Employees State Insurance Act, 1948 – CMA Inter Business Laws and Ethics Study Material is designed strictly as per the latest syllabus and exam pattern.
Employees State Insurance Act, 1948 – CMA Inter Law and Ethics Study Material
Short Notes
Question 1.
Write notes on the following:
Purposes for which Employees’ State Insurance Fund may be expended under the Employees’ State Insurance Act, 1948. (Dec 2012, 5 marks)
Answer:
- Various purposes for which ESifund may be expended under the Employees State Insurance Act, 1948. are as follows:
- Payment of benefits to the insured person or their families.
- Payment in relation to any contract entered for implementing the provisions of the Act.
- Payment of salaries to the employees of Employee State Insurance Corporation.
- Payment of fees to members of standing committee.
Question 2.
Write short note on the following term:
Dependent (Dec 2019, 5 marks)
Answer:
“Dependant” means any of the following relatives of a deceased insured person, namely,-
(i) a widow, a legitimate or adopted son who has not attained the age of twenty-five years, an unmarried legitimate or adopted daughter. [i(a) a widowed mother].
(ii) if wholly dependent on the earnings of the insured person at the time of his death, a legitimate or adopted son or daughter who has attained the age of twenty-five years and is infirm;
(iii) if wholly or in part dependent on the earnings of the insured person at the time of his death,-
- parent other than a widowed mother,
- a minor illegitimate son, an unmarried illegitimate daughter or a daughter legitimate or adopted or illegitimate if married and a minor or if widowed and a minor,
- a minor brother or an unmarried sister or a widowed sister if a minor,
- a widowed daughter-in-law,
- a minor child of a pre-deceased son,
- a minor child of a pre-deceased daughter where no parent of the child is alive, or
- a paternal grandparent if no parent of the insured person is alive.
Question 3.
Write short note on the following terms:
Duties of medical benefit council (Dec 2022, 5 marks)
Descriptive Questions
Question 4.
What are the different purposes for which employees’ state insurance funds may be utilized by the central government? (June 2017, 10 marks)
Answer:
Purposes for which the fund may be expended
Section 28 of the Act provides the Central Government may utilize the State Insurance Fund only for the following purposes:
payment of benefits and provision of medical treatment and attendance to insured persons and, where the medical benefit is extended to their families, the provision of such medical benefits to their families in accordance with the provisions of this Act and defraying the charges and costs in connection therewith;
payment of fees and allowances to members of the corporation, the Standing Committee and the Medical Benefit Council, the Regional Boards, Local, Committees and Regional and Local Medical Benefit Councils;
payment of salaries, leave and joining time allowances, travelling and compensatory allowances, gratuities and compassionate allowances, pensions, contributions to provident or other benefit fund of officers and servants of the corporation and meeting the expenditure in respect of offices and other services set up for the purpose of giving effect to the provisions of this Act;
establishment and maintenance of hospitals, dispensaries and other institutions and the provision of medical and other ancillary services for the benefit of insured persons and, where the medical benefit is extended to their families;
payment of contributions to any State Government, local authority or any private body or individual, towards the cost of medical treatment and attendance provided to insured persons and, where the medical benefit is extended to their families, including the cost of any building and equipment, in accordance with any agreement entered into by the Corporation;
defraying the cost (including all expenses) of auditing the accounts of the Corporation and of the valuation of its assets and liabilities;
defraying the cost (including all expenses) of the Employees’ Insurance Courts set up under this Act;
payment of any sums under any contract entered into for the purpose of this Act by the Corporation or the Standing Committee or by any officer duly authorized by the Corporation or the Standing Committee in that behalf:
payment of any sums under any decree, order or award of any Court or tribunal against the corporation or any of its officers or servants for any act done in the execution of his duty or under a compromise or settlement of any suit or other legal proceedings or claim instituted or made against the corporation;
defraying the cost and other charges of instituting or defending any civil or criminal proceedings arising out of any action taken under this Act;
defraying expenditure, within the limits prescribed, on measures for the improvement of the health, welfare of insured persons and for the rehabilitation and re-employment of insured persons who have been disabled or injured; and
such other purposes as may be authorized by the corporation with the previous approval of the Central Government.
Question 5.
