Hello members,
I am in a manufacturing company. Some of the workers and employees are under the ESI Act, but there are also some employees and managers who are not covered under ESI because their wages are higher than the ESI ceiling limit. Now my confusion is... Are these employees covered under the compensation act or excluded from both Acts?
From India
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I am in a manufacturing company. Some of the workers and employees are under the ESI Act, but there are also some employees and managers who are not covered under ESI because their wages are higher than the ESI ceiling limit. Now my confusion is... Are these employees covered under the compensation act or excluded from both Acts?
From India
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Dear Pankaj, who are not cover under ESIC, they are automaticaly applicable as per workmen compensation act. you need to cover them under the Mediclaim & Personal Accident policy.
From India, Mumbai
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208From India, Mumbai
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Those who are not covered under the ESI Act will not be automatically covered under the EC Act. They will be covered under the EC Act only if they fall under the definition of 'employee' under the EC Act 1923. There is no law in India that mandates employees outside the purview of the ESI scheme to be covered under a Medical/Personal Accident insurance scheme.
Vaeghese Mathew
TVM - 09961266966
From India, Thiruvananthapuram
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Vaeghese Mathew
TVM - 09961266966
From India, Thiruvananthapuram
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Sir(s),
The definition of the term "employee" as laid down in section 2(1)(dd) read with Schedule II of the Employees' Compensation Act, 1923 is a very long list of persons who are treated as "employees" and are entitled to compensation under the said Act. State Governments have also made some additions to the list.
In my opinion, it may be safe to conclude that those employees who are neither entitled as "employees" under the Employees' Compensation Act, 1923, nor under the ESI Act, 1948, are not entitled to any compensation even though the accident may have occurred during and in the course of employment. Perhaps, such employees in such eventualities may have to approach civil courts by way of civil suits for compensation.
From India, Noida
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The definition of the term "employee" as laid down in section 2(1)(dd) read with Schedule II of the Employees' Compensation Act, 1923 is a very long list of persons who are treated as "employees" and are entitled to compensation under the said Act. State Governments have also made some additions to the list.
In my opinion, it may be safe to conclude that those employees who are neither entitled as "employees" under the Employees' Compensation Act, 1923, nor under the ESI Act, 1948, are not entitled to any compensation even though the accident may have occurred during and in the course of employment. Perhaps, such employees in such eventualities may have to approach civil courts by way of civil suits for compensation.
From India, Noida
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Other than ESI-covered employees, other employees will be covered under the Workmen's Compensation Act if they come under the definition of workmen in the Act. You have to provide medical insurance for the safety of the employer. Otherwise, the employer is responsible for the payment of compensation in case of employment injury or death. It is always better to cover such employees under WC/Medical insurance.
From India, Hyderabad
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From India, Hyderabad
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In my view, if an employee is neither covered by the ESI Act nor by the Employee Compensation Act, it is advisable to cover them under an accident policy of an insurance scheme. Failing to do so, the employer renders himself personally liable for the compensation if the employee pursues the case before any Tribunal or Civil court.
B. Saikumar
In-House HR & IR Advisor
From India, Mumbai
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B. Saikumar
In-House HR & IR Advisor
From India, Mumbai
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Sirs,
I understand that the provision of social security at the workplace for employees not covered by either the ESI Act, 1928, or the EC Act, 1923 is nonexistent. It entirely depends upon the discretion of the employer/management whether to provide compensation or not. Filing a case in a civil court and continuing to contest it is a challenging task, and if the employer can prove negligence or any shortcomings on the part of the injured officer/employee, they will receive no compensation.
From India, Noida
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I understand that the provision of social security at the workplace for employees not covered by either the ESI Act, 1928, or the EC Act, 1923 is nonexistent. It entirely depends upon the discretion of the employer/management whether to provide compensation or not. Filing a case in a civil court and continuing to contest it is a challenging task, and if the employer can prove negligence or any shortcomings on the part of the injured officer/employee, they will receive no compensation.
