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EMPLOYEES' STATE INSURANCE ACT, 1948
34 OF 1948
An Act to provide for certain benefits to employees in case of sickness, maternity and "employment injury" and to make provision for certain other matters in relation thereto.
WHEREAS it is expedient to provide for certain benefits to employees in case of sickness, maternity and employment injury and to make provision for certain other matters in relation thereto: It is hereby enacted as follows :-
SECTION 01: SHORT TITLE, EXTENT, COMMENCEMENT AND APPLICATION
(1) This act may be called the Employees' State Insurance Act, 1948.
(2) It extends to1[the whole of India]2[* * *].
(3) It shall come into force on such date or dates as the Central Government may, by
notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act and3[for different States or for different parts thereof].
(4) It shall apply, in the first instance, to all factories (including factories belonging to the4 [Government] other than seasonal factories :5[Provided that nothing contained in this subsection shall apply to a factory or establishment belonging to or under the control of the Government whose employees are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act.]
(5) The appropriate Government may, in consultation with the Corporation and6[where the appropriate Government is a State Government, with the approval of the Central Government], after giving six months' notice of its intention of so doing by notification in the Official Gazette, extend the provision of this Act or any of them, to any other establishment or class of establishments, industrial, commercial, agriculture or otherwise:7[Provided that where the provisions of this Act have been brought into force in any part of a State, the said provisions shall stand extended to any such establishment or class of establishments Within that part if the provisions have already been extended to similar establishment or class .of establishments in another part of that State.]
8[(6) A factory or an establishment to which this Act applies shall continue to be overned by this Act notwithstanding that the number of persons employed therein at any time falls below the limit specified by or under this Act or the manufacturing process therein ceases to be carried on with the aid of power.]
SECTION 02: DEFINITIONS
In this Act, unless there is anything repugnant in the subject or con- text-
(1) "appropriate Government" means, in respect of establishment under the control of the
Central Government or9[a railway administration] or a major port or a mine or oilfield, the Central Government, and in all other cases, the ‡[State] Government;
(2)11[***]
(3) "confinement" means 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;
(4) "contribution" means 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 employee in accordance with the provisions of this Act;
(5)12[***]
(6) "Corporation" means the Employees State Insurance Corporation set up under this Act ; 13[(6A) "dependant" means any of the following relatives of a deceased insured person, namely :-
(i) a widow, a minor legitimate or adopted son, an unmarried legitimate or adopted14[daughter;] 15[(ia) a widowed mother;]
(ii) if wholly dependent on the earnings of the insured person at the time of his death, a legitimate or adopted son or daughter who has attained the age of eighteen years and is infirm;
(iii) if wholly or in part dependent on the earnings of the insured person at the time of his death,-
(a) a parent other than a widowed mother,
(b) a minor illegitimate son, an unmarried illegitimate daughter or a daughter legitimate or adopted or illegitimate if married and a minor or if widowed and a minor,
(c) a minor brother or an unmarried sister or a widowed sister if a minor,
(d) a widowed daughter-in-law,
(e) a minor child of a pre-deceased son,
(f) a minor child of a pre-deceased daughter where no parent of the child is alive, or
Definitions
(g) a paternal grand-parent if no parent of the insured person is alive;]
(7) "duly appointed" means appointed in accordance with the provisions of this Act or with the rules or regulations made there under;
16[(8) "employment injury" means a personal injury to an employee caused by accident or an occupational disease arising out of and in the course of his employment, being an insurable employment, whether the accident occurs or the occupational disease is contracted within or outside the territorial limits of India;]
(9) "employee" means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and-
(i) who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or else- where; or
(ii) who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or
(iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose ser- vices are so lent or let on hire has entered into a contract of service;17[and includes any person employed for wages on any work con- nected with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of raw materials for, or the distribution or sale of the products of, the factory or establishment]18[or any person engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 (52 of 1961)-, or under the standing orders of the establishment; but does not include]-
(a) any member of 20[the Indian] naval, military or air forces; or
20[(b) any person so employed whose wages (excluding remuneration for overtime work) exceed ‡[such wages as may be prescribed' by the Central Government] : Provided that an employee whose wages (excluding) remuneration for overtime work) exceed ‡[such wages as may be prescribed by the Central Government] at any time after (and not before) the beginning of the contribution period, shall continue to be an employee until the end of that period;]
(10) "exempted employee" means an employee who is not liable under this Act to pay the employees' contribution. 22(ll) "family" means all or any of the following relatives of an insured person, namely:-
(i) a spouse;
