The Employees State Insurance Act

The Employees State Insurance Act is a piece of social security legislation conceived as a means of extinction of the evils of society, namely want, disease, dirt, ignorance and indigence. The object of this Act is to secure sickness, maternity, disablement, and medical benefit to employees and dependants’ benefits to the dependants. These benefits are secured by financial contributions to the Scheme by employers and employees.

Application
In the first instance, it shall apply to all factories (including factories belonging to government) other than seasonal factories. Covered only to employee receiving Rs.10,000 and below.

Definition

“Factory”
Where on ten or more employed and being carried out the Manufacturing activity with the aid of power or where on 20 or more persons employed and being carried out the Manufacturing activity without aid of power.

“Employee”
means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and - (i) who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere; or
(ii) who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or
(iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service; and includes any person employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of raw materials for, or the distribution or sale of the products of, the factory or establishment or any person engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 (52 of 1961), or under the standing orders of the establishment; but does not include - (a) any member of the Indian naval, military or air forces; or
(b) any person so employed whose wages (excluding remuneration for overtime work) exceed such wages as may be prescribed by the Central Government :
Provided that an employee whose wages (excluding) remuneration for overtime work) exceed such wages as may be prescribed by the Central Government at any time after (and not before) the beginning of the contribution period, shall continue to be an employee until the end of that period;
“Family”
A Spouse
A minor Legitimate or adopted child
A child who is wholly dependent till he or she attains age of 21 yrs
An Unmarried daughter
A child who is in firm by reason of any physical or mental abnormality
Dependent parents

“
Wages”
All remuneration paid or payable but does not include PF & Gratuity payable of the discharge

“Employment Injury”
A personal injury to an employee caused by accident or an occupational disease arising out of and in the course of employment
"dependant"
means any of the following relatives of a deceased insured person, namely :- (i) a widow, a minor legitimate or adopted son, an unmarried legitimate or adopted daughter;
(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 eighteen years and is infirm;
(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;

"immediate employer"
in relation to employees employed by or through him, means a person who has undertaken the execution, on the premises of factory or an establishment to which this Act applies or under the supervision of the principal employer or his agent, of the whole or any part of any work which is ordinarily part of the work of the factory or establishment of the principal employer or is preliminary to the work carried on in, or incidental to the purpose of, any such factory or establishment, and includes a person by whom the services of an employee who has entered into a contract of service with him are temporarily lent or let on hire to the principal employer and includes a contractor;
"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 undertaking at the time of the accident resulting in the disablement : Provided that every injury specified in Part II of the Second Schedule shall be deemed to result in permanent partial disablement.
"permanent total disablement"
means such disablement of a permanent nature as incapacitates an employee for all work which he was capable of performing at the time of the accident resulting in such disablement :
Provided that permanent total disablement shall be deemed to result from every injury specified in Part I of the Second Schedule or from any combination of injuries specified in Part II thereof where the aggregate percentage of the loss of earning capacity, as specified in the said Part II against those injuries, amounts to one hundred per cent or more.


“Sickness”
A condition, which required medical treatment, attendance and necessitates abstention from work on medical grounds.

Main Provisions


Contribution:
The sum payable to the contribution by the principal employer in respect of an employee and employer
Employee Contribution is 1.75%
Employer’s Contribution is 4.75%

Contribution Period
Benefit Period
1st April to 30th Sept
1st Jan to 30th June of the year following
1st October to 31st March
1st July to 31st Dec

Standard Benefit:
• Means 50 % of contributed daily wages (Average of six months contributions)

BENEFITS

Sickness Benefit:
91 days in any two consecutive benefit periods (50% of Standard Benefit)

Extended Sickness Benefit
124 days which may be extended to 309 days in case of TB, leprosy etc during a period of 3 yrs. (25% above the Std Benefit)

Enhanced Sickness Benefit
7 days for vasectomy and 14 days for tubectomy. (Twice Standard Benefit)
No benefit for the first two days. (Waiting days)


Maternity Benefit (Twice Std Benefit rate)
12 weeks (84 Days) 6 weeks in case of miscarriage (42 Days). Additional one month if necessary.


Disablement Benefit (Employment Injury)
In case of temporary disablement as long as incapacity lasts and incase of permanent disablement for life time.
Dependent’s Benefit (70% of wage)

Dependent’s Benefit
To widow/s for life or till remarriage
To children till they attain 18 yrs
Medical Benefit
(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 inpatient 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 superannuating had he not sustained such permanent disablement:
Provided also that an insured person, who has attained the age of super-annotation, and his spouse shall be eligible to receive medical benefit subject to payment of contribution and such other conditions as may be prescribed by the Central Government.
Explanation: In this section, "superannuating", in relation to an insured person, means the attainment by that person of such age as is fixed in the contract or conditions of service as the age on the attainment of which he shall vacate the insurable employment or the age of sixty years where no such age is fixed and the person is no more in the insurable employment.

Funeral Benefit
Rs. 2500/- is paid immediately by ESIC to meet the funeral expenses of Insured person


Accidents happening while traveling in employer's transport. - (1) An accident happening while an insured person is, with the express or implied permission of his employer, traveling 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; and
(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 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