Q.1. Explain in detail about ESI Act.

Ans.: The Employees State Insurance Act, ESI Act for short, was enacted by the Government of
India in 1948. The major objective of the Act was to provide certain benefits to employees in
case of sickness, maternity and injury (during employment) and for providing other benefits in
relation to the main objectives.
The Employee State Insurance Act, 1948
The Government of India through notification in the Official Gazette has amended the
Employees’ State Insurance (Central) Rules, 1950. Accordingly, as per rule 50, the wage limit
for coverage of an employee under Employees State Insurance Act has been enhanced from Rs.
10,000 to Rs. 15,000 with effect from 1 May 2010.
Applicability
The ESI Act, 1948 in the first instance, applies to:
 Factories using power in the manufacturing process and employing 10 or more persons
 Non-power using factories or establishments employing 20 or more persons for wages.
The Act contains an enabling provision under which Appropriate Government is empowered to
extend the provision of the ESI Act, 1948 to other classes of establishments.
 Industrial
 Commercial
 Agricultural or otherwise
Under these provisions the State Governments have extended the provisions of the ESI Act to the
following classes of establishments.
 Shops
 Hotels & Restaurants
 Cinemas including preview Theaters
 Road Motor Transport Undertaking
 News Paper Establishments

Wage Ceiling
Employees of covered units and establishments drawing wages upto Rs. 15,000 per month come
under the purview of the ESI Act 1948 for multi dimensional social security benefits.
Contribution
ESI scheme is financed by contribution raised from employees covered under this scheme and
their employers as a fixed percentage of wages. Rates of contribution are as follows:
 Employees contribution 1.75% of wages ( Employees earning up to Rs. 50 per day are exempted
from payment of their contribution)
 Employer’s contribution 4.75% of wages.

Social Security Benefits

 Various benefits that the insured employees and their dependents are entitled to are as follows
 Medical Benefits
 Sickness Benefits
 Maternity Benefits
 Disablement Benefits
 Dependent Benefits
 Other Benefits (like funeral expenses, vocational rehabilitations, free supply of physical aids
etc).

Safeguard for Insured Employees:

 Right to receive payment of any benefit under the Act are not transferable.
 Employer shall not dismiss, discharge or reduce the wages or otherwise punish a covered
employee during the period he/she is in receipt of Sickness Benefit or Maternity Benefit etc.
 By reason of his liability to pay his share of contribution under the ESI Act, no employer shall
directly or indirectly reduce the wages of a covered employee.
 Right to approach ESI Court against any action/decision of the Medical Board etc
 Cash Benefits payable under the Act are not liable to attachment or sale in execution of any
decree or order of any court

Duties of Employer
 An employer shall apply in Form-01 for coverage under the ESI Act, within 15 days after the Act
becomes applicable to a factory or establishment.
 The employer shall submit Declaration Form in respect of all coverable employees in the unit.
 The employer shall deposit both employees’ and employers’ contribution as per specified rates
within 21 days of the following month.
 The Employer shall maintain all such records and registers as are required under the Act and
produce them for verification / inspection before the authorized officers of the Corporation.
 The employer shall submit half-yearly Return of Contributions (RC) by 12th May/11th November
every year with all columns properly filled.
 The employer will report any change in business activity, address, ownership or the management
to ESIC authorities forthwith.

Q.2. Explain Workmen Compensation Act, 1923 and Equal Remuneration

Act, 1976.

Ans.: The Workmen’s Compensation Act, aims to provide workmen and/or their dependents
some relief in case of accidents arising out of and in the course of employment and causing
either death or disablement of workmen. It provides for payment by certain classes of employers
to their workmen compensation for injury by accident.

Who is a Workman?
In order to be a workman within the meaning of section2 (1) (n) of Worker’s Compensation Act
a person should first be employed; second, his employment should not be of casual nature; third,
he should be employed for the purposes of the employer’s trade or business; and lastly, the
capacity in which he works should be one set out in the list in Schedule II of the Act.

EMPLOYEES ENTITLED TO COMPENSATION

Every employee (including those employed through a contractor but excluding casual
employees), who is engaged for the purposes of employer’s business and who suffers an injury in
any accident arising out of and in the course of his employment, shall be entitled for
compensation under the Act.

EMPLOYER’S LIABILITY FOR COMPENSATION (ACCIDENTS)

The employer of any establishment covered under this Act, is required to compensate an
employee:

a. Who has suffered an accident arising out of and in the course of his employment, resulting into
(i) death, (ii) permanent total disablement, (iii) permanent partial disablement, or (iv) temporary
disablement whether total or partial, or

b. Who has contracted an occupational disease.

Contracting Out

Any contract or agreement which makes the workman give up or reduce his right to
compensation from the employer is null and void insofar as it aims at reducing or removing the
liability of the employer to pay compensation under the Act.

Equal Remuneration Act

The Equal Remuneration Act, 1976 provides for payment of equal remuneration to men and
women and help prevent gender discrimination. Article 39 of the Indian Constitution envisages
that the States will have a policy for securing equal pay for equal work for both men and women.
To give effect to this constitutional provision, the Equal Remuneration Act, 1976 was
introduced.

Duties of Employer
Under the Equal Remuneration Act, employers are required to ensure the following with respect
to workmen:

 No employer shall pay to any worker, employed by him in an establishment or

employment, remuneration, whether payable in cash or in kind, at rates less favourable
 than those at which remuneration is paid by him to the workers of the opposite sex in
such establishment or employment for performing the same work or work of a similar
nature.
 No employer for the purpose of complying with the Equal Remuneration Act can reduce
the rate or salary of any worker.

In addition, no employer while making recruitment for the same work or work of a similar nature
can make any discrimination against women except where the employment of women in such
work is prohibited or restricted by a law in force.

Maintenance of Register
All employers are required to maintain a register and other documents in relation to the workers
employed as per the prescribed rules. Rule 6 of the Equal Remunerations Rules provides that
every employer maintain a register in relation to the workers employed by him in Form D.

Penalty under Equal Remuneration Act

The penalty provided under the Equal Remuneration Act can be divided into two categories as
follows:

Minor Infraction
If an employer commits any of the following offences under the Equal Remuneration Act, a
penalty of Rs.1000 can be levied.

 Omits or fails to maintain any register or document in relation to workers employed.

 Omits or fails to produce any register, muster-roll or other document pertaining to the
employment of workers.
 Omits or refuses to give any evidence or prevents his agent, servant or any other person
in charge of the establishment, or any worker, from giving evidence.

Major Infraction
If an employer commits any of the following offences under the Equal Remuneration Act, a
penalty of Rs.5000 can be levied.

 Discriminates in recruitment in contravention to the Equal Remuneration Act.

 Makes a payment of remuneration at unequal rates to men and women workers, for the
same work or work of a similar nature.
 Makes any discrimination between men and women workers in contravention of the
Equal Remuneration Act.
 Omits or fails to carry out any direction made by the Government.