The Employee State Insurance Act, [ESIC] 1948, is a piece of social welfare legislation enacted primarily with the object of providing certain benefits to employees in case of sickness, maternity and employment injury and also to make provision for certain others matters incidental thereto.
The Act in fact tries to attain the goal of socio-economic justice enshrined in the Directive principles of state policy under part 4 of our constitution, in particular articles 41, 42 and 43 which enjoin the state to make effective provision for securing, the right to work, to education and public assistance in cases of unemployment, old age, sickness and disablement.
The act strives to materialize these avowed objects through only to a limited extent. This act becomes a wider spectrum than factory act. In the sense that while the factory act concerns with the health, safety, welfare, leave etc of the workers employed in the factory premises only. But the benefits of this act extend to employees whether working inside the factory or establishment or elsewhere or they are directly employed by the principal employee or through an intermediate agency, if the employment is incidental or in connection with the factory or establishment.
Labour policy in India has been evolving in response to specific needs of the situation to suit requirements of planned economic development and social justice and has two fold objectives, namely maintaining industrial peace and promoting the welfare of labour. Labour Policy Highlights –
Creative measures to attract public and private investment.
Creating new jobs
New Social security schemes for workers in the unorganized sector.
Social security cards for workers.
Unified and beneficial management of funds of Welfare Boards.
Reprioritization of allocation of funds to benefit vulnerable workers.
Model employee-employer relationships.
Long term settlements based on productivity.
Vital industries and establishments declared as `public utilities`.
Special conciliation mechanism for projects with investments of Rs.150 crores or more.
Industrial Relations committees in more sectors.
Labour Law reforms in tune with the times. Empowered body of experts to suggest required changes.
Statutory amendments for expediting and streamlining the mechanism of Labour Judiciary.
Amendments to Industrial Disputes Act in tune with the times.
Efficient functioning of Labour Department. More labour sectors under Minimum Wages Act.
Child labour act to be aggressively enforced.
Modern medical facilities for workers.
Rehabilitation packages for displaced workers.
Restructuring in functioning of employment exchanges. Computerization and updating of data base.
Revamping of curriculum and course content in industrial training.
Joint cell of labour department and industries department to study changes in laws and rules.
Labour legislation that is adapted to the economic and social challenges of the modern world of work fulfils three crucial roles-
It establishes a legal system that facilitates productive individual and collective employment relationships, and therefore a productive economy;
By providing a framework within which employers, workers and their representatives can interact with regard to work-related issues, it serves as an important vehicle for achieving harmonious industrial relations based on workplace democracy;
It provides a clear and constant reminder and guarantee of fundamental principles and rights at work which have received broad social acceptance and establishes the processes through which these principles and rights can be implemented and enforced. But experience shows that labour legislation can only fulfills these functions effectively if it is responsive to the conditions on the labour market and the needs of the parties involved.
The most efficient way of ensuring that these conditions and needs are taken fully into account is if those concerned are closely involved in the formulation of the legislation through processes of social dialogue. The involvement of stakeholders in this way is of great importance in developing a broad basis of support for labour legislation and in facilitating its application within and beyond the formal structured sectors of the economy.
The law relating to labour and employment is also known as Industrial law in India. The history of labour legislation in India is interwoven with the history of British colonialism. The industrial/labour legislations enacted by the British were primarily intended to protect the interests of the British employers. Considerations of British political economy were naturally paramount in shaping some of these early laws. Thus came the Factories Act.
It is well known that Indian textile goods offered stiff competition to British textiles in the export market and hence in order to make India labour costlier the Factories Act was first introduced in 1883 because of the pressure brought on the British parliament by the textile magnates of Manchester and Lancashire.
Thus India received the first stipulation of eight hours of work, the abolition of child labour, and the restriction of women in night employment, and the introduction of overtime wages for work beyond eight hours. While the impact of this measure was clearly welfarist the real motivation was undoubtedly protectionist. The earliest Indian statute to regulate the relationship between employer and his workmen was the Trade Dispute Act, 1929 (Act 7 of 1929).
Provisions were made in this Act for restraining the rights of strike and lock out but no machinery was provided to take care of disputes. The original colonial legislation underwent substantial modifications in the post-colonial era because independent India called for a clear partnership between labour and capital.
The content of this partnership was unanimously approved in a tripartite conference in December 1947 in which it was agreed that labour would be given a fair wage and fair working conditions and in return capital would receive the fullest co-operation of labour for uninterrupted production and higher productivity as part of the strategy for national economic development and that all concerned would observe a truce period of three years free from strikes and lockouts. Ultimately the Industrial Disputes Act (the Act) brought into force on 01.04.1947 repealing the Trade Disputes Act 1929 has since remained on statute book.