Mention the benefits that are entitled to the insured persons under the Employees’ State Insurance Act, 1948. (Dec 2018, 6 marks)
Answer:
According to Section 46 of the Employees State Insurance Act, 1948 states that the insured persons, their dependents shall be entitled to the following benefits
- Annual payments to any insured person in case of his sickness
- Annual payments to an insured woman in case of confinement or miscarriage or sickness arising out of the pregnancy, confinement, premature birth of child or miscarriage
- Annual payments to an insured person siffering from a disablement as a result of an employment injury sustained as an employee
- Annual payments to such dependents of an insured person who dies as a result of an employment injury sustained as an employee
- Medical treatment for and attendance on insured persons
- Payment to the eldest surviving member of the family of an insured person, who has died, towards the expenditure on the funeral of the deceased insured person; if the injured person at the time of his death does not have a family, the funeral payment will be paid to the person who actually incurs the expenditure.
The amount of such payment shall not exceed such amount as may be prescribed by the Central Government. The claim for such payments shall be made within 3 months of the death of the insured person or within such extended period as the Corporation allows in this behalf.
Question 6.
Mention any seven purposes for which the ESI fund may be expended. (Dec 2019, 7 marks)
Answer:
Section 28 of the Employees State Insurance Act, 1948 provides the Central. Government may utilize the State Insurance Fund only for the following purposes:
- payment of benefits: and provision of medical treatment and attendance to insured persons and, where the medical benefit is extended to their families, the provision of such medical benefit to their
families in accordance with the provisions of this Act and defraying the charges and costs in connection therewith; - payment of fees: and allowances to members of the Corporation, the Standing Committee and the Medical Benefit Council, the Regional Boards, Local Committees and Regional and Local Medical Benefit Councils;
- payment of salaries: leave and joining time allowances, travelling and compensatory allowances, gratuities and compassionate allowances, pensions, contributions to provident or other benefit fund of officers and servants of the Corporation and meeting the expenditure in respect of offices and other services set up for the purpose of giving effect to the provisions of this Act;
Question 7.
Mention any seven purposes for which the ESI fund may be expended. (Dec 2019, 7 marks)
Answer:
Section 28 of the Employees State Insurance Act, 1948 provides the Central.
Government may utilize the State Insurance Fund only for the following purposes:
(i) payment of benefits: and provision of medical treatment and attendance to insured persons and, where the medical benefit is extended to their families, the provision of such medical benefit to their families in accordance with the provisions of this Act and defraying the charges and costs in connection therewith;
(ii) payment of fees: and allowances to members of the Corporation, the Standing Committee and the Medical Benefit Council, the Regional Boards, Local Committees and Regional and Local Medical Benefit Councils;
(iii) payment of salaries: leave and joining time allowances, travelling and compensatory allowances, gratuities and compassionate allowances, pensions, contributions to provident or other benefit funds of officers and servants of the Corporation and meeting the expenditure in respect of offices and other services set up for the purpose of giving effect to the provisions of this Act;
(iv) establishment and maintenance of: hospitals, dispensaries and other institutions and the provision of medical and other ancillary services for the benefit of insured persons and, where the medical benefit is extended to their families;
(v) payment of contributions: to any State Government, local authority or any private body or individual, towards the cost of medical treatment and attendance provided to insured persons and, where the medical benefit is extended to their families, including the cost of any building and equipment, in accordance with any agreement entered into by the Corporation;
(vi) defraying the cost: of auditing the accounts of the Corporation and of the valuation of its assets and liabilities;
(vii) payment of any sums: under any contract entered into for the purpose of this Act by the Corporation or the Standing Committee or by any officer duly authorized by the Corporation or the Standing Committee in that behalf;
(viii) payment of sums under any decree, order or: award of any Court or Tribunal against the Corporation or any of its officers or servants for any act done in the execution of his duty or under a compromise or settlement of any suit or other legal proceeding or claim instituted or made against the Corporation;
(ix) defraying expenditure: within the limits prescribed, on measures for the improvement of the health, welfare of insured persons and for the rehabilitation and re-employment of insured persons who have been disabled or injured.
Practical Questions
Question 8.
Attempt the following stating relevant legal provisions and decided case law, it any:
Electronics Ltd. is an establishment covered under the Employees’ State Insurance Act, 1948. The salesmen of the company were paid a commission @ 10 % of the sales done by them every month. The ESI Inspector asked the employer to deposit contributions (the sum of money payable to the ESI Corporation by the principal employer in respect of an employee) in respect of the commission paid. Is he justified? Give reasons. (Dec 2012, 4 marks)
Answer:
According to ESI Act, 1948 wages includes any remuneration paid at intervals not exceeding two months. The employee receives incentives! commission in addition to wages. As the commission is paid every month, the ESI Inspector can ask the employer to deposit contributions.
