11/1/13

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ESIC
4
The protective umbrella for the employers
4
Provides means for the economic growth of
the nation
4
The safety net for the employees
4
Provides proper living conditions for the wor!
force
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The scheme was conceived
originally by some employers.
They too! concerted action for
formal legislative protection by
nations.
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Is the ESI "ct#
1$%& a
compulsory
provision'
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The ESI Act, 1948 is
not
a compulsory provision for any
factory or establishment
There are provisions for
exemption.
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the benefits provided by him
to his employees are
substantially similar
or
superior
to those provided for in the
"#I $ct, %&'(.
$n employer can rightly demand
exemption,
if
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This condition must be really
fulfilled.
The assertion will be verified with
reference to the past records, in
spite of the exemption already
given.
11/1/13
What was the position when
there was no social security
system and no ESI Corporation?
11/1/13
11/1/13
T
h
e

P
i
o
n
e
e
r
s
Industrial (evolution
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)ne side

In the 1&*+s# income levels for most worers began to

improve# and people ad,usted to the different
circumstances and conditions- .y that time# .ritain had
changed forever-

The economy was e/panding at a rate that was more than

twice the pace at which it had grown before the Industrial
(evolution-

"lthough vast differences e/isted between the rich and the

poor# most of the population en,oyed some of the fruits of
economic growth-

The widespread poverty and constant threat of mass

starvation that had haunted the preindustrial age lessened
in industrial .ritain-
11/1/13
The other side

Employment
Many parents were willing to allow their children to work in these new textile factories because
they needed the extra money for their farm life. However, more workers were still needed. One
solution to the problem was to obtain children from orphanages and workhouses. hese children
became known as pauper apprentices. his involved those signing contracts that virtually made
them the property of the factory and the factory owner. !hildren were expected to work from as
young as four years old. Most child factory workers were orphans and had no other choice.
!hildren usually weren"t paid as much as grown men were. heir salaries usually came out to be
one#third of the typical wage. here are some accounts of children being paid $%.&' per day for
delivering newspapers. (lso, some of these children died from the hard work.)

*unishments
!hildren were sometimes hit with a strap to make them work faster. +n some factories children
were dipped head first into the water cistern if they became drowsy. !hildren were also punished
for arriving late for work and for talking to the other children. (pprentices who ran away from the
factory were in danger of being sent to prison. !hildren who were considered potential runaways
were placed in irons. hey would also have weights tied to their necks if they weren"t working
,uick or well enough.)

(ccidents
One of the main concerns about the number of textile workers was the safety of the factories.
-nguarded machinery was a ma.or problem for children working in factories. here were reports
that every year there were nearly a thousand people treated for wounds and mutilations caused by
machines in factories. Many of the workers were often abandoned from the moment the accident
occurs.)
11/1/13
(obert )wen 0 Philanthrophist businessman 0
1elsh 0 pleaded for international agreement on
social security-
2erome .lan3ui 0 1&3&
4illerme 0 1&3$ 0 5rance 0 Pleaded for
international agreement-
6aniel 7egrand 0 1&%8 0 Swit9erland 0 :;en are
men< not producing machines=-
>arl ;ar/ and Engels ! 1&%&
11/1/13
15

?eorge Cadbury 0 1&@+

7ouis 1ollowisi !1&83! 5rance 0 introduced the

first bill on labour legislation before the 5rench
parliament-

)ttowan .ismar 0 ?ermany ! "ccident

Insurance# 1&&3# ;aternity# 1&&%# Sicness and
)ldage Pension# 1&&$

?erman Emperor 0 1&$+ 0 convened the first

International 7abour Conference in .erlin-
11/1/13

"nother conference at .russels 0 1&$8

International "ssociation for 7abour 7egislation by a

voluntary organisation 0 1$++

Two more conferences at the instance of the same

"ssociation at .erne# Swit9erland 0 1$+A and 1$+@-

Bational Insurance "ct# 1$11 0 passed in the C>-

"nother International Conference at .erne

recommends action programme 0 1$13
11/1/13
Upton Sinclair

In 1904 Sinclair spent seven weeks in disguise, working undercover in Chicago's eatpacking plants to research
his !ictional e"pos#, The Jungle$ %hen it appeared in 190&, it 'ecae a 'est(seller$

The Jungle is a 190& novel written ') author and *ournalist +pton Sinclair$ Sinclair wrote this novel to highlight
the plight o! the working class and to reove !ro o'scurit) the corruption o! the ,erican eatpacking
industr) during the earl)(-0th centur)$

.he novel depicts in harsh tones the povert), a'sence o! social progras, unpleasant living and working
conditions, and hopelessness prevalent aong the working class, which is contrasted with the deepl)(rooted
corruption on the part o! those in power$

.he sad state o! turn(o!(the(centur) la'or is placed !ront and center !or the ,erican pu'lic to see, suggesting
that soething needed to 'e changed to get rid o! ,erican / wage slaver)0$

.he pressure and the pu'lic outcr), led to the passage o! the 1eat Inspection ,ct and the
2ure 3ood and 4rug ,ct o! 190&,

+pton Sinclair originall) intended to e"pose 5the in!erno o! e"ploitation 6o! the t)pical ,erican !actor) worker
at the turn o! the -0th Centur)7,5 'ut the reading pu'lic instead !i"ated on !ood sa!et) as the novel's ost
pressing issue$

In !act, Sinclair 'itterl) aditted his cele'rit) rose, 5not 'ecause the pu'lic cared an)thing a'out the workers, 'ut
sipl) 'ecause the pu'lic did not want to eat tu'ercular 'ee!/

