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Prestation on Labour Laws Which Help for Proficient Functioning of HR Department in a Company(ESI Act 1948)Col Vinod Batra (Retd)Vice President Pink City Expressway pvt Ltd1Essential Qualities of HR ManagerKnowledge of Labour LawsSocial norms of society and employeesGood Communication skillsGood verbal and written expression in EnglishUnderstanding of Legal proceedings2Labour Laws Applicable For Construction AgenciesWorkmen Compensation Act 1923Payment of Gratuity Act 1972.Employees PF & Misc Provisions Act 1952Maternity Benefit Act 1961Minimum Wages Act 1948Payment of wages Act 1936Equal Remuneration Act 1979Payment of Bonus Act1965Industrial Dispute Act 1947Child Labour Act 1986Factories Act 1948Cess Act 1996Employees State Insurance Act 1948

3Employees' State Insurance Corp.For all employees earning 15000 or less per month as wages.Managed by the ESI Corporation (ESIC) according to the ESI Act 1948.An autonomous corporation under Ministry of Labour and Employment.Setup hospital either independently or in collaboration with state government or other private entities.4Back GroundIn March 1923, B. N. Adarkar economist and later Governor of the Reserve Bank of India, was appointed by the Government of India to create a health insurance scheme for industrial workers. He submitted a report which became the basis for the Employment State Insurance (ESI) Act of 1948. The ESI Act was enacted in India in 1948, but come into reality from 25 February 1952Established in Kanpur and Delhi. Initially intended for workers working in factories and companies only. Now applicable to all establishments having 10 or more workers.5Benefits of ESIInsured persons and their family are entitled to (1) Medical benefits and (2) cash benefits. Entitled to medical treatment for themselves and their dependents,.Maternity benefit in case of women employees. IProvision for a disablement benefit and a family pension. Funeral Benefit to dependents of Insured Persons/Insured Women. Super Specialty Treatment through Private Tie Up Network as well as through its own Super Specialty Hospitals situated throughout India. Medical and PG Medical, Dental Colleges in which it has set aside certain percentage of seats for children of Insured Persons. 6 The following benefits are provided under section 46.

Medical benefit

Sickness benefit

Maternity benefit Dependents benefit

Disablement benefit

Funeral expenses Others benefits

Social Security Benefits of ESIC:

7 The ESI Scheme provides full range of Medical Care to all Insured person and their family, through a network of ESI Dispensaries, Hospitals & Panel Clinics, Diagnostic Centers & Super Speciality.

Super- Speciality treatment such as:- Open Heart Surgery, Neuro Surgery, Bone Marrow Transplant, Kidney Transplant or specialized investigations like CAT scan, MRI, Angiography etc.

Eligibility for MB:- An employee who is covered under the Scheme for the first time is eligible for medical care for a period of three months. If employee contributes at least for 78 days in a contribution period the eligibility is there up to the end of the corresponding benefit period.

Claim form under ESI Act:- Form - 09

Medical Benefits

8 Sickness Benefits represents periodical cash payments made to an IP during the period of certified sickness occurring in a benefit period when IP requires medical treatment and attendance with abstention from work on medical grounds.Eligibility for SB:- Minimum 78 days contribution in one contribution period. The daily rate of Sickness Benefit is 50% of the daily wages. Max. Duration:- Maximum period of 91 days in any two consecutive benefit periods.

Claim form under ESI Act:- Form - 09 Extended Sickness Benefit: Extended Sickness Benefit is a Cash Benefit paid for prolonged illness due to any of the 34 specified diseases as per

Eligibility for Extended SB:- Continuous employment for a period of 2 years and should have contributed for at least 156 days in 4 preceding contribution periods. The daily rate of Extended Sickness Benefit is 40% more than SB rate.

Maximum Duration of ESB:- Including Sickness Benefit payable for 91 days the ESB is payable upto a further period of 124/309 days that can be extended upto 2 years in special circumstances on recommendation of competent authority.

Sickness Benefits:

9 Maternity Benefit consists of periodical cash payments in case of confinement or miscarriage or sickness arising out of pregnancy, confinement, premature birth of child or miscarriage, to an insured woman as certified by a duly appointed medical officer or mid wife.

Eligibility for MB:- The contribution condition is the same as for Sickness Benefit. The daily benefit rate is double the Sickness Benefit rate and is thus roughly equivalent to the full wages. Benefit is paid for Sundays also.

