LABOUR & INDUSTRIAL LAW- PAPER II

MODULE II NOTES

MODULE II -Administration of ESI Scheme-benefits-ESI Corporation Standing Committees

Medical Benefit Council-ESI Fund-Liability of employer
Employees State Insurance Act,1948
The scheme was inaugurated in Kanpur on 24th February 1952 (ESIC Day) by then Prime
Minister Pandit Nehru. It was the first major legislation on social Security for workers in
independent India.
The objective of the Act is to provides an integrated need based social insurance scheme that
would protect the interest of workers in contingencies such as sickness, maternity, temporary
or permanent physical disablement, Occupational diseases or death due to employment injury
resulting in loss of wages or earning capacity. The Act also guarantees reasonably good medical
care to workers and their immediate dependents.
The Act extends to whole of India. Act applies to all the factories Including Government
factories). If Government factory is providing better facility than the benefits mentioned in the
Act then this Act is not applicable. State Government in consultation with Central Government
can extend the provisions of this Act to any other establishments, but before extending 6
months’ notice must be given. Once the factories or establishments comes under the ACT, it
should continue to contribute ESI even if number of employees come down to lesser than
prescribed in the ACT
International Ore & Fertilizers (India) Pvt Ltd V. ESI Corp. AP
In the case of International Ore and Fertilizers (India) Pvt. Ltd. v. Employees' State Insurance
Corporation, the Supreme Court of India addressed the applicability of the Employees' State
Insurance (ESI) Act, 1948, to establishments classified as "shops."
Background
The Government of Andhra Pradesh, through a notification dated September 25, 1974,
extended the provisions of the ESI Act to various establishments, including "shops," employing
20 or more persons, effective from March 30, 1975. Following this, an inspection of
International Ore and Fertilizers (India) Pvt. Ltd.'s premises in Secunderabad revealed that the
company employed between 27 to 29 individuals and was engaged in importing fertilizers. The
Employees' State Insurance Corporation (ESIC) subsequently required the company to comply
with the ESI Act's provisions.
Legal Issue
whether the company's establishment qualified as a "shop" under the ESI Act, thereby making
it subject to the Act's provisions.
Supreme Court's Decision:

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The Supreme Court held that the term "shop" should be interpreted broadly to fulfil the welfare
objectives of the ESI Act. The Court emphasized that a restrictive interpretation would
undermine the Act's purpose. Consequently, the company's establishment was deemed a "shop"
under the Act, making it liable for compliance.
This judgment underscores the judiciary's approach to interpreting welfare legislation like the
ESI Act. By adopting a liberal interpretation of the term "shop," the Court ensured that the Act's
benefits extended to a broader range of employees, aligning with its social welfare objectives.
Regional Director ESI Corp. V. Ram Chander
In the case of Regional Director, Employees' State Insurance Corporation v. Ram Chander
(1987), the Supreme Court of India examined whether a tailoring establishment employing
fewer than 20 individuals and utilizing electric power in its operations fell under the purview
of the Employees' State Insurance (ESI) Act, 1948.
Background
Ram Chander operated a tailoring shop named M/s. Commercial Tailors in Jodhpur, employing
between 10 to 12 tailors. The establishment used electric power for ironing clothes, an essential
part of the tailoring process. The Employees' State Insurance Corporation (ESIC) sought to
apply the provisions of the ESI Act to this establishment.
Legal Issue
Whether the tailoring shop qualified as a "factory" under Section 2(m) of the Factories Act,
1948, which defines a factory as any premises where a manufacturing process is carried out
with the aid of power and employs ten or more workers.
Supreme Court's Decision
The Supreme Court held that the tailoring shop met the definition of a "factory" under the
Factories Act. The Court reasoned that the process of stitching clothes, which includes ironing
with the aid of electric power, constitutes a manufacturing process. Since the establishment
employed more than ten workers and used power in its operations, it was deemed a factory.
Consequently, the provisions of the ESI Act were applicable to Ram Chander's establishment.
This judgment clarified that establishments engaged in manufacturing processes with the aid
of power and employing ten or more individuals are subject to the ESI Act, even if they are
small tailoring shops. The decision underscored the broad applicability of labour welfare
legislation to various types of establishments.
The Act is Applicable for;
• All factories (excluding seasonal factories) employing at least 10 persons
• Shops
• Hotel and restaurants
• Cinemas and theatres
• Road-motor transport establishments
• Newspaper establishments
• Private medical and educational institutions employing at least 20 persons. Etc.

