BENEFIT TO FAMILY

>> What is the benefit admissible to the family members? 

1. Family members are also entitled to full medical care as and when needed 

2. The family members are also entitled to artificial Hmbs, artificial appliances etc. as a part of medical treatment. 

3. The medical benefit is also admissible to the family during the period the insured person is in receipt of unemployment allowance. In case he dies during the period, his family continues to receive the medical benefit till the end of those twelve months. 

4. Reimbursement of expenditure incurred on the funeral of the deceased employee. 

5. In case of the death of the insured employee due to employment injury, the spouse, widowed mother and children are entitled to Dependants' benefit. 

6. Any benefit due to the insured employee at the time of death is paid to the nominee. 

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links

• INFORMATION ON ESIC
• GENERAL REGULATIONS ::
  • CHAPTER I - Short title and extent & Definitions
  • CHAPTER II - COLLECTION OF CONTRIBUTIONS, ETC.
  • CHAPTER III - BENEFITS CLAIMS
  • CHAPTER IV MISCELLANEOUS
• CENTRAL RULES ::
  • CHAPTER I - SHORT TITLE AND EXTENT & DEFINITIONS
  • CHAPTER II CORPORATION, STANDING COMMITTEE AND MEDICAL BENEFIT COUNCIL
  • CHAPTER III - FINANCE AND AUDIT
  • CHAPTER IV - CONTRIBUTIONS
  • CHAPTER V - BENEFITS
  • CHAPTER V-A : TRANSITORY PROVISIONS
  • CHAPTER VI- ADJUDICATION OF DISPUTES AND CLAIMS
  • CHAPTER VII- PENALTIES
  • CHAPTER VIII- MISCELLANEOUS
  • SCHEDULE II
  • SCHEDULE III
• BENEFITS ::
  • MEDICAL-BENEFITS
  • SICKNESS-BENEFIT
  • SICKNESS-RATES
  • MATERNITY-BENEFITS
  • DISABLEMENT-BENEFITS
  • DEPENDENTS-BENEFITS
  • OTHER BENEFITS
• Information for employers ::
  • DUTIES OF EMPLOYERS
  • RIGHTS OF EMPLOYERS
  • TIPS
  • RECORD MAINTENANCE
  • INSPECTIONS
  • OBLIGATIONS
• Expects View ::
  • APPLICABILITY OF THE ACT
  • WORKMEN UNDER E.S.I
  • WAGE - CONTRIBUTION
  • OTHER MISCELLANEOUS
• Recent Case Laws ::
  • APPLICABILITY OF THE ACT
  • COVERAGE OF EMPLOYEES ENGAGED THROUGH A CONTRACTOR
  • COVERAGE OF ESTABLISHMENTS UNDER THE ACT
  • COVERAGE OF SHOPS UNDER THE ACT
  • DAMAGES INTEREST FOR LATE OR NON-DEPOSIT OF CONTRIBUTIONS
  • 'EMPLOYEE' UNDER THE ACT
  • EMPLOYEES’ INSURANCE COURT
  • APPEAL-EMPLOYEES' INSURANCE COURT
  • PROSECUTION UNDER THE ACT
  • RECOVERY OF CONTRIBUTIONS
  • WAGES' FOR ESI'S CONTRIBUTION
  • MISCELLANEOUS
• FREQUENTLY ASKED QUESTION ::
  • COVERAGE OF FACTORY
  • COVERAGE OF 'EMPLOYEE
  • CONTRIBUTION
  • MAINTENANCE OF RECORDS
  • REGISTRATION OF EMPLOYEES
  • MEDICAL BENEFIT
  • BENEFITS TO EMPLOYEE
  • BENEFIT TO FAMILY

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BENEFITS TO EMPLOYEE

>> What Is 'Sickness Benefit'? 

If an insured person requires medical treatment and attendance and needs abstention from work on medical grounds, Sickness benefit is paid for the period of abstention duly certified by the Authorized Medical Officer, for a period not exceeding 91 days in two consecutive benefit periods (say one year) @ 60% of his wages, subject to payment of contribution for not less than 78 days in the corresponding contribution periods. 

>> What Is Extended Sickness Benefits? 

