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Employees’ State Insurance Act, 1948

Important Definitions under Employees State Insurance Act, 1948

The Employees State Insurance Act, 1948 is beneficial and social legislation. Its main aim is to provide economic security to people who work in certain factories and establishments. The Act contains several important definitions and provisions that regulate these workers. It basically provides for payment of benefits to workers in cases of sickness, maternity, injury, etc.

Employees State Insurance Act 1948

Employees State Insurance Act, 1948 – Important Definitions

The Employees State Insurance Act contains several important definitions that explain the meaning of important provisions. We must understand all of these provisions in detail to comprehend the Act. The following terms are some such important definitions.

1) Appropriate Government

The definition of “appropriate government” divides powers between the Central and State governments effectively. The Central government is appropriate in cases of establishments that the Central government controls.

It is the appropriate government for railway administration, major ports, mines, and oil fields as well. In all other cases, the appropriate government is the relevant State government.

2) Confinement

Pregnancy which leads to the birth of a living child is called “confinement” under this Act. It can also mean the birth of a child (living or dead) after 26 weeks of pregnancy.

Learn more about Payments of Wages Act – Salary Payment Rules here in detail.

3) Contribution

Principal employers under this Act have to pay a sum of money to the Employees State Insurance Act Corporation according to relevant provisions.

This money is basically later payable to employees by the ESI Corporation for their benefits. Every employer to whom the Act applies has to make this contribution.

4) Corporation

This important definition describes the Employees State Corporation that this Act has set up. This corporation has several important powers and duties.

5) Dependant

In case a worker under the Act dies during employment, the ESI Corporation pays some money to his dependants. In order to understand who must receive this money, we must know who these “dependants” are.

According to the Act, dependants are certain relatives of a deceased worker. These include his widow, a son below 25 years of age, an unmarried daughter and his widowed mother.

A son/daughter above 25 years can also be a dependant if he/she is wholly dependant on the worker. In certain cases, dependants can also be a minor illegitimate child, minor sibling, a parent other than widowed mother, etc.

 6) Employment Injury

An employee can receive financial support under this Act for specific injuries that occur in employment only.

Hence, the Act refers to them as “employment injuries”.

These injuries must be a result of an accident or occupational disease arising in the course of employment. It is immaterial whether the workers contract these occupational diseases within India or outside.

7) Employee

This is a very important definition because only “employees” under the Act can claim compensation thereunder. An employee is basically a person who is employed for wages in relevant factories/establishments.

Furthermore, there are some additional requirements depending on the nature of the employee’s services.

For example, an employee may directly work permanently for the principal employer or may work temporarily on contract.

8) Exempted Employee

There are certain employees who are not liable to pay a contribution to the ESI Corporation under this Act. These employees are called as exempted employees.

9) Family

The definition of “family” is very similar to the definition of dependants. It includes a worker’s spouse, minor child, unmarried daughter, dependent parents, minor siblings, etc.

10) Factory

A “factory” means any premises (or its precincts) wherein 10 or more employees work or have been working. These workers should be in employment for the preceding twelve months.

Furthermore, some manufacturing process must take place on such premises. Mines or railway running sheds, however, cannot come under the definition of factories.

11) Insured Person

An insured person under this Act is basically an employee to whom contribution is payable. Furthermore, he can claim all other benefits under the Act.

12) Principal Employer

A principal employer is generally the owner or occupier of a factory to which the Act applies. It can also include the owner’s managing agent or factory manager and legal representative of a deceased owner/occupier.

In the case of departments of the Central government, the principal employer is the department’s head. In all other establishments, the person in charge of supervision and control is usually the principal employer.

13) Sickness

Sickness basically means a condition for which an employee has to undergo medical treatment. He may even have to abstain from working during the duration of such sickness.

14) Seasonal Factory

There are certain kinds of factories which work seasonally for some specific purposes only. These include manufacturing processes like cotton ginning, cotton/jute pressing, manufacturing or coffee, etc.

Furthermore, this includes a factory that works for not more than 7 months in a year in similar pursuits.

15) Wages

Wages include remuneration payable to an employee in cash under the terms of an express or implied contract of employment.

It may also include all other amounts payable to employees as wages under other laws. However, wages do not include pension, traveling allowances, gratuity and other similar sums.

16) Permanent Partial/Total Disablement

The ESI Act contains a few categories of disablements for which employees can claim compensation. These may be either permanent or temporary. Permanent disablements may further be either partial or total.

Permanent disablement means disablement of permanent nature which affects an employee’s earning capacity. Part II of the Second Schedule deals with these injuries, whereas Part I describes permanent total injuries.

Questions on Employees State Insurance Act

Question: Mention the missing word in these following statements.

(a) __________ describes the birth of a child during or after pregnancy.

(b) The widow, unmarried daughter, minor son and widowed mother of a deceased employee are his __________.

(c) __________ factories function only for certain months a year.

(d) Mines are railway running sheds do not come under the ambit of __________.

Answers:          (a) confinement          (b) dependants          (c) seasonal          (d) factories

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