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Applicability of Act - Exemptions Section 87-91
Section 87: Exemption of a factory or establishment or class of factories or
establishments:- The appropriate Government may by notification in the Official Gazette and
subject to such conditions as may be specified in the notification, exempt any factory or
establishment or class of factories or establishments in any specified area from the operation
of this Act for a period not exceeding one year and may from time to time by like notification
renew any such exemption for periods not exceeding one year at a time.
Section 88 Exemption of persons or class of persons: The appropriate Government may, by
notification in the Official Gazette and subject to such conditions as it may deem fit to impose,
exempt any person or class of persons employed in any factory or establishment or class of
factories or establishments to which this Act applies from the operation of the Act.
Section 89 Corporation to make representation: No exemption shall be granted or renewed
under section 87 or Section 88, unless a reasonable opportunity has been given to the
Corporation to make any representation it may wish to make in this regard to the proposal and
such representation has been considered by the appropriate Government.
Section 90. Exemption of factories or establishments belonging to Government or any
local authority: The appropriate Government may, after consultation with the Corporation, by
notification in the Official Gazette and subject to such conditions as may be specified in the
notification, exempt any factory or establishment belonging to any local authority, from the
operation of this Act if the employees in any such factory, or establishment are otherwise in
receipt of benefits substantially similar or superior to the benefits provided under this Act.
Section 91 Exemption from one or more provisions of the Act: The appropriate Government
may, with the consent of the Corporation, by notification in the Official Gazette, exempt any
employees or class of employees in any factory or establishment or class of factories or
establishments from one or more of the provisions relating to the benefits provided under this.
This Act shall not applicable to
1. Seasonal Factories
2. Any member of naval, military, or air force
3. Any employee wages exceeds the limits prescribed by the Act
4. Factories working with the aid of power whereon less than 10 persons are employed
5. Factories working without the aid of power whereon less than 20 persons are employed
6. Mines (subject to the Mines Act, 1952)
7. Railway running sheds
Constitutionality of the Act
The ESI Act serves as a constitutional instrument because of its practice of providing insurance
and medical insurance. While the ESI Act is mostly executed through the ESI Corporation, the
Central Government takes control of most of the proceedings. This control by the Central
Government largely contributes to the constitutionality of the Act, because Insurance, be it

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public or private, is listed in the Seventh Schedule of the Indian Constitution as a Union List
subject i.e. it can only be legislated by the Central Government.

Employee State
Insurance Corporation Standing Committee
(ESIC)

ESI Scheme
Administration

Regional Board, Local

Medical Benefit Council Committee, Inspector,
Office and Staff

Employees State Insurance Corporation

The ESI Act exercises its function through the Employees’ State Insurance Corporation,
established via section 3, a body created to maintain social security. It was established on 24
February, 1952. The corporation is supposed to grant relief to the employees in case of medical
emergencies.
The composition of the ESIC is defined in section 4, and it is as follows:

• The Director-General (Ex-officio)

• Chairman, appointed by the Central Government.
• Vice-Chairman appointed by the Central Government.
• Not more than 5 persons nominated by the Central Government.
• 1 person to represent each state.
• 1 person representing the Union Territories.
• 10 persons representing employers.
• 10 persons representing employees.
• 2 persons representing the medical profession.
• 3 members of parliament (2: Lok Sabha and 1: Rajya Sabha).
Everyone is appointed by Central Government in consultation with respective team except
State representation where every State Government appoints its representative.
Term of Office of members of the E.S.I. Corporation (Sec.5)
The representatives of employers, employees, medical profession and parliament are to hold
office for a period of 4 years from the date of their appointment or election is notified. But
they shall, notwithstanding the expiry of the said period of 4 years, continue to hold office until
the appointment or election of his successor is notified.