This is an additional sickness benefit provided by the Corporation in exercise of its powers under Section 99 of the Act. An insured person who has completed two years of insurable employment and contributed for not less than 156 days during this period is entitled to extended sickness benefit for a period of 309 days for the 34 specified long term diseases. This period can be extended up to 730 days or  till the insured person attains the age of 60 years which ever is earlier. The benefit is payable @ 140%, of the standard benefit rate which works out to 70% of his wages. The insured person and his family are also entitled to Medical Benefit during this extended period. 

>> What is 'Enhanced Sickness Benefit'? 

To promote the norms of small family, this cash benefit is paid to the Insured person for undergoing vasectomy/ tubectomy operation. This is paid at double the standard benefit rate i.e. full wages, for a period of 7 days for vasectomy operation and for 14 days for tubectomy operation. This period can be extended in case of any post operative complications. 

>> What Is Disablement? 

Disablement is a condition resulting from employment injury, which may render the insured person temporarily incapable of doing his work and necessitating medical treatment (temporary disablement). It may reduce his earning capacity (permanent partial disability) or it may totally deprive the insured person from the capacity of doing any work (permanent total disability). 

>> What is 'Employment Injury"? 

It is a personal injury to an employee caused by an accident or occupational disease arising out of and In the course of his insurable employment within or outside territorial Iimits of lndia. 

>> What is Occupational Disease? 

Contracting any disease, while in employment for a specified period in any of the dustries listed in Part A, B, or C of Schedule III to the Act is called Occupation disease. Occupational health hazards can be of two main types. Short term and high dose with acute on set, synonymous with acute poisoning, included by large dose of a toxic substance In an industrial environment, and the other one is chronic on set, which is the result of repeated or continuous exposure of small doses of substances. 

>> What is 'Temporary Disablement Benefit'? 

It is a periodical payment to an insured person suffering from Disablement as a result  of 'Employment injury' for the period of abstention from work duly certified by an authorized Medical Officer. This is paid till the temporary disability lasts and the employee is able to resume his normal duties, @150% of the standard benefit rate which is 75% of his wages. 

>> What is Permanent Disablement Benefit? 

If there is any residual disability of permanent nature due to employment injury, the insured person Is examined by a Medical Board to access the loss of earning capacity if any and its percentage. The insured person is paid monthly periodical payments of permanent disablement for life from the date following the date of termination of temporary disablement at that percentage out of full daily rate of disablement benefit Periodical increase in the benefit is also admissible due to erosion in the cost of living. The benefit can be drawn in cash at the Branch Office, by Money Order at the cost of the Corporation, or credited to the Bank Account of the insured person every month. The insured person can also opt for the payment in lump sum if his daily rate of PDP does not exceed rupees five or even if it exceeds five per day, but the commuted value does not exceed Rupees 30000. 

>> What is Dependants' Beneflt? 

Dependants' benefit is a monthly pension payable to the eligible dependants of a insured person who dies as a result of an employment injury or occupational disease. The benefit can be drawn in cash at the Branch Office or by Money order at the cost of the Corporation or it can be credited every month to the bank account of the beneficiary. 

>> How long is it paid and at what rate? 

The rate of dependants' benefit is the full rate of disablement benefit, which is 75% ( the wages of the deceased insured person. It is distributed among the dependant as follows:

1) Widow: Till death or remarriage at 3/5th of the full rate. 

2) Widowed mother till death @2/5th of the full rate. 

3) Sons @2/5th of the full rate each till he attains the age of twenty -five years. 

4) Unmarried daughters@2/5th of the full rate till they get married. 

5) If the son or daughter is infirm and wholly dependant on the earnings of the insured person at the time of his death, they continue to receive the benefit even after attaining the age of 25 years/ marriage as the case may be. If the total dependants' benefit for all the dependants worked out as above exceeds at any time, the full rate, the share of each of the dependants shall be proportionately reduced, so that the total amount payable to them does not exceed the amount at full rate. 

>> Whether the TDB/PDB/DB Is also admissible in the case of a casual or temporary employee If he meets with an employment injury on the very first day or on any day before he completes his first contribution period? 

