ESI CORPORATION STANDING COMMITTEE MEDICAL BENEFIT COUNCIL AUDIT AND FUND CONTRIBUTION

1. EMPLOYEES
STATE
INSURANCE
ACT 1948
BY:
AZIMATHUL MARSHIYA.M
III LLB “B” SECTION

2. Introduction:
The employees state insurance act and the scheme
framed under constitute an important social security
programme and protection to industrial workers and their
families who are exposed to the risks of sickness,
employment injury and occupational diseases and in the
case of female employees to maternity.
The promulgation of ESI Act by Indian parliament is the
1st major legislation on social security for workers in the
independent India.

3. Background of the Act:
Similar laws were found in many european countries for
the past many years. The report of Royal Commission
On Labour (1931) recommended that was a greater need
for sickness insurance in India than any other countries
in the world.
The govt of India used to follow broadly the social
legislation of western countries. But in the case of ESI
Act made positive and remarkable depature from the
English Model since the Indian Act Contained the
“Triple Cover”.

4. Triple Cover
Employment
injury
Sickness Maternity

5. Preamble and Object:
1. ESI Act entitle to promote the social welfare of
the workers.
2. The act is designed to provide the cash benefit in
the case of sickness, maternity and employment
injury, payment in the form of pension to the
dependents of the workers who died of
employment injury and medical benefit to
workers.
3. It introduces contributory principles and provides
the protection against sickness offers lump sum
payments by pension in the case of dependents
benefit.

6. CORPORATION,
STANDING
COMMITTEE
AND
MEDICAL BENEFIT
COUNCIL

7. ESTABLISHMENT OF EMPLOYEES’ STATE
INSURANCE CORPORATION. [Section 3]
Central government establishes the corporation
to be known as the employees' state insurance
corporation. This corporation will be having
following characteristics:
1. Separate corporate body.
2. Having perpetual succession. (No death)
3. Have a common seal.
4. Employees' state insurance corporation can sue. (File a suit in
court on other)
5. Other can sue employees' state insurance corporation.

8. THE CORPORATION SHALL CONSIST OF THE FOLLOWING
MEMBERS. [Section 4]
(a) Chairman, Vice-Chairman to be appointed by the Central Government;
(b) not more than 5 persons to be appointed by the Central Government;
(c) one person each representing each of the States in which this Act is in force
to be appointed by the State Government concerned;
(d) one person to be appointed by the Central Government to represent the
3Union Territories;
(e) 10 persons representing employers to be appointed by the Central
Government in consultation with such organisations of employers.
(f) 10 persons representing employees to be appointed by the Central
Government in consultation with such organisations of employees.
(g) 2 persons representing the medical profession to be appointed by the
Central
Government in consultation with such organisation of medical practitioners.
(h) 3 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
(i) The Director-General of the Corporation ex-officio.

9. TERM OF OFFICE OF MEMBERS OF THE
CORPORATION. [Section 5]
Members referred to in clauses (f), (g), (h) shall be four years,
commencing from the date on which their appointment or
election.
The members of the Corporation referred to in clauses (a),(b),(c)
and (e)of Section 4 shall hold office during the pleasure of the
government appointing them.

10. CONSTITUTION OF STANDING COMMITTEE. [Section 8]
Standing Committee of the Corporation shall be constituted from among its
members, consisting of
(a) A chairman, appointed by the central government;
(b) Three members of the corporation appointed by the central govt.
three members appointed by state governments thereon as the central
government may, by notification
gazette, specify from time to time;
(c) eight members elected by the corporation as follows-
(ii) 3 members from among the members of the Corporation representing
employers;
(iii) 3 members from among the members of the Corporation representing
employees;
(iv) 1 member from among the members of the Corporation representing the
medical profession; and
(v) 1 member from among the members of the Corporation elected by Parliament;
(d) the Director General of the Corporation, ex officio

11. TERM OF OFFICE OF MEMBERS OF STANDING
COMMITTEE. [Section 9]
a member of the Standing Committee shall cease to hold
office when he ceases to be a member of the Corporation.
The term of office of a member of the Standing
Committee, other than a member referred to in clause (a)
or clause (b) or clause (bb) of Section 8, shall be two
years from the date on which his election.

12. MEDICAL BENEFIT COUNCIL. [Section 10](2010
AMENDMENT)
(a) the Director General, the Employees' State Insurance
Corporation, ex officio
as Chairman;
(b) The Director General, Health Services, ex officio as Co-
chairman;".
(c) one member each representing each of the States
(d) 3 members representing employers to be appointed by the
Central
Government in consultation with such organisations of employers.
(e) 3 members representing employees to be appointed by the
Central Government in consultation with such organisations of
employees.
(f) 3 members, of whom not less than one shall be a woman,
representing the medical profession, to be appointed by the Central
Government.

13. DUTIES OF MEDICAL BENEFIT COUNCIL. [Section 22]
Advise the corporation and the standing committee on
matters relating to the
administration of medical benefit, the certification for
purposes of the grant of
benefits and other connected matters;
Have such powers and duties of investigation as may be
prescribed in relation to complaints against medical
practitioners in connection with
medical treatment and
attendance; and
Perform such other duties in connection with medical
treatment and attendance.