(ii) a minor legitimate or adopted child dependent upon the in- sured person;
(iii) a child who is wholly dependent on the earnings of the insured person and who is
(a) receiving education, till he or she attains the age of twenty- one years,
(b) an unmarried daughter;
Definitions
(iv) a child who is infirm by reason of any physical or mental abnormality or injury and is wholly dependent on the earnings of the insured person, so long as the infirmity continues; (v) dependent parents;
(12) "factory" means any premises including the precincts thereof-
(a) whereon ten or more persons are employed or were employed for wages on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power or is ordinarily so carried on, or
(b) whereon twenty or more persons are employed or were employed for wages on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power or is ordinarily so carried .on, but does not include a mine subject to the operation of the Mines Act, 1952 (35 of 1952)-or a railway running shed ;]
(13) "immediate employer" in relation to employees employed by or through him, means a person who has undertaken the execution, on the premises of factory or an establishment to which this Act applies or under the supervision of the principal employer or his agent, of the whole or any part of any work which is ordinarily partof the work of the factory or establishment of the principal employer or is preliminary to the work carried on in, or incidental to the purpose of, any such factory or establishment, and includes a person by whom the services of an employee who has entered into a contract of service with him are temporarily lent or let on hire to the principal employer „[and includes a contractor];
24[(13A) "insurable employment" means an .employment in a factory or establishment to which this Act applies;]
(14) "insured person" means a person who is or was an employee in respect of whom contributions are or were payable under this Act and who is, by reason thereof, entitled to any of the benefits pro- vided by this Act; 25[(14A) "managing agent" means any person appointed or acting as the representative of another person for the purpose of carrying on such other person's trade or business, but does not include an individual manager
subordinate to an employer;]
26[(14AA) "manufacturing process" shall have the meaning assigned to it in the Factories Act, 1948 (63 of 1948)- ;] 25[(14B) "miscarriage" means expulsion of the contents of a pregnant uterus at any period prior to or during the twenty-sixth week of pregnancy but does not include any miscarriage, the causing of which is punishable under the Indian Penal Code (45 of 1860);]
(15) "occupier" of the factory shall have the meaning assigned to it in the Factories Act-,27[1948] (63 of 1948); 28[(15A) "permanent partial disablement" means such disablement of a permanent nature, 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 : Provided that every injury specified in Part II of the Second Schedule shall be deemed to result in permanent partial disablement.] 29[(15B) "permanent total disablement" mean 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: Provided that permanent total disablement shall be deemed to result from every injury specified in Definitions Part I of the Second Schedule or from any combination of injuries specified in Part II thereof where the aggregate percentage of the loss of earning capacity, as specified in the said Part II against those injuries, amounts to one hundred percent or more.]
30[(15C) "power" shall have the meaning assigned to it in the Factories Act,1948 (63 of 1948)-;]
(16) "prescribed" means prescribed by rules made under this Act;
(17) "principal employer" means-
(i) in a factory, the owner or occupier of the factory and includes the managing agent of such owner or occupier, the legal representative of a deceased owner or occupier, and where a person has been named as the manager of the factory under31[the Factories Act, 1948 (63 of 1948)], the person so named; (ii) in any establishment under the control of any department of any Government in India, the authority appointed by such Government in this behalf or where no authority is so ap- pointed, the head of the department;
(iii) in any other establishment, any person responsible for the supervision and control of the establishment;
(18) "regulation" means a regulation made by the Corporation;
(19) "Schedule" means a Schedule to this Act; 33[(19A) "seasonal factory" means a factory which is exclusively engaged in one or more of the following manufacturing processes, namely, cotton ginning, cotton or jute pressing, decortication of ground- nuts, the manufacture of coffee, indigo, lac, rubber, sugar (including gur) or tea or any manufacturing process which is incidental to or connected with any of the aforesaid processes and includes a factory which is engaged for a period not exceeding seven months in a year-
(a) in any process of blending, packing or repacking of tea or coffee; or
(b) in such other manufacturing process as the Central Government may, by notification in the Official Gazette, specify:]
(20) "sickness" means a condition which requires medical treatment and attendance and necessitates abstention from work on medical grounds:
(21) "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 of33[doing the work which he was doing prior to or at the time of the injury];
(22) "wages" means all remuneration paid or payable, in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled and includes34[any payment to an employee in respect of any period of authorised leave, lock out, strike which is not illegal or lay-off and] other additional remuneration, if any,35[paid at intervals not exceeding two months], but does not include- (a) any contribution paid by the employer to any pension fund or provident fund, or under this Act;(b) any travelling allowance or the value of any travelling con- cession; Definitions (c) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or (d) any gratuity payable on discharge.