No qualifying conditions or contributory conditions are attached for payment of temporary disablement benefit, permanent disablement benefit or Dependants benefit. Even if he meets with an employment injury on the very first day of his joining the insurable employment, the benefit is admissible. 

>> What Is maternity benefit? 

Maternity benefit is periodical payments to an Insured person for specified period of abstention from work, due to confinement, miscarriage or sickness out of pregnancy, pre-mature birth of child or miscarriage or confinement. 

>> What Is confinement? How long is the maternity benefit admissible In case of confinement? 

Confinement means labour resulting in the issue of a living child or labour after 26 weeks of pregnancy resulting in the issue of a child whether alive or dead. Maternity benefit at double the standard benefit rate (full wages) is payable for 84 days, subject to payment of contribution for not less than 70 days in the immediately preceding two contribution period. The benefit can be claimed at anytime prior to six weeks before the expected date of confinement or from the date of confinement as per the condition and the requirement of the insured woman. 

>> What Is 'miscarriage' and how long is the benefit admissible? 

'Miscarriage' means the expulsion of the contents of a pregnant uterus at any time prior to or during the 26th week of pregnancy, but does not include a miscarriage, the cause of which is punishable under the Indian penal code. Maternity benefit is payable for miscarriage for a period of 6 weeks (42 days) from the date following the date of miscarriage at double the standard benefit rate subject to fulfillment of the contributory condition prescribed. 

>> What is sickness arising out of pregnancy etc. How long is the Maternity benefit Is admissible for it? 

If the insured woman needs medical treatment and attendance and abstention from work due to sickness arising out of pregnancy. miscarriage, premature child birth or confinement, duly certified by an authorized Medical Officer, Maternity Benefit at doublet he standard benefit rate is payable for a period one month. 

>> What is medical bonus? 

Medical Bonus is lump sum payment made to an insured woman or an insured person in respect of his wife for each confinement to meet the confinement expenses, if the confinement occurs at a place where necessary facilities under the ESI Scheme are not available. At present the confinement expenses paid is Rs. 2500/- per confinement. 

>> What are funeral expenses? To whom is It paid? 

A lump sum payment not exceeding Rs.5000 towards expenditure on the funeral of a deceased insured person, is paid either to  the eldest surviving member of the family or if he has no family or not residing with his family at the lime of death, to  the person who actually performs the funeral of the deceased insured person. 

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MEDICAL BENEFIT

>> What is Medical Benefit? 

Medical benefit means the medical attendance and treatment to the insured persons covered under the Act and their families as and when needed. This is the only benefit provided in kind through the State Governments (except in Delhi), and uniform to all as per their requirement without linking it to their wages and contributions. 

>> What is the scale of Medical Benefit?

Full range of Medical, surgical & obstetric Treatment consisting of out-door treatment, in-patient treatment, supply of all drugs and dressings, pathological and radiological investigations, pre-natal and post-natal care super specialty consultation & treatment, ambulance services, provision of artificial appliances etc. 

>> How long is Medical benefit available? 

The insured person and his family are entitled to the Medical Benefit from the very first day of his/her joining the insurable employment. A person who is covered under the scheme for the first time is eligible for medical care for self and family for three months. If he/she continues in insurable employment for three months or more, the benefit is admissible till the beginning of the corresponding benefit period. If contributions were paid/ payable for not less than 78 days in the said contribution period, medical benefit is admissible till the end of the corresponding benefit period. If the Insured person is In ESI coverage for at least 2 years, and contributed for not les than 156 days, and is suffering from any of the 34 specified long term diseases, the medical benefit is admissible till the incapacity lasts or for a period of 3years for self and family. 

>> How a temporary or casual employee who works for 3 or 4 days and leaves the employment is entitled to  the medical care? 

If he leaves the employment before his registration process is completed, the employer may provide him with a 'certificate of employment' consisting of his date of employment, date of leaving, family particulars etc. in form ESIC-86. Based on this certificate that person and his family can avail ‘medical benefit' forr a period of 3 months. 

>> If the insured person's family is residing in another place in the same State or another State, how the family can avail the medical benefit? 