Medical Bonus:- Medical Bonus is lump sum payment made to an insured woman or the wife of an insured person in case she does not avail medical facility from an ESI hospital at the time of delivery. The amount of Bonus is Rs. 2500/-.

Maternity Benefits:

10The Benefit is paid as follows:-

(a) For Child Delivery:- For a total period of 12 weeks beginning not more than 6 weeks before the expected date of child birth. (b) For Miscarriage:- For a period of 6 weeks following the date of miscarriage. (c)For Sickness arising out of pregnancy, confinement, premature birth of child or miscarriage:- For an additional period of upto 04 weeks. Claim form under ESI Act:- Form 09 & 19 (Notice of Work)

11 Disablement Benefit is admissible for disablement caused by employment injury. At the first instance, temporary disablement benefit is payable as long as the temporary disability lasts. If the employment injury results in partial or total/permanent disability, permanent disablement benefit is payable till the death of the insured person.

The Daily benefit rate for Permanent and Temporary Disablement is roughly equivalent to about 100% of the wage rate.

For permanent partial disablement, the rate of benefit is proportionate to the percentage of loss of earning capacity. The benefit is paid for Sundays also.

Claim form under ESI Act: For Temporary Disablement:- Form 09 For Permanent Disablement:- Form 14

Disablement Benefit

12 Dependents benefit is paid as family pension to the dependants of a deceased insured person in the event of death due to employment injury or occupational disease and is equivalent to about 70% of the wages.

Eligible Members:

A widow can receive this benefit on monthly basis for life or till her Re-Marriage.A son or daughter can receive this benefit till (25) twenty five years of age. Other dependants like parents including a widowed mother etc. can also receive this benefit under certain conditions. The first installment is payable within a maximum of three months following the death of an insured person and therefore, on a regular monthly basis.

Claim form under ESI Act:- Form 15 & 16

Dependent Benefits

13 Funeral expenses are in the nature of a lump sum payment of Rs. 10000/- (revised from @ 5000/- w.e.f:- April 2011) made to defray the expenditure on the funeral of deceased insured person. The amount is paid either to the eldest surviving member of the family or, in his absence, to the person who actually incurs the expenditure on the funeral.

Claim form under ESI Act:- Form 22

Others Benefits:-

Rehabilitation Allowance:- Rehabilitation in case of disabled insured persons under 45 years of age with 40 percent or more disablement.

Free Supply:- Free Supply of physical aids and appliances such as crutches, wheelchairs, dentures, spectacles and other such physical aids.

Old Age Medical Care:- Old age Medical care for self and spouse at a nominal contribution of Rs. 120/- per annum.

Rajiv Gandhi Shramik Kalyan Yojana:- Unemployment Allowance is payable to those workers facing involuntary unemployment due to closure of factory or non-employment injury. Benefit rate which is just above 50% of the daily wages for max 01 year.

Funeral Expenses

14 The Employees State Insurance Act, 1948

15Employee State Insurance SchemeMission Statement : To provide for certain benefits to Employees in case of Sickness, Maternity and Employment Injury and to make provisions for Related Matters.

16The ESI Scheme is an integrated measure of Social Insurance come to the life through the Employees' State Insurance Act 1948Designed to complete the task of protecting Employees against the hazards of Sickness, Maternity, Disablement or Death due to Employment injury To provide full Medical care to insured persons and their families. 17Applicability of the ESI Act:Under Section 2(12) The Act is applicable to the Factories employing 10 (Ten) or more persons irrespective of whether power is used in the process of manufacturing or not. Under Section 1(5) of the Act, the Scheme has been extended to Shops, Hotels, Restaurants, Cinemas including preview Theatre, Road motor transport undertakings and Newspaper establishment employing 20 (Twenty) or more persons. Further, u/s 1(5) of the Act, the Scheme has been extended to Private Medical Institution and Educational Institutions employing 20 (Twenty) or more persons in certain States . The existing wage-limit for coverage under the Act, is Rs. 15,000/- per month (excluding remuneration for overtime) w. e. f:- May 01, 2010. AREAS COVERED The ESI Act is applicable across the length and breadth of the India.

