University School of

Business
Bachelor of Business
Administration

Industrial Relations and

Labor Laws
20BAT-375

Penalties-ESI Act DISCOVER . LEARN .

EMPOWER
 Penalties-ESI
Act

Course Outcome
CO Title Level
Number
CO1 Understanding of the concept of Rememb
industrial relations, functioning of trade er
unions and legal Machinery for handling   Will be covered in this
industrial disputes.
lecture
CO2 Knowledge of protective and social Understa
security laws of India and their nd
application.  
https://www.acko.com/health-insurance/
CO3 Understanding of the role of ILO in Apply employees-state-insurance-scheme/
regulating industrial relations, importance
of collective bargaining and workers’
participation.

2
 Introduction

The ESI Act is vital legislation that seeks to provide benefits to the

employees across India. However, the employers have also benefitted from

this Act as they are safeguarded from praying multiple compensations to

the employees.
 Penalties
1) Section 84 of the ESI Act contains penalties for making false or wrong
statements. In case an insured person gives any false information with an
intention to take benefits which is not admissible to him under the Act,
such persons shall be punished with imprisonment for a term that may
extend to six months or a fine that may extend to two thousand rupees or
both imprisonment and fine.
 Penalties
2) Section 85 deals with penalties under ESI Act with respect to non-
compliance of provisions and regulations mentioned in the Act. If a
person doesn’t pay the contribution which he is liable to pay, then he
shall be punished with imprisonment for a term which may extend for
a period of three years .
 Penalties
3) Section 85A provides enhanced penalties under ESI Act. This
section says that in certain cases, after a previous conviction, if a
person commits the same offence punishable under this Act will be
punished with imprisonment for a term that may extend to two years
and with a fine of Rs. Five thousand for every such subsequent
offence.
 Penalties
4.Section 85B contains the provision of recovering damages by the
corporation from the employer through penalty under this section in
case an employer fails to pay contribution that is payable under this Act
within the prescribed time or pays contribution after the expiry of the
time period provided that the employer shall be given a good
opportunity of being heard before the recovery of such damages.
 Penalties
5) Section 85C provides that in case of conviction of an employer for
an offence of non-payment of contribution under ESI Act, the court,
along with the punishment prescribed, has the right to direct him to pay
the amount of contribution within a time period for which he was
convicted.
 Penalties
6) Section 86 of the Act provides that under this Act no prosecution
shall be instituted without a previous sanction of the Insurance
Commissioner or of any other such officer of the Corporation as may
be authorised primarily on this behalf by the Director-General of the
Corporation.
 Penalties
7) Section 86A provides that in case the person committing an offence
under the ESI Act is a company, every person who at the time of the
commission of the offence was in charge and responsible for the
management and the conduct of the business of the company will be
guilty of the offence and will be liable for punishments and penalties
under ESI Act.
 Penalties
8) Section 75 contains the provisions for adjudication of disputes and
claims. It specifies that if an employer or employee under the Act has
any dispute that can be settled by the Employees Insurance Court after
adjudicating the dispute if made before it, with the condition that 50%
of the security deposit should be made under section 75 (2B) unless it
is reduced/waived for the reasons recorded by the learned court.
 Summary

• The penalties under ESI Act have ensured that the employers and the

managers comply with the provisions of this Act. These penalties

under ESI Act intend to hold the employers accountable for their

work, which may affect their employees.

Assessment Pattern

13
 Applications

• •HREmployer
Budgeting
Rights protection
• Manpower allocation
• Workplace Morale
• Performance management
• Organizational commitment

14
 REFERENCES

• Reference Books- S.C. Srivastava, Industrial Relation & Labour

Laws,Vikas Publishing; Seventh edition

• Reference Journal for advance study-ILR Review ,SAGE Journals

• Reference Website-
• http://ncwapps.nic.in/acts/TheEmployeesStateInsuranceAct1948.pdf
• https://www.esic.nic.in/Tender/ESIAct1948Amendedupto010610.pdf

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THANK YOU

For queries
Email: amrit.usb@cumail.in

Jaspreet.mba@cumail.in