"the family is residing in any other place either in the same State or different State, based on the declaration of the insured person and certified by the employer, the family is provided with a 'family identity card' for receiving medical benefit from ESI Dispensary in the area in which it is residing. After IT rollout, the 'Family' is issued a separate 'smart card'. By producing this smart card, the family can avail the medical benefit from any ESI Dispensary/ Hospital either at their place of residence or in any other part of the country. 

>> How to get medical benefit when an Insured person is leaving for another station for a temporary period? 

While leaving the station, the insured person may obtain a certificate of employment from his employer in ESIG-105, and carry the same with him along with his identity card. 

Based on this, the insured person can avail the medical benefit in any ESI Dispensary/Hospital across the country. After the introduction of IT rollout, 'Pehchan Card' for self and family is being issued. With this, the insured person and his family can avail the 'medical benefit' in any ESI Dispensary/ Hospital throughout the country. 

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REGISTRATION OF EMPLOYEES

>> What is Registration of an Insured Person? 

Registration is the process of obtaining and recording information about the entry of an employee into insurable employment, for the purpose of his identification under the Act. 

>> What is Registration of an Insured Person? 

The benefits provided under the Act are related to the contribution paid by the employer on behalf of the insured person. Therefore, to identify each insured person, both for proper recording of the contributions received as also for honoring his claims for benefits, registration of an insured person is necessary 

>> How are the employees registered under the Scheme? 

At the time of joining the insurable employment, an employee is required to fill in a Declaration Form (Form-I) and submit a family photo in duplicate to the employer, which is to be submitted to the ESI Branch Office by his employer. The employee is then allotted an insurance number for the purpose of his identification under the scheme and issued a temporary identity card for availing medical benefit for self and family for a period of three months. Thereafter, he is provided with a permanent photo identity card. A. person once registered need not register again in case of change of employment. The same registration can be transferred from one place to the other. Now the ESIC is going online'. Smart card name "Pehchan Card" separately for self and family with biometric details are issued, which is valid in any ESI Hospital/ dispensary throughout the country for availing the medical benefits. The employee can also draw his cash benefits from any of the ESI Branch Office throughout the country. 

>> What is an identity card? 

On registration under the scheme, the employee is termed as insured person. He is provided with a 'temporary identification certificate', which is valid for a period of 3 months, but may be extended if necessary till a permanent family photo identity card with family particulars is issued. The identity card serves as a means of identification both for availing medical benefit at the dispensary/hospital and availing cash benefits at the ESI branch Office. The identity card should be signed/ thumb impression affixed by the insured person. Any changes in his residence/ dispensary/ employment are carried out by the Branch Office Manager in the identity card. Now the smart cards (Pehchan) are being issued to the insured person for drawing cash benefits from any ESI Branch Office of his choice and convenience. 

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MAINTENANCE OF RECORDS

>> What are the records to be maintained for ESI purpose?

In addition to the Muster roll, wage record and books of Account maintained under other laws, the employer is required to maintain the following registers for ESI:-

1. Employees Register in new Form 6

2. Accident Register in new Form 11 and

3. An inspection book. The immediate employer is also required to maintain the Employee's Register for the employees deployed to the principal employer.

>> What are the returns/ reports to be submitted by the employer? 

1. An annual return in Form 01-A by 31st January of every year to the Regional Office showing the changes if any during the preceding year.

2. Return of Contributions in quadruplicate for each contribution period to be submitted to the branch office duly enclosing all the paid challans for the six months within 42 days of expiry of each contribution period, i.e. by 11th November for contribution period ended 30th Sept., and 12th  May for the contribution period ended 31st March.

3. Reports: Accident report in Form 12 in case any accident takes place, to the notice of the Accident.

4. Declaration Forms: in Form 1 for all the employees at the time of coverage of the unit, and thereafter as and when a new employee joins the insurable employment along with a return in Form 3 in duplicate with in 10 days.

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CONTRIBUTION

>> What is 'Contribution'? 

Contribution is the sum of money payable to the Corporation by the Principal employer in respect of an employee and Includes any amount payable by or on behalf of the employer in accordance with the provisions of the Act (Section2(4)). 

>> What Is the Present Rate of Contribution? 

a) Employer's contribution: A sum equal to 4.75% of the wages payable to an employee, rounded off to the next higher rupee; 

b) Employee's contribution: A sum equal to 1.75% of the wages payable to an employee, rounded to the next higher rupee; 

>> Is there any provision for exemption from payment of Employer's contribution? 