Sinclair re*ected the legislation, as he viewed it as an un*usti!ied 'oon to large eat packers partiall) 'ecause the
+$S$, rather than the packers, was to 'ear the costs o! inspection at 830,000,000 a )ear$ 9e !aousl) noted the
liited e!!ect o! his 'ook ') stating, 5I aied at the pu'lic's heart, and ') accident I hit it in the stoach$5
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Sweatshops of 1845 - unch
Courtesy! wi"ipedia
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Bational Insurance "ct# 1$11 0 passed in

the C>-

"nother International Conference at .erne

recommends action programme 0 1$13
11/1/13
Chronology of events
+
1$1& 0 5irst 1orld 1ar is over
+
1$1$ 0International 7abour
)rganisation is
formed 0 Treaty of 4ersailes
on *&-@-1$1$
+
1$*+ 0 (atification of I7) convention
by various nations followed by
implementation-
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Preamble of the )onstitution
of the
International *abour
+rganisation
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11/1/13

hereas universal and lasting peace can be established only if it is

based upon social ,ustice-

$nd whereas conditions of labour exist involving such in,ustice

hardship and privation to large numbers of people as to produce
unrest so great that the peace and harmony of the world are
imperilled-

and an improvement of those conditions is urgently re.uired- as, for

example, by the regulation of the hours of work including the establishment of a maximum
working day and week, the regulation of the labour supply, the prevention of unemployment, the
provision of an adequate living wage, the protection of the wor!er against
sic!ness, disease and in,ury arising out of his employment the
protection of children, young persons and women, provision for old age and injury, protection of
the interests of workers when employed in countries other than their own, recognition of the
principle of equal remuneration for work of equal value, recognition of the principle of freedom of
association, the organization of vocational and technical education and other measures;

hereas also the failure of any nation to adopt humane conditions

of labour is an obstacle in the way of other nations which desire to
improve the conditions in their own countries-

The /igh )ontracting Parties, moved by sentiments of ,ustice and

humanity as well as by the desire to secure the permanent peace of
the world, and with a view to attaining the ob,ectives set forth in
this Preamble, agree to the following )onstitution of the
International *abour +rgani0ation:
+
%&12 3 $s per the I*+
)onventions,
*abour welfare
legislations are
enacted the world over.
+
4ut, India hesitates
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1922 Inian reluctance is criticise in the I!"#

"ne member $ent on recor sayin% that amon% the

civilise countries, Inia is the only country $here
no social security measures is in e&istence#

Immeiately, the embarrasse Inian representatives

%ave an assurance that steps $oul be ta'en to
enact le%islation for insurance in respect of
accients.

The earlier enactments lie the

5atal "ccidents "ct# 1&&A or The
1orers .reach of Contract "ct#
1&A$ or the Employer and the
1ormenDs E6isputesF "ct# 1&@+
did not significantly help the
woring population in India as
they did in England-
11/1/13
At the last session of the Indian Legislative Assembly, a resolution, tabled by
Mr. Joshi, hels to illustrate the !ondition of servitude in "hi!h Indian "or#ers
still are, desite the attemt at organisation begun by the $rades %nion
Congress. $his resolution !ontained the demand for the reeal of the
&or#men's (rea!h of Contra!t A!t, and the removal from the Indian )enal
Code of se!tions *+, and *+-, "hi!h ermit imrisonment for !ertain
brea!hes of !ontra!t. %nder the (rea!h of Contra!t A!t a "or#er "ho fails to
fulfil his !ontra!t of servi!e, having re!eived an advan!e of money from his
emloyer, is liable to be !alled on to reay the advan!e or fulfil his !ontra!t,
failing "hi!h he !an be imrisoned. $his la" "as assed shortly after the
Indian Mutiny, and embodies in fa!t the !hief feature of indentured labour.
$he Assembly, after mu!h debate, agreed that there "as a strong !ase for
the reeal of these la"s, and !onsented to introdu!e legislation to that effe!t
if, after !onsulting the Lo!al .overnments, the ma/ority favoured reeal.
11/1/13

0tate intervention in labour matter !an be tra!ed

ba!# to the ena!tment of the 1mloyers and
&or#men's 2isutes A!t 134, "hi!h rovided for
the seedy disosal of the disute relating to the
"ages of "or#men engaged in rail"ays, !anals
and other ubli! "or#s, by Magistrates. After
&orld &ar51 ho"ever, 0tate intervention in
2isute 6esolution be!ame more systemati! and
effe!tive.7
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Are they social security enactments?

Fatal Accidents Act, 1855

The Workers Breach of Contract Act,

1859

the Emploer and the Workmen!s

"#isp$tes% Act, 18&'
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The 5atal $ccidents $ct, %(66
8 An Act to provide compensation to families for loss occasioned by
the death of a person caused by actionable wrong.
8 Preamble-
8 1hereas no action or suit is now maintainable in any court against a
person who# by his wrongful act# neglect# or default# may have
caused the death of another person# and it is often!times right and
e/pedient that the wrong!doer in such case should be answerable in
damages for the in,ury so caused by him< It is enacted as followsG
11/1/13

1(A# S)IT *"+ ,"-.E/SATI"/ T" T0E *A-I!1 "* A .E+S"/ *"+ !"SS
",,ASI"/E2 T" IT 31 0IS 2EAT0 31 A,TI"/A3!E 4+"/5#

161A#7 Suit for compensation to the family of a person for loss occasione to it
by his eath by actionable $ron%#9&henever the death of a erson shall be
!aused by "rongful a!t, negle!t or default, and the a!t, negle!t or default is su!h as
"ould :if death had not ensued; have entitle the party in8ure to maintain an
action an recover ama%es in respect thereof, the arty "ho "ould have
been liable if death had not ensued, shall be liable to an a!tion or suit for damages,
not"ithstanding the death of the erson in/ured, and although the death shall have
been !aused under su!h !ir!umstan!es as amount in la" to felony or other !rime.