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The Chairman, Vice-Chairman, representatives of the Central Government, State Government
and Union territories shall hold office during the pleasure of the Government appointing
them. An outgoing member of the Employees State Insurance Corporation shall be eligible for
re-appointment or re-election.
Powers of ESIC

• Employment of Staff (Sec 17): The Corporation may employ the necessary staff for the
efficient transaction of its business
• Promotion of Measures for Health (Sec 19): It may, in addition to the scheme of
benefits specified in this Act, promote measures for the improvement of the health and
welfare of insured persons and for the rehabilitation and re- employment of insured
persons who have been disabled or injured
• Holding of Properties (Sec 29): It can acquire, hold and sell or otherwise transfer any
movable and immovable property
• Appointment of Inspector (Sec-45): The Corporation may appoint such persons as
inspectors for the purpose of the Act within such local limits as it may assign to them.
• Contribution (Sec-45A): the Corporation may on the basis of information available to it,
by order, determine the amount of contribution payable in respect of employees of a
factory or establishment in respect of which no particulars, registers or records are
submitted, furnished or maintained.
• The Corporation may from time to time invest any moneys which are not immediately
required for expenses.
• The Corporation may with the previous sanction of the Central Government. raise loans
and take measures for discharging such loans.
• The Corporation may constitute for the benefit of its staff of any class of them such
provident or other benefit fund as it may think fit.
All orders and decisions of the E.S.I. Corporation shall be authenticated by the signature of the
Director General of the Corporation. As regards other Instruments issued by the Corporation,
they shall be authenticated by the signature of the Director General or such other Officer of the
Corporation as may be authorised by him.
Duties of ESIC
❖ Budget Estimate (Sec-32): The Corporation shall in each year frame a budget showing
probable receipts and expenditure which it proposes to incur during the following year. It
shall submit a copy of the budget for the approval of the Central Government.
❖ Maintain Accounts (Sec 33): It shall maintain correct accounts of its income and
expenditure
❖ Facilitate Auditing (Sec-34): Accounts so maintained shall be duly audited by auditors
appointed by the Central Government.
❖ Publish Annual Report (Sec 35): The Corporation shall submit an annual report of its
working and activities to the Central Government

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❖ Place before Parliament (Sec 36): The annual report, the audited accounts together with
the auditor’s report thereon, and the budget as finally adopted by it shall be placed before
Parliament.
❖ Valuation of Assets and Liabilities: The Corporation shall, at intervals of five years, have
a valuation of its assets and liabilities made by a valuer appointed with the approval of the
Central Government
Standing Committee – Sec 8
Subject to the general superintendence and control of the ESIC and to act as its executive body,
a standing committee has constituted from among the members of ESIC. It consists of;
• Director General of ESIC (Ex-Officio)
• Chairman
• 3 members of ESIC
• 3 members representing states notified CG
• 8 members elected by the ESIC
• 3 members representing Employers
• 3 members representing Employees
• 1 Person representing Medical Practice
• 1 Person representing Parliament
Power and Duties of Standing Committee (Sec-18)
❖ Administer the affairs of the ESI under the guidance of ESIC
❖ It may exercise any other power and any of the functions of ESIC
Medical Benefit Council- Sec 10
To advise the ESIC on the medical side of its operations a Medical Council has been
constituted. It consists of;
• Director General (Health Services) Ex-Officio
• Deputy Director General -Health Services
• Medical Commissioner of the ESIC
• 1 member representing each state
• 3 members representing Employers
• 3 members representing Employees
• 3 members representing Medical Practice (atleast1 should be women)
Power and Duties (Sec-22)
❖ Advise ESIC and Standing committee
❖ Investigation in relation to complaint against medical practitioner
❖ Shall perform such other duties in connection with the medical treatment
Employment Injury - Sec 2(1)(8)
It means a personal injury to an employee caused by the accident or an occupational disease
arising out of and in the course of employment.