From India, Noida
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Dear all,
An employee falling under the definition of a workman as per the Workmen Compensation Act, drawing wages/salary beyond the ceiling limit, i.e., Rs. 15,000, will definitely be entitled to compensation if the injury/death occurs during the course of employment. It is at the sole discretion of the management to obtain insurance coverage for such employees to avoid any legal financial liability at any stage. There is a provision to obtain a policy for gratuity under the Payment of Gratuity Act.
From India, Delhi
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An employee falling under the definition of a workman as per the Workmen Compensation Act, drawing wages/salary beyond the ceiling limit, i.e., Rs. 15,000, will definitely be entitled to compensation if the injury/death occurs during the course of employment. It is at the sole discretion of the management to obtain insurance coverage for such employees to avoid any legal financial liability at any stage. There is a provision to obtain a policy for gratuity under the Payment of Gratuity Act.
From India, Delhi
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Employees drawing Rs 15000 or more are not eligible for ESIC. They can be covered under EC/WC Policy in case of ESIC jurisdiction-notified areas. In the case of non-notified areas, all should be covered under WC/EC.
From India, Mumbai
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From India, Mumbai
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Thanks for your valuable replies, but there is one more thing which I forgot to mention above. The company is also providing medical benefits in their salary breakdowns. Are they eligible for compensation or not?
From India
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From India
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Giving medical allowance or its reimbursement is not an excuse for denying compensation under the EC Act. After the 2010 amendment to the EC Act, the employer shall reimburse the medical expenses incurred by the employee meeting with employment injury, in addition to the amount of compensation.
Varghese Mathew
From India, Thiruvananthapuram
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Varghese Mathew
From India, Thiruvananthapuram
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You have to get exemption from ESIC office/govt. in that case.Normally if any organsation gives better facilities more than ESIC then only they get exemption order. Otherwise ESIC is mandatory.
From India, Mumbai
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From India, Mumbai
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Dear all,
Employees in implemented areas may not be coverable under the ESI Act due to two reasons: 1) the organizational manpower is low (10 for factories / 20 for others) and as such, it is not coverable, 2) if the manpower is more and the employee draws wages in excess of Rs. 15,000 per month either at the time of joining or at the beginning of a new contribution period.
Liabilities of likely accidents of such employees will have to be covered by obtaining only an Employee Compensation policy; an accident policy or medi-claim policy may not be able to cover the liabilities. The policy can be discussed with any general insurance company.
The Employee Compensation Act is about compensating for the loss of earning capacity due to an accident; it goes beyond the mere cost of medical treatment due to an accident. As such, an accident policy or medi-claim policy may not be adequate to cover the cost of compensation to be paid.
Shrikant Prabhudesai
shrikant@classiclabour.com
From India, Mumbai
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Employees in implemented areas may not be coverable under the ESI Act due to two reasons: 1) the organizational manpower is low (10 for factories / 20 for others) and as such, it is not coverable, 2) if the manpower is more and the employee draws wages in excess of Rs. 15,000 per month either at the time of joining or at the beginning of a new contribution period.
Liabilities of likely accidents of such employees will have to be covered by obtaining only an Employee Compensation policy; an accident policy or medi-claim policy may not be able to cover the liabilities. The policy can be discussed with any general insurance company.
The Employee Compensation Act is about compensating for the loss of earning capacity due to an accident; it goes beyond the mere cost of medical treatment due to an accident. As such, an accident policy or medi-claim policy may not be adequate to cover the cost of compensation to be paid.
Shrikant Prabhudesai
shrikant@classiclabour.com
From India, Mumbai
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People have inappropriate perceptions that wherein ESI Act is applicable, EC Act is not applicable. This is not the case; both Acts are applicable.
For employees covered under ESI Act (having a 15K salary) & EC Act, the employee can only claim compensation under one Act. Due to the bar imposed by section 61 under the ESI Act, it means that employees covered by the ESI Act cannot claim similar benefits to which they are entitled under any other applicable law, such as the EC Act or any other.
The real issue is not applicability but the bar on claiming compensation. The reason employees covered under the ESI Act in ESI-implemented areas are kept out of the purview of the EC Act (meaning EC policy).
In my view, post the 2010 amendment in the EC Act, as earlier it was the WC Act wherein the word "workman" has been replaced by "Employee," and due to other major changes, it became applicable to all employees irrespective of designation.