2<===> 1very su!h a!tion or suit shall be for the benefit of the "ife, husband, arent
and !hild, if any, of the erson "hose death shall have been so !aused, and shall be
brought by and in the name of the e?e!utor, administrator, or reresentative of the
erson de!eased@ and in every su!h a!tion the Court may give su!h damages as it
may thin# roortioned to the loss resulting from su!h death to the arties
rese!tively, for "hom and for "hose benefit su!h a!tion shall be brought@ and the
amount so re!overed, after dedu!ting all !osts and e?enses, in!luding the !osts not
re!overed from the defendant, shall be divided amongst the before5mentioned
arties, or any of them, in su!h shares as the Court by its /udgment or de!ree shall
dire!t.
11/1/13
4or'men9s 3reach of ,ontract Act, 18:9
At the last session of the Indian Legislative Assembly, a resolution, tabled by Mr.
Joshi, hels to illustrate the !ondition of servitude in "hi!h Indian "or#ers still are,
desite the attemt at organisation begun by the $rades %nion Congress.
This resolution containe the eman for the repeal of the 4or'men9s 3reach
of ,ontract Act, and the removal from the Indian )enal Code of se!tions *+, and
*+-, "hi!h ermit imrisonment for !ertain brea!hes of !ontra!t.
%nder the (rea!h of Contra!t A!t a "or#er "ho fails to fulfil his !ontra!t of servi!e,
having re!eived an advan!e of money from his emloyer, is liable to be !alled on to
reay the advan!e or fulfil his !ontra!t, failing "hi!h he !an be imrisoned.
$his la" "as assed shortly after the Indian Mutiny, and embodies in fa!t the !hief
feature of indentured labour. $he Assembly, after mu!h debate, agreed that there
"as a strong !ase for the reeal of these la"s, and !onsented to introdu!e
legislation to that effe!t if, after !onsulting the Lo!al .overnments, the ma/ority
favoured reeal.
11/1/13

Employers an 4or'men9s 2isputes Act 18;<

0tate intervention in labour matter !an be tra!ed

ba!# to the ena!tment of the 1mloyers and
&or#men's 2isutes A!t 134, "hi!h rovided for
the seedy disosal of the disute relating to the
"ages of "or#men engaged in rail"ays, !anals
and other ubli! "or#s, by Magistrates.

After &orld &ar51 ho"ever, 0tate intervention in

2isute 6esolution be!ame more systemati! and
effe!tive.
11/1/13
England
8
Factory Acts were introduced to protect working people from
employers who permitted dangerous practices in workplaces.
8
The first Acts of 1809 and 1823 failed to include effectie
enforcement clauses.
8
!n 1833 "ord Ashley #later earl of $haftes%ury& introduced the first
effectie law' esta%lishing an inspectorate with powers to enter
premises and re(uire compliance with restrictions on the
employment of women and children.
8
A coherent law relating to safety at work was not achieed until
19)9 when the *ealth and $afety +,ecutie was set up.

$he fa!tory reform movement surred the

assage of la"s to limit the hours that !ould
be "or#ed in fa!tories and mills.

$he first aim of the movement "as for a Aten

hours billA to limit to ten hours the "or#ing day
of !hildren.

6i!hard Bastler "as one of the movementCs

most rominent leaders.

$he Da!tories A!t 13,- :sometimes also !alled the AEealth and
Morals of Arenti!es A!tA; "as an A!t of the )arliament of the
%nited Fingdom "hi!h regulated fa!tory !onditions, ese!ially
in regard to !hild "or#ers in !otton and "oollen mills.

It "as the !ulmination of a movement originating in the 13th

!entury, "here reformers had tried to ush several a!ts through
)arliament to imrove the health of the "or#ers and
arenti!es.
$he a!t had the follo"ing rovisionsG

Da!tory o"ners must obey the la".

+
All fa!tory rooms must be "ell ventilated and lime5
"ashed t"i!e a year.
+
Children must be sulied "ith t"o !omlete outfits
of !lothing.
+
Children bet"een the ages of + and 13 !an "or#
ma?imum 3 hours.
+
Adoles!ents bet"een 1* and 13 years old !an "or#
ma?imum 1- hours.
+
Children under + years old are not allo"ed to "or#
but they must be enrolled in the elementary s!hools
that fa!tory o"ners are reHuired to establish.
+
$he "or# hours of !hildren must begin after 4 a.m.,
end before + .m., and not e?!eed 1- hours a day.

Children must be instru!ted in reading, "riting and arithmeti! for the first
four years of "or#.

Male and female !hildren must be housed in different sleeing Huarters.

Children may not slee more than t"o er bed.

Da!tory o"ners are also reHuired to tend to any infe!tious diseases.

Dines of bet"een I- and IJ !ould be imosed on fa!tory o"ners, but the

Act establishe no inspection re%ime to enfor!e !onditions.

