Clean and Green Nation

Topics: Employment, Minimum wage, Wage Pages: 7 (2240 words) Published: August 22, 2013
As you are aware that the ESI Amendment Act 2010 has been notified and it has come in to effect w.e.f. 01-06-2010. The ESI Amendment Act 2010 has brought new changes which are necessary to be understood by all HRM & other Labour Law practitioners. Following are the important amendments and its implications:- 1. Sec. 2 clause (6A)(a)(i) & (ii) -The age of the dependents has been increased from 18 years to 25 years-though in the proposed bill, the age suggested was 21 years. 2. Sec. 2 Clause(6A)(11)-"Family"- A qualification has been attached to the "dependent parents" of the Insured Person to avail the medical benefits etc under the Act, which was not in the Act earlier. Sub Clause (v) of Clause 11 of Section 2 has been substituted with words " dependent parents, whose income from all sources does not exceed such income as may be prescribed by the Central Government".  

3. Sec. 2 Clause(6A)(11)-"Family" - New members has been introduced to the words "Family" - Sub Clause (vi) of Clause 11 of Section 2 has been inserted, which says " in case the insured person is unmarried and his or her parents are not alive, a minor brother or sister wholly dependant upon the earnings of the insured person" shall also form part of family of the Insured Person.  4. Traniees appointed under the Standing Orders- ESI Contribution liable to be paid - The definition of the "employee" has been amended. Now the trainees are brought under the ambit of the Act and are liable to pay ESI contribution. Clause 9 of Section 2 has been AMENDED.  5. FACTORY -DEFINITION-Clause 12 of Section 2 has been amended - The old definition and New definition of Factory needs to be compared, thus I am reproducing the both for ready reference:-  Old Definition:- Prior to ESI Amendment Act 2010

  Sec 2 (12) “factory” means any premises including the precincts thereof- (a) whereon ten or more persons are employed or were employed FOR WAGES on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power or is ordinarily so carried on, or (b) whereon twenty or more persons are employed or were employed for wages on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power or is ordinarily so carried on, but does not include a mine subject to the operation of the Mines Act, 1952 (35 of 1952) or a railway running shed];  NEW DEFINITION:-

Sec 2 (12) "factory" means any premises including the precincts thereof whereon ten or more persons are employed or were employed on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on or is ordinarily so carried on, but does not include a mine subject to the operation of the Mines Act, 1952 or a railway running shed;’.  On comparing the both the following implications of the amendment comes out:- * Now the units where manufacturing activities are performed by 10 or more PERSONS has been brought under the ambit of the Act, irrespective of use of POWER and irrespective of the fact that 10 or more coverable employees are engaged or not. * The definition of the "Factory" has been amended to bring the small units within the ambit of the Act. Earlier the ESI Act was applicable to units employing 10 or more persons manufacturing with aid of "POWER"- Now the word POWER has been omitted. Thus, every unit manufacturing and employing 10 or more persons has been brought under the ambit of the ESI Act. * Secondly, one hidden amendment has been made in the Act-The uncovered employees would also be counted for the purpose of applicability of the ESI Act. Earlier the unit employing 10 or more workers and doing manufacturing process, would still be out of the purview of the Act, if there are Persons drawing salary above the prescribe limit. Let me explain with an example-  

Suppose in a unit there were 12...
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