14. Disqualification. [Section 13]
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 if
1. he is declared to be of unsound mind by a competent court; or
2. if he is an undischarged insolvent; or
3. If he a shareholder or a partner of company.
4. If he has been convicted of an offence involving moral turpitude.
Sita ram v D.M.Pillibit AIR 1957
Moral turpitute is clearly an ingredient of an offence where it consist of an act
of giving false information knowing it to be in order to injure someone else.

15. FEES AND ALLOWANCES. [Section 15]
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.

16. FINANCE AND AUDIT

17. EMPLOYEES’ STATE INSURANCE FUND. [Section 26]
All contributions paid under this Act and all other moneys
received on behalf of the Corporation shall be paid into a fund
called the Employees‘ State Insurance Fund.
The Corporation may accept grants, donations and gifts from the
Central or any State Government, local authority, or any
individual or
body whether incorporated or not, for all or any of the purposes of
this Act.
All money received will be paid in to reserve bank of Indian or
government approved bank credited to the account of the
Employees’ State Insurance Fund.
account shall be operated on by such officers as may be authorised
by the Standing Committee with the approval of the Corporation

18. THE EMPLOYEES’ STATE INSURANCE FUND SHALL
BE EXPENDED ONLY FOR THE FOLLOWING
PURPOSES. [Section 28]
1. Payment of benefits and provision of medical treatment.
2. Payment to insured persons.
3. Payment of medical benefits to insured person families.
4. payment of fees and allowances to members of the Corporation, the
Standing Committee and the Medical Benefit Council, the regional
boards, local committees and regional and local Medical Benefit
Councils.
5. payment of salaries, leave and joining time allowances, travelling
and compensatory allowances, gratuities and compassionate
allowances, pensions, contributions to provident or other benefit
fund of officers and servants of the Corporation.
6. meeting the expenditure in respect of offices and other services set.

19. HOLDING OF PROPERTY. [Section 29]
1. Employees' State Insurance Corporation can hold both
movable property and immovable property.
2. It can sell or transfer the both movable property and
immovable property for the purposes for which the
Corporation is established.
3. It can raise loans and take measures for discharging such
loans.
4. It can provide benefits for its staff.

20. ACCOUNTS. [Section 33]
The Corporation should maintain correct accounts of its income and expenditure in such
form and in such manner as may be prescribed by the Central Government.
AUDIT. [Section 34]
He has the right to demand the production of books, account, connected
vouchers and other documents and papers and to inspect any of the offices of the
Corporation.
Audit report thereon should be forwarded to the Corporation which shall
forward the same to the Central Government along with its comments on the
report of the Comptroller and Auditor General.
ANNUAL REPORT. [Section 35]
The Corporation shall submit to the Central Government an annual report of its work
and activities.
The corporation should make valuation of its assets and liabilities for every 3 years of
period. (2010 amendment)

21. CONTRIBUTIONS

22. ALL EMPLOYEES TO BE INSURED. [Section 38]
Factory or establishment having more than 10 employees should be insured under the
Employee State Insurance Act
CONTRIBUTION. [Section 39]
1. Employer and employer liable for payment of the contribution to the Employee State
Insurance Corporation.
2. The rate of contribution paid by employer and employee will be decided by the
central government.
3. Currently, the employee’s contribution rate is 1.75% of the wages and that of
employer’s is 4.75% of the wages paid/payable in respect of the employees in every
wage period.
4. If wage is received every month by employee, the Contribution to the ESI
Corporation should be made by employer and employee every month without fail.
5. 12% of interest per year should be paid If employer delays in payment of
the contribution to ESI corporation

23. PRINCIPAL EMPLOYER TO PAY CONTRIBUTIONS IN
THE FIRST INSTANCE. [Section 40]
1. Employer should pay the contribution to ESI Corporation of behalf of
his employee.
2. Employer may deduct employee contribution from employee wage for
payment of contribution to ESI Corporation.
3. Employer may recover the employee contribution paid from the wage of
the employee which should not exceed the amount equivalent to
employer contribution.
4. Employer will become responsible for the payment to the ESI
contribution after deduction of the employee contribution from the
employee wage
5. Employer should bear the expenses occurred in payment of contributions
to the Corporation.

24. AMENDMENTS

25. ESI (AMENDMENT)ACT ,2010
*VRS Employees also covered- 50(3)
*Un recognised sector employees covered New chapter v-A added
ESI (AMENDMENT)ACT ,2019
 Compulsary esi registration of employees
 Compulsary esi registration card
 Timely deposit of esi contribution

26. Recent updates during covid:
1. The ESIC has approved relaxation in eligibility criteria &
enhancement in the payment of unemployment benefit under its
Atal Bihari Vyankti Kalyan Yojana.
2. ESIC beneficiaries will get facilities soon in hospita;
empannelled under Ayush Bharath
3. ESIC to settle claims for unemployment benefit within 15 days .

27. THANK YOU!!