Module IV

SOCIAL SECURITY Of
WORKMEN

Presented By: Ms. Nikita B. Talukdar

 03

BENEFITS UNDER EMPLOYEE

STATE INSURANCE
CHAPTER IV OF SS CODE2020
Current status of ESI Law Coverage under ESI
Act
Coverage Position (As on 31st March 2022)

No. of Insured Persons 3.10 Crores

No. of Employees 2.78 Crores

Total No. of Beneficiaries 12.04 Crores

No. of Insured women 58.69 Lakhs

No. of Employers, etc 15.94 Lakhs

Current status of ESI Law Coverage under ESI
Act
• E.S.I. Scheme being contributory in nature, all the employees in the
factories or establishments to which the Code applies shall be
insured in a manner provided by the Code.
• The contribution payable to the Corporation in respect of an
employee shall comprise of employer's contribution and employee's
contribution at a specified rate.
• The rates are revised from time to time.
 Benefits
• Section 32 to 41 of the SS Code provides for the provisions regarding the
benefits to n be given to the insured persons.
• The law provides Six kinds of benefits to a person covered under ESI Law.
Section 32 provides that:
(1) Subject to the provisions of this Code, the Insured Persons, their
defendants or the persons hereinafter mentioned, shall be entitled to the
following benefits, namely:—
ESI BENEFITS
 (a) SICKNESS BENEFIT
periodical payments to any Insured Person in
case of his sickness certified by a duly appointed
medical practitioner or by any other person
possessing such qualifications and experience as the
Corporation may, by the regulations, specify in this
behalf.
Section 2 (77) defines "sickness“ as a condition
which requires medical treatment and attendance
and necessitates abstention from work on medical
ground

SICKNESS BENEFIT
 Clause 32 (3) provides:
the qualification of a person to claim sickness
benefit, and the conditions subject to which such
benefit may be given and the rate and period
thereof, shall be such as may be prescribed by the
Central Government.

SICKNESS BENEFIT
 • As per the Old Act (ESI ACT)
• Sickness Benefit in the form of cash compensation at the rate of 70
per cent of wages is payable to insured workers during the
periods of certified sickness for a maximum of 91 days in a year.
• In order to qualify for sickness benefit the Insured Person is
required to contribute for 78 days in a contribution period of 6
months.
 (b) MATERNITY BENEFIT

periodical payments to an Insured Person

being a woman in case of confinement or
miscarriage or sickness arising out of
pregnancy, premature birth of child, such
woman being certified to be eligible for such
payments by an authority specified in this
behalf by the regulations.

MATERNITY BENEFIT
Refer Sections: S. 32(3), 41 clauses (4), (7)
S. 2 (91) "woman" means a woman employed, whether directly or through any
contractor, for wages in any establishment:
Provided that for the purposes of Chapter IV, a woman who is or was an employee in
respect of whom contribution is or were payable under the said Chapter . . . . . and
shall include—
(i) a commissioning mother who as biological mother wishes to have a child and
prefers to get embryo implanted in any other woman;
(ii) a woman who legally adopts a child of up to three months of age
 S. 2 (18) "confinement" :
labour resulting in the issue of a living child, or labour after twenty-six
weeks of pregnancy resulting in the issue of a child whether alive or
dead;
 • Maternity Benefit is payable to an Insured Woman in the following cases subject to
contributory conditions :-
1. Maternity Benefit is payable for a maximum period of 26 weeks upto 2 surviving children
in case of confinement of which not more than 8 weeks shall precede the expected date of
confinement.
2. Miscarriage or Medical Termination of Pregnancy (MTP)-payable for 6 weeks (42
days) from the date following miscarriage.
3. Sickness arising out of Pregnancy, Confinement, Premature birth-payable for a period
not exceeding one month
4. In the event of the death of the Insured Woman during confinement leaving behind a
child, Maternity Benefit is payable to her nominee.
• Maternity benefit rate is 100% of average daily wages
 (c) DISABLEMENT BENEFIT
Periodical payments to an Insured Person
suffering from disablement as a result of an
employment injury sustained by him as an
employee for the purposes of this Chapter and
certified to be eligible for such payments by an
authority specified in this behalf by the
regulations.
Benefit given in cases of Permanent
disablement and Total Disablement.
Refer Sections: 2(28), 34, 35. 36, 37, 41 (1) Disablement benefit
to (4) (7)
• As per ESI Act: Temporary Disablement Benefit at the rate of 90%

of wage is payable so long as disability continues.