18ESI Contribution Share:Employees ESI Contribution (1.75% Of Gross Salary)Employers ESI Contribution (4.75% Of Gross Salary)Total ESI Contribution (6.5% Of Gross Salary)19Calculation of ESI SubscriptionExample:-Salary 10000 p.m.Contribution by Employee . . . 175.00 (1.75%)Contribution by Employer . . . . 475.00 (4.75%)To be deposited at ESIC office . .650 (6.5%)20Contribution Deposit & Due Date:The amount of contribution (Employees and Employers share) is to be deposited with the authorized bank (State Bank Of India) through Online Generated Challan, on or before 21st day of the Succeeding month, of month following the calendar month.Contribution can also be submitted Online, by selecting Online Payment Option during Payment of the contribution, the process will take you the Payment page of SBI corporate banking login to complete the payment & same will be competed in few minutes.

21Special ProvisionsIf the employee is drawing upto Rs.70/- as daily average wage, he is exempt from the payment of his share of contribution. The employer is however to pay employer's share of 4.75% of the salary received by the employee. The State Govt. bears one-eight share of expenditure on medical benefits with in the per capita ceiling of Rs. 1200/- per I.P. family per annum & all additional expenditure beyond the ceiling. 22Contribution & Benefit Period:Employers covered under the Act, are required to Pay the Contribution towards the scheme on a Monthly basis. There are two contribution periods each of Six months and two corresponding benefit periods also of Six months duration as under.

Contribution Period Benefit Period 1st April to 30th Sep. 1st Jan to 30th June (of the following year )

1st Oct to 31st March 1st July to 31st Dec.

** At an average the ESI Corporation makes 40 lacs individual payments each year amounting to about Rs. 300 crores as cash benefits.

23 Complete the Registration process with in 15 days after the Act becomes applicable. Submit Form - 01 to the Regional office or apply through Online to get the unique Registration No. under this Act.

Following Responsibility are:-

Generate the TIC & handover to employee for Smart Card. Maintain an Accident Book in Form - 11 (under Regulation 66)Submit an Accident Report in Form 16 within 24 hours of Accident.Grant leave to insured employees on the basis of sickness certificates.

Records Maintenance :-

Register of Employees in Form -6 (under Regulation 32) Accident Book in Form - 11 (under Regulation 66) Inspection Book (under Regulation 102A) File for copies of return of declaration forms. File for copies of Return of Contribution, Challans, etc. File for general correspondence & copies of Accident Reports.

Obligation of the Employers:

24 Under Section 39(5)(a) of the ESI act, read with Regulation 31(A) of the ESI (General) Regulations 1950, the employer is liable to pay simple interest @ 15 percent per annum in respect of each day of default or delay in payment contributions. In addition, under the Provision of Regulation 31-C of ESI (General) Regulations, 1950, read with section 85 (B)(i) of the ESI Act, the Corporation is empowered to recover damage as under: Period of delay in Rate of Damages payment of Contribution on the amount due i). Up to less than 2 months 5 %ii). 2 months and above but less than 4 months 10% iii). 4 months and above but less than 6 months 15% iv). 6 months and above 25%

Interest and Damages as Penalty:

25 Right to receive Payment of any benefit under the Act that shall not be Transferable or Assignable. Cash Benefits payable under the Act are not liable to attachment or sale in execution of any decree or order of any court. Employer shall not dismiss, discharge or reduce the wages or otherwise punish a covered employee during the period he / she is in receipt of Sickness Benefit or Maternity Benefit etc. By reason of his liability to pay his share of contribution under the ESI Act, no employer shall directly or indirectly reduce the wages of a covered employee. Right to register their grievances / complaints at any level for immediate Redressal & Judgement. Right to approach EI Court against any action/ decision of the medical Board etc.

Safeguards for Insured Employees:

26Use of IT. Introduction of Pehchan smart cards in 'Project PanchdeepPoor families eligible under the Rashtriya Swasthya Bima Yojana can also avail facilities in ESI hospitals and dispensaries. 27 Medical treatment is available in any ESI Dispensary, Centre & ESI Hospital all over of India. As per rule, Smart card (know as Pahachan card) will be accepted (valid) for life long. No need to take New card, when employee is changing the Job or office. It is comfortable to carry always by the insured persons & their families. Employees & their family members details can change or update with out any objection. Insured person health record will be available online for any future treatment required to the person in all ESIC centers.Any one can find the details easily of insured persons & his family members by login with IP No. on esic.in (via- IPs login). Temporary and permanent workers can use this facility of Smart Card to avail all the above benefits easily.