36[(23) "wage period" in relation to an employee means the period in respect of which wages are ordinarily payable to him whether in terms of the contract of employment, express or implied or other- wise;]
37[(24) all other words and expressions used but not defined in this Act and defined in the Industrial Disputes Act, 1947 (14 of 1947)-, shall have the meanings respectively assigned to them in that Act.]
SECTION 02A: REGISTRATION OF FACTORIES AND ESTABLISHMENTS
Every factory or establishment to which this Act applies shall be registered within such time and in such manner as may be specified in the regulations made in this behalf.]
SECTION 03: ESTABLISHMENT OF EMPLOYEES' STATE INSURANCE CORPORATION
(1) With effect from such date as the Central Government may, by notification in the Official Gazette, appoint in this behalf, there shall be established for the administration of the scheme of Employees' State Insurance in accordance with the provisions of this Act a Corporation to be known as the Employees' State Insurance Corporation.
(2) The Corporation shall be a body corporate by the name of Employees' State Insurance
Corporation having perpetual succession and a common seal and shall by the said name sue and be sued.
SECTION 04: CONSTITUTION OF CORPORATION
The Corporation shall consist of the following members, namely :-
39[(a) a Chairman to be 40[appointed] by the Central Government;
(b) a Vice-Chairman to be40[appointed] by the Central Government;]
(c) not more than five persons to be40[appointed] by the Central Government41[***];
(d) one person each representing each of the42[43[States] in which this Act is in force] to be44 [appointed] by the45[State] Government concerned;
(e) one person to be44[appointed] by the Central Government to represent the [Union territories];
(f)47[ten] persons representing employers to be44[appointed] by the Central Government in consultation with such organisations of employers as may be recognised for the purpose by the Central Government; (g)47[ten] persons representing employees to be 44[appointed] by the Central Government in consultation with such organisations of employees as may be recognised for the purpose by the Central Government;
(h) two persons representing the medical profession to be 44[appointed] by the Central Government in consultation with such organisations of medical practitioners as may be
recognised for the purpose by the Central Government; 48[***] 49[(i)) three members of Parliament of whom two shall be members of the House of the People (Lok Sabha) and one shall be a member of the Council of States (Rajya Sabha) elected respectively by the members of the House of the people and the members of the Council of States; and
(j) the Director General of the Corporation, ex. officio.]
SECTION 05: TERM OF OFFICE OF MEMBERS OF THE CORPORATION
(1) Save as otherwise expressly provided in this Act, the term of office of members of the
Corporation, other than 50[the members referred to in clauses (a), (b), (c), (d) and (e) of section 4-'and the ex officio member,] shall be four years commencing from the date on which their51 [appointment] or election is notified: Provided that a member of the corporation shall, notwithstanding the expiry of the said period of four years, continue to hold office until the52 [appointment] or election of his successor is notified.
(2) The members of the Corporation referred to in clauses 53[(a), (b), (c), (d)and (e)] of section 4-shall hold office during the pleasure of the Government54[appointing] them.
SECTION 06: ELIGIBILITY FOR RE-NOMINATION OR RE-ELECTION
An outgoing member of the Corporation, the Standing Committee, or the Medical Benefit Council shall be eligible for 55[reappointment] or re-election as the cases may be.
SECTION 07: AUTHENTICATION OF ORDERS, DECISIONS, ETC
All orders and decisions of the Corporation shall be authenticated by the signature of the Director General of the Corporation and all other instruments issued by the Corporation shall be authenticated by the signature of the Director General or such other officer of the Corporation as may be authorised by him.]
