EMPLOYEE STATE INSURANCE ACT

1948
The employees state insurance act 1948

Pioneering measure in social insurance in india.

Health insurance first discussed in 1927 by indian
legislature.
Originally called workmens state insurance bill 1946.
Came into force on 19th april 1948.
 OBJECTIVE

The objective of the act is to secure sickness,

maternity and medical benefits to employees of
factories and establishments and dependents benefits
to the dependents of such employees.
 APPLICABILITY
ACT APPLIES TO FACTORIES USING POWER not
using AND EMPLOYING 20 OR MORE PERSONS.
Gradually extended to the following:
Smaller power-using factories with 10-19 persons
Non-power factories with 20 or more persons
Shops
Hotels and restaurants
Cinemas including preview theaters
Newspaper establishments
Road motor transport undertakings employing 20 or
more persons
State govt may cover other establishments in consultation
with the esi corporation and with approval of the central
govt.
 DEFINITIONS

EMPLOYEE: EMPLOYEE REFERS TO ANY

PERSON EMPLOYED ON WAGES IN CONNECTION
WITH THE WORK OF A FACTORY OR
ESTABLISHMENT TO WHICH THIS ACT APPLIES.
INCLUDES TECHNICAL, MANUAL, CLERICAL
AND SUPERVISORY FUNCTIONS
NO DISTINCTION BETWEEN CASUAL AND
TEMPORARY EMPLOYEES OR TECHNICAL AND
NON-TECHNICAL, OR TIME-RATE OR PIECE-RATE
COVERS ADMIN STAFF AND THOSE IN
PURCHASE
DOES NOT INCLUDE NAVAL, MILITARY OR AIR
FORCE PERSONNEL.
 DEFINITIONS (CONTD.)

WAGES: MEANS ALL REMUNERATION PAID IN

CASH, INCLUDING PAYMENT IN PERIOD OF LEAVE,
LOCKOUT OR STRIKE WHICH IS NOT ILLEGAL.
DOES NOT INCLUDE:
CONTRIBUTION PAID TO THE PROVIDENT FUND
OR PENSION FUND
TRAVELLING ALLOWANCE
SUM PAID TO DEFRAY SPECIAL EXPENSES
GRATUITY PAYABLE ON DISCHARGE
 Registration

Registration of a factory/establishment with the

employees state insurance corporation (esi) is a
statutory responsibility of the employer under
section 2-a and 10-b.
Declaration of registration in form 01 to be
furnished to the appropriate regional office within 15
days of the act becoming applicable.
Employer should get the declaration form filled in by
every employee covered under the scheme.
 BENEFITS

1. Sickness and extended sickness benefit

2. Maternity benefit
3. Disablement benefit
4. Dependants benefit
5. Medical benefit
6. Funeral benefit
 SICKNESS AND EXTENDED SICKNESS BENEFIT
Represents periodical payments made to an insured
person for the period of certified sickness after
completing 9 months in insurable employment.
To qualify, contributions should be for minimum 78
days in the relevant period.
Maximum duration for benefit is 91 days.

Rates of payment vary from rs.14-125 per day, i.E.

Average of 50% of daily wages.

Insured persons suffering from tb, leprosy, mental and
malignant diseases or other specified long term
diseases are entitled to extended benefits at higher
rates, provided he has been continually employed for at
least two years.
 MATERNITY BENEFIT

Implies cash payment to an insured woman in case of

confinement or miscarriage or sickness arising out of
pregnancy or premature birth.
Woman should have contributed for minimum 70 days in
the preceding two consecutive contribution periods.
Daily rate of benefits double the standard sickness
benefit rate, i.E. Full wages.
Normally payable for max 12 weeks for confinement and
6 weeks for miscarriage or medical termination of
pregnancy.
Payable even in the event of the death of the woman.
 DISABLEMENT BENEFIT
In case of temporary disability arising out of
employment injury, this benefit is admissable for
the entire period certified by an insurance medical
officer/practitioner for which the insured person
does not work for wages.
Rate payable not less than 70% of daily wages;
minimum 3 days of incapacity required.
In case injury results in permanent, partial or total

loss of earning capacity, periodical payments to be

made for life. One-time lumpsum is permissible in
certain cases.
 DEPENDANTS BENEFIT

