ESI ACT 1948

ESI ACT 1948

 An Act to provide for certain benefits to employees in
case of sickness, maternity and ‘employment injury ’.
 It extends to the whole of India.
 It shall apply, in the first instance, to all factories
including factories belonging to the Government other
than seasonal factories.
Definitions
“ Appropriate Government ” means, in respect of
establishments under the control of the Central
Government or a railway administration or a major
port or a mine or oil-field, the Central Government,
and in all other cases, the State Government ;

“ Immediate Employer ”
Means a person who has undertaken the execution
on the premises of a factory or an establishment to
which this Act applies or under the supervision of
the principal employer or his agent,
“ Principal Employer ”
Means —
(i) In a factory, the owner or occupier of the factory and
includes the managing agent of such owner or occupier,
the legal representative of a deceased owner or occupier,
and where a person has been named as the manager of
the factory under 3 the Factories Act, 1948, the person so
named ;
(ii) In any establishment under the control of any
department of any Government in India, the authority
appointed by such Government in this behalf or where
no authority is so appointed, the head of the department
(iii) In any other establishment, any person responsible for
the supervision and control of the establishment ;
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.
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
Principal employer to pay
contributions in the first instance
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.
Recovery of contributions from
immediate employer.
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
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.
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.
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
 Every insured employee is entitled to the cash benefit for the
period of sickness certified by a duly appointed medical
practitioner if the contributions in respect of him were payable
for not less than 78 days in the corresponding contribution
period.
 Cash benefit takes the form of periodical payment made to an
insured person which is payable for maximum numbers of 91
days in any two consecutive benefit periods. The benefit is not
paid for the first two days of sickness which is treated as the
waiting period.
 Insured persons suffering from long term diseases like T.B.,
leprosy, mental, heart etc. and who have been continuous
employment for two years are entitled to get sickness benefit
period up to 309 days.
MATERNITY BENEFIT
 A periodical cash benefit is payable to an insured
woman employee, in cash of confinement,
miscarriage, medical termination of pregnancy,
premature birth of a child or sickness arising from
pregnancy etc.
 If the contributions in respect of her were payable for
at least 70days in the two immediately preceding
contribution periods
 The benefit is payable of twice the standard benefit
rate or Rs.20, whichever is higher for all days on which
she does not work during the prescribed period.
DISABLEMENT BENEFIT
 It is payable to an employee who is injured in the course of
his employment and is permanently or temporarily
disabled or contacts any occupational disease.
 A person who sustains temporary disablement for not less
than 3days(excluding the day of accident) shall be entitled
to periodical payment as may be prescribed by the central
govt.
 The benefit of temporary disablement is, however, not
payable for any day on which the employee works, remains
on lease, holiday or strike in respect of which he receives
wages.
DEPENDANTS’ BENEFIT
 If any employee dies during any period for which he is
entitled to a cash benefit, the amount of such benefit
shall be payable up to & including the day of his death.
 The amount of benefit shall be paid to the nominee or,
where there is no nomination, to the heir or legal
representative of the deceased employee.
MEDICAL BENEFIT
 An insured person or a member of his family whose
condition requires medical treatment and attendance
entitled to receive medical benefit.
 Rs.250 on account of confinement expenses shall be paid to
an insured person or his wife if confinement occurs at a
place where necessary medical facilities under E.S.i.C.
schemes are not available.
 Employer not to dismiss or punish employee during period
of sickness- section73.

 Package covers all aspects of health care from primary to

super-specialist facilities, such as:
1) Specialist consultation and diagnostic facilities
1. Free supply of drugs and dressing
2. X-ray and laboratory investigations
3. Vaccination and preventive innoculations
4. Ante-natal, confinement, post-natal care or
conveyance charges
5. Free diet during admission in hospitals
6. Free supply of artificial limbs, aids and appliances for
physical rehabilitation
7. Family welfare services and other national health
programme services
8. Medical certification
9. 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.