The Employees State Insurance Act, 1948 | Labour and Industrial Law - CLAT PG PDF Download

Introduction

The Employees' State Insurance Act consists of various sections that offer medical benefits and insurance to employees working in factories registered under the ESI Corporation. This marks the beginning of a formal social security program in India, which is an exciting development from both an employee's and a legal perspective.

Application and Scope of the Act

The Employees' State Insurance Act, 1948 (ESI), provides financial support and assistance to the working class during times of medical distress, including:

• Sickness
• Maternity Leave
• Disorders (mental or physical)
• Disability
• Death

This self-financed initiative serves as a form of social security scheme, aiming to prevent the working class from facing financial difficulties arising from these medical issues.

Constitutionality of the Act

• The ESI Act is considered a constitutional instrument as it provides insurance and medical insurance. While the ESI Corporation primarily implements the Act, the Central Government oversees most of the proceedings. 
• This central control contributes to the constitutionality of the Act, as insurance, whether public or private, is listed in the Seventh Schedule of the Indian Constitution as a Union List subject, meaning it can only be legislated by the Central Government.

Definitions

The Employees State Insurance Act includes several key definitions that clarify the meanings of important provisions.

Appropriate Government Section 1

• The definition of "appropriate government" effectively divides powers between the Central and State governments.
• The Central government is deemed appropriate for establishments under its control, such as railway administration, major ports, mines, and oil fields.
• In all other cases, the relevant State government is considered the appropriate government.

Confinement Section 3

• "Confinement" under this Act refers to pregnancy resulting in the birth of a living child. It can also encompass the birth of a child (living or deceased) after 26 weeks of pregnancy.

Contribution Section 4

• Principal employers are required to contribute a sum of money to the Employees State Insurance Corporation as per relevant provisions.
• This money is ultimately payable to employees by the ESI Corporation for their benefits.
• Every employer to whom the Act applies must make this contribution.

Corporation Section 6

• This definition outlines the Employees State Corporation established by the Act.
• The corporation is endowed with various significant powers and responsibilities.

Dependant Section 6A

• When a worker covered under the Act dies during employment, the ESI Corporation provides financial assistance to his dependants.
• To determine who receives this money, it is essential to identify the "dependants" as defined by the Act.
• Dependants include certain relatives of the deceased worker, such as his widow, a son under 25 years of age, an unmarried daughter, and his widowed mother.
• A son or daughter over 25 years old can also be considered a dependant if they are wholly reliant on the worker.
• In specific cases, dependants may also include a minor illegitimate child, minor sibling, or a parent other than the widowed mother.

Employment Injury Section 8

• Financial support under this Act is available for specific injuries that occur during employment.
• These injuries, referred to as "employment injuries," must result from an accident or occupational disease arising in the course of employment.
• It does not matter whether the worker contracts these occupational diseases within India or outside.

Employee Section 9

• This definition is crucial because only "employees" under the Act are eligible to claim compensation.
• An employee is generally someone who is employed for wages in relevant factories or establishments.
• There are additional requirements depending on the nature of the employee's services.
• For instance, an employee may work directly for the principal employer on a permanent basis or temporarily on a contract basis.

Exempted Employee Section 10

• Certain employees are not required to contribute to the ESI Corporation under this Act.
• These employees are referred to as exempted employees.

Factory Section 12

• A "factory" is defined as any premises (or its precincts) where 10 or more employees work or have worked.
• These workers should have been employed for the preceding twelve months.
• Additionally, some manufacturing process must occur on such premises.
• However, mines and railway running sheds are excluded from the definition of factories.

Insured Person Section 14

• An insured person under this Act is essentially an employee for whom a contribution is payable.
• This individual is entitled to claim various benefits under the Act.

Principal Employer Section 17

• A principal employer is typically the owner or occupier of a factory to which the Act applies.
• It can also include the owner's managing agent, factory manager, or legal representative of a deceased owner/occupier.
• In the case of Central government departments, the principal employer is the head of the department.
• In other establishments, the person in charge of supervision and control usually serves as the principal employer.