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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 : —
CHAPTER I
PRELIMINARY
1. Short title, extent, commencement and application. — (1) This Act may be called the
Employees’ State Insurance Act, 1948.
(2) It extends to 2
[the whole of India 3
[*]].
(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 and 1
[for different States or for different parts thereof].
(4) It shall apply, in the first instance, to all factories (including factories belonging to
the 2
[Government]) other than seasonal factories.
3
[Provided that nothing contained in this sub-section 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 and 4
[where
the appropriate Government is a State Government, with the approval of the Central
Government], after giving 5
[one month’s] notice of its intention of so doing by notification in the
Official Gazette, extend the provisions of this Act or any of them, to any other establishment, or
class of establishments, industrial, commercial, agricultural or otherwise.
6
[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.]
1
[(6) A factory or an establishment to which this Act applies shall continue to be governed
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.]
2. Definitions. — In this Act, unless there is anything repugnant in the subject or context,
—
(1) “ appropriate Government ” means, in respect of establishments under the control of
the Central Government or 2
[a railway administration] or a major port or a mine or oil-field, the
Central Government, and in all other cases, the 3
[State] Government ;
2
4
[(2) * * *]
(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
[(5) * * *]
(6) “ Corporation ” means the Employees’ State Insurance Corporation set up under this
Act ;
1
[(6-A) “ dependant ” means any of the following relatives of a deceased insured person,
namely : —
2
[(i) a widow, a legitimate or adopted son who has not attained the age of twenty-five
years, an unmarried legitimate or adopted daughter ; ]
3
[(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
4
[twenty-five] and who 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,
© 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
(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 ;
1
[(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 elsewhere ; 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
3
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 services are so lent or let on hire has
entered into a contract of service ; 2
[and includes any person employed for
wages on any work connected 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 ;
1
[or any person engaged as an apprentice, not being an apprentice engaged under the Apprentices
Act, 1961 (52 of 1961), 2
[and includes such person engaged as apprentice whose training period
is extended to any length of time]
but does not include] — ]
(a) any member of 3
[the Indian] naval, military or air forces ; or 4
[(b) any person so employed whose wages (excluding remuneration for
overtime work) exceed 5
[such wages as may be prescribed by the
Central Government] :
Provided that an employee whose wages (excluding remuneration for overtime work)
exceed 5
[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 employee’s contribution ;
6
[(11) “ 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 insured 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 ;
(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 ;
1
[(v) dependant parents, whose income from all sources does not exceed such income
as may be prescribed by the Central Government ;
(vi) in case the insured person is unmarried and his or her parents are not alive, a
minor brother or sister wholly dependant upon the earnings of the insured
person ;]]
2
[(12) “ factory ” means any premises including the precincts thereof whereon ten or more
persons are employed or were employed on any day of the preceding twelve months, and in any
part of which a manufacturing process is being carried on 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 ;]
4
(13) “ immediate employer ” in relation to employees employed by or through him, means
a person who has undertaken the execution on the premises of a 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 part of 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 1
[and includes a contractor].
2
[(13-A) “ 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 provided by this Act ;
3
[(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 ;
4
[(14AA) “ manufacturing process ” shall have the meaning assigned to it in the Factories Act,
1948 (63 of 1948) ;]
(14-B) “ mis-carriage ” 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, 5
[1948 (63 of 1948)] ;
1
[(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 ;
(15B) “ permanent total disablement ” means 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 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 ;]
2
[(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
under 3
[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 appointed, the head of the department ;
5
(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 ;
1
[(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 of 2
[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 includes 1
[any
payment to an employee in respect of any period of authorised leave, lock-out, strike which is not
illegal or layoff and] other additional remuneration, if any, 2
[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 concession ;
© 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 ;
3
[(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 otherwise;]
4
[(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.]
5
[2-A. 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.]
CHAPTER II
CORPORATION, STANDING COMMITTEE AND MEDICAL BENEFIT COUNCIL
3. 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 Insur-
6
ance 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.