With effect from 1 -4-2008, the wage ceiling limit for coverage of employees with disability has been raised to rupees twenty five thousand a month. To encourage the employers for employing more employees with disability, the employer is exempted from payment of Employers share of contribution on the wages paid to the employees with disability for a maximum period of three years from the date of commencement of the contribution period in which such employee with disability is employed. The Central Government shall reimburse this Employers contribution to the ESI Corporation. 

>> What is the time limit for payment of contribution? 

Contribution shall be paid in respect of an employee in to a bank duly authorized by the Corporation within 21 days of the last day of the calendar month in which the contribution falls due for any wage period (Reg. 29 &31). 

>> What is the manner of payment? 

The total amount of contribution (both the shares) in respect of all the employees for each month is to be deposited with the authorized bank branches in cash or by cheque through a challan or demand draft: in the prescribed form in quadruplicate. Chalan prescribed for this purpose shall be supplied free of cost by the concerned Branch Office on placing the indent. The payment can be made online after generating online challan by giving necessary details in online register of employees in Form 5. 

>> What are consequences of non/late payment of employees' contribution deducted but not paid? 

Any sum deducted by the Principal employer from wages under the ESI Act shall be deemed to have been entrusted to him by the employee for the purpose of paying contribution in respect of which it was deducted (Sec. 40(4). Non-payment or delay payment of the Employee's contribution deducted from the wages of the employee amounts to' Breach of trust' and is punishable under IPC406. 

>> Will the delayed payment attract any interest? 

An employer who fails to pay the contribution within the limit prescribed under Regulation 31. shall be liable to pay simple interest at the rate of 12% per annum in respect of each day of default or delay in payment of contribution (Regulation 31-A). 

>> What are the penal provisions for non-payment or delayed payment of contribution? 

1. The employer is liable for prosecution under Section 85(a) of the Act. 

2. The Corporation may levy and recover damages at the following rates, not exceeding the amount of contribution payable for default or delay in payment of the contribution. 

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Period of delay Rate of damages In % p.a.

*************************************************

Less than 2 months 5% 

2 to 4 months 10%

4 to 6months: 15% 

6 months and above; 25% 

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>> What are the contribution periods and benefit periods? 

The financial year from April to March has been divided in to two six monthly contribution periods i.e. 1st April to 30" September and 1st October to 31st March of next year. The benefit period for each contribution period commences three months after the end of the relevant contribution period i.e. Jan to June and July to December (the calendar year from January to December has been divided in to two six monthly benefits periods). 

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WAGES

>> How wages are computed for payment of contribution? 

The following items are taken into account for computation of wages for payment of contribution. 

a) Basic Pay, Wages, Salary; 

b) D.A./HRA/CCA/overtime/officiating allowance/Night shift allowance I efficiency allowance/ Heat, Gas,        Dust allowance/ Education allowance/ Food & Tea allowance/ conveyance allowance; 

c) Wages/salary/ pay for weekly off and public holidays; 

d) Commission paid to sales staff; 

e) Subsistence allowance paid to an employee during the period of suspension; 

f) Attendance Bonus or incentive or exgratia in lieu of Attendance Bonus or production incentive; 

g) Regular Honorarium or salary or remuneration paid to a Director; 

h) Collection Batta paid to running staff. 

i) Actual payments made towards leave salary, layoff compensation, or wages for strike period. 

Any other remuneration paid or payable in cash to an employee if the terms of contract of employment, expressed or implied were fulfilled. 

>> If the wages of an employee exceeds Rs. 15,000 in a month, can he be treated as not covered and deduction of contribution from his wages Is stopped? 

If the wages of an employee (excluding remuneration for overtime work) exceeds the wage limit prescribed by the Central Government after start of contribution period, he continues to be an employee till the end of that contribution period and contribution is to be deducted and paid on the total wages earned by him. 

>> What is the effect of Increase In wages from a retrospective date? 