$he a!t failed to rovide a !lear la" of the hours one is ermitted to "or#
and failed to in!lude suervision to ma#e sure the la" "as being follo"ed.
India has not done enough in so!ial se!urity sa!eG
ILB reortG -,1,

.1K1LAG India has erformed oorly in roviding so!ial

se!urity rote!tion to its eole until re!ently "ith Avery high
vulnerabilityA to overty and informal labour ra!ti!es in the
"orld, a!!ording to a reort released by the International
Labour Bffi!e :ILB; today, 14.11.-,1,, $imes of India.

In its first !omrehensive C&orld 0o!ial 0e!urity 6eortC, the

ILB has suggested that India has not done enough in the
arena of so!ial se!urity rote!tion, "hi!h is re!#oned as the
Ahuman fa!e of globalisation, in line "ith its fis!al statusA.
IK2IA

.E/SI"/S= A,T, 18>1

*A,T"+IES A,T, 1881

.+"?I2E/T *)/2S A,T, 192:

.A1-E/T "* 4A5ES A,T, 19@;

I/S)+A/,E A,T, 19@8

E-.!"1-E/T "* ,0I!2+E/ A,T, 19@8

La" relating to the business of insuran!e.
3=<:*; AauditorA means a erson Hualified
under the Chartered A!!ountants A!t, 1+*+
:33 of 1+*+;, to a!t as an auditor of
!omanies@>
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%&17 3 or!men8s )ompensation
$ct,%&17 comes into existence.
%&19 3 I*+ )onvention for #ic!ness
Insurance.
%&1( 3 :overnment of India
refuses to ratify the I*+
convention of %&19.
;easons given by the :overnment
in %&1(.
%. <igratory nature of Indian labour-
1. Preference to Indigenous system
of medicines-
7. ant of .ualified doctors-
'. ;esistance of wor!ers to any
compulsory deduction-
6. *ac! of financial resources with
the :overnment.
11/1/13
Centre, then, as#ed for the !omments of the
0tates.

.un8abG 6e!ommended 0i!#ness Insuran!e, but no

administrative ma!hinery "as re!ommended.

4est 3en%alG 2id not say anything, as the 6oyal

Commission of Labour "as to visit India soon.

,hennaiG 0uggested )D for all !ontingen!ies.

All the States "ere against the .overnments'

finan!ing of the 0!heme.

$he 6oyal Commission of Labour has also re!orded

these details e?tensively in )age -44 of its reort
:Chater MIL;.
H
11/1/13
;oyal )ommission of *abour
1$*$!31
=The .uestion of ma!ing provision
for wor!ers during sic!ness, even
if it had not been previously
raised by :overnment, would have
been forced on us by what we
found in every industrial centre.>
*J
#oyal Commission of $a%our
19-9(31
!f the great need of the workers for something of this kind,
there can be no doubt. "y common consent the incidence of
sickness is substantially higher than in #estern countries; the
medical facilities are much less adequate and the wages
generally paid make it impossible for most workers to get
through more than a very short period of illness without
borrowing. $ndeed, sickness is an important contributory cause of
indebtedness, with all that debt entails under existing conditions;
for often, at his time of greatest need, the worker may find
himself destitute of resources, unable to take proper measures to
restore his health and in difficulties regarding even the means of
subsistence. %he situation calls for the exploration of all methods
that may lead to the alleviation of the existing hardships.&
11/1/13

=+f the great need of the wor!ers for something of this

!ind, there can be no doubt.

4y common consent the incidence of sic!ness is

substantially higher than in estern countries-

the medical facilities are much less ade.uate and the wages
generally paid ma!e it impossible for most wor!ers to get
through more than a very short period of illness without
borrowing.

Indeed, sic!ness is an important contributory cause of

indebtedness, with all that debt entails under existing
conditions-

for often, at his time of greatest need, the wor!er may find
himself destitute of resources, unable to ta!e proper
measures to restore his health and in difficulties regarding
even the means of subsistence.

The situation calls for the exploration of all methods that

may lead to the alleviation of the existing hardships.>
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#oyal Commission of $a%our

Its recommendations were considered %y the &o'ernment

of India

In consultation with

(he Standin) *d'isory Committee of the $a%our and

Industries +epartment

*nd

(he &o'ernment *ctuarial +epartment in $ondon,

It was- then- decided to

+rop the matter for the time-%ein),

11/1/13
3ut,

!abour movements presse for the

insurance schemeA

The Te&tile !abour EnBuiry committee set up

by -umbai 5overnment,

The Canpur Te&tile !abour EnBuiry

committee set up by the ). 5overnment an

The 3ihar !abour EnBuiry ,ommittee

+ecommene introuction of a contributory

sic'ness insurance scheme#
11/1/13

%.0. 0o!ial 0e!urity A!t, 1+3J

Ke" Nealand 0o!ial 0e!urity A!t, 1+33

11/1/13
1939(19)5 ( The *econd World War+
19)5( ,erman is apportioned
amon- fo$r po.ers+ The ,erman
econom -ets red$ced to ashes+
11/1/13

1$81 0 The Iindu headline reads#

:?erman 6; attains full value=-

The economic miracle of 1est

?ermany has been attributed to the
splendid social security system of
that country-

1$%1! Second 1orld 1ar was on-

1inston Churchill entrusts the wor of

formulating a comprehensive labour welfare
legislation for the post war .ritain-
11/1/13
8
"rnest 4evin, <inister of *abour, as!ed 4everidge
to loo! into existing schemes of social security,
which had grown up hapha0ardly, and ma!e
recommendations.
8 The ;eport to the Parliament on #ocial Insurance
and $llied #ervices was published in %&'1.
8 It proposed that all people of wor!ing age should
pay a wee!ly national insurance contribution.
8 In return, benefits would be paid to people who
were sic!, unemployed, retired or widowed.
8 4everidge argued that this system would provide a
minimum standard of living ?below which no one
should be allowed to fall?.
11/1/13
5ive @:iant "vils@

4everidge said that the government

should find ways of fighting the five
A:iant "vils8 of
1
ant,
1
Bisease,
1
Ignorance,
1
#.ualor and
1
Idleness.
hich one of the five is easier to
tac!leC
11/1/13

(he most remar"a%le asset of the #eport was the

con'incin) manner of .e'erid)e/s ar)ument which made it
so widely accepta%le!

