Recent Amendments in ESI Act 1948
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.
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Coming up Next – Recent Amendments to the Payment of Gratuity Act, 1972
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.