The relevance of the dignity of human labour and the need for protecting and safeguarding the interest of labour as human beings has been enshrined in Chapter-III (Articles 16, 19, 23 & 24) and Chapter IV (Articles 39, 41, 42, 43, 43A & 54) of the Constitution of India keeping in line with Fundamental Rights and Directive Principles of State Policy.
Labour is a concurrent subject in the Constitution of India implying that both the Union and the state governments are competent to legislate on labour matters and administer the same. The bulk of important legislative acts have been enacted by the Parliament.
The legislations can be categorized as follows-
1) Labour laws enacted by the Central Government, where the Central Government has the sole responsibility for enforcement.
2) Labour laws enacted by Central Government and enforced both by Central and State Governments.
3) Labour laws enacted by Central Government and enforced by the State Governments.
4) Labour laws enacted and enforced by the various State Governments which apply to respective States.
The Constitution of India provides detailed provisions for the rights of the citizens and also lays down the Directive Principles of State Policy which set an aim to which the activities of the state are to be guided. These Directive Principles provide:
a. for securing the health and strength of employees, men and women;
b. that the tender age of children are not abused;
c. that citizens are not forced by economic necessity to enter avocations unsuited to their age or strength;
d. just and humane conditions of work and maternity relief are provided; and
e. that the Government shall take steps, by suitable legislation or in any other way, to secure the participation of employee in the management of undertakings, establishments or other organisations engaged in any industry.
Under the Constitution of India, Labour is a subject in the Concurrent List where both the Central & State Governments are competent to enact legislation subject to certain matters being reserved for the Centre.
Some of the important Labour Acts, which are applicable for carrying out business in India are: –
Shops & Establishments Act (Of respective states)
Factories Act, 1948
Employees’ Provident Fund and Miscellaneous Provisions Act, 1952
Employees’ State Insurance Act, 1948
Workmen’s Compensation Act, 1923
Maternity Benefit Act, 1961
Payment of Gratuity Act, 1972 – Minimum Wages Act
Payment of Bonus Act 1965
Contract Labour [Regulation & Abolition] Act 1970
Payment of Wages Act, 1936 Table.
Indian labour law refer to laws regulating labour in India. Traditionally Indian governments at federal and state level have sought to ensure a high degree of protection for workers, but in practice, legislative rights only cover a minority of workers. India is a federal form of government and because labour is a subject in the concurrent list of the Indian Constitution, labour matters are in the jurisdiction of both central and state governments. Both central and state governments have enacted laws on labour relations and employment issues.
Licence fee to be remitted along with the application of License –
For 5 or more workmen but less than 20 – Rs. 15,
For 20 or more workmen but less than 50 – Rs. 40,
For 50 or more workmen but less than 100 – Rs. 80,
For 100 or more workmen but less than 200 – Rs. 150,
For 200 or more workmen but less than 400 – Rs. 300,
For 400 or more workmen – Rs. 400.
The licensing officer shall prepare an estimate of the amount needed to provide for recruitment or employment of migrant workmen. The Security Deposit shall not exceed 40% of the amount estimated by him.
The Minimum Wages rates in the Central sphere differ from the wage rates in the State Sphere/UT administration ?
Yes, Central Government and each State Government/ UT administration, notify the Minimum rates of wages in respect of a scheduled employment separately from time to time. In the Central Sphere, The rate notified by the Central Government or the Concerned State Government/UT administration, whichever is higher will be made applicable.
These are the notices/ abstract to be displayed at work spot –
Abstract of Act,
Notice showing rates of wage,
Date of payment of wages,
Hours of work,
Name and Address of Inspectors,
Place & Time of disbursement of Wages,
Copy of Certificate of registration,
Copy of Health of Safety Policy (of application).
What should an employer do on receipt of the coverage notice?
An employer is required to submit initial returns (please see annexure for details) within 15 days from the date of receipt of coverage notice. The employer is also required to remit the contribution from the date of coverage to the month prior to the date of issue of coverage notice within 15 days of receipt of the notice.
The employer is also required to submit all monthly and annual returns (please see annexure for details) from the date of coverage.
For 21 or more Workmen but less than 50 – Rs. 37.50,
For 51 or more Workmen but less than 100 – Rs. 75,
For 101 or more Workmen but less than 200 – Rs. 150,
For 201 or more Workmen but less than 400 – Rs. 300,
For 401 and above – Rs. 375.
Indian labour law refer to laws regulating labour in India. Traditionally Indian governments at federal and state level have sought to ensure a high degree of protection for workers, but in practice, legislative rights only cover a minority of workers.
India is a federal form of government and because labour is a subject in the concurrent list of the Indian Constitution, labour matters are in the jurisdiction of both central and state governments. Both central and state governments have enacted laws on labour relations and employment issues.