• For permanent Disablement: The benefit is paid at the rate of 90%

of wage in the form of monthly payment depending upon the extent

of loss of earning capacity as certified by a Medical Board

S. 2 (28) "employment injury" means a personal injury to an employee,

caused by accident or an occupational disease (Refer S. 36), as the case

may be, arising out of and in the course of his employment,—

(i) for the purposes of Chapter IV, if the employee is an insured or insurable

employee under section 28 whether such accident occurs or the occupational

disease is contracted within or outside the territorial limits of India;

S. 2 (55) "permanent partial disablement" means, where the disablement is of a
permanent nature, such disablement as reduces 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: (REFER IV SCHEDULE):
S. 2 (56) "permanent total disablement" 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:(REFER IV SCHEDULE)
S. 2 (83) "temporary disablement" means a condition resulting from an employment
injury which requires medical treatment and renders an employee, as a result of such
injury, temporarily incapable of doing the work which he was doing prior to or at the
time of the injury;
 (d) DEPENDANTS' BENEFIT

periodical payments to such dependants

of an Insured Person who dies as a result
of an employment injury sustained by
him as an employee for the purposes of
this Chapter, as are entitled under this
Chapter.
Refer Sections: 2(28), 34, 35. 36, 38.
 (d) DEPENDANTS' BENEFIT
DB paid at the rate of 90% of wage in the form of monthly payment
to the dependants of a deceased Insured person in cases where

death occurs due to employment injury or occupational hazards.

(24) "dependant" means any of the following relatives of deceased employee,
namely:—
(a) a widow, a minor legitimate or adopted son, an unmarried legitimate or adopted
daughter or a widowed mother:
Provided that for the purposes of Chapter IV, a legitimate adopted son, who has not
attained the age of twenty-five years, shall be dependent of the deceased
employee;
(b) if wholly dependant on the earnings of the employee at the time of his
death, a legitimate or adopted son or a daughter who has attained the age of
eighteen years and who is infirm;
(c) if wholly or in part dependent on the earnings of the employee at the time of his death,
—
(i) a widower;
(ii) a parent other than a widowed mother;
(iii) a minor illegitimate son, an unmarried illegitimate daughter or a daughter legitimate or
illegitimate or adopted if married and a minor or if widowed and a minor;
(iv) a minor brother or an unmarried sister or a widowed sister if a minor;
(v) a widowed daughter-in-law;
(vi) a minor child of a pre-deceased son;
(vii) a minor child of a pre-deceased daughter where no parent of the child is alive, or;
(viii) a grandparent if no parent of the employee is alive.
 (e) MEDICAL BENEFIT
Full medical care is provided to an
Insured person and his family
members from the day he enters
insurable employment. There is no
ceiling on expenditure on the
treatment of an Insured Person or his
family member.
• Medical treatment for and attendance on Insured Persons
• Refer Section: 32(2) 39, 40 of the Code on Social Security
2020
• Treatment given in the form of out-patient treatment and
attendance in a hospital or dispensary, clinic or other
institution or by visits to the home of the Insured Person or
treatment as in-patient in a hospital or other institution. (S. 39)
 (f) FUNERAL EXPENSES
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, or, where the Insured
Person did not have a family or was not living
with his family at the time of his death, to the
person who actually incurs the expenditure
on the funeral of the deceased Insured Person.
Claim for Payment to be made within 3
months.
Section 33. Corporation’s power to promote measures
for health, etc., of Insured Persons.

The Corporation may, in addition to the benefits specified in this Chapter,

promote measures for the improvement of the health and welfare of Insured
Persons and for the rehabilitation and re-employment of Insured Persons who
have been disabled or injured and may incur in respect of such measures,
expenditure from the Employees' State Insurance Fund within such limits as
may be prescribed by the Central Government.
 03

General Provisions regarding

benefits
• Section 41 provides for certain conditions/restrictions which

has to be followed before claiming any benefit under ESI

Provision.

• Let us discuss few important conditions/restrictions mentioned

in the next slides.

 S. 41 Clause (1)

Save as may be provided in the regulations, no person shall be

entitled to commute for a lump sum any disablement benefit

admissible under this Chapter.

• With respect to clause (1) S. 41 SS Code 2020 the following case may be relevant.

Mr. A. Tehan V/S M/S. Associated Electrical Agencies & Anr. (1996)

. . . .ESI law is a beneficial legislation. Benefits under it are more substantial than Workmen

Compensation legislation… the only disadvantage, if at all it can be called a

disadvantage, is that he will get compensation under the ESI Act by way of periodical

payments and not in a lump sum as under the Workmen's Compensation Act. If the

Legislature in its wisdom thought it better to provide for periodical payments rather than

lump sum compensation its wisdom cannot be doubted. . . .

 S. 41 Clause (2)

Save as may be provided in the regulations, no person shall be entitled to

sickness benefit or disablement benefit for temporary disablement on

any day on which he works or remains on leave or on a holiday in respect of

which he receives wages or on any day on which he remains on strike.

