ESI benefits and the settlement of disputes and claims

1. The benefits: section 32 [ESI Act s.46]

• (a) Sickness benefit — periodical payments to an insured person whose sickness is certified by a duly appointed medical practitioner. “Sickness” means a condition that requires medical treatment and attendance and necessitates abstention from work on medical grounds (s.2(77)). Under the old scheme it was paid at about 70 per cent of wages for up to 91 days in two consecutive benefit periods, subject to contribution conditions.
• (b) Maternity benefit — periodical payments to an insured woman for confinement, miscarriage, or sickness arising out of pregnancy, confinement, premature birth or miscarriage. An insured woman includes a commissioning mother and an adopting mother of a child up to three months (s.2(91)). A woman eligible for this benefit cannot claim maternity benefit from her employer under Chapter VI (s.41(7)(b)); until she qualifies under ESI, Chapter VI continues to protect her (s.61).
• (c) Disablement benefit — periodical payments to an insured person disabled by an employment injury. Temporary disablement is paid while it lasts; permanent disablement is paid for life according to the loss of earning capacity determined by a medical board (s.37).
• (d) Dependants' benefit — periodical payments to the dependants of an insured person who dies as a result of an employment injury (s.38) [s.52]. It goes first to the dependants in clauses (a) and (b) of s.2(24) (widow, minor or infirm children, widowed mother); if there are none, to the other dependants. It may be reviewed for remarriage, attaining twenty-five, end of infirmity and similar changes (s.38(3)).
• (e) Medical benefit — treatment and attendance, as out-patient, at home or as in-patient, in ESI hospitals and dispensaries or tied-up institutions (s.39) [s.56]. The Corporation may extend it to the insured person's family (s.32(2)). It is provided by the State Government or by the Corporation itself (s.40) [s.58].
• (f) Funeral expenses — a payment to the eldest surviving member of the family of a deceased insured person (or to whoever actually incurred the cost), up to the prescribed amount, claimed within three months of death.

Besides these the Corporation may promote measures for the health, welfare, rehabilitation and re-employment of disabled insured persons (s.33), may run schemes in under-used ESI hospitals for other beneficiaries on user charges (s.44), and may run schemes for unorganised, gig and platform workers (s.45), which is new.

2. Employment injury: the deeming rules

Disablement and dependants' benefit depend on an employment injury. Sections 34 to 36 help the claimant [ESI ss.51A to 51E, 52A]:

• an accident in the course of employment is presumed to arise out of it, unless the contrary is shown (s.34(1));
• rescue or protection of persons or property in an emergency on the premises is covered (s.34(2));
• an accident while commuting between residence and workplace for or after duty is covered if nexus of circumstances, time and place is established (s.34(3));
• travel in a vehicle provided by the employer, not a public transport service, is covered (s.34(4));
• acts in breach of law or orders, done for the employer's business, are covered (s.35);
• an occupational disease in the Third Schedule is deemed an employment injury: for Part A employments on contracting it, for Part B after six months' continuous employment, for Part C after the period the Corporation specifies (s.36).

3. General rules on benefits: section 41 [ESI ss.60 to 65, 71]

• Disablement benefit cannot be commuted into a lump sum except as regulations allow (s.41(1)).
• No sickness benefit or temporary disablement benefit for a day on which the person works, is on paid leave or holiday, or is on strike (s.41(2)).
• A person receiving sickness or temporary disablement benefit must stay under treatment, follow the medical officer's instructions, not leave the area without permission, and submit to examination (s.41(3)).
• No combination for the same period of sickness and maternity benefit, sickness and temporary disablement benefit, or maternity and temporary disablement benefit; where two are available the person chooses (s.41(4), (5)).
• On death, cash benefit due up to the day of death goes to the nominee or legal heir (s.41(6)).
• Bar on employer liability: a person eligible for dependants' or disablement benefit cannot claim employees' compensation from the employer; an insured woman cannot claim Chapter VI maternity benefit from him (s.41(7)) [s.61].
• Benefit received without entitlement must be repaid (s.41(8)).