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In the Course of employment emphasizes the time when the accident injury was caused. 'Out
of employment' emphasizes that there must be casual connection between the employment and
accident injury (Bai Atmaram v Bombay Port Trust)
Time and Place of accident is immaterial, but work should not totally unrelated to the
employment, there should be a nexus or casual connection (ESI Corp. Bangalore V. L.Ranga
Rao)
Dependant Sec 2(6-A)
"Dependant" means any of the following relatives of a deceased insured person, namely:
(i) a widow, a legitimate or adopted son who has not attained the age of twenty-five years, an
unmarried legitimate or adopted daughter; a widowed mother;
(ii) if wholly dependent on the earnings of the insured person at the time of his death, a
legitimate or adopted son or daughter who has attained the age of twenty-five and who is infirm;
(iii) if wholly or in part dependent on the earnings of the insured person at the time of his death,
(a) a parent other than a widowed mother,
(b) a minor illegitimate son, an unmarried illegitimate daughter or a daughter legitimate or
adopted or illegitimate if married and a minor or if widowed and a minor,
(c) a minor brother or an unmarried sister or a widowed sister if a minor,
(d) a widowed daughter-in-law,
(e) a minor child of a pre-deceased son,
(f) a minor child of a pre-deceased daughter where no parent of the child is alive, or
(g) a paternal grand-parent if no parent of the insured person is alive
Principal Employer - Section-2(17)
"Principal employer" means –
(i) in a factory, the owner or occupier of the factory and includes the managing agent of such
owner or occupier, the legal representative of a deceased owner or occupier, and where a person
has been named as the manager of the factory under the Factories Act, 1948, the person so
named.
Director of a company is not 'Principal Employer', person designated as the manager of the
factory under the Factories Act, 1948 is Principal Employer (Suresh v Collector of Bombay)
Contribution - Section 2(4)
It means the sum of money payable to the Corporation by the principal employer in respect of
an employees and includes any amount payable by or on behalf of the employee in accordance
with the provisions of this Act. The contributions payable shall ordinarily fall due on the last

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day of the wage period. The contributions shall be paid at rates prescribed by the Central
Government.
Currently Contribution rate is 4%

• 3.25% by Employer Contribution

• .75% by Employee Contribution
According to Section 40 of the Act, the principal employer is liable to pay both the employers’
contributions and the employees’ contribution, in respect of every employee whether directly
employed by him or by or through an immediate employer. If any contribution is not paid by
the principal employer on due date, he shall be liable to pay simple interest at 12% p.a., or at
higher rate specified in the regulations. (Section 39(5))
Immediate Employer: (Section -2(13))
" immediate employer" in relation to employees employed by or through him, means a person
who has undertaken the execution on the premises of a factory or an establishment to which
this Act applies or under the supervision of the principal employer or his agent, of the whole
or any part of any work which is ordinarily part of the work of the factory or establishment of
the principal employer or is preliminary to the work carried on in, or incidental to the purpose
of, any such factory or establishment and includes a person by whom the services of an
employee who has entered into a contract of service with him are temporarily lent or let on
hire to the principal employer and includes a contractor.
Employee-Section-2(9)
"employee" means any person employed for wages in or in connection with the work of a
factory or establishment to which this Act applies and
(i) who is directly employed by the principal employer on any work of, or incidental or
preliminary to or connected with the work of, the factory or establishment, whether such work
is done by the employee in the factory or establishment or elsewhere; or
(ii) who is employed by or through an immediate employer on the premises of the factory
or establishment or under the supervision of the principal employer or his agent on work which
is ordinarily part of the work of the factory or establishment or which is preliminary to the work
carried on in or incidental to the purpose of the factory or establishment; or
(iii) whose services are temporarily lent or let on hire to the principal employer by the
person with whom the person whose services are so lent or let on hire has entered into a
contract of service; and includes any person employed for wages on any work connected with
the administration of the factory or establishment or any part, department or branch thereof or
with the purchase of raw materials for, or the distribution or sale of the products of, the factory
or establishment;
Not includes
(a) any member of the Indian naval, military or air forces; or

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(b) any person so employed whose wages (excluding remuneration for overtime work) exceed
such wages as may be prescribed by the Central Government. Current wage limit is Rs21000
per month
Corporation Section 2(6)
"Corporation" means the Employees' State Insurance Corporation set up under this Act;
Confinement Section 2(3)
"confinement" means labour resulting in the issue of a living child, or labour after twenty-six
weeks of pregnancy resulting in the issue of a child whether alive or dead.
ESI Scheme Benefits (Sec 46 to Sec 73)