.e'erid)e appealed to conser'ati'es and other dou%ters %y

ar)uin) that the welfare institutions he proposed would
increase the competiti'eness of .ritish industry in the post-
war period- not only %y shiftin) la%our costs li"e healthcare
and pensions out of corporate led)ers and onto the pu%lic
account- %ut also %y producin) healthier- wealthier and thus
more moti'ated and producti'e wor"ers who would also
ser'e as a )reat source of demand for .ritish )oods,

$he reort of 0ir &illiam (everidge !ame

to be des!ribed as a monumental
do!ument on so!ial se!urity.
11/1/13

5rom its inception, the I*+ has

recogni0ed social ,ustice as a
prere.uisite to world peace.

$fter the #econd orld ar, its aims

and purposes were reasserted and
strengthened in The Beclaration of
Philadelphia, adopted on <ay %&,
%&'&, which states:
11/1/13
<oney Today
19.%%.122(
=<y boss was candid enough to say that
one can stay only as long as one is
useful,> says Belhi-based $. :aurav.
=Product life-cycles are short. )onstant
innovation and product repositioning are
the norm. It8s essential to !eep moving
,ust to survive,> says Bony Duria!ose,
director, "dge "xecutive #earch.
The product Duria!ose is tal!ing about is
youEthe employee.
4eclaration o! 2hiladelphia
%. *abour is not a commodity-
1. 5reedom of expression and association are
essential to sustained progress-
7. Poverty anywhere constitutes a danger to
prosperity anywhere- FandG
'. $ll human beings, irrespective of race, creed
or sex, have the right to pursue both their
material well-being and their spiritual
development in conditions of freedom and
dignity, of economic security and e.ual
opportunity.
11/1/13

A ,anaian stuy su%%ests that the

$ealthiest nations o not have the
healthiest peopleA instea, it is countries
$ith the smallest economic %ap bet$een
the rich an poor# D-ar' 3ourrie Inter
.ress Service (2@#>#1999E#
11/1/13
The $ealthiest nations o not have the
healthiest peopleA
instea, it is countries $ith
the smallest economic %ap bet$een the
rich an poor#
D-ar' 3ourrie Inter .ress Service (2@#>#1999E#
11/1/13

hile addressing businessmen,

in the year %&'6, after the
#econd orld ar, HD <inister
"rnest 4evin stressed on the
need for providing basic
economic security to create
fairer conditions of living for the
wor!ing population also.
11/1/13

=If profit can be the only

motive, the natural corollary
is economic disorder, and
economic disorder will bring
you bac! to the same
position you are in now, ever
recurring, and future
generations will again pay,
in the same form or another,
the bitter price we are
paying nowI> he said.
11/1/13

Indian .overnment as#s )rof. (.). Adhar#ar

to reare su!h a reort for India.

Ee submits his reort )lanning on 0o!ial

0e!urity in India7
on
1:#8#1944#
Hniversal Beclaration of
/uman ;ights
"veryone, as a member of
society, has the right to social
security

!"rticle **
11/1/13
11/1/13
Consequently, the ESI Act, 1948 is
born as part of the first packae of
labour !elfare measures
imme"iately after In"ian
in"epen"ence#
Dundamental )rin!iles
1+ The proposed scheme m$st not /e too
am/itio$s in the /e-innin-0
1+ 2t m$st /e simple, clear and
strai-htfor.ard,
3+ 2t m$st /e financiall so$nd, economical in
.orkin- and act$ariall /alanced0
)+ 2t m$st minimi3e disp$tes and liti-ation0
5+ 2t m$st /e .orka/le in the pec$liar
circ$mstances of 2ndian la/o$r and
ind$str0
11/1/13
Courtesy: Times of India
11/1/13
Dundamental )rin!iles :Contd.;
&+ 2t m$st /e in conformit .ith
international la/o$r con4entions0
5+ 2t m$st not /e saddled .ith financial
responsi/ilities .hich /elon- to
other meas$res of social sec$rit
and finall
8+ 2t m$st /e s$fficientl fle6i/le+
11/1/13
Kot to be saddled
4
For the s$ccess of the E*2 *cheme, 7rof+
Adarkar .anted certain e6tra meas$res to
/e taken+ 8is stand .as that the E*2
*cheme sho$ld not /e 9sa""le" !ith
bur"ens leitimately belonin to
other branches of social insurance:+
Therefore, .hile form$latin- the E*2
*cheme, he made fo$r ass$mptions for
its s$ccess+
11/1/13
Dour Assumtions
4
EaF "doption of a scheme for Cnemployment
Insurance and creation of new employments in
the post war period#
4
EbF Establishment of a scheme of )ld "ge
Pension#
4
EcF "doption of certain pre!medical measures
lie education in health and improvement in
environment hygiene besides regulation of
wages and rigorous enforcement of factory laws
and# finally#
4
EdF Bational Iealth 6rive-
11/1/13
"rt- %1 of the Constitution
The State shall# within the limits of
its economic capacity and
development# mae effective provision
for securing public assistance in case
of unemployment# old!age# sicness#
disablement and other cases of
undeserved wants-
11/1/13