SECTION 08: CONSTITUTION OF STANDING COMMITTEE
A Standing Committee of the Corporation shall be constituted from among its members, consisting of-
(a) a Chairman, nominated by the Central Government;
(b) three members of the Corporation,57[58[appointed] by the Central Government];
59[(bb) three members of the Corporation representing such three State Governments thereon as the Central Government may, by notification in the Official Gazette, specify from time to time;]
(c)60[eight] members elected by the Corporation as follows -
(i)61[* * *]
(ii)62[three] members from among the members of the Corporation representing employers;
(iii)62[three] members from among the members of the Corporation representing employees;
(iv) one member from among the members of the Corporation representing the medical profession; and
(v) one member from among the members of the Corporation elected by63[Parliament];
64[(d) the Director General of the Corporation, ex officio.]
SECTION 09: TERM OF OFFICE OF MEMBERS OF STANDING COMMITTEE
(1) Save as otherwise expressly provided in this Act, the term of office of a member of the Standing Committee, other than a member referred to in clause (a) or65[clause (b) or clause (bb)] of section 8-, shall be two years from the date on which his election is notified : Provided that a member of the Standing Committee, shall, notwithstanding the expiry of the said period of two years, continue to hold office until the election of his successor is notified :Provided further that a member of the Standing Committee shall cease to hold office when he ceases to be a member of the Corporation.
(2) A member of the Standing Committee referred to in clause (a) or66[clause (b) or clause (bb)] of section 8-shall hold office during the pleasure of the Central Government.
SECTION 10: MEDICAL BENEFIT COUNCIL
(1) The Central Government shall constitute a Medical Benefit Council consisting of-
(a) the Director General, Health Services, ex officio, as Chairman;
(b) a Deputy Director-General, Health Services, to be67[appointed] by the Central Government;
(c) the Medical Commissioner of the Corporation, ex officio;
(d) one member each representing each of the68[69[States (other than Union territories)] in which this Act is in force] to be67[appointed] by the70[State] Government concerned;
(e) three members representing employers to be70[appointed] by the Central Government in consultation with such organisations of employers as may be recognised for the purpose by the Central Government;
(f) three members representing employees to be70[appointed] by the Central Government in consultation with such organisations of employees as may be recognised for the purpose by the Central Government ; and
(g) three members, of whom not less than one shall be a woman, representing the medical profession, to be70[appointed] by the Central Government in consultation with such organisations of medical practitioners as may be recognised for the purpose by the Central Government.
(2) Save as otherwise expressly provided in this Act, the term of office of a member of the Medical Benefit Council, other than a member referred to in any of the clause (a) to (d) of subsection (1), shall be four years from the date on which his71[appointment] is notified:]73 [Provided that a member of the Medical Benefit Council shall, notwithstanding the expiry of the said period of four years continue to hold office until the74[appointment] of his successor is notified.]
(3) A member of the Medical Benefit Council referred to in clauses (b) and (d) of sub-section (1) shall hold office during the pleasure of the Government75[appointing] him.
SECTION 11: RESIGNATION OF MEMBERSHIP
A member of the Corporation, the Standing Committee or the Medical Benefit Council may resign his office by notice in writing to the Central Government and his seat shall fall vacant on the acceptance of the resignation by that Government.
SECTION 12: CESSATION OF MEMBERSHIP
76[(1)] A member of the Corporation, the Standing Committee or the Medical Benefit Council shall cease to be a member of that body if he fails to attend three consecutive meetings thereof : Provided that the Corporation, the Standing Committee or the Medical Benefit Council, as the case may be, may, subject to rules made by the Central Government in this behalf, restore him to membership.
77[(2) Where in the opinion of the Central Government any person78[appointed] or elected to represent employers, employees or the medical profession on the Corporation, the Standing Committee or the Medical Benefit Council, as the case may be, has ceased to represent such employers, employees or the medical profession, the Central Government may, by notification in the Official Gazette, declare that with effect from such date as may be specified therein such person shall cease to be a member of the Corporation, the Standing Committee or the Medical Benefit Council, as the case may be.] 79[(3) A person referred to in clause (i) of section 4-shall cease to be a member of the Corporation, when he ceases to be a member of Parliament.]
SECTION 13: DISQUALIFICATION
A person shall be disqualified for being chosen as or for being a member of the Corporation, the Standing Committee or the Medical Benefit Council-
(a) if he is declared to be of unsound mind by a competent Court; or
(b) if he is an un discharged insolvent; or
(c) if he has directly or indirectly by himself or by his partner any interest in a subsisting contract with, or any work being done for, the Corporation except as a medical practitioner or as a shareholder (not being a Director) of a company; or
(d) if before or after the commencement of this Act, he has been convicted of an offence involving moral turpitude.
