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THE EMPLOYEES' STATE INSURANCE ACT, 1948

CONTENTS

THE EMPLOYEES' STATE INSURANCE ACT, 1948. 1

What are the establishments to which the Act is not applicable?. 1

Cinema Theatre, having less than 20 employee excluding security guards engaged through outside agency? 1

Casual Workers employed for the maintenance of an establishment?. 1

Is Petrol Pump a factory?. 1

Is an automobile workshop a factory?. 1

Are the factories belonging to the Government governed by the Act?. 1

Does the Act continue to apply to an establishment even after the establishment goes out of the municipal limits due to the alteration of boundaries?. 1

Would the Act cease to apply to a factory or an establishment if the number of person employed therein falls below the limit specified by or under the Act or the manufacturing process therein ceases to be carried on the aid of power?. 2

Whether consultants are employees?. 2

Is a Managing Partner of a partnership business or a Managing Director of a company an employee within the meaning of Section 2(9) of the Act?. 2

A Managing Partner of a partnership business or a Managing Director of a company cannot be treated as an employee. The same person cannot occupy the position of both employer and employee.. 2

Who is an "exempted employee"?. 2

 

 

What are the employees to which the Act is not applicable?

This act does not apply to:

1.    Employees drawing wages exceeding Rs. 15,000/- p.m.

2.    Wage limit for disabled employee Rs. 25,000/- p.m. [Proviso: employees continue to be employee until the end of the period even if his wages exceeded Rs. 15,000/- a month after the beginning of contribution period.]

3.    Apprentice engaged under The Apprentice Act, 1961

4.    Member of naval, military or air force

 

Cinema Theatre, having less than 20 employee excluding security guards engaged through outside agency?

The Security Guards came within the definition of employees under Section 2(9) of the Act. The theatre was the principal employer of the security guards and therefore the theatre is a covered establishment.

 

Casual Workers employed for the maintenance of an establishment?

Once the establishment is covered by the Act, the employer is liable to pay contribution in respect of the employees in respect of repairs and maintenance of the establishment. The casual workers are employees under Section 2(9) of the Act.

 

Is Petrol Pump a factory?

A petrol pump employing more than 10 employees is a factory. The activity of pumping petroleum product with the aid of power is sufficient to bring in within the definition of "manufacturing process", under the Factories Act.

 

Is an automobile workshop a factory?

If twenty or more persons are employed in an automobile workshop to repair vehicles to put them to use, it should be construed that manufacturing process is carried on in the workshop and therefore it is a factory.

 

 

Are the factories belonging to the Government governed by the Act?

The Act does apply to factories belonging to the Government.

 

Does the Act continue to apply to an establishment even after the establishment goes out of the municipal limits due to the alteration of boundaries?

Once the establishment goes out of the municipal limits, it ceases to be governed by the Act.

 

Would the Act cease to apply to a factory or an establishment if the number of person employed therein falls below the limit specified by or under the Act or the manufacturing process therein ceases to be carried on the aid of power?

The factory or the establishment shall continue to be governed by the Act notwithstanding the fall in the number of persons employed or discontinuance of the use of power. {Section 1(6)}

 

 

Whether consultants are employees?

Consultants do not work in the premises of the establishment. Their work is carried out in their own places. They are engaged as consultants in the matter of carrying on the business of the respondent just as retaining tax consultants such engagement cannot create employer-employee relationship.

 

 

Is a Managing Partner of a partnership business or a Managing Director of a company an employee within the meaning of Section 2(9) of the Act?

A Managing Partner of a partnership business or a Managing Director of a company cannot be treated as an employee. The same person cannot occupy the position of both employer and employee.

 

Who is an "exempted employee"?

Exempted employee means an employee who is not liable to pay the employee's contribution by reason of the fact that his average daily wages are below Rs. 50.00 but who at the same time is entitled to the benefits under the Act. {Section 2(10) & Regulation 52}

 

What are the benefits available under the Act?

Benefits available under the act are:

1.    Disablement Benefit

2.    Dependents Benefit

3.    Sickness Benefit

4.    Maternity Benefit

5.    Medical Benefit

6.    Funeral Expenses