1

PRELIMINARY
It extends to the whole of India.
This act came into force from 19th April 1948. It shall apply, in the first instance, to all factories

(including factories belonging to the Government) other than seasonal factories

Applicability of the Act

Smaller power using factories employing 10 to 19

persons; Non power using factories employing 20 or more persons; Shops; Hotels and Restaurants Cinemas Newspaper establishment Road motor transport undertaking, employing 20 or more persons.
3

Applicability of the Act

This act does not apply to A mine Railway running shed Specified seasonal factories

Definations
Appropriate Government means in respect of establishments under the control of the Central Government or [a railway administration] or a major port or a mine or oilfield, the Central Government, and in all other cases, the State Government

Dependant or adopted son, an unmarried widow, a minor legitimate

legitimate and adopted daughter a widowed mother A parent other than a widowed mother 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, A minor brother or an unmarried sister or a widowed sister if a minor A widowed daughter-in-law Paternal grand-parent if no parent of the insured person is alive
6

Employee
Any person employed for wages in or in connection with the

work of a factory or establishment to which this Act applies and

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 elsewhere 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 whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service

Definitions
"family" means all or any of the following relatives of an

insured person, namely:--

a spouse a minor legitimate or adopted child dependent upon the

insured person a child who is wholly dependent on the earnings of the insured person and who is receiving education, till he or she attains the age of twenty-one years an unmarried daughter 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 dependent parents
8

Definitions
"factory" means any premises including the precincts

thereof

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 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 or a railway running shed

Definitions
Insured person" 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 provided by this Act Managing agent 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 Manufacturing process" shall have the meaning assigned

to it in the Factories Act, 1948

10

Definitions
Principal employer means 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 under The Factories Act, 1948 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 appointed, the head of the department in any other establishment, any person responsible for the supervision and control of the establishment;
11

Definitions
Sickness A condition which requires medical treatment and attendance and necessitates abstention from work on medical grounds Power shall have the same meaning assigned to it in

the Factories Act, 1948

12

 "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 includes 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, 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 any travelling allowance or the value of any travelling concession; any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment any gratuity payable on discharge;
13

Contributions
Contributions from employers 4.75% of total wages paid to all the employees covered under the ESI Scheme in each wage period Contributions from employees 1.75% of the wages paid/payable to every individual worker in each wage period Contributions from state government 1/8 share of expenses towards the cost of medical share The total value of combined employers and employees

share has to be deposited in the SBI or in any other authorized bank on or before 21st of the month.
14

Contributions
Employees whose daily average wages are below Rs. 15

are exempted from payment of their contributions. Contribution Period & Benefit Periods
1st April to 30th September Contribution 1st Jan to 30th June Benefit

In the case of new employee the first contribution period shall commence from the date of his employment and the corresponding first benefit period shall commence on the expiry of 9 months from the said date.

15

Standard Benefit Rate

The daily rate at which sickness benefit is payable to an

insured employee during the period of sickness is called Standard Benefit Rate.

16

Registration
It is a statutory responsibility of the employer.
The owner of a factory/establishment to which the Act

applies for the first time is liable to furnish to the appropriate regional office, within 15 days after the Act becomes applicable. A declaration of registration form 01 has to be given in the regional office. Regional office will examine the coverage and after it is satisfied, it will allot a code number to the employer.
17

Registers
Registers of Employees
Accident Book Inspection Book

18

Administration
The scheme is administered by a corporate body called the Employees

State Insurance Corporation. The members are

Employees Employers

The Parliament
Central & State Governments Medical Profession

Corporation is headed by Union Minister of Labour as its Chairman.

Each Regional office is under the charge of a regional Director.

Regional office maintains all the records of insured persons within its

area and administers local offices.

19

Benefits
Sickness and Extended sickness benefits In case of any special long tern ailment 40% higher than the standard benefit. Maternity Benefit Double than the standard benefit rate Disablement Benefit Temporary disablement 70% of wages until it lasts Permanent Total Disablement - 70% of wages as pension Permanent Partial Disablement a part of above will be taken as pension.
20

Benefits
Dependents Benefit 40% of the wages is the standard rate In case of Widow or Children it is 70% of the wages until widow lives or marries and in case of children upto the age of 18. 3/10 of the full rate to the parents. If more than one parents this amount will equally be divided among them.

21

Benefits
Funeral Benefits Introduced in 1968. Max Rs. 1500 . Time limit to claim is within 3 months of the death of insured person. Medical Benefits Restricted Medical Care Expanded Medical Care Full Medical Care
22

Restrictions
Both Sickness and Maternity Benefits
Both Sickness Benefit and disablement benefit for

temporary disablement Both maternity benefit and disablement benefit for temporary disablement

23

Protection
Employer cant dismiss, discharge or punish an employee

during the period of his/her sickness benefit or maternity benefit or disablement benefit. But if
Employee has received temporary disablement benefit and

remained absent for six months or more continuously Employee is under medical treatment for sickness, other than T.B. or a disease arising out of pregnancy, and has remained absent for six months or more continuously Employee is under medical treatment for T.B. or a disease arising out of pregnancy, and has remained absent for eighteen months or more continuously
24

Penalties and Damages

If fails to contribute 3-12 months imprisonment along

with fine of Rs. 4000. Employer is liable to pay interest @ 6% per annum if he delay the payment of contribution. The amount of Damages can not exceed the amount of contribution.

25

Queries???

26