Page 223 - DCOM207_LABOUR_LAWS

Labour Laws

Notes The major objective of the Act was to provide certain benefits to employees in case of sickness,
maternity and injury (during employment) and for providing other benefits in relation to the
main objectives.

Self Assessment

Fill in the blanks:
4. The .................. Act, 1948, is a pioneering measure in the field of social insurance in our
country.
5. The Employees’ State Insurance Act came into force from .................. .
6. The Act in fact tries to attain the goal of socio-economic justice enshrined in the ..................
principles of state policy under part 4 of our Constitution.

13.3 Applicability and Coverage of this Act

Under Section 1(4) of the Act, the implementation of the scheme is territorial. The Act applies in
the first instance to all factories using power and employing 20 or more persons on wages. The
provisions of the Act have also been extended, or are being gradually extended, under Section
1(5) of the Act to cover

l z Smaller power-using factories employing 10 to 19 persons;
l z Non-power using factories employing 20 or more persons;
l z Shops;

l z Hotels and restaurants;
l z Cinemas, including preview theatres;
l z Newspaper establishments; and
l z Road motor transport undertakings employing 20 or more persons.
The Act, however, does not apply to a mine or railway running shed, and specified seasonal
factories. The State Government may extend the provisions of the Act to cover other establishments
or class of establishments, industrial, commercial, agricultural or otherwise, in consultation with
the Corporation and with the approval of the Central Government, after giving six months notice
of its intention to do so in the Official Gazette.

Example: The ESIC Act applies to non-seasonal, power using factories or manufacturing
units employing ten or more persons and non-power using establishments employing twenty or
more persons.
Under the enabling provisions of the Act, a factory or establishment, located in a geographical
area, notified for implementation of the scheme, falls in the purview of the act. Employees of the
aforesaid categories of factories or establishments, but drawing wages only up to ` 6,500 a month
are entitled to health insurance cover under the ESI act. The wage ceiling for purpose of coverage
is revised from time to time; to keep pace with rising cost of living and subsequent wage hikes.

!
Caution The present ceiling of ` 6,500 has been effective from 1 January 1997 the appropriate
government state or central is empowered to extend the provision of the ESI Act to various
classes of establishment, industrial, commercial, agricultural or otherwise in nature.

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