1hat is "rt- %*'

1hy is it there in the 6irective

Principles'
11/1/13
11/1/13
The social security system of a
country is
the symbol of civilisation.
The e/tent of its success depends
upon the degree of maturity of the
society as a whole-
8
=The political costs of ine.uality
are recogni0ed and accepted as
being too high. The economic
costs of fighting the effects are
also high. )iting some research,
the 44) also noted that for each
dollar spent on poverty causes,
seven dollars were saved on
conse.uences.>
11/1/13

addresses and
provides solution
precisely to
this problem
11/1/13
ESI "ct# 1$%&

#tatement of +b,ects and ;easons

4ill No. 6' of %&'J
or!men8s #tate Insurance 4ill
=1- The introduction of a scheme of /ealth
Insurance for Industrial or!ers has been
under the consideration of the :overnment of
India for a long time. The necessity for such a
scheme has become more urgent in view of
the conditions brought about by war->
8&
The ESI Corporation runs an
important scheme which is the
bedroc! of society as a whole - The
scheme provides the basic structure
for the nation8s economy.
11/1/13

The orld 4an!@s report in %&&'

had identified the existence of
the lin! between the sound
social security system of a
country and its ability to
compete effectively in the world
mar!et.
11/1/13
5ragile Bemocracies, Ine.uality
=turn good people to evil>
8 In <ay 1221, the 44) aired a documentary related to
ine.uality, called =The "xperiment>, where they showed in
detail how ine.uality can =turn good people to evil>.
8 Ine.uality is also characteri0ed by a concentration of
wealth, which means concentration of political power.
8 /istorically, one of the main reasons for continued poverty
has been the desire to maintain this power.
8 The "#I )orporation, precisely, provides solution in that
context.

:Everyone has the right to wor# to ,ust

and favourable conditions of wor and
to protection for himself and his family
JandK an e/istence worthy of human
dignity L Everyone has the right to a
standard of living ade3uate for the
health and well being of himself and his
family# including food# clothing# housing
and medical care-=

-ho said thisC

11/1/13
And, in the year -,1-
11/1/13
0"eatshos
$he !hemi!als used in the ro!essing of 55555555rodu!ts in the
s"eatshos in a foreign !ountry, are at 1OO times the legal limit. OO
er!ent of "or#ers in these shos are sub/e!t to resiratory, liver,
#idney roblems.
11/1/13
;The 8$man <ace
has impro4ed
e4erthin-
e6cept the h$man
race+;
( Adlai *te4enson
11/1/13
E/perience 0 Iow to use it'

e must use our experience and

not get tied down by
experience.

-4everidge
11/1/13
Providing
social security
is
the responsibility of the
state
11/1/13
ESI Corporation

The scheme is administered by a duly

constituted corporate body called the
"mployees8 #tate Insurance )orporation K"#I)L.

It comprises members representing )entral and

#tate :overnments, "mployers, "mployees,
Parliament and the medical profession.

Hnion <inister of *abour functions as )hairman

of the )orporation whereas the Birector :eneral,
as chief executive, discharges the duty of
running the day-to-day administration.
11/1/13
ESI Corporation
)onstitution
J.%2.%&'(
Standing Committee
$ #tanding )ommittee representing
all staeholders is elected from the
body corporate for managing the
affairs of the scheme and monitoring
the progress of implementation of
various decisions and policies from
time to time-
11/1/13
<edical 4enefit )ouncil
" statutory body advises the
Corporation on matters related to
administration of medical benefit
under the ESI scheme-
11/1/13
8
)an the )hairman be authorised
to exercise the powers of the "#I
)orporation by the "#I
)orporationC
ESI "ct is applicable to

Non-seasonal factories, using power in

the manufacturing process, employing %2
or more persons in receipt of monthly
wages not exceeding ;s.%6,222N-
Kexcluding overtime allowanceL

/otelsN;estaurants., #hops, )inema

housess, Newspaper establishments,
;oad <otor Transport establishments
employing 12 or more persons for wages
not exceeding ;s.%6,222N- per month in
Tamil Nadu
11/1/13 $3
#ec.%K6L casts the security net wider than #ec. % K'L.
+*
#ec. %K6L
O
E/tension of all or any of the provisions of
the "ct-
O
To any establishment#
O
To any class of establishments#
O
Such establishments may be
+
industrial#
+
commercial#
+
agricultural or
+
otherwise-
+J
Sec- 1 EAF

he types of establishments notified as coverable by

/tate 0%vernments1

Hotels,

2estaurants,

!inema houses including preview theatres,

2oad transport establishments 32unning staff can be

exempted under /ec.445

6ews paper establishments as defined in the

783!/9M*5 (ct,:;''

/hops.

<actories employing &% or more persons without the

aid of power in the manufacturing process 3upto :;4;5
+4
Coverage of MEmployeesD

$ll persons employed for wages in

connection with the wor! of a
factory or an establishment to
which the $ct applies

$ll employees under #ec. 7(

implies coverage of all, whether
they are regular or casual or
temporary wor!er or time rated or
piece rated wor!er, part-time
wor!ers, trainees, etc.,
11/1/13 $8
)ategories of
"mployees

Birectly employed by the Principal "mployer

either in factory Nestablishment or elsewhere

"mployed by N through immediate employer

KcontractorL in the premises or outside the
premises under the supervision of Principal
"mployer

Those, whose services are temporarily lent

or let on hire to the Principal "mployer

$ll employees within the wage limit are

coverable.
11/1/13 $&

"mployed in connection with the

administration, purchase of raw
materials, distribution or sale of
the product of the factory N
establishment.

