The Act contain following major definition:

Employee

According to Section 2(9) of the Act, an "employee" is any individual paid wages to perform duties at a factory or other institution to which this Act applies. It has a broad meaning and encompasses administrative, manual, technical, and managerial tasks. The Act covers individuals whose monthly compensation (excluding compensation for overtime labor) does not exceed Rs. 6,500. The Act does not distinguish between technical and non-technical personnel or between casual and temporary workers. Additionally, there is no differentiation between workers paid on a piece-rate or time-rate basis. The Act covers all employees, including those employed directly by the major employer, those working on factory property by or via a contractor, and those employed elsewhere under the principal employer's supervision. Additionally, it includes those who work in administrative roles as well as those that buy raw materials, distribute goods, sell them, or perform other similar or related tasks. However, no member of the Indian military, navy, or air force is included in the definition of "employee."

Wages

"Wages" refers to any remuneration given in cash provided the contract's conditions are met, including any payments made during legally permitted periods of authorized leave, lockout, strike, or layoff, as well as additional remuneration paid at intervals not exceeding two months, but excluding:

Administration under the Act

The Employees State Insurance Corporation is the corporate entity responsible for managing the scheme. It consists of members who represent important interest groups such as the medical profession, the parliament, employers, employees, and the federal and state governments. This large group is in charge of formulating policies, making decisions, and monitoring the operation of the program through a "Standing Committee" made up of members of the main corporate body. The chairman of the Corporation is the Union Minister of Labor. The Corporation's Director-General is in charge of formulating policies, overall supervision, coordination, and communication with the Central and State Governments. He also serves as an ex-officio member of the Corporation and its Standing Committee. For the purpose of implementing the Scheme, the ESIC has established a nationwide network of local and regional offices. A Regional Director is in charge of each regional office. The regional office oversees local offices and keeps track of every covered individual in its jurisdiction.

Benefits under the Act

All the benefits under the scheme are paid in cash except the medical benefit, which is given in kind. The benefits are:

Conclusion

The Employees' State Insurance Act (ESI) is an important piece of legislation in India that protects workers and the companies they work for. The Act also protects employers from being put in danger by their employees in the event of any kind of injury or death.

FAQs

Q1. What are the other bodies of the ESI Corporation?

Ans. The bodies of ESI Corporation are:

• The Medical Benefit Council, a specialist group that advises the Corporation on the administration of medical benefits, and the Standing Committee, a representative body of the Corporation for governing the Corporation's business, are operating at the national level.

• The Regional Boards and Local Committees have been established at the regional level to assess the scheme's operation and offer recommendations for improvement.

Q2. Is it mandatory for the Employer to register under the scheme?

Ans. Yes, the employer is required by law to register their factory or business under the ESI Act within 15 days of the day on which it becomes applicable to them, as per Section 2 -A of the Act read with Regulation 10-B.

Q3. What is the scale of Medical Benefit?

Ans. The scale of medical benefit, surgical, and obstetric treatment that includes outpatient and inpatient care, drug and dressing supply, pathological and radiological investigations, prenatal and postnatal care, superspecialty consultation and treatment, ambulance services, artificial appliance provision, and so on.

Q4. What is Rajiv Gandhi Sharmik Kalyan Yojana?

Ans. The scheme protects individuals who are eligible for an unemployment stipend after three years of insurable work in the event of factory or establishment closure or non-employment injury-related unemployment. The unemployment allowance is paid for a total of 12 months during the course of your life.