Periodical pension paid to dependants of deceased where

death occurs out of employment injury or disease.
Widows: 3/5th of benefit rate for life or until remarriage
Children: 2/5th of benefit rate until 18
Total amount distributed not to exceed ceiling of
disablement benefit.
Benefit not paid to married daughters.
In case there is no widow or child, benefit can be paid to
other dependants including parents.
Amount paid is reviewed and increases granted from
time to time to compensate for erosion in real value and
cost of living.
 MEDICAL BENEFIT
Insured persons and their families entitled to free, full
and comprehensive medical care.
Extended upto two years for chronic and long-term
diseases.
Treatment continues even if person goes out of
coverage, till sickness ends.
Package covers all aspects of health care from primary
to super-specialist facilities, such as:
1) Out-patient treatment
2) Domiciliary treatment
3) Specialist consultation and diagnostic facilities
 MEDICAL BENEFIT (CONTD.)

1) In-patient treatment
2) Free supply of drugs and dressing
3) X-ray and laboratory investigations
4) Vaccination and preventive innoculations
5) Ante-natal, confinement, post-natal care
6) Ambulance service or conveyance charges
7) Free diet during admission in hospitals
8) Free supply of artificial limbs, aids and appliances for
physical rehabilitation
9) Family welfare services and other national health
programme services
10) Medical certification
11) Special provisions including super-speciality treatment.
 FUNERAL BENEFIT
Funeral expenses are in the nature of a lump sum
payment upto a maximum of rs.2500 made to defray
the expenditure of the funeral of deceased insured
person.
The amount is paid either to the eldest surviving

member of the family or, in his absence, to the person

who actually incurs the expenditure on the funeral.

ALL BENEFITS UNDER THE ESI SCHEME

ARE PAID IN CASH EXCEPT MEDICAL
BENEFIT, WHICH IS GIVEN IN KIND.
 PROTECTION

An employer cannot dismiss or punish an employee

under treatment for sickness of in receipt of any benefit
or absent from work due to illness. Any notice of
dismissal, discharge or reduction is invalid. However, the
employer can discharge or punish the employee if:
He has received temporary disablement benefit and
remained absent for 6 months or more
Is under treatment for sickness other than tb or arising
out of pregnancy and remained absent for 6 months or
more
Is under medical treatment for tb or a malignant disease
and has remained absent continuously for 18 months or
more.
 MISCELLANEOUS

Cash benefits payable under the esi act are not

liable to attachment or sale in execution of any
court decree or order.

Right to receive benefit is not transferable.

Disputes under the provisions of the act to be

decided by the employees insurance court (eic)
and not by a civil court. Appeals to the high court
only by an order of the eic on a question of law.

Period of limitation for appeal is 60 days.

CASE ON MANIBEN GOVINDBHAI AND ANR. VS EMPLOYEES' STATE INSURANCE ... ON 17
APRIL, 2000
Shah, the learned Advocate appearing for the respondent-
Corporation. On the facts and in the circumstances of the case, the
matter is taken up for final hearing today itself. The facts of the
present petition, in short, are that the petitioner No. 1-Maniben is
the widow of deceased-Govindbhai Kanabhai Makwana who was an
insured person under the Employees' State Insurance Act, 1948.
Petitioner No. 2 is the son of deceased-Govindbhai Kanabhai
Makwana. The petitioners filed ESI Application No. 7 of 1985 before
the Employees' Insurance Court at Ahmedabad and claimed for
dependent benefits for herself and also for her then minor son which
application was allowed by the ESI Court vide its judgment and
order dated 7-1-1992. The petitioners were, thereafter, intimated by
the respondent by its letter dated 12/16th March, 1992 that they
have accepted the verdict of the ESI Court given in the said ESI
Application No. 7 of 1985 and in the same letter, the petitioner No. 1
was asked to submit Form No. 18 duly filled in and supported with
original death certificate.