Secondly, GPA/Medical Policy are not valid from the EC Act point of view; the employee needs to go for EC Policy. Though the Act does not mandatorily prescribe an Insurance Policy, to shift self-liability and avoid the risk of huge payment, it is always advisable to have an EC Policy.
So for employees who are not covered under the ESI Act either due to a non-implemented area of ESI or due to being out of salary coverage, it is better to have blanket coverage under an EC Policy.
From India, Delhi
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For employees covered under ESI Act (having a 15K salary) & EC Act, the employee can only claim compensation under one Act. Due to the bar imposed by section 61 under the ESI Act, it means that employees covered by the ESI Act cannot claim similar benefits to which they are entitled under any other applicable law, such as the EC Act or any other.
The real issue is not applicability but the bar on claiming compensation. The reason employees covered under the ESI Act in ESI-implemented areas are kept out of the purview of the EC Act (meaning EC policy).
In my view, post the 2010 amendment in the EC Act, as earlier it was the WC Act wherein the word "workman" has been replaced by "Employee," and due to other major changes, it became applicable to all employees irrespective of designation.
Secondly, GPA/Medical Policy are not valid from the EC Act point of view; the employee needs to go for EC Policy. Though the Act does not mandatorily prescribe an Insurance Policy, to shift self-liability and avoid the risk of huge payment, it is always advisable to have an EC Policy.
So for employees who are not covered under the ESI Act either due to a non-implemented area of ESI or due to being out of salary coverage, it is better to have blanket coverage under an EC Policy.
From India, Delhi
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Dear Sh. Essykkr,
In your remarks, as above, you have mentioned the provisions of Section 61 of the ESI Act and stated that "People have inappropriate perceptions that wherein the ESI Act is applicable, the EC Act is not applicable. This is not the case; both Acts are applicable."
In this connection, I would like to point out that under Section 53 of the said Act, there is a specific bar against receiving benefits under the Employees' Compensation Act, 1923.
You have further stated that "In my view, post the 2010 amendment in the EC Act, as earlier it was the WC Act wherein the word 'workman' has been replaced by 'Employee', and due to other major changes, it became applicable to all employees irrespective of designation."
In this connection, I may submit that under the Employees' Compensation Act, 1923, only those employees are entitled to compensation who have been defined as "employee" under Section 2(dd) and Schedule-II of the said Act and not all employees as mentioned by you.
From India, Noida
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In your remarks, as above, you have mentioned the provisions of Section 61 of the ESI Act and stated that "People have inappropriate perceptions that wherein the ESI Act is applicable, the EC Act is not applicable. This is not the case; both Acts are applicable."
In this connection, I would like to point out that under Section 53 of the said Act, there is a specific bar against receiving benefits under the Employees' Compensation Act, 1923.
You have further stated that "In my view, post the 2010 amendment in the EC Act, as earlier it was the WC Act wherein the word 'workman' has been replaced by 'Employee', and due to other major changes, it became applicable to all employees irrespective of designation."
In this connection, I may submit that under the Employees' Compensation Act, 1923, only those employees are entitled to compensation who have been defined as "employee" under Section 2(dd) and Schedule-II of the said Act and not all employees as mentioned by you.
From India, Noida
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Sorry, section 53 of the ESI Act was accidentally left out or could not be pointed out. For the applicability of the EC Act as mentioned by you, it shall be as per the schedule appended. However, there is a difference of opinion in the legal fraternity. I have discussed this issue numerous times with consultants and seniors. They said it is applicable to all; otherwise, what is the essence of the word 'employee' instead of 'workmen' in the industry? Though I am also of the view that without an amendment in the schedule, it is not correct to say that it covers all employees irrespective of designation.
I would request other fellow members to shed some light on this. It's a matter of debate because otherwise, what was the use of changing its name or what was the intention of the legislatures? As its name suggests and keeping in view of BPO IT ITES companies changing workforce scenario, it was amended. Anyway, let's have a clear view of others.
From India, Delhi
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I would request other fellow members to shed some light on this. It's a matter of debate because otherwise, what was the use of changing its name or what was the intention of the legislatures? As its name suggests and keeping in view of BPO IT ITES companies changing workforce scenario, it was amended. Anyway, let's have a clear view of others.