 S. 41 Clause (3)

A person who is in receipt of sickness benefit or disablement benefit (other

than benefit granted on permanent disablement) —
(a) shall remain under medical treatment at a dispensary, hospital,
clinic or other institution provided under this Chapter, and
(b) shall not while under treatment do anything which might retard

or prejudice his chances of recovery;

(c) shall not leave the area in which medical treatment provided by
this Chapter is being given, without the permission of the medical
officer, medical attendant or such other authority as may be specified in
this behalf by the regulations; and
(d) shall allow himself to be examined by any duly appointed medical
officer or other person authorized by the Corporation in this behalf.
S. 41 Clause (4)
S. 41 Clause (4)
 S. 41 Clause (4)

An Insured Person shall not be entitled to receive for the same period—
(a) both sickness benefit and maternity benefit; or
(b) both sickness benefit and disablement benefit for temporary disablement; or
(c) both maternity benefit and disablement benefit for temporary disablement.

S. 41 Clause (5)

Where a person is entitled to more than one of the benefits mentioned in sub-
section (4), he shall be entitled to choose which benefit he shall receive.
 S. 41 Clause (7)

ESI Employees Compensation

CHAPTER VII
CHAPTER IV
 S. 41 Clause (7)

ESI Maternity Benefit

CHAPTER VI
CHAPTER IV
 S. 41 Clause (7)

(a) Any person eligible for availing dependent or disablement benefit under this
Chapter shall not be entitled to claim Employees’ Compensation from his
employer under Chapter VII. (Ch. VII deals with provisions of Employees
compensation in cases of employment injury)

(b) Any women employee eligible for availing maternity benefit under this

Chapter shall not be entitled to claim maternity benefit from her employer
under Chapter VI.
 So, if a person is insured under Chapter IV relating to ESI provisions, he
shall not be entitled to claim benefit under employees compensation.
 Chapter IV of ESI prevails over Chapter VII.
 A person cannot claim both benefits. He is not entitled to choose.
 Similarly, if a women is eligible for maternity benefit under ESI chapter, shall
not be entitled to claim maternity benefit under Chapter VI (Special chapter
on Maternity. Various benefits on maternity given like Nursing break, crèche,
work from home etc.)
CASE LAWS
 Mr. A. Tehan V/S M/S. Associated Electrical Agencies & Anr. (1996)

Facts of the Case:

• The appellant was employed by Respondent No.1 for carrying out repairs of television
sets.
• On July 17, 1987 while he was repairing a television set a component of it burst and that
caused an injury to his face. As a result thereof he lost vision of his left eye.
• The appellant being an employee and insured person under the Employment State
Insurance Act, 1948 and as the injury sustained by him was an employment injury,
became entitled to the benefit of Section 46(c) of the ESI Act.
• Therefore, he approached the ESI Corporation and the Corporation granted the
benefit available to him under the ESI Act.
• Thereafter in September 1991 he served a notice on Respondent No.1
demanding Rs. 7 lakhs as compensation.
• This was followed by Application on 1992 before the Commissioner
for Workmen's Compensation, Bombay under Workmen's
Compensation Act, 1923 wherein he claimed compensation of Rs.1,06,785
with penalty, penal interest and costs.
• Commissioner Decided against the respondent (the employer)
• Respondent filed case in Bombay high court, the Division bench of HC
allowed the appeal and dediced in favour o Respondednt (the employer)
• Hence the matter reached before SC by filing an SLP by the appeallant.
 • Issue raised??

Validity of the Bar created by Section 53 of ESI Act and

maintainability of the application filed by the appellant under the
Workmen's Compensation Act.
 • Held:
• Appellant cannot claim the benefit under Workmen Compensation Act as S. 53
created a bar that is a employee is insured under ESI Act, he cannot claim benefit
under any law and Workmen compensation Act Shall not apply.
• Observation of court;
• A comparison of the relevant provisions of the two Acts makes it clear that both the Acts
provide for compensation to a workman/employee for personal injury caused to him by
accident arising out of and in the course of his employment.
• The ESI is a later Act and has a wider coverage.
• It is more comprehensive.
• It also provides for more compensation than what a workman would get under the
Workmen's Compensation Act.
• While enacting the ESI Act the intention of the Legislature could not have been to create
another remedy and a forum for claiming compensation for an injury received by the
employee by accident arising out of and in the course of his employment.
• Bar is against receiving or recovering any compensation or damages under the Workmen's
Compensation Act or any other law for the time being in force or otherwise in respect of an
employment injury.
• The bar is absolute as can be seen from the use of the words shall not be entitled to receive or
recover, "whether from the employer of the insured person or from any other person", "any
compensation or damages" and "under the Workmen's Compensation Act, 1923 (8 of 1923), or
any other law for the time being in force or otherwise".
 Kerala CBSE School Management'S vs State Of Kerala
Represented By on 3 July, 2009