Benefits of Smart Card:

28Enrolment Process for Smart Card

IP walks in with family and old insurance paper cardwalks Branch Official Checks DF & approves or rejectsIP walks in 10 enrolment station 1 & operator checks details ,modifies name ,if required walks IP walks in 10 enrolment station 2 for biometric capture Web cam

Family PhotographBiometric Scanner

IP isued with a slip capturing IP no., date of enrolment, no. of enrolments, Branch Official name, enrolment official name

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Acknowledgement

Finger prints29Brain Storming Questions ? ?In which year the ESI Act was made applicable?

How many days treatment will entitled to an employee who has joined for first time ?

How many days contribution will entitle an employee a sickness Benefit of 50% of daily wages ?30Brain Storming Questions ? ?In which year the ESI Act was made applicable?In the year 1952How many days treatment will entitled to an employee who has joined for first time ?90 DaysHow many days contribution will entitle an employee a sickness Benefit of 50% of daily wages ?Minimum 78 days contribution in one contribution period. The daily rate of Sickness Benefit is 50% of the daily wages.31How much percentage contribution an employer has to deposit on behalf of employee ?

Up to what date the contribution is to be deposited by employer?

Can an employer reduce the wages during the receipt of Sickness benefits ?

What is the rate of damage to be paid for delay in contribution by employer for more than 4 months?

32How much percentage contribution an employer has to deposit on behalf of employee ?4.75 %Up to what date the contribution is to be deposited by employer?on or before 21st day of the Succeeding month.Can an employer reduce the wages during the reciept of Sickness benefits ?Employer can not reduce the wages or otherwise punish a covered employee during the period he / she is in receipt of Sickness Benefit.What is the rate of damage to be paid for delay in contribution by employer ?4 months and above but less than 6 months 15%33Case StudyESI CASE OF EFKON34Thank You3536PF Latest InstructionsGovt. of India has issued notification enhancing wage Ceiling for EPF, EPS & EDLI contribution from existing Rs. 6500/- to Rs.15000/-. Minimum member/widow pension has also been increased to Rs. 1000/-.Children pension & orphan pension increased to Rs. 250/ & Rs. 750/- respectively.37The salient points of the notification are as under: -These amendments shall be effective from 1/9/2014. All employees whose salary is between 6500/- to 15000/- and presently not enrolled, will have to be enrolled as PF member and their EPF,EPS & EDLI contributions to be deposited w.e.f.1/9/2014. Such members whose EPS contribution is presently remitted on higher salary and if they wish to pay Pension(EPS) contribution on salary higher than 15000/, they have to exercise fresh option within 6 months time. Such members will have to themselves Govt. share of 1.16% on such higher salary in excess of 15000/-.384.If Members who are drawing salary more than 15000/- & presently not PF member are enrolled as member for the first time, they can not become EPS member and their entire employee & employer share will go to Provident Fund.5. EDLI benefit in case of death while in service has been increased to 3.60 lakhs.(Rs. 15000*20+ 20% additional benefit). 6. EDLI exempted establishments should get their master policy modified accordingly.

39PF contributionEmployee Share Employer ShareTotalEPF (Employee Provident Fund)EPF (Employer Provident Fund)EPS (Employer Pension Scheme)Admin ChargesDeposit Linked Employee (DLE)Employees Deposit Linked Insurance (EDLI)12%3.67%8.33%1.10%0.50%0.01%25.61%40Salary Structure ElementsPer Month (Rs.)Per Month (Rs.)Earnings (A)Basic Salary3100031000H.R.A1550015500Conveyance Allow. 800800Medical Allow. 12501250Special Allowance 1214111121Privilege (En-cashable) Leave**15291529PF (Employer's Contribution)7801800Monthly Gross CTC 6300063000Deduction (B)Employee Contribution7801800Employer Contribution7801800Privilege (En-cashable) Leave** 15291529Labour Welfare Fund (LWF)1010In hand per month (A-B) 599015787141Salary Structure ElementsPer Month (Rs.)Earnings (A)Basic Salary6000H.R.A3000Conveyance Allow. 800Medical Allow. 1250Special Allowance 1934Privilege (En-cashable) Leave**296PF (Employer's Contribution)720Monthly Gross CTC 14000Deduction (B)Employee Contribution720Employer Contribution720Privilege (En-cashable) Leave** 296Labour Welfare Fund (LWF)10In hand per month (A-B) 1225442ESIC contributionEmployee Share Employer ShareTotal1.75%4.75%6.50%Note:1. Maximum salary of Rs. 15000/- per month2. ESIC should be deduct on Gross CTC43CASE STUDY OF PINKCITY EXPRESSWAY PVT LTD ON CONTRIBUTION TO ESIA Special Purpose Vehicle Company incorporated by M/s KMC Constructions Ltd. (KMC), M/s Emirates Trading Agency LLC (ETA) and M/s IKSHU Infrastructure Private Limited.Purpose of SPV is to Undertake, promote, develop, finance, design, establish, engineer, procure, erect, construct, equip, operate, maintain, repair and upgrade the existing four-Lane Highway into Six Lane Highway in the Gurgaon Kotputli - Jaipur section of NH-8 from KM 42.70 to KM 273.00 in the state of Haryana / Rajasthan.44This project is being executed on BOT basis on Design, Build, Finance and Operate pattern under NHDP Phase-V and its ancillary facilities including Toll Plazas, connecting roads, buildings, commercial premises, hoardings, electric fittings, drains, waterways, water-pipes, telephone lines (the Project) and to change and collect tolls, fees, cess, rents from the users of the Project.