From India, Delhi
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When the EC Act defines "employee" and Schedule II gives the list of such employees, why does the legal fraternity have doubts? If the intention of the legislature was to cover all employed persons other than IPs, it could have framed such a definition and repealed Schedule II.
Varghese Mathew
From India, Thiruvananthapuram
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Varghese Mathew
From India, Thiruvananthapuram
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As Mr. Harsh Kumar and Verghese Mathew pointed out, there is no confusion regarding the coverage of employees under the EC Act. It only applies to those employees employed in the capacities explained in Schedule II to the Act; not all employees. Since Schedule II to the amended Act extends coverage to more employees than those under the old Schedule, the Act was renamed the Employees' Compensation Act to reflect this extended coverage.
B. Saikumar
In-House HR & IR Advisor
From India, Mumbai
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B. Saikumar
In-House HR & IR Advisor
From India, Mumbai
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I would like to know if a person working in a company in the marketing department is entitled to receive any compensation for accidents that occur during the course of performing his duties (such as traveling for the company's work) if he is not covered under ESI.
Thanks,
Annon
From India, Ghaziabad
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Thanks,
Annon
From India, Ghaziabad
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Dear Annon,
Yes, such an employee is entitled to receive compensation as per the provisions of the Employee Compensation Act, 1923. The Act was earlier known as the Workmen's Compensation Act, 1923. It is essential for such an organization to cover these liabilities by obtaining an Employee Compensation Policy available with any general insurance companies. In the event that a young employee meets with a serious accident, the payment of compensation may amount to lakhs of rupees as their salary would be Rs. 15,000 or more per month.
The ESIC continues to pay a pension to nominees every month as per the rules, whereas here it is a one-time payment based on the loss of earning capacity as detailed in the Act.
Shrikant
shrikant@classiclabour.com
From India, Mumbai
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Yes, such an employee is entitled to receive compensation as per the provisions of the Employee Compensation Act, 1923. The Act was earlier known as the Workmen's Compensation Act, 1923. It is essential for such an organization to cover these liabilities by obtaining an Employee Compensation Policy available with any general insurance companies. In the event that a young employee meets with a serious accident, the payment of compensation may amount to lakhs of rupees as their salary would be Rs. 15,000 or more per month.
The ESIC continues to pay a pension to nominees every month as per the rules, whereas here it is a one-time payment based on the loss of earning capacity as detailed in the Act.
Shrikant
shrikant@classiclabour.com
From India, Mumbai
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The author of the thread has clearly mentioned that they are into Manufacturing Industry meaning thereby they are covered by the definition of Factories Act and will fall under Schedule II clause (ii) and also would like to produce the same a below-
The following persons are employees within the meaning of section 2(i)(dd)] and subject to the provisions of that section, that is to say, any person who is—
(ii) employed, in any premises wherein or within the precincts whereof a manufacturing process as defined in clause (k) of section 2 of the Factories Act, 1948 (63 of 1948), is being carried on, or in any kind of work whatsoever incidental to or connected with any such manufacturing process or with the article made 8[whether or not employment in any such work is within such premises or precincts], and steam, water or other mechanical power or electrical power is used; or
Now please carefully read both the clauses it is clear the definition is ANY PERSON WHO IS EMPLOYED. the word Employed has been used in both the clauses, which mean any person employed. Are managers/suprevisors etc are not employed.
Earlier the definition used to be "Workman" means under 2(n) (old Act).
So my point is as far as employment category covered under Schedule II, in such categories, all employees are covered irrespective of their designation .
From India, Delhi
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The following persons are employees within the meaning of section 2(i)(dd)] and subject to the provisions of that section, that is to say, any person who is—
(ii) employed, in any premises wherein or within the precincts whereof a manufacturing process as defined in clause (k) of section 2 of the Factories Act, 1948 (63 of 1948), is being carried on, or in any kind of work whatsoever incidental to or connected with any such manufacturing process or with the article made 8[whether or not employment in any such work is within such premises or precincts], and steam, water or other mechanical power or electrical power is used; or
Now please carefully read both the clauses it is clear the definition is ANY PERSON WHO IS EMPLOYED. the word Employed has been used in both the clauses, which mean any person employed. Are managers/suprevisors etc are not employed.
