Home > Compliance, Labour Law > Recent Amendments in ESI Act 1948

Recent Amendments in ESI Act 1948

June 19, 2012

There have been many significant Amendments in the ESI, PF & Gratuity acts which have an effect in terms of  coverage of establishments and the definition of employees and wage limits and their consequential effect on benefits. These Amendments will be covered in this 3 part series.

It is an effort to keep the HR professionals and employers abreast of key amendments since they impact significantly the decisions of the employers relating to benefits under these Acts. This compilation is posted only as a matter of information and the readers are advised to verify the original amendment/provisions before acting on them.

For a more details on ESI FAQs for Employers refer to our post here

Key amendments of the Employees’ State Insurance Act 1948

 

S.No Section/Rule/Reg. Position before amendment Position after amendment
1 Sec.1(5) The Appropriate Government (central or state government) can extend the application of the Act  to any establishment by giving six months notice  by notifying it  in Official Gazette Now, the Appropriate (central or state government) Government can extend the application of the Act to any establishment by giving one month notice by notifying it in Official Gazette.
2 Sec.2(6-A) The definition of dependant included only a minor legitimate or adopted son. However, the scope of the definition has been widened to include legitimate or adopted son who has not attained the age of twenty five years.
3 Sec.2(9) The definition of employee excluded apprentices appointed under standing orders also besides the apprentices appointed under the Apprentices Act 1961 The definition of employee now includes apprentices appointed under standing orders but excludes only the apprentices appointed under the Apprentices Act 1961.
4 Sec.2(11) The definition of family included only those parents who are dependant of the insured person. it excluded a minor brother or sister even though they were wholly dependent up on the earnings of the insured person. The definition of family now includes also those parents who have some source of income subject to a limit prescribed by the Central government as well as a minor brother or sister if their parents are not alive and the insured person is not married and they are wholly dependent up on the earnings of the insured person.
5 Sec.2(12) The definition of factory has segregated factories in two categories for coverage. Those running with power and those without power. Those with power were included even though they employed ten or more persons but those running without power were included only when they employ twenty or more persons. This distinction has been removed and all those factories are covered if they employ ten or more persons irrespective whether run with power or without power.
6 Sec. 45 It provides for appointment of Inspectors for implementing the provisions of the Act Now these Inspectors are called Social Security Officers.
7 Sec.45-AA Non-existent A new section has been added to enable employers to appeal to an Appellate Authority against an order passed by the Corporation in respect of payment of contribution within sixty days of the date of such order. Thus this provides a remedy to the employers against an order passed under Sec.45-A.
8 Sec.51-E Non-existent A new section has been added to cover accidents occurring to an employee while commuting to and from office to residence and vice versa for duty, provided there is nexus between the circumstances and employment. Thus it sets at rest doubts to a large extent about such accidents arising out of and in the course of employment.
9 Sec.31-E Non-existent New sections 31-D and 31-E have been added after 31-C . As per Sec.31-E, if an employer succeeds in the appeal u/Sec.45-AA, the amount deposited by him with  ESI Corporation in full or in part as decided by the Appellate Authority shall be refunded to the employer with simple interest specified in Regulation 31-A.Thus this affords a relief to the employer from financial hardship.
10 Rule 59 Existing limit of funeral expenses is Rs. 5000/- Revised to Rs.10000/-
11 Reg.10(C) Under the un-amended Regulation, the employer has to furnish information in Form 01-A by 31st of January every year. The existing Reg.10(C)  has been substituted by new 10(C)as per whichany change in the particulars furnished at the time of registration shall be intimated in Form 01 to the Regional or Sub-regional Office of the Corporation within two weeks of such change.

 Note :- Since it is well known to every one by now that the wage limit of an employee has been revised from Rs.10000/-p.m  to Rs.15000/p.m , this amendment has not been included it in the table of amendments above.

Your comments queries & suggestions will help us come up with relevant write ups in future, hence, post your feedback in comments section or write to us at advisory@talentmoon.com

Coming up Next – Recent Amendments to the Payment of Gratuity Act, 1972

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This is a Guest post by Sai kumar, an HR professional with three decades of experience in the field of labour laws and industrial relations in a public sector as well as in a reputed labour law firms. 

