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Unit 4: The Employees’ State Insurance Act, 1948: Definitions, Scope and Objective

of this Act extend to employees whether working inside the factory or establishment or elsewhere Notes
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.

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.
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.

4.3 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
 Smaller power-using factories employing 10 to 19 persons;
 Non-power using factories employing 20 or more persons;
 Shops;

 Hotels and restaurants;
 Cinemas, including preview theatres;
 Newspaper establishments; and

 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.

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