Earlier the definition used to be "Workman" means under 2(n) (old Act).
So my point is as far as employment category covered under Schedule II, in such categories, all employees are covered irrespective of their designation .
From India, Delhi
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Dear friends,
I very much appreciate the valuable and logical inputs offered by all the responding members, though some points seem unacceptable to me. The question is whether the Employees' Compensation Act, 1923 is applicable to those employees, including managerial cadre personnel, not covered by the ESI Act in the event of employment accidents. In this regard, I am in complete agreement with Varghese Mathew. If we analyze the preamble of the E.C Act with reference to the Statement of Objects and Reasons, "the Act has its roots in charity, sympathy, and the advancement of socialistic ideas," as observed by the Honorable High Court of Allahabad in Works Manager, Carriage & Wagon Shop, EIR v. Mahabir (AIR 1954 All 132). However, the Act limits its application to the employees based on their vulnerability or risk of exposure to employment accidents in general. Hence, the definition of 'employee' with reference to the list enumerated in Schedule II. We have to bear in mind that the list furnished in the Schedule is not illustrative but exhaustive.
From India, Salem
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I very much appreciate the valuable and logical inputs offered by all the responding members, though some points seem unacceptable to me. The question is whether the Employees' Compensation Act, 1923 is applicable to those employees, including managerial cadre personnel, not covered by the ESI Act in the event of employment accidents. In this regard, I am in complete agreement with Varghese Mathew. If we analyze the preamble of the E.C Act with reference to the Statement of Objects and Reasons, "the Act has its roots in charity, sympathy, and the advancement of socialistic ideas," as observed by the Honorable High Court of Allahabad in Works Manager, Carriage & Wagon Shop, EIR v. Mahabir (AIR 1954 All 132). However, the Act limits its application to the employees based on their vulnerability or risk of exposure to employment accidents in general. Hence, the definition of 'employee' with reference to the list enumerated in Schedule II. We have to bear in mind that the list furnished in the Schedule is not illustrative but exhaustive.
From India, Salem
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If the 'manager' is in the manufacturing sector coming under the Factories Act, he is an employee under the Employees' Compensation Act (if he is not covered under the ESI Act) and is eligible for compensation for employment injury.
Email: varghese21283@mail.com
Phone: 9961266966
From India, Thiruvananthapuram
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Email: varghese21283@mail.com
Phone: 9961266966
From India, Thiruvananthapuram
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Those who are not covered under the ESI Act will not be automatically covered under the EC Act. They will be covered under the EC Act only if they fall under the definition of 'employee' under the EC Act of 1923. Additionally, for calculating compensation, the maximum wages will be Rs. 8,000.
J.K. Pamnani
From India, New Delhi
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J.K. Pamnani
From India, New Delhi
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They are eligible for compensation even company is giving them medical in their salary breakups.
From India, New Delhi
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From India, New Delhi
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Dear Tushar ji,
[QUOTE=tushar.swar;2152385]Those who are not covered under ESIC are automatically applicable as per the Workmen Compensation Act. I hope you will correct yourself after reading the comments of senior learned members.
[QUOTE=tushar.swar;2152385]You need to cover them under the Mediclaim & Personal Accident policy. The liability under the EC Act cannot be met by a mediclaim policy or personal accident policy. Only an EC policy will come to your rescue in liability under the EC Act, as mentioned by Shrikant Prabhudesai.
From India, Mumbai
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[QUOTE=tushar.swar;2152385]Those who are not covered under ESIC are automatically applicable as per the Workmen Compensation Act. I hope you will correct yourself after reading the comments of senior learned members.
[QUOTE=tushar.swar;2152385]You need to cover them under the Mediclaim & Personal Accident policy. The liability under the EC Act cannot be met by a mediclaim policy or personal accident policy. Only an EC policy will come to your rescue in liability under the EC Act, as mentioned by Shrikant Prabhudesai.
From India, Mumbai
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EMPLOYEES' COMPENSATION ACT - IMP- PROVISIONS IN TELUGU VERSION.pdf
Employees' Compensation Act 1923.doc