Dear All,
We are a steel manufacturing group with a site in a remote area. In terms of ESI, it is a non-implemented area, so there is no ESI coverage. Instead, we have covered the employees under the Workmen's Compensation Act. However, I am curious to know, if ESI is not applicable, why can't we consider another policy besides workmen's compensation?
Please advise.
Saravanan
From India, Ambala
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6We are a steel manufacturing group with a site in a remote area. In terms of ESI, it is a non-implemented area, so there is no ESI coverage. Instead, we have covered the employees under the Workmen's Compensation Act. However, I am curious to know, if ESI is not applicable, why can't we consider another policy besides workmen's compensation?
Please advise.
Saravanan
From India, Ambala
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Dear Saravanan,
Please name the other policies which seem to be more beneficial and which can be substituted in place of WC Policy?
With Regards,
R.N.Khola
From India, Delhi
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Please name the other policies which seem to be more beneficial and which can be substituted in place of WC Policy?
With Regards,
R.N.Khola
From India, Delhi
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Dear Mr. Khola,
According to the law, we are required to cover only workers' compensation (WC) if Employee State Insurance (ESI) is not applicable. However, it is legally possible to have coverage other than workers' compensation.
Please provide your suggestions.
Regards,
Saravanan
From India, Ambala
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According to the law, we are required to cover only workers' compensation (WC) if Employee State Insurance (ESI) is not applicable. However, it is legally possible to have coverage other than workers' compensation.
Please provide your suggestions.
Regards,
Saravanan
From India, Ambala
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I completely agree with Saravanan. If not ESIC, the only option is WC. Some may have a doubt: can our management provide excellent hospital/medical benefits/death benefits too? Can we be exempted from ESIC? The simple answer is NO, for obvious reasons.
From India, Bangalore
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From India, Bangalore
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If you are able to provide better medical and other benefits to your employees, certainly, you will get an exemption from the operation of ESI. But before that, you have to ensure that the facilities provided by you are better in all means. Let it be in the form of taking care of employees in the event of their accident on duty, giving 90 or more days of leave, medical benefits to dependents of the employees, pension in case of permanent incapacity due to employment injury, compensation to dependents in the event of an employee's death, or such other benefits which are not generally covered by any mediclaim policy in practice. There may be a number of insurance policies which are all framed with some hidden points. If you go through them, you will find that the ESI will be a better choice for an employer.
The Workmen's (Employees') Compensation Act is a general enactment directing the employers to pay compensation in case of death or permanent incapacities caused to the employees while on duty. No one can predict when an accident takes place or when the liability comes into being. If at the time of death or accident the employer finds that he does not have enough money to meet the liability, then the purpose of the enactment will not be met. It is with a view to making the employer financially sound that a policy to cover such untoward happenings has been incorporated in the Act itself. The employer may be sound enough to meet any unexpected expenditure, but it cannot be predicted or taken for granted by the law enforcing authorities.
Now the role of ESIC in workmen's compensation is just like any other insurance company. That is, the ESI Corporation takes the entire responsibility of the employer regarding the payment of compensation in case of death or injury against a consideration paid or payable monthly. Therefore, if the employer is operating in a notified area, then ESIC will absolve all the liabilities of the employer in respect of workmen's compensation (as well as maternity benefits payable under the Maternity Benefits Act). At the same time, if the employer is not in a notified area then naturally, the ESIC cannot do anything but the employer has to find a solution, i.e., to take a suitable policy which will bring in sufficient funds to pay off its liability towards compensation without hampering its working capital. Since the ESI Act has also put some restrictions regarding coverage based on the salary of the insured (employees), the employer has also to find out an alternative as said above in respect of those who are out of the purview of ESI.
Regards,
Madhu.T.K
From India, Kannur
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The Workmen's (Employees') Compensation Act is a general enactment directing the employers to pay compensation in case of death or permanent incapacities caused to the employees while on duty. No one can predict when an accident takes place or when the liability comes into being. If at the time of death or accident the employer finds that he does not have enough money to meet the liability, then the purpose of the enactment will not be met. It is with a view to making the employer financially sound that a policy to cover such untoward happenings has been incorporated in the Act itself. The employer may be sound enough to meet any unexpected expenditure, but it cannot be predicted or taken for granted by the law enforcing authorities.
Now the role of ESIC in workmen's compensation is just like any other insurance company. That is, the ESI Corporation takes the entire responsibility of the employer regarding the payment of compensation in case of death or injury against a consideration paid or payable monthly. Therefore, if the employer is operating in a notified area, then ESIC will absolve all the liabilities of the employer in respect of workmen's compensation (as well as maternity benefits payable under the Maternity Benefits Act). At the same time, if the employer is not in a notified area then naturally, the ESIC cannot do anything but the employer has to find a solution, i.e., to take a suitable policy which will bring in sufficient funds to pay off its liability towards compensation without hampering its working capital. Since the ESI Act has also put some restrictions regarding coverage based on the salary of the insured (employees), the employer has also to find out an alternative as said above in respect of those who are out of the purview of ESI.
Regards,
Madhu.T.K
From India, Kannur
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Workmens Compensation Act 1923.doc
Employee's Compensation Act-2009.pdf