Dependents
Sickness
Benefits
Benefits

Maternity Medical
ESI Scheme
Benefits Benefits
Benefits

Disablement Funeral
Benefits Expenses

Under Section 46 of the Act, the insured persons, their dependants are entitled to the
following benefits on prescribed scale:
(a) periodical payments in case of sickness certified by medical practitioner;
(b) periodical payments to an insured workman in case of confinement or miscarriage or
sickness arising out of pregnancy, confinement;
(c) periodical payment to an insured person suffering from disablement as a result of
employment injury;

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(d) periodical payment to dependants of insured person;
(e) medical treatment and attendance on insured person;
(f) payment of funeral expenses on the death of insured person at the prescribed rate of.
General provisions relating to Benefits
• Right to receive benefits is not transferable or assignable.
• An insured person is not entitled to receive for the same period more than one benefit,
e.g. benefit of sickness cannot be combined with benefit of maternity or disablement, etc.
Sickness Benefit
✓ Sickness signifies a state of health necessitates medical treatment/attendance and
abstention from the work on medical grounds
✓ Financial support extended by the ESIC for such a contingency is called as Sickness
benefit
✓ Medical practitioner certificate must
✓ Limits of claim prescribed by CG
✓ Daily rate will be as per standard rate fixed as per Rule 54
✓ It is period payment made to an insured person for the period of certified sickness after
employing in insurable employment
✓ Payable for only 91 days
Extended Sickness Benefit
▪ It is a cash benefit paid for prolonged illness (Tuberculosis, Leprosy, etc)-34 specified
illness
▪ Minimum period of insurable employment - 2 years
▪ Contributed 156 days in 4 preceding contribution period
▪ 40% more than the standard rate fixed as per Rule 54
▪ 91 days + 124 days to 309 days and extendable up to 2 years
Enhanced Sickness Benefit
▪ It is a cash benefit for undergoing Sterilisation operation for Vasectomy or Tubectomy
▪ Daily rate is double the standard rate Period 7 days for Vasectomy and 14 days for
Tubectomy
Standard rate of Sickness benefit is 80% of the wages
Maternity Benefit
✓ Maternity benefit is cash payable to an insured women for the abstention for maternity
related hospitalization.
✓ Confinement benefit payable for a period of 12 weeks (84 days) on production of Form
21 and 23
✓ Miscarriage / Medical treatment of pregnancy payable for 26 weeks from the date of
following miscarriage
✓ For sickness arranging out of pregnancy, confinement, premature birth of child or
miscarriage -additional period of 4 weeks paid

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✓ Maternity benefit is 100% of average daily wages.
✓ Criminal abortion or miscarriage does not entitle to benefit
✓ Medical Bonus - If the ESIC facility is not used at the time of a delivery, the bonus is
payable Rs.1000 from 1st April, 2003
Disablement Benefit
✓ Disablement Benefit can be availed with respect to
• Temporary Disablement Benefit
• Permanent Disablement Benefit
✓ Temporary Disablement
• Provided in case of temporary disablement arising out of and in the course of
employment injury or occupational disease.
• Disablement benefit for the period certified by Medical Practitioner
• Temporary Disablement rate will 90% of daily wages
• Not payable, if the disablement period is less than 3 days
✓ Permanent Disablement
• Given in the case of permanent partial or total disablement - Loss of earning capacity
as determined by the Medical Practitioner
• Rate of disablement benefit are determined with the provision of the Rule 57
• Periodical increase also allowed based on cost-of-living index
• Lumpsum payment is also allowed
Dependants Benefit
Dependants benefit is a monthly pension payable to eligible dependants of an Insured person
who dies as a result of an employment injury or occupational disease.
Beneficiary and Duration of benefit
✓ Widow : during life time or remarriage
✓ Legitimate/adopted Son : up to attainment of 25 years
✓ Legitimate/adopted unmarried daughter : up to 25 year or until marriage
✓ Infirm Legitimate son / daughter : till Infirmity lasts
✓ Benefit Rate: 90% average daily wages among dependants in fixed percentage
Medical Benefit
✓ Medical benefit includes medical benefit for family members of the Insured Person.
✓ Outpatient treatment and Inpatient treatment
• All Medicines and drugs
• Dressing and bandaging
• Pathological / Radiological services
• Antenatal and postnatal cases
• Emergency Treatment
✓ First time eligibility - only after contributing 78 days in a contribution period

