ESI Act-a quick review

Article: 66
The prosperity of any economy to a large extend depends on industry. Success of any industry is based on the cordial relation between the members of the industry. That is economic progress of the country is largely depends on the good relation between the employer and employee. In India similar to the protection given to investors, Shareholders and other stakeholders, labourers are equally protected through the enactments of various labour laws. These labour laws are intended to protect the interests of laboures and thereby ensure their satisfaction and active participation in nation building.
The existing labour laws in India are applicable to all sectors but unfortunately majority of our population unaware about their rights. The malice of unfair labour practices and victimization of workers are at large. Compliance of labour legislation is neglected and nobody treats it as a heinous act.
ESI Scheme of India is an integrated social security scheme to provide protection to workers in the organized sector and their dependants in contingencies, such as sickness, maternity or death and disablement due to an employment injury or occupational disease. As the name suggests, it is basically an ‘insurance’ scheme. ESIC - Employees State Insurance Corporation (ESIC) has been formed to supervise the scheme under section 3 of the Act. The Corporation supervises and controls the ESI scheme.
Recently, Central Government has taken many initiatives to widen the applicability of ESI Act. v  Medical facilities are provided through a network of 1388 ESI Dispensaries, over 1678 Panel Clinics; v  148 ESI hospitals and 42 hospitals annexes with other 27739 beds; v   the Corporation has tie up arrangements with advanced medical institutions in the country, both in the public and private sector; v  The medical benefit is administered with the active cooperation of the State Governments
In an establishment where 10 or more persons are employed, that comes under the purview of ESI. The Government has the power to extend the provisions of the ESI Act to various classes of establishments. Based on this  provision, many  Governments  have extended the ESI Act to medical and educational institutes, shops, hotels, restaurants, theatres, motor transport undertakings, newspaper and advertising establishments etc., employing 10 or more persons.
The funding to the ESI Scheme is mainly by the member contributions. Member’s contribution is split into two and shared by the employer and employee in a prescribed proportion. Present sharing proportion  is as follows:
1.   Employees: 1.75 percent of wages and 2.   Employers: 4.75 percent of wages. An employee earns up to Rs. 100/- per day is exempted from paying their contribution. In such case, the ESI contribution shall be 4.75 percentage of wages-employer’s contribution-only.
v  Employees drawing wages up to Rs.15,000/- per month of covered units only come under the purview of the ESI Act, 1948. v  Persons with disabilities employed on or after 01.04.2008 and drawing monthly wages up to Rs.25000/- are covered under the Scheme and Employers’ share of contribution is paid by Government for three years.
The employer covered by ESI has certain benefits:
1.   They are exempted from applicability of Workmen’s Compensation Act, 1923. 2.   Exemption from applicability of Maternity Benefit Act, 1961. 3.   Contribution under the ESI Act is allowable deduction under the Income Tax Act.
Important points.
1.	An employer will apply in Form-01 for coverage under the ESI Act, within 15 days after the Act becomes applicable to the  establishment.
2.	The employer has to collect temporary identity cards followed by permanent photo identity cards and pass them on to the employees concerned.
3.	Deposit both employee’s and employer’s contribution within 21 days of the following month.
4.	The employer will maintain an Accident Book and submit accident reports to the Branch Office, involving insured worker(s) on the job, within 24 hours of an accident
5.	Right to receive payment of any benefit under the Act that shall not be transferable or assignable
6.	The employer will maintain all such records and registers as are required under the Act
7.	Cash Benefits payable under the Act are not liable to attachment or sale in execution of any decree or order of any court.
8.	The employer shall submit half-yearly Return of Contribution by 12th May/11th November every year.
9.	No dismissal or punishment during period of sickness
10.	The Employer has to ensure that contribution is paid in respect of all contract labour, badili and casual workers drawing wages up to Rs.15,000/- a month.
11.	The employer will promptly report the date of closure of a factory/establishment or change of business activity to the ESIC Branch Office/Regional Office, preferably within seven days of such closure and clear ESI liabilities.
12.	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
13.	An employer will also ascertain the liability towards ESI dues, while taking over the ownership of a factory/establishment through purchase, gift, lease, license or otherwise as the new owner is liable to discharge past liabilities.
v  Failure to pay contributions shall be punishable with imprisonment.
Section-86-A: If the person committing an offence under the ESI Act is a company (i.e. body corporate including a firm and other association of individual), every person who was in charge of the company shall be liable to be proceeded against and punished, unless it is proved that the offence was committed without his knowledge or despite exercise of due diligence to prevent the same. Thus, any director, manager, secretary etc. Who has consented, connived or was negligent in the matter of commission of any such offence is guilty of that offence. Case study: Buckingham & Carnatic Co v. Venkatayya  - 1964 SC The provision (of section 73) is applicable only in case of punitive action for all kinds of misconduct during which employee has received sickness benefits. This protection is not applicable in case of abandonment of employment or when termination is automatic as per contract. Rajveer Singh v. Judge 1996 (Rajasthan HC provisions of section 73 are not applicable, when termination of an employee is automatic. Section 73 of the Act provides that no employer shall dismiss, discharge or reduce or otherwise punish an employee during the period employee is in receipt of sickness benefit or maternity benefit. He also cannot dismiss, discharge or otherwise punish employee when he is in receipt of disablement benefit or is under medical treatment or is absent from work due to sickness. This gives protection to employee when he is in receipt of sickness benefit or maternity benefit. Employer cannot take disciplinary action against employee in such cases. This provision is grossly misused by employees