Employees State Insurance Act, 1948 CMA Inter Law, and Ethics Notes
1. Objective and Scope of Employees’ State Insurance Act
- An act to provide benefits to employees of organised sector.
- Applies to whole of India including Jammu & Kashmir.
- Objective of the act is protect the interest of workers in contingencies such as sickness, disability, maternity or death due to employment injury.
- Amended in 2010 by virtue of ESI (Amendment) Act, 2010 with a view to increase the purview of the Act.
- Applies to employees receiving wages monthly up to 21,000 per month.
2. Dependent
“Dependant” means any of the following relatives of a deceased insured person, namely,-
(i) a widow, a legitimate or adopted son who has not attained the age of twenty-five years, an unmarried legitimate or adopted daughter. [i (a) a widowed mother].
(ii) if wholly dependent on the earnings of the insured person at the time of his death, a legitimate or adopted son or daughter who has attained the age of twenty-five years and is infirm;
(iii) if wholly or in part dependent on the earnings of the insured person at the time of his death,-
- parent other than a widowed mother,
- a minor illegitimate son, an unmarried illegitimate daughter or a daughter legitimate or adopted or illegitimate if married and a minor or if widowed and a minor,
- a minor brother or an unmarried sister or a widowed sister if a minor,
- a widowed daughter-in-law,
- a minor child of a pre-deceased son,
- a minor child of a pre-deceased daughter where no parent of the child is alive, or
- a paternal grandparent if no parent of the frisured person is alive.
3. Employment injury
- Employment injury means an injury caused to an employee arising out of and in the course of his employment being an insurable employment.
- Whether the accident occurs within or outside the territorial limits of India.
- Employment injury need not be confined to employer’s premises only.
- It extends to time and place(theory of notional extension).
- It is not limited to injury or wound but has broader coverage.
- There needs to be some nexus (means relation) between the employment and the accident.
Includes
- Injury by knocking the belt of pulley though caused by ignorance of employee himself
- Injury caused by person who was beaten at the job though there was threat pre-announced due to call for strike
Excludes
Accident while on the way to office
4. Types of disablement
(i) Temporary Disablement:
Condition resulting from an employment injury which requires medical treatment and results the employee temporarily incapable.
(ii) Permanent Partial Disablement:
It means such disablement of a permanent nature, as reduced the earning capacity of an employee in every employment which he was capable of undertaking at the time of the accident resulting in the disablement. Provided that every injury specified in Part II of the Second Schedule to the Act shall be deemed to result in permanent partial disablement.
(iii) Permanent Total Disablement:
- It means such disablement of a permanent nature as incapacitates an employee for all work which he was capable of performing at the time of the accident resulting in such disablement.
- Provided that permanent total disablement shall be deemed to result from every injury specified in Part- I of the Second Schedule to the Act or from any combination of injuries specified in Part- II there of, where the aggregate percentage of loss of earning capacity, as specified in the said Part – II against those injuries, amount to 100% or more.
Noteworthy Points:
- The rate of contribution towards the Employees’ State Insurance Fund is 3.25% and 0.75% of employee’s wages by the employers and employees respectively.
- According to ESI Act, 1948 wages includes any remuneration paid at intervals not exceeding two months.
Factory or establishment to which the Employees’ State Insurance Act,1948 applies has to be registered within 15 days. - The judge of Employees Insurance Court (EIC)should be either a Judicial Officer or Legal practitioner for at least 5 years.
5. Changes in Employees State Insurance Act, 1948
- Employees must be registered online on the date of appointment; the online system shall allow maximum 10 days to register the new employee.
- Employee will have to collect their Biometric ESI Permanent Card from nearest Branch Office.
- Contribution against employee must be deposited within the due date. One shall not be able to deposit contribution online after 42 days from the end date of the contribution period.
- Exemption from payment of employee’s contribution – The average daily wages during a wage period for exemption from payment of employee’s contribution under section 42 shall be upto and inclusive of rupees one hundred seventy-six only.
Contribution have been reduced:
| ESI contribution Rates | Rate (%) |
| Employer’s Share | 3.25 |
| Employee share | 0.75 |
| Total ESI Contribution | 4 |