SECTION 14: FILLING OF VACANCIES
(1) Vacancies in the office of ƒ[appointed] or elected members of the Corporation, the
Standing Committee and the Medical Benefit Council shall be filled by81[appointment] or election, as the case may be.
(2) A member of the Corporation, the Standing Committee or the Medical Benefit Council82 [appointed] or elected to fill a casual vacancy shall hold office only so long as the member in whose place he is82[appointed] or elected would have been entitled to hold office if the vacancy had not occurred.
SECTION 15: FEES AND ALLOWANCES
Members of the Corporation, the Standing Committee and the Medical Benefit Council shall receive such fees and allowances as may from time to time be prescribed by the Central Government.
SECTION 16: PRINCIPAL OFFICERS
83[(1) The Central Government may, in consultation with the Corporation, appoint a Director General and a Financial Commissioner.]
(2) The Director General shall be the Chief Executive Officer of the Corporation.
(3)84[The Director General and the Financial Commissioner] shall be whole time officers of the Corporation and shall not undertake any work unconnected with their office without the sanction of the Central Government 85[and of the Corporation].
(4)86[The Director General or the Financial Commissioner] shall hold office for such period, not exceeding five years, as may be specified in the order88[appointing] him. An outgoing86 [Director General or the Financial Commissioner] shall be eligible for 89[reappointment] if he is otherwise qualified.
(5)87[The Director General or the Financial Commissioner] shall receive such salary and
allowances as may be prescribed by the Central Government.
(6) A person shall be disqualified from being90[appointed] as or for being91[the Director
General or the Financial Commissioner] if he is subject to any of the disqualification specified in section 13-.
(7) The Central Government may at any time remove ˆ[the Director Gen- eral or the Financial Commissioner] from office and shall do so if such removal is recommended by a resolution of the Corporation passed at a special meeting called for the purpose and supported by the votes of not less than two-thirds of the total strength of the Corporation.
SECTION 17: STAFF
(1) The Corporation may employ such other staff of officers and servants as may be necessary for the efficient transaction of its business, provided that the sanction of the Central Government shall be obtained for the creation of any post92[the maximum monthly salary of which93[exceeds such salary as may be prescribed by the Central Government]].
94[(2)(a) The method of recruitment, salary and allowances, discipline and other conditions of service of the members of the staff of the Corporation shall be such as may be specified in the regulations made by the Corporation in accordance with the rules and orders applicable to the officers and employees of the Central Government drawing corresponding scales of pay: Provided that where the Corporation is of the opinion that it is necessary to make a departure from the said rules or orders in respect of any of the matters aforesaid, it shall obtain the prior approval of the Central Government.
(b) In determining the corresponding scales of pay of the members of the staff under clause (a), the Corporation shall have regard to the educational qualifications, method of recruitment, duties and responsibilities of such officers and employees under the Central Government and in case of any doubt, the Corporation shall refer the matter to the Central Government whose decision thereon shall be final.] (3)Every appointment to95[posts96[(other than medical posts)] corresponding to97[Group A and Group B] posts under the Central Government] shall be made in consultation with the98
[Union] Public Service Commission : Provided that this sub-section shall not apply to an
officiating or temporary99[appointment] for100[a period] not exceeding one year :101[Provided further that any such officiating or temporary appointment shall not confer any claim for regular appointment and the services rendered in that capacity shall not count towards seniority or minimum qualifying service specified in the regulations for promotion to next higher grade.]
102[(4) If any question arises whether a post corresponds to103[Group A and Group B] post under the Central Government, the question shall be referred to that Government whose decision thereon shall be final.]
SECTION 18: POWERS OF THE STANDING COMMITTEE
(1) Subject to the general superintendence and control of the Corporation, the Standing
Committee shall administer the affairs of the Corporation and may exercise any of the powers and perform any of the functions of the Corporation.
(2) The Standing Committee shall submit for the consideration and decision of the
Corporation all such cases and matters as may be specified in the regulations made in this behalf.
(3) The Standing Committee may, in its discretion, submit any other case or matter for the decision of th
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