In case the wages of an employee is increased from a retrospective date resulting in crossing the wage limit prescribed, its effect on coverage of that employee is only after expiry of the Contribution period during the currency of which such increase is announced or declared. The contribution on enhanced wages is also payable from the month in which such increase is announced. There is no need to pay the contribution on the arrears for the period prior to the month of declaration/announcement/agreement. 

>> Why contribution should be paid on the total wages beyond the wage ceiling limit when an employee crosses the wage limit prescribed by the Central Government? 

Any employee who crosses the prescribed ceiling limit in any month at any time after commencement of the contribution period, continues to be an employee till the end of that contribution period. 

Though there is a wage ceiling limit for coverage of an employee, there is no ceiling limit in the definition of wages for payment of contribution. Hence contribution is payable on the total wages without any ceiling limit. 

>> Why over-time is to be excluded for wage ceiling limit for coverage of an employee? 

Overtime is not a regular and continuous payment, but it is of an occasional nature. If overtime is also taken for wage limit for coverage of an employee, he may be going out of coverage for some time and again coming within the orbit of the scheme, when overtime is not there. This frequent Interruption from the scheme deprives him of the benefits admissible under the scheme even after making payment of contribution for a part of contribution period. To ensure continued security and protection, overtime is excluded for determining the wage ceiling for coverage of an employee. However, it is included for payment of contribution to cover the risk during the period he was on overtime work, and to enable him to draw cash benefits at an enhanced rate, as by adding overtime wages to his average daily wages, he is fitted in to the next higher slab in the Standard Benefit table in Rule 54 for claiming cash benefits. 

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COVERAGE OF 'EMPLOYEE'

>> Who are the persons to be covered as "Employees" ?

My person employed for wages in or in connection with the work of a covered factory or establishment, and: 

1) Directly employed by the Principal employer on any work of the Factory or establishment within the premises or elsewhere, or in any part, department or branch dealing with administration, purchase of raw materials, sale, or distribution of the products of the factory or establishment. 

2) Employees of the Immediate employer: 

a) Employed in the premises on any work of the factory or establishment; 

b) Employed outside the premises on any work of the factory or establishment under the supervision of the Principal employer or his agent; 

c) Employees lent or let on hire to the principal employer on any work of the factory, or 

d) Paid Directors of a company. 

Exclusions: 1. An Apprentice engaged for the first time under the Apprentice Act 1961 and 2. An employee drawing wages above the wage ceiling prescribed by the Central Government 

>> What is the wage ceiling limit prescribed for coverage of an employee? 

It is Rs. 15,000 per month from 1-May, 2010. 

The wage ceiling for cover age of an employee with 'disability' is Rs. 25,000/- per month from 1-4-2010. 

>> What is 'Average Daily Wages'? 

Average daily wages: 

a) ln respect of an employee who is employed on time rate basis, the amount of wages which would have been payable to him for the complete wage period had he worked on all the working days in that wage period divided by 26, if he is monthly rated, 13 if he is fortnightly rated,6 if he is weekly rated and 1 if he is daily rated. 

(b) In respect of piece rated employee, the amount of wages earned during the complete wage period divided by the number of days in full or part for which he worked for wages in that wage period (Rule 1-B). 

>> Who is an 'Exempted Employee'? 

An employee who is exempted from payment of employees' contribution is called an exempted employee. The present exemption limit is average daily wages of Rs.70 (seventy rupees). However, employers contribution is payable on these wages. 

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COVERAGE OF FACTORY

>> What is the definition of a Factory for coverage under ESI?

Factory is defined under section 2(12) as "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 Mines Act 1952, or a railway running shed”

>> Whether the persons employed who are not coverable under the Act are also counted for the purpose of counting 10/20 persons for coverage of factory/ establishment? 

Yes. All persons employed in the premises including the precincts thereof irrespective of their wages including casual, trainees, contract employees are counted for the purpose of coverage of the factory/ establishment. Even the Directors employed are to be counted.

>> Who are the persons not to be counted for coverage of a factory? 

The following persons are not to be counted

a) A proprietor or a partner whether drawing salary or not;

b) A contract Of lending the services of his employee;

c) An apprentice engaged for the first time under the Apprentice Act, 1961;

d) Persons employed on contract for service, e.g. legal, technical, tax consultants;

e) Persons employed in branch/sales offices etc. away from the factory premises are not to be counted for the purpose of covered as employee under Section 2 (9), if their wages does not exceed the ceiling limit prescribed.

