Employee State Insurance Act

Topics: Employment, Member of Parliament, Medicine Pages: 36 (12413 words) Published: December 2, 2010
Employee State Insurance Act, 1948


The Employee State Insurance Act, 1948 is one of the Acts relating to Social Security. Before this Act, there was no such legislation on the social security except the Workmen’s Compensation Act, 1923. The Workmen’s Compensation Act, 1923 provided only for compensation in case of: i) injury by accident arising out of and in the course of employment ii) occupational diseases

The Employee State Insurance Scheme on the other hand was made to provide benefits in the case of: i) Sickness
ii) Maternity
iii) Employment injury
iv) Benefits to the dependants of workers who died of employment injury v) Benefits for other disabilities
Under the Workmen’s Compensation Act, the employer was liable for Compensation only when the worker works inside the factory. Under the Employee State Insurance Act, a claim arises whenever the employee may be i.e. inside or outside the factory. Under this Act, the liability for claims is placed on a Statutory Organization i.e. Employee State Insurance Corporation. The ESI Act for the first time introduced the concept of Contributory Principle i.e. the benefits under the Act are secured by financial contributions to the ESI Scheme both: i) by the employers and

ii) by the employees

(1) This Act may be called the Employees' State Insurance Act, 1948.

(2) It extends to the whole of India.

(3) It shall come into force on such 2date or dates as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act and for different States or for different parts thereof.

(4) It shall apply, in the first instance, to all factories (including factories belonging to the government) other than seasonal factories:

[PROVIDED that nothing contained in this sub-section shall apply to a factory or establishment belonging to or under the control of the government whose employees are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act.]

(5) The appropriate government may, in consultation with the Corporation and where the appropriate government is a State Government, with the approval of the Central Government], after giving six months’ notice of its intention of so doing by notification in the Official Gazette, extend the provisions of this Act or any of them, to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise:

[PROVIDED that where the provisions of this Act have been brought into force in any part of a State, the said provisions shall stand extended to any such establishment or class of establishments within that part if the provisions have already been extended to similar establishment or class of establishments in another part of that State.]

(6) A factory or an establishment to which this Act applies shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time falls below the limit specified by or under this Act or the manufacturing process therein ceases to be carried on with the aid of power.

The Beginning:
The Employee State Insurance act was promulgated by the Parliament of India in the year 1948.To begin with the ESIC scheme was initially launched on 2 February 1952 at just two industrial centers in the country namely Kanpur and Delhi with a total coverage of about 1.20 lac workers. There after the scheme was implemented in a phased manner across the country with the active involvement of the state government.

The ESIC Act applies to non-seasonal, power using factories or manufacturing units employing ten or more persons and non-power using establishments employing twenty or more persons. Under the enabling provisions of the act, a factory or establishment, located...
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