Sai Kumar has been  involved  extensively in research on labour law issues and case-law  on subjects such as the Industrial Disputes Act, the Standing Orders Act, the Factories Act, the Contract Labour Act, the P.F Act, the ESI Act  and the Gratuity Act etc and currently advises Talentmoon and its clients.

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Categories: Compliance, Labour Law
  1. jyoti
    November 21, 2013 at 9:50 pm

    Dear Sir

    Myself jyoti . i am covered under ESIC . My husband is getting salary above 30000 p.m. But no reimbursement is their for him in his job. Can he be eligible for indoor medical reimbursement under me?
    thanks

    • January 16, 2014 at 10:00 am

      Reply from the Author-@Jyoti – In my view, the medical benefit under ESI Act is extended to the families of the insured employees without linkage to wages even for in-patient treatment. For more clarification and details, please visit ESIC web site.

  2. ashok mengale
    October 17, 2013 at 5:20 pm

    This distinction has been removed and all those factories are covered if they employ ten or more persons irrespective whether run with power or without power.Esic cover for shop, shoping mall, small scale industry etc for above mentioned strength.

    Mr.Ashok Mengale
    Reliable consultant
    9881376783

  3. Himanshu Goyal
    October 16, 2013 at 3:59 pm

    Dear sir,

    May you please help me in this. I am working as a HR manager in a petrol pump. My firm got a notice from ESIC. I have following queries-
    1. is esic applicable on me as I don’t work through “FACTORY” and I m not involving in any “MANUFACTURING PROCESS”.

    2. for calculating limit of 10/20 employees , which employees should be considered?
    – employees having salary less than 15000
    – or all employees.

    thanks for help..

    Himanshu
    090241-80160

    • ashok mengale
      October 17, 2013 at 5:32 pm

      This distinction has been removed and all those factories are covered if they employ ten or more persons irrespective whether run with power or without power.Esic cover for shop, shoping mall, small scale industry etc for above mentioned strength.

      Mr.Ashok Mengale
      Reliable consultant
      9881376783

    • November 20, 2013 at 9:47 am

      Reply from Author – Please go through the definition of manufacturing process under Sec.2(k) of the Factories Act 1948. All employees are to be included irrespective of wage limit for calculating 10/20 employees.

      Additional comments from admin – Manufacturing process includes pumping oil under Section 2(k)(ii) of the Factories Act 1948. Further Section 2(12) of the ESI act 1948 defines the meaning of a factory as relevant to the act. In the case of Bara Nagar Service Station v. ESI Corporation 1989 (58) FLR 698, the judgement stated that Servicing of vehicles with a view to its use by the customer or repairing of the batteries so that they are used in vehicles amounts to manufacturing process.( ref-http://www.esicdelhi.org.in/chp1.php).

      You are also referred to a informative article in Business standard at http://www.business-standard.com/article/economy-policy/pumping-oil-in-petrol-pump-is-manufacture-109101200062_1.html

      Please note that this is not any legal opinion but only an information for your guidance. For any guidance in this matter you are advised to consult a practising ESI consultant.

  4. mritunjay
    September 15, 2013 at 10:07 am

    mention year of amendment also.

  5. Niddhi Akhouri
    January 18, 2013 at 1:03 pm

    LIMITATION PERIOD:- The unbridled powers of the visiting inspectors demanding the contribution for the very old periods also, have been put to hold by the Parliament (on the recommendations of the Apex Court). The New Proviso has been inserted in Section 45-A, which provides as under
    “Provided further that no such order shall be passed by the Corporation in respect of the period beyond five years from the date on which the contribution shall become payable.”.

    Is there any judgement based on the above proviso inserted to Section 45-A (1) vide Employees State Insurance (Amendment) Act, 2010 in favor of employers.

  6. R.Srinivasan
    July 20, 2012 at 3:28 pm

    Dear sir,

    Can you please tell what are the forms and registers to be maintained under ESI and PF Act generally. Since both are made online recently I am confused what registers / forms to be maintained and which one to omit.

    I am working in Hyd.

    Please help me.

    Regards,

    R.Srinivasan
    Mobile : 9533697005

    • July 25, 2012 at 1:33 pm

      @Srinivasan- After on line return facility, you need not submit paper returns in Form-3A,5,6A,10& 12A.however, you need to submit other returns namely Form-9(revised), Form-2 and Form-5A- reply from the author

  1. June 24, 2012 at 11:01 pm
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