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Unit 13: The Employees’ State Insurance Act, 1948

Self Assessment Notes

State whether the following statements are true or false:
1. The Act makes any distinction between casual and temporary employees or between
technical and non-technical employees.
2. The definition of “employee” includes any member of the Indian naval, military or air
force.
3. “Wages” means all remuneration paid in cash if the terms of the contract are fulfilled, and
includes any payment in any period of authorised leave

13.2 Scope and Objective of the Act

The Employees’ State Insurance Act, 1948, is a pioneering measure in the field of social insurance
in our country. The subject of health insurance for industrial workers was first discussed in 1927
by the Indian Legislature, when the applicability of the Conventions adopted by the International
Labour Conference was considered by the Government of India. The Royal Commission on
Labour, in its report (1931), stressed the need for health insurance for workers in India. One of
the earlier decisions of the Labour Ministers’ Conferences between 1940 and 1942 was to invite an
expert to frame a scheme of health insurance for workers. In pursuance thereof, the responsibility
for preparing a detailed scheme of health insurance for industrial workers was entrusted in March
1943 to Prof. B.P. Adarkar who submitted his report in December 1944. This was considered by
the Government of India and State governments as well as other interested parties. The Adarkar
Plan and various other suggestions emerged finally in the form of Workmen’s State Insurance
Bill 1946, which was then referred to a Select Committee in November 12, 1947: The Select
Committee. extended the cover-age to all the employees in factories, and changed its name from
Workmen’s State Insurance Bill to Employees’ State Insurance Bill.

Did u know? The Employees’ State Insurance Act came into force from 19th April 1948. The
scheme framed under the Act aims at providing for certain cash benefits to employees in
the event of sickness, maternity, employment injury, and medical facilities in kind, and 18
contains provisions for certain other matters having bearing thereon.
The Employee State Insurance Act, [ESIC] 1948, is a piece of social welfare legislation enacted
primarily with the object of providing certain benefits to employees in case of sickness, maternity
and employment injury and also to make provision for certain others matters incidental thereto.
The Act in fact tries to attain the goal of socio-economic justice enshrined in the Directive
principles of state policy under part 4 of our Constitution, in particular articles 41, 42 and 43
which enjoin the state to make effective provision for securing, the right to work, to education and
public assistance in cases of unemployment, old age, sickness and disablement. The act strives
to materialise these avowed objects through only to a limited extent. This Act becomes a wider
spectrum than factory Act. In the sense that while the factory Act concerns with the health, safety,
welfare, leave etc. of the workers employed in the factory premises only. But the benefits of this
Act extend to employees whether working inside the factory or establishment or else where or
they are directly employed by the principal employee or through an intermediate agency, if the
employment is incidental or in connection with the factory or establishment.

13.2.1 Objectives of this Act

The object of the Act is to secure sickness, maternity, disablement and medical benefits to
employees of factories and establishments and dependents’ benefits to the dependents of such
employees.

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