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✓ It is a responsibility of the State Government to provide required infrastructure for ESIC
to provide medical services
Funeral Expenses
✓ On the death of the insured person, funeral expenses will be paid to eldest member of the
family
✓ Claim shall be made within 3 months
✓ Funeral expenses amount payable by ESIC is Rs.15000
Other Benefits
✓ Old age Medical Care can be opted by retired IP by paying Rs.120
✓ Vocational rehabilitation for permanently disabled
✓ Physical rehabilitation
General Provisions regarding benefit
❖ Benefits not assignable or attachable (non-transferable)
❖ Bar on availing similar benefits under other enactment on similar grounds. However,
compensation can be claimed from the third party who was responsible for the act
❖ Cash benefits cannot be commutable
❖ Benefits cannot be combined and claimed (E.g. Sickness benefit and Maternity Benefit,
MB and Disablement Benefit)
❖ In case employer fails to deposit the contribution within stipulated timeline, employee
may disentitle to avail the benefit or may become entitled to lower scale benefits
❖ If ESIC satisfies with the fact that, employee already contributed, then they may consider
for full entitlement.
❖ Employer should not reduce the wages for his contribution to ESICs
❖ If any insured person availed benefit illegally, ESIC can recover the amount
❖ Employer should not dismiss or punish employee during the period of sickness
Employees' State Insurance Fund
Section 26 of the Act provides that all contributions paid under this Act and all other moneys
received on behalf of the Corporation shall be paid into a Fund called the Employees' State
Insurance Fund which shall be held and administered by the Corporation for the purposes of
this Act.
The Corporation may accept grants, donations and gifts from the Central or any State
Government, local authority, any individual or body whether incorporated or not, for all or
any of the purposes of this Act.
All moneys accruing or payable to the said Fund shall be paid into the Reserve Bank of India
or such other bank as may be approved by the Central Government to the credit of an account
styled the account of the Employees' State Insurance Fund.
Such account shall be operated on by such officers as may be authorised by the Standing
Committee with the approval of the Corporation

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Section 28 - Purposes for which the Fund may be expended
The Employees' State Insurance Fund shall be expended only for the following purposes,
namely:
(i) payment of benefits and provision of medical treatment and attendance to insured persons
and, where the medical benefit is extended to their families, the provision of such medical
benefit to their families,
(ii) payment of fees and allowances to members of the Corporation, the Standing Committee
and the Medical Benefit Council, the Regional Boards, Local Committees and Regional and
Local Medical Benefit Councils;
(iii) payment of salaries, leave and joining time allowances, travelling and compensatory
allowances, gratuities and compassionate allowances, pensions, contributions to provident or
other benefit fund of officers and servants of the Corporation and meeting the expenditure in
respect of offices and other services set up for the purpose of giving effect to the provisions of
this Act
(iv) Establishment and maintenance of hospital, dispensaries and other institutions and the
provision of medical and other ancillary services
(v) payment of contributions to any State Government local authority or any private or
individual, towards the cost of medical treatment and attendance provided to insured persons
and, where the medical benefit is extended to their families, their families, including the cost
of any building and equipment, in accordance with any agreement entered into by the
Corporation;
(vi) Defraying the cost (including all expenses) of auditing the accounts of the Corporation and
of the valuation of its assets and liabilities;
(vii) Defraying the cost (including all expenses) of the Employees' Insurance Courts set up
under this Act;
(viii) Payment of any sums under any contract entered into for the purposes of this Act by the
Corporation or the Standing Committee or by any officer duly authorized.
(ix) Payment of sums under any decree, order or award of any Court or Tribunal against the
Corporation or any of its officers or servants:
(x) Defraying the cost and other charges of instituting or defending any civil or criminal
proceedings arising out of any action taken under this Act;
(xi) Defraying expenditure, within the limits prescribed, on measures for the improvement of
the health welfare of insured persons and for the rehabilitation and re-employment of insured
persons who have been disabled or injured; and
(xii) Such other purposes as may be authorized by the Corporation with the previous approval
of the Central Government