Part time employees on contract

of service

+utsourced process 3 "lement of

supervision is essential.

)ontract of #ervice Os. )ontract

for service.
$$ 11/1/13
11/1/13
)ontribution
Period
4enefit Period
5rom 1-%-*+1* to 3+-$-*+1* 5rom 1-1-*+13 to 3+-@-*+13
5rom 1-1+-*+1* to 31-3-*+13 5rom 1-8-*+13 to 31-1*-*+13
)ontribution PayableN
EmployerDs share of contribution O %-8AP of employeeDs
wages Employee to pay O 1-8AP of employeeDs wages Q
Eligibility for Sicness .enefit N on the contribution being
payable / paid for 8& days in the corresponding contribution
period-
5irst Contribution Period and 5irst .enefit Period

The "#I) charges interest , if the employers

do not pay the contributions in time.

The "#I) imposes damages, if the employers

do not pay the contributions in time.

The "#I) recovers the arrears through

coercive measures, if the employers do not
pay the contributions, interest and damages.

The "#I) prosecutes too, in such cases.

11/1/13
4enefits under
the "#I $ct,
%&'(
11/1/13
;edical .enefit
It is admissible from the first day
of insurable employment.
To the Insured Person and his
family members.
#uper speciality treatments as per
the administrative instructions.
11/1/13
Sicness .enefit

ages ;s. 6222 p.m.

#tandard 4enefit ;ate

6ivide the total wages paid during the

contribution period by the number of
days for which these wages were paid

72222N %(7P%J7.&7

#ic!ness 4enefit P ;s. %J7.&7x92Q

+ne month sic!ness 4enefit payable

is P ;s. %%6x72P7'62
11/1/13
1hat is sicness'

#uffering from disease

;e.uiring medical
treatment

;e.uiring abstention of
medical grounds
11/1/13
Eduardo 6oryan
?The debt crisis of the %&(2@s in *atin $merica, and then the recent
"ast $sia )risis, have shown ,ust how .uic!ly people@s lives are
turned upside down by steep recession, and how the poor suffer
the most during these times,? says "duardo Boryan, the orld
4an!@s Oice President for /uman Bevelopment, and a former )osta
;ican "ducation <inister, %&&'-&(.
?#o social safety nets are vital to catch people who lose their ,obs,
become hungry or sic!.
4ut a system that solely concentrates on helping poor people deal
with a crisis once it happens runs the ris! of !eeping them in a
poverty trap by not providing any opportunities.
e need to embrace a more holistic approach that ma!es social
protection more li!e a springboard that lets people ,ump into more
secure lives.?
11/1/13
E/tended Sicness .enefit

7' diseases

ages ;s. 6222 p.m.

#.4P %%6.22x&%P%2'J6.22

72& days x ;s. %71 per day K%J7.&7 x (2QL

772 days x ;s. %71 per day

Total 972 days

"ligibility: +n payment of contribution for %(7

days in preceding four contribution periods and
is eligible for #4 in one period at least.
11/1/13
:nhanced sickness ;ene!it
to promote family welfare,
0 days for men
14 days for women
.enefit paid is e1ui'alent to the
wa)es
11/1/13
Temporary 6isablement
.enefit
8
ages ;s. 6222 p.m.
8
$ny number of days x ;s.%'( per
day
8
If disabled for 72 days
%'(x72P'''2.
11/1/13
Permanent Bisablement
4enefit
ages ;s. 6222 p.m.
If disabled permanently
<onthly payment as per the
percentage of loss of earning
capacity.
If it is 62Q, then the monthly
payment is 62Q of ;s. '''2.
11/1/13
Bependants 4enefit
ages ;s. 6222 p.m.
If the employment in,ury is a fatal one,
<onthly payment to his family
members ;s. '''2 is apportioned
among wife and children.
11/1/13
;aternity .enefit
11/1/13
1aternit) ;ene!it

Wa)es #s, 5222 p,m,

Standard .enefit #ate #s, 134,54

6aternity .enefit 7 S.#

Cash .enefit for 84 days initially,

Can %e e8tended for another 42 days in case

of sic"ness due to pre)nancy or confinement,

9ne month 6. 7 134842 7 45:2

11/1/13
;aternity .enefit

<aternity 4enefit is available for

miscarriage also.

)ash benefit for '1 days which can be

extended to 72 more days in case of
sic!ness due to pregnancy or
miscarriage.
11/1/13
+T/"; 4"N"5IT#

;uneral E8penses

9ld *)e 6edical Care

<ocational #eha%ilitation

hysical #eha%ilitation
11/1/13
Hnemployment allowance
Hni.ue scheme for extending =cash-assistance> to the
employees covered under the "#I $ct KInsured PersonsL while
they become unemployed in certain contingencies has been
introduced by the "#I )orporation with effect from %-'-1226.
$ccording to this #cheme, cash payment will be given to the
affected insured persons to the maximum of one year or till re-
employed whichever is earlier.
This benefit is called as =;$RIO :$NB/I #/;$<ID D$*S$N
S+R$N$>.
#ee $dministrative instructions for more.
11/1/13
ESIC 0 The benefactor par!e/cellence

:The pac!age Eof benefits provided

by the ESICF can rarely be matched
by private employers on their own
because of the heavy costs involved 0
not to mention the disinclination
among employers# with honorable
e/ceptions# to operate health care
systems for their worforce=
0 The Iindu E1-1-*++AF-
11/1/13 118
Sec- 1 EAF