4. The Corporation against the employer

• Failure to insure or pay (s.42) [s.68]: if the employer does not insure an employee, insures him only after the accident, or fails to pay contributions, and the employee loses benefit as a result, the Corporation pays the employee the benefit he would have had and recovers its capitalised value from the employer, after hearing him.
• Excessive sickness (s.43) [s.69]: where sickness is excessive because of insanitary working conditions or neglect of health regulations by the occupier (or by a landlord of workers' lodgings), the Corporation may claim the extra expenditure, and after an inquiry ordered by the appropriate Government the amount is enforceable like a decree.
• Assessment of dues (s.125) [s.45A]: an Authorised Officer decides disputes on applicability and determines the amount due, after an inquiry with the powers of a civil court, within five years of the dues arising, aiming to finish in two years. Appeal lies to an appellate authority of the Corporation within sixty days on depositing 25 per cent (s.126). Interest (s.127) and damages up to the amount of arrears (s.128) follow default, and dues are recovered by a Recovery Officer by attachment, arrest or receiver (s.129).

5. Employees' Insurance Court: sections 48 to 52 [ESI ss.74 to 83]

Constitution (s.48): the State Government constitutes an EI Court for a local area. A person who is or has been a judicial officer, or a legal practitioner of five years' standing, is qualified to be a Judge.

Matters (s.49(1)): any question, dispute or claim about whether a person is an employee or liable to pay the employee's contribution; the rate of wages or average daily wages; the rate of contribution; who is the employer; the right to any benefit and its amount and duration; the Corporation's directions on review of dependants' benefit; any other dispute between employer and Corporation, employer and contractor, or employee and employer about contributions or benefits; recovery of contributions; recovery of benefits wrongly received; claims under section 42; orders of the appellate authority under section 126; and claims by an employer against a contractor.

Pre-deposit (s.49(2)): an employer disputing contributions or dues claimed by the Corporation must first deposit 50 per cent of the amount claimed, which the Court may waive or reduce for recorded reasons.

Exclusive jurisdiction (s.49(3)) [s.75(3)]: no civil court may decide these questions, or any liability to be decided by a medical board or medical appeal tribunal.

Medical questions (s.37) [s.54A]: whether there is permanent disablement and the loss of earning capacity are decided by a medical board, with appeal to a medical appeal tribunal or directly to the EI Court, and a second appeal to the EI Court from the tribunal.

Powers and procedure (ss.50, 51): the powers of a civil court for summoning, discovery and evidence; it is a civil court for section 195 and Chapter XXVI of the Criminal Procedure Code; its orders are executable as decrees. Proceedings must begin within three years of the cause of action. A party may appear through a legal practitioner or an officer of a registered trade union. The Court may refer a question of law to the High Court.

Appeal (s.52) [s.82]: to the High Court, only on a substantial question of law, within sixty days, with sections 5 and 12 of the Limitation Act applying. The EI Court may, and if the High Court directs must, withhold payment pending the Corporation's appeal.

6. Problem

Meena, an insured worker in an ESI-covered garment factory, loses three fingers in a press. Her employer had not paid contributions for her for the last six months. The ESI office refuses benefit on that ground and she sues her employer in the civil court for damages. Advise her.

Issue. Whether non-payment of contributions defeats her claim, and which forum has jurisdiction.

Law. Section 42: where an employee loses benefit because the employer failed to pay contributions, the Corporation pays the benefit and recovers its capitalised value from the employer. Section 41(7)(a) bars a claim for employees' compensation against the employer, and section 49(1)(e) and (3) give the EI Court exclusive jurisdiction over the right to benefit.

Application. The injury arose out of and in the course of employment at the press, so it is an employment injury. The employer's default is his liability, not hers. Her civil suit is barred because the question of her right to benefit is within section 49.

Conclusion. Meena should claim permanent disablement benefit from the Corporation, assessed by a medical board, and if refused apply to the EI Court within three years. The Corporation will recover the capitalised value from the employer, who also faces interest, damages and prosecution.

How this is examined

Expect “Explain the benefits available under the ESI scheme” as an essay, and “Employees' Insurance Court: constitution and powers”, “dependants' benefit” or “medical benefit” as short notes. In the essay, take the six benefits in order with one line on qualifying conditions, then the bars in section 41. For the court, give constitution, the list of matters, the 50 per cent deposit, the exclusion of civil courts, limitation and the appeal.