>> What is meant by 'premises'?

The term 'Premises' and 'Precincts' have not been defined in the Act. According to the definition assigned to the 'premises' under Section 2(m) of the Factories Act, 1948, it is a generic building, or shed. In view of the word 'precincts', thereof ' separate buildings' located apart or a distance when used for one continuous manufacturing process shall also constitute the 'Premises'.

>> What is Manufacturing Process? 

Manufacturing process shall have the meaning assigned to it in the Factories Act, as per Section 2(14-AA) of the Act. It is defined in section 2(K) of the Factories Act as “any process for

1) Making, altering repairing, ornamenting, finishing, packing, Oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adopting any article or substance with a view to its use, sale, transport, delivery, or disposal; or

2) Pumping of oil water, or sewages, or any other; or

3) Generating, transforming, or transmitting power; or

4) Composing types for( printing, by letter press. lithography, photogravure or other similar processes, or book binding; or

5) Constructing, reconstruction, repairing, refitting, finishing, or breaking up ships or vessel; or

6) Preserving or storing an article in cold storage; and

7) Tapping, collecting, cross matching and keeping in bottles, the blood, or whole human blood.

>> What are the establishments that attract coverage under ESI? 

According to the notification issued by the State Government concerned under Section 1 (5) of the Act, the following establishments employing 20 or more persons for wages attracts ESI coverage.

1) Shops

2) Hotels or restaurants not having any manufacturing activity, but only engaged in 'sales'.

3) Cinemas including preview theatres;

4) Road Motor Transport Establishments;

5) News paper establishments.(that is not covered as factory under Sec.2(12));

6) Private Educational Institutions (those run by individuals, trustees, societies or other organizations) and Medical Institutions (including Corporate, Joint Sector, trust, charitable, and private ownership hospitals, nursing homes, diagnostic centers, pathological labs).

>> Who are the persons to be counted for coverage of an establishment? 

The words 'premises' and 'precincts' used in the definition of 'factory' have not been used in the notifications issued by the State Governments, while extending the provisions of the Act to the establishments under Sec. 1 (5) of the Act. So long as the establishment employs a minimum prescribed number of 20 coverable employees for wages, it will stand covered under the Act whether these employees are employed at one place or at places away from each other, as they are engaged in the, organized activity of the same establishment. Thus, all the coverable employee including those working in branches, regd. office, sales office etc. whether situated in implemented area or not.

>> Can a factory or establishment once covered go out of coverage if the number of persons employed therein goes down to the minimum limit prescribed? 

Once a factory or an Establishment is covered under the Act, it continues to be covered notwithstanding the fact that the number of persons/ coverable employees employed therein at any time falls below the required Limit or the manufacturing process therein ceases to be carried on (Section 1 (6) of the Act).

>> Is there any provision for 'exemption of a factory or establishment from ESI coverage? 

Yes. If the employees in a factory or establishment are other-wise in receipt of benefits substantially similar or superior to those provided under the ESI Act, the appropriate, Government may grant exemption to such factory or establishment for a period of one year at a time prospectively in consultation with ESIC. Application for renewal is to be made three months before the date of expiry of exemption period (Section 87).

>> Who is a Principal Employer? 

(A) In the case of a factory, any of the following:•

(I) Owner;

(ii) Occupier;

(iii) Managing Agent of the owner or occupier;

(iv) Legal representative of a deceased owner or occupier;

(v) Manager of the factory under the Factories Act, 1948.

(B) In the case of Establishments belonging to or under the control of Government of India:

(i) The Specified Authority

(ii) The Head of the Department (In the absence of specified Authority).

(C) In the case of other establishments:

Any person responsible for the supervision and control of the establishment.

>> Who is an Immediate Employer? 

Immediate Employer can be any or all of the following:-

i. One who executes any work inside the premises of the principal employer of a factory or an establishment

ii. One who executes the work of a factory or establishment outside the premises under the supervision of its principal employer or his agent;

iii. One who lets on hire the services of his employees to the principal employer of a factory or establishment; and

iv. A Contractor (Sec. 2(13)).

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