Sec- 1 EAF specifies that the scheme can

be e/tended to all- The phrase any
other establishment or class of
establishments, industrial, commercial,
agricultural or otherwise& shows that the
intention of the government is to e/tend
the benefits to everybody gradually in
the order in which it has been provided
there-
11/1/13
Some milestones in the
history of the ESI Corporation
11/1/13
1$%&

The ESI "ct# 1$%& was passed by

6ominion 7egislature on 1$th "pril
1$%&-
11/1/13
1$A1

The employers who were brought under coverage of the "ct complained that
there was rise in the cost of production and their competitive capacity with
the industries located in neighbouring centres decreased-

The government # therefore# introduced the concept of EmployersD Special

Contribution which necessitated the employers throughout the nation to pay
a nominal contribution# ot e/ceeding AP of the total wage bill of the
employer# to the ESI Corporation# with the intention to spread the incidence
of cost of the scheme e3uitably- That was the primary intention of the
amendment of the year 1$A1-

)n the *%th Bovember# 1$AA# Chapter 4" became applicable to the whole of
India e/cept the State of 2ammu and >ashmir- This Chapter provides for
Transitory Provisions- 6uring the transitory period every principal employer
had to pay to the Corporation a special contribution sub,ect to the other
provisions in the Chapter-
11/1/13
1$@@

6ependant parents of insured women were included in the definition of the tem
MfamilyD- 6ependant parents of insured persons had already been included-

Provision for the taing over by the ESI Corporation of the administration of the
medical benefit from State ?overnment was made-

Sec- *!" to mae it obligatory for the Principal Employer to have his factory or
establishment registered under the "ct# was inserted- (eg- 1+!. came later in
the year 1$@&-

Sec- %A!" and Sec- %A!. were introduced-

"lternative Evidence of sicness concept was introduced-

;aternity .enefit provisions for miscarriage was introduced-

;aternity .enefit provisions were also e/tended to sicness arising out of

pregnancy# confinement# premature birth of child# miscarriage-
11/1/13
1$8+

The words :e/cept the State of

2ammu and >ashmir= were omitted
from Sec- 1E*F-
11/1/13
1$8A

1age limit increased to (s- 1+++-

Provision for compulsory imprisonment under

Sec- &A was introduced-

Sec- &A!"# &A!. and &A!C were added-

Sec- %+A IPC was amplified to cover non!payment

of contribution recovered by the employers from
their employees-

Sec- $3!" was added to saddle the liability on the

transferee also-
11/1/13
1$&%

1age limit was increased to (s- 1@++-

EmployerDs share of contribution was

delined from the employeeDs share to
reduce clerical wor of the employers-

:1ee= was changed and :wage period=

concept was introduced-
11/1/13
1$&$

Children up to the age of *1 years and

infirm children without any age restriction
were included as MfamilyD members-

Bumber of employers and employees

representatives in the Corporation became
ten-

1age ceiling# rate of contributions# period

and conditions of grant of benefits and
wage limit for e/emption were taen to
(ules-
11/1/13

(ecovery machinery was set up

e/clusively for the ESI Corporation duly
vested with the powers available under
the Income Ta/ provisions-

(etired insured persons and the persons

who leave insurable employment due to
employment in,ury on payment of (s- 1*+
was introduced-

Condition to deposit A+P of the claim in

dispute was introduced-
11/1/13
*+1+
"mendments were made e/tensively in
various spheres of activities of the
)rganisation- "s they are of recent events#
the details are not provided here- Suffice it
to say that the definition of the term factory
has undergone a significant change with the
re3uirement of power having been removed
and the phrase :for wages= deleted- The
opening of medical colleges opens a new
chapter in the functioning of the scheme-
11/1/13
Ias to be run only by
?overnments
The ESI Scheme in India which collects only
1-8AP of wages as Employees Contribution is
still viable for almost @ decades without any
assistance from Central ?overnment# only
because it is compulsory and also because
the field of dispersal of benefit load is
larger- This is in sharp contrast to the position
obtaining in smaller countries where the
employees contribution is much more# ranging
from *8 to 83P-
11/1/13
(obert )wen

:1hat ideas individuals may attach to the term

R;illenniumR I now not< but I now that society
may be formed so as to e/ist without crime#
without poverty# with health greatly improved#
with little# if any misery# and with intelligence and
happiness increased a hundredfold< and no
obstacle whatsoever intervenes at this moment
e/cept ignorance to prevent such a state of
society from becoming universal-=

- Robert Owen, 1.1.1816

when he opened the
Institute for the Formation of Character.
11/1/13
Courtesy: Wikipaedia
11/1/13
$dvantages to "mployers

E/emption from
aF ;aternity .enefit "ct
bF 1ormen Compensation "ct
"bsolved of all liabilities of
providing medical facilities to
employees and their dependants
in ind or cash or as fi/ed cash
allowance
13*

Is the role of the State

necessary in the scheme
of things'
133

$ssures proper and

corruption-free
administration to achieve
the purpose of the
#cheme.
13%

=/ealth is one area in

which the public sector
consistently does a better
,ob than the private sector
at controlling costs>
!Paul >rugman
Bobel Pri9e winner
EThe Iindu 0 1%-@-*+11F
13A
Bow
you now
11/1/13
the essential facts
pertaining to
the history of social
security
11/1/13
)ongratsT
- 4y ;. Nadaraasan
11/1/13 138