Employees’ State Insurance Act, 1948 Defining various provisions & act of the ESI

1. Employees’ State Insurance
Act, 1948
Presented by:
Name: Shreezal G.C.
Roll no: 231
Name: Krishna Mittal
Roll no: 335

2. The employees’ state insurance act – 1948
•Pioneering measure in social insurance in India.
•Health insurance first discussed in 1927 by Indian legislature.
•Originally called “workmen’s state insurance bill” 1946.
•Came into force on 19th April 1948.

3. 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.

4. 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 theatres
◦ 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.

5. The employees state insurance act, 1948
Act does not apply to:
◦ Seasonal factories engaged exclusively in any of the activities like: cotton
ginning, cotton or jute pressing, decoration of ground nuts, manufacturing
coffee, indigo, lac, rubber, sugar, or tea or any manufacturing process
incidental to or connected with any of the afore said activities, and including
factories engaged for a period not exceeding seven months in a year in
blending, packing or repackaging tea or coffee, or in such other processes as
may be specified by the central govt.
◦ The factories exempted as seasonal from the provisions of the act.
 ** Sec.2(9) The definition of employee excluded apprentices appointed under standing orders also besides the
apprentices appointed under the Apprentices Act 1961 The definition of employee now includes apprentices
appointed under standing orders but excludes only the apprentices appointed under the Apprentices Act 1961.

6. The employees state insurance act, 1948
Act does not apply to:
◦ Mines
◦ Railway running sheds
◦ Govt. factories or establishments and Indian naval,
military, or air force
◦ Other Govt. notified exempted establishments

7. The employees state insurance act, 1948
ACT AUTHORISATION
◦ To Promote and measure for health and welfare of INSURED EMPLOYEES (IE)
◦ Intervene for the rehabilitation and re-employment for disabled / injured
◦ To appoint inspectors for purposed of the act
◦ To determine the amount of contribution and relevant verification

8. 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.

9. 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

10. 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.

11. The employees state insurance act, 1948
Employees state insurance corporation
◦ Sec. 3 of this act provides for the establishment of ESIC by the central govt.
for administration of the ESIS according to the provision of this act. Such
corporation shall be the body corporate having perpetual succession and a
common seal and can sue or be sued by on the said name.
◦ Constitution:- sec.(4)
The Central govt. appoints a chairman, vice chairman, and other members
of interest of employees, employers, state govt./union territories, medical
profession. 3 members of parliament and director general of corporation are
its ex- officio members.

12. The employees state insurance act, 1948
Employees state insurance corporation
◦ POWERS AND DUTIES:-
Sec. (19) empowers to promote measures for improvement of the health
and welfare of the insured person and rehabilitation and re- employment of
insured person who have been disabled or injured and incur in respect of
such measure expenditure from the fund of the corporation within such limits
as may be prescribed.
sec.(29) empowers:- (a) to acquire and hold property both movable and
immovable, sell or otherwise transfer the said property; (b) it can invest and
re-invest moneys which are not immediately required for expenses and/or
realize such investment; (c) it can raise loan and discharge such loan with the
previous section of the central govt.; (d) it may constitute for the benefits of
its staff or any class of them such provident or other benefit fund as it may
think fit. However power u/s 29 can be exercised subject to such conditions
as may be prescribed by the central govt.

13. The employees state insurance act, 1948
Employees state insurance corporation
◦ WINGS OF ESIC:
1. STANDING COMMITTEE
2. MEDICAL BENEFITS COUNCIL

14. The employees state insurance act, 1948
Standing committee
◦ Constitution: (sec. 8)
This is the committee of ESIC. It shall be constituted among its members,
consisting of;
a) A Chairman appointed by the central govt.
b) 3 members of the ESIC appointed by the central govt.
bb) 3 members of the corporation representing such 3 state govt. thereon as the central
govt. may, by notification in the official gazette, specify from time to time.
c) 8 members elected by the corporation:-
- 3 members from among the members of ESIC representing the employers;
- 3 members from among the members of ESIC representing the employees;
- 1 member from among the members of ESIC representing the medical
professional;
- 1 member from among the members of ESIC elected by parliament
d) The director general of ESIC, ex- officio.

15. The employees state insurance act, 1948
Standing committee
Empowered to:-
◦ 1. Shall administer the affair of the corporation
◦ 2. Shall submit the consideration and decision of the
corporations
◦ 3. Have discretion on other issues of corporation

16. The employees state insurance act, 1948
Medical Benefit Council
Duties :- sec. (22)
◦ 1. Advise to administration on Medical Benefit, purpose of
grants and related matter
◦ 2. Have power and duties of INVESTIGATION as may be
prescribed in relation to complaint against Medical practitioner,
its treatment and attendance
◦ 3. Perform other duties