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Constitution of Employees' Insurance Court. (Section 74)
The (State) Government shall, by notification in the Official Gazette, constitute an Employees'
Insurance Court
Any person who is or has been a judicial officer or is a legal practitioner of five years' standing
shall be qualified to be a Judge of the Employees' Insurance Court.
Matters to be decided by the Employees' Insurance Court (Section 75)
▪ whether any person is an employee within the meaning of this Act or whether he is liable
to pay the employee's contribution, or
▪ the rate of wages or average daily wages of an of an employee for the purposes of this Act,
or
▪ the rate of contribution payable by a principal employee, or a principal employer in respect
of any employee, or
▪ the person who is employee, or was the principal employer in respect of any employee, or
▪ the right of any person to any benefit and as to the amount and duration thereof, or any
other matter which is in dispute between a principal employer and the Corporation, or
between a principal employer and an immediate employer, or between a person and the
Corporation or between an employee and a principal or immediate employer, in respect of
any contribution or benefit or other dues payable or recoverable under this Act.
Commencement of proceedings (Section 77)
The proceeding before an Employees' Insurance Court shall be commenced by application.
Every such application shall be made within a period of three years from the date on which the
cause of action arose
Powers of Employees' Insurance Court (Section 78)
Shall have all the powers of a civil Court for the purposes of summoning and enforcing the
attendance of witnesses, compelling the discovery and production of documents and material
objects, administering oath and recording evidence and such Court shall be deemed to be a
civil Court. The Employees' Insurance Court shall follow such procedure as may be prescribed
by rules made by the [State] Government. An order of the Employees' Insurance Court shall be
enforceable as if it were a decree passed in a suit by a civil Court.
Appeal (Section 82)
An appeal can be made to the High Court from an order of an Employees' Insurance Court. An
appeal under this section shall be sixty days.
Stay of payment (Section 83)
Where the Corporation has presented an appeal against an order of the Employees' Insurance
Court, that Court may, and if so, directed by the High Court shall, withhold the payment of any
sum directed to be paid by the order appealed against.
Punishment for false statement (Section 84)
Whoever knowingly makes or causes to be made any false statement or false representation,
for the purpose of causing any increase in payment or benefit under this Act or for the purpose

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of causing any payment or benefit to be made where no payment or benefit is authorised by or
under this Act, or for the purpose of avoiding any payment to be made by himself under this
Act or enabling any other person to avoid any such payment,
shall be punishable with imprisonment for a term which may extend to six months or with fine
not exceeding two thousand rupees, or with both. Where an insured person is convicted under
this section, he shall not be entitled for any cash benefit under this Act for such period as may
be prescribed by the Central Government
Punishment for failure to pay contributions, etc. (Section 85)
If any person
A. fails to pay any contribution which under this Act he is liable to pay, or
B. deducts or attempts to deduct from the wages of an employee the whole or any part of the
employer's contribution, or
C. in contravention of section 72 reduces the wages or any benefits admissible to an employee,
or
D. in contravention of section 73 or any regulation dismisses, discharges, reduces or otherwise
punishes an employee, or
E. fails or refuses to submit any return required by the regulations or makes a false return, or
F. obstructs any Inspector or other official of the corporation in the discharge of his duties, or
G. is guilty of any contravention of or non-compliance with any of the requirements of this Act
or the rules or the regulations in respect of which no special penalty is provided,
shall be punishable
offence under clause (a),
➢ with imprisonment for a term which may extend to three years but
▪ which shall not be less than one year, in case of failure to pay the employee's contribution
which has been deducted by him from the employee's wages and shall also be liable to
fine of ten thousand rupees;
▪ which shall not be less than six months, in any other case and shall also be liable to fine
of five thousand rupees
where he commits an offence under any of the clauses (b) to (g) (both inclusive), with
imprisonment for a term which may extend to one year or with fine which may extend to four
thousand rupees, or with both
Enhanced punishment in certain cases after previous conviction (85-A): Whoever, commits
the same offence shall, for every such subsequent offence, be punishable with imprisonment
for a term which may extend to two years and with fine of five thousand rupees
Provided that where such subsequent offence is for failure by the employer to pay any
contribution which under this Act, he is liable to pay, he shall, for every such subsequent
offence, be punishable with imprisonment for a term which may extend to five years but which
shall not be less than two years and shall also be liable to fine of twenty-five thousand rupees

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