• Issue:
• The point that arises for decision in these cases is whether the notification dated
8.10.2007, issued by the Kerala Government under Section 1(5) of the Employees
State Insurance Act, 1948, extending the provisions of the said Act WPC
No.5986/08 and connected cases to educational institutions, is valid or not.
• The petitioners in these cases represent the managements of schools affiliated to CBSE,
ICSE and also unaided but recognised schools under the Kerala Education Rules.
Notification excluded public and aided schools.
• Writ petition was filed before Kerela HC.
• Contention of Petitioners
a) The educational institutions not being establishments similar to industrial,
commercial or agricultural establishments, are not covered by the words 'or otherwise'
used in Sec. 1 (5).
• S. 1(5) ESI Act says: The appropriate Government may, . . . .extend the provisions of
this Act or any of them, to any other establishment or class of establishments,
industrial, commercial, agricultural or otherwise..
(b) The schools affiliated to CBSE are under the control of the Central Government
and therefore, the appropriate Government to issue the notification under Section 1(5)
of the Act is the Central Government and not the State Government and the notification
was ultra vires and therefore, unenforceable.
• Contention of State:
• The words 'or otherwise' employed are wide enough to cover all other
establishments other than industrial, commercial or agricultural.
• According to the State, since educational institutions have been held to be
industrial establishments by the Supreme Court in
Bangalore Water Supply and Sewerage Board v. A.Rajappa (1978) the notification
does not suffer from any infirmity.
• It also submits that though the CBSE is controlled by the Central Government, it
cannot be said that the schools affiliated to CBSE are also controlled by the Central
Government. So, the State prayed for dismissing the writ petition.
 • Held:
• On the contention of petitioner it was argued that the word 'establishment' must have
some relation with factory and educational institution is not even remotely connected
with the activity, which is carried out in factories.
• This argument is not acceptable.
• The purpose of the Act is to confer certain benefits upon the employees and employees of
any establishment may deserve such benefits.
• The extension of the provisions of the ESI Act to educational institutions and the
interpretation given to the words "or otherwise" by the Bombay High Court in an earlier
decision lay down the correct legal position.
• We hold that the notification under Section 1(5) of the ESI Act can cover an
educational institution for reason that, the educational institutions like schools are
industrial establishments, in view of the decision of the Apex Court in Bangalore Water
Supply and Sewerage Board's case.
• In view of the binding precedent laid down by Apex Court in Bangalore Water Supply and
Sewerage Board's case, we cannot accept that contention.
• Further, the interpretation of the definition of "industry" in Section 2(j) of the
Industrial Disputes Act is applicable to the interpretation of the word "industrial" in
Section 1(5) of the E.S.I. Act,
• In the result, the writ petitions fail and they are accordingly dismissed.
 Consequences of not insuring a employee
(S. 42)
(1) If any employer, —
(a) fails or neglects to insure under section 28, an employee at the time of his
appointment as a result of which the employee becomes disentitled to any benefit
under this Chapter; or
(b) insures under section 28, an employee on or after the date of accident which
resulted in personal injury to such employee which has the effect of making such
employee disentitled to receive any dependant benefit or disablement benefit from
the Corporation; or
(c) fails or neglects to pay any contribution which he is liable to pay.
 Consequences of not insuring a employee
(S. 42)

• Then, the Corporation may, on being satisfied that the benefit is payable to the
employee, pay to the employee benefit at such rate to which he is entitled or
would have been entitled if the failure or neglect would not have occurred, and
• the Corporation shall be entitled to recover from the employer, subject to the
employer being given an opportunity of being heard, the capitalised value of the
benefit paid to the employee, to be calculated in such manner as may be prescribed
by the Central Government:
 Punishment

• Section 133.
• If any person,—
(a) being an employer, fails to pay any contribution which he is liable to pay under
this Code or rules, regulations or schemes made thereunder; or. . . .
• he shall be punishable,—
with imprisonment for a term which may extend to three years,
• but—
• (a) which shall not be less than one year, in case of failure to pay the
employee's contribution which has been deducted by him from the
employee's wages and shall also be liable to fine of one lakh rupees;
 Provision of ESI for Gig, platform and
unorganized workers

• Section 45.
• Clause (1) Notwithstanding anything contained in this Chapter, the Central
Government may, by notification, frame scheme for unorganised
workers, gig workers and platform workers and the members of their
families for providing benefits admissible under this Chapter by the
Corporation.
 Thanks!
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