4. Constitution of Corporation. — The Corporation shall consist of the following
members, namely : —
1
[(a) a Chairman to be 2
[appointed] by the Central Government ;
(b) a Vice-Chairman to be 2
[appointed] by the Central Government ;]
© not more than five persons to be 2
[appointed] by the Central Government 3
[* * *] ;
(d) one person each representing each of the 1
[2
[States] in which this Act is in force] to
be 3
[appointed] by the State Government concerned ;
(e) one person to be 3
[appointed] by the Central Government to represent the 4
[Union
territories] ;
(f) 5
[ten] persons representing employers to be 3
[appointed] by the Central Government
in consultation with such organisations of employers as may be recognised for the
purpose by the Central Government ;
(g) 5
[ten] persons representing employees to be 3
[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 3
[appointed] by the Central
Government in consultation with such organisations of medical practitioners as may
be recognised for the purpose by the Central Govern-ment ; 6
[*]
7
[(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.]
5. Term of office of the members of the Corporation. — (1) Save as otherwise expressly
provided in this Act, the term of office of members of the Corporation, other than 1
[the members
referred to in clauses (a), (b), ©, (d) and (e) of section 4 and the ex-officio member,] shall be four
years commencing from the date on which their 2
[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 the 2
[appointment] or election of his successor is
notified.
(2) The member of the Corporation referred to in clauses 3
[(a), (b), ©, (d) and (e)] of
section 4 shall hold office during the pleasure of the Government 4
[appointing] them.
6. Eligibility for 5
[re-appointment] or re-election. — An outgoing member of the
Corporation, the Standing Committee, or the Medical Benefit Council shall be eligible for 5
[reappointment]
or re-election as the case may be.
6
[7. 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 DirectorGeneral
or such other officer of the Corporation as may be authorised by him.]
8. Constitution of Standing Committee. — A Standing Committee of the Corporation shall
be constituted from among its members, consisting of —
7
(a) a Chairman 1
[appointed] by the Central Government ;
(b) three members of the Corporation, 2
[1
[appointed] by the Central Government] ;
3
[(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 ;]
© 4
[eight] members elected by the Corporation as follows : —
(i) 5
[* * *]
(ii) 6
[three] members from among the members of the Corporation representing
employers ;
(iii) 6
[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 by 1
[Parliament] ;
2
[(d) the Director-General of the Corporation, ex-officio.]
9. 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) or 3
[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) or 3
[clause (b)
or clause (bb)] of section 8 shall hold office during the pleasure of the Central Government.
10. Medical Benefit Council. — (1) The Central Government shall constitute a Medical
Benefit Council consisting of —
4
[(a) the Director General, the Employees’ State Insurance Corporation, ex-officio as
Chairman ;
(b) the Director General, Health Services, ex-officio as Co-Chairman ; ]
© the Medical Commissioner of the Corporation, ex-officio ;
(d) one member each representing each of the 1
[States (other than Union territories)]
in which this Act is in force to be 2
[appointed] by the State Government
concerned ;
(e) three members representing employers to be 2
[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 be 2
[appointed] by the Central
Government in consul-tation with such organisations of employees as may be
recognised for the purpose by the Central Govern-ment ; and
(g) three members, of whom not less than one shall be a woman, representing the
medical profession, to be 2
[appointed] by the Central Government in consul-
8
tation 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 clauses (a) to (d) of
sub-section (1), shall be four years from the date on which his 3
[appointment] is notified:
4
[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 the 3
[appointment] of his successor is
notified.]
(3) A member of the Medical Benefit Council referred to in clauses (b) and (d) of subsection
(1) shall hold office during the pleasure of the Government 1
[appointing] him.
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.
12. Cessation of membership. — 2
[(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.
3
[(2) Where in the opinion of the Central Government any person 4
[appointed] or elected
to represent employers, employees or the medical profession on (sic.) 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.]
5
[(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.]
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 undischarged insolvent ; or
© if he has directly or indirectly by himself or by his partner any interest in subsisting
contract with, or any work being done for, the Corporation except as a medical
practitioner or as a share-holder (not being a Director) of a com-pany ; or
(d) if before or after the commencement of this Act, he has been convicted of an
offence involving moral turpitude.
14. Filling of vacancies. — (1) Vacancies in the office of 1
[appointed] or elected members
of the Corporation, the Standing Committee Medical Benefit Council shall be filled by 2
[appointment] or election, as the case may be.
(2) A member of the Corporation, the Standing Committee or the Medical Benefit
Council 1
[appointed] or elected to fill a casual vacancy shall hold office only so long as the
member in whose place he is 1
[appointed] or elected would have been entitled to hold office if the
vacancy had not occurred.