45Road was existing as four lane road and the compny was tasked to upgrade the into Six Lanes.Toll plaza was existing at Shahjahanpur which was taken over by PCEPL in March 2009.Task of Toll collection was assigned to M/S EFKON Pvt Ltd.An LOA was signed with EFKON for doining the task of Toll Collection at three toll plazas. 46That EFKON further sub contracted the contract to the extent of providing the manpower for operating the concerned toll plazas to M/s Samarth Infotech pvt. Ltd. The total valued amount for three months i.e April, 2009 to June, 2009 is (Rs. 68.34 lacs. *3 = 2,80,00,000 Rs. /-) Rs. 2,80,00,000/- only and this includes all expenses plus expenses on manpower. 47That the Dy. Director, ECIC, Ro-Jaipur issued a show cause notice dated 19.3.2014 for payment of contributions as required by law for the period of three months April, 2009 to June, 2009. On such Notice PCEPL immediately contacted to EFKon India i.e, immediate employer. Appellant along with the representative of M/s EFKON India pvt. Ltd appeared on 30.6.2014 before the respondent and provided the copies of all relevant documents pertaining to the actual salary paid to the employees of three concerned toll plazas. These documents shows that the contribution ascertained by the respondent is excessive and an outcome of wrong calculation method. More so, when the documents were supplied the respondent did not consider the same and passed the illegal order on his assumptions48By analyzing the log sheets it can easily be ascertained that the actual expense incurred on manpower for the relevant period is Rs. 4,612,180/- . The working have been based on the actual cost accounted in books charged by sub-contractor (Samarath Infotech Pvt.Ltd./Softech Computer) through their invoices is annexed herewith and marked as Annexure- 6. Therefore, as the invoices generated by the Samrath the total ESI liability would be Rs. 114,477/- and not the contribution as determined in the impugned order.49The Assigned Task of M/s. Efkon India Pvt. Ltd. was as under:- Manpower for toll collection except security personnel and equipment maintenance.Related communication costs.Toll Stationery.Manpower boarding cost.Plaza and Lane Housekeeping.For Smooth toll plaza operations, additional support activities are required which as agreed, shall be responsibility of PCEPL.50M/s. Efkon India Pvt. Ltd. had sub- contracted the above stated work to M/s. Samarth Softech Solution Pvt. Ltd. M/s. Samarth Softech Solution Pvt. Ltd. in turns raise its bills towards supply of manpower to M/s. Efkon India Pvt. Ltd. As such all the salary slips and details of employees are maintained by the m/s. Efkon India Pvt. Ltd. and M/s. Samarth Softec Solution Pvt. Ltd. 51We have received an official Notice on 19th March 2014 from ESIC office Alwar, Rajasthan. Under this said notice the our third party Company EFKON India was not paid their ESI contribution (Rs. 18,20,000/-) for a period of April 2009 to June 2009 as in according to ESIC Act.-1948. ESIC office given a certain date (15.04.2014 at 1:00 pm) for presenting all required document to clear the said matter. But, It appears that in spite of several reminder from ESIC, M/s. EFKON has not complied with submission of necessary document related to the payment received52ESIC letter No. 15000335570001099/ 7320141224 / 2885 dated 04.07.2014 is state that the employer representative Mr, Anil Ajmera accomplenied by sh. Hemant Taylor representative of M/s. Efkon India Pvt. Ltd. was further sub-contracted to another firm by M/s. Efkon India but no document supporting this statement was produced.53