An Essay on the Employees State Insurance Act, 1948

Abstract

The ESI Scheme is a statutory scheme and is regulated by the ESIC Act, ESIC Rules and ESIC Regulations. It is managed by an organization called as the Employees' State Insurance Corporation (ESIC). The organization is comprised of people represented by Employers, Employees, the Central Government, State Government, Medical Profession and the Hon’ble Members of Parliament. The organization has a CEO. The Director General is the Chief Executive Officer. The ESIC scheme is financed by the contribution received from the employees, employers and the State Government who shares 1/8^th of the cost of medical expenditure.

The Employees State Insurance Act, 1948 is welfare legislation. The objective of the act is to provide certain benefits to employees in case of sickness, maternity benefit and employment injury. Further the act also ensures to extend its beneficial provisions for other matters related to the employees. The act extends to whole of India. As per sub section 4 of section 1, the act applies to all the factories in the first instance irrespective that it is owned by the government or not. The act further extends the definition of factories in section 2(12). It states that ‘factory’ means any premises including the precincts where 10 or more persons are or were employed on any day of the preceding twelve months in part of the manufacturing process. This sub section exempts the mines operated under the Mines Act or a railway running shed. The Act also provides under the section 2(24) that any words or definitions which are not explicitly provided under the Act has to be referred with the Industrial Dispute Act, 1947 for having the interpretation. Employees earning less than Rs 21,000/- are covered under the ESIC Scheme.