DR.

RAM MANOHAR LOHIYA NATIONAL

LAW UNIVERSITY, LUCKNOW
2017-18

LABOUR LAW

TOPIC: MEDICAL INSURANCE FOR EMPLOYEES:WHAT

IT IS AND WHAT IT NEEDS TO BE?

SUBMISSION TO: SUBMISSION BY:

Mr. Vikas Bhati Aditi Vatsa
Assistant Professor (Law) Enrollment no.- 007
Dr. RMLNLU B.A. LL.B. (Hons.)
STATEMENT OF PROBLEM:
This project deals with what medical insurance in India is, specifically Employees State
Insurance Scheme. The benefits of the said ESI scheme has also been discussed. ESI Act
vis a vis Employees Compensation Act has also been looked upon.

AIMS AND OBJECTIVES:

1. What is medical insurance and the schemes related to it.
2. How does medical insurance work for employees.
3. What are the powers of ESI corporation.

METHOD OF STUDY:
The method used for research purposes is entirely doctrinal. The data has been gathered by
referring through various books of the given subject. Analysis of that particular data has
been done by breaking the data into different sections and then drawing out conclusions
from those different sections.

SCOPE:
The scope of the project is to focus on the medical insurance for employees, what it is
presently. Various schemes have been discussed focusing on the Employment State
Insurance schemes. Medical Insurance for employees has also been looked at from a
judicial aspect, The advantages that an employee receives under the ESI Act has been
discussed.

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 TABLE OF CONTENT

INTRODUCTION ....................................................................................................................... 4

MEDICAL INSURANCE – A LEGISLATIVE APPROACH ............................................................... 5

EMPLOYEES' STATE INSURANCE SCHEME .................................................................................. 6

EMPLOYEES CONTRIBUTION ........................................................................................................ 7

BENEFITS OF THE ESI SCHEME .................................................................................................... 8

MEDICAL INSURANCE FOR EMPLOYEES - JUDICIAL ASPECT……………………………10

WHO IS AN EMPLOYEE?..........................................................................................................11

POWERS OF CSI CORPORATION…………………………………………………………….13

BAR AGAINST RECEIVENG OR RECOVERY OF COMPENSATION OR DAMAGES UNDER

ANY OTHER LAW……………...………………………………………………………….13

TAXATION………………………………………………………………………………………..13

REIMBURSEMENT OF RETIRED EMPLOYEE…………………………………………………14

ESI ACT VIS A VIS EMPLOYEES' COMPENSATION ACT…………………………………….14

ANALYSIS…………………………………………………………………………………………16

CONCLUSION…………………………………………………………………………….17

BIBLIOGRAPHY………………………………………………………………………….18

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 INTRODUCTION

The concept of Health insurance for industrial workers in India was first discussed in 1927
by the Indian Legislature, when the applicability of the conventions adopted by the
International Labour Conference was considered by the Government of India. The Royal
commission on Labour in its report (1931) stressed the need for health insurance for
workers in India and then Employees’ State Insurance Act 1948 came as an important piece
of social security legislation. The term "employee" in the Act should be held to cover a
wider field and should receive very liberal connotation so that the employee may not be
exploited and victimised. The Employees’ State Insurance Scheme of India is a
multidimensional social security system tailored to provide socio-economic protection to
the worker population and their dependants covered under the scheme. Big changes have
occurred over the last decade, during which the sector was opened to private participation,
but with foreign direct investment (FDI) capped at 26%. Government or state-based
systems include Central Government Health Scheme (CGHS) and Employees State
Insurance Scheme (ESIS).

In this project, the first chapter on health insurance in India has briefly covered the
development, evolution and current perspective of medical insurance of employees in the
country. The formal system for health insurance in India which began with the inception of
the Employee's State Insurance Scheme, introduced vide the ESI Act, 1948, has been
mentioned. The legislation has emphasis that it is imperative that there be adequate
numbers not only to sustain health insurance but also ensure affordable premium. The
various judicial trends with respect to the medical insurance provided by the employers has
also been dealt with.

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 MEDICAL INSURANCE – A LEGISLATIVE APPROACH

The Workmen’s Compensation Act 1923 is one of the earliest pieces of labour legislation.
It covers all cases of ‘accident arising out of and in the course of employment’ and the rate
of compensation to be paid in a lump sum, is determined by a schedule proportionate to the
extent of injury and the loss of earning capacity. The younger the worker and the higher the
wage, the greater is the compensation subject to a limit. The injured person, or in case of
death the dependent, can claim the compensation. This law applies to the unorganised
sectors and to those in the organised sectors who are not covered by the Employees State
Insurance Scheme, which is conceptually considered to be superior to the Workmen’s
Compensation Act.

The Employees’ State Insurance Act, 1948 provides a scheme under which the employer
and the employee must contribute a certain percentage of the monthly wage to the
Insurance Corporation that runs dispensaries and hospitals in working class localities. It
facilitates both outpatient and in-patient care and freely dispenses medicines and covers
hospitalization needs and costs. The Maternity Benefit Act is applicable to notified
establishments. Its coverage can therefore extend to the unorganised sector also, though in
practice it is rare. A woman employee is entitled to 90 days of paid leave on delivery or on
miscarriage. The Workmen’s Compensation Act and the ESI Act especially have been
much used by employees. An overwhelming amount of litigation has been on classifying a
particular injury or disease is employment-related or not.

In our constitution as well, the Directive Principles of State Policy has provisions related to
the same. Article 39(e) charges that the policy of the State shall be to secure ‘health and
strength of the workers. Article 42 mandates that the States shall make provision, statutory
or executive ‘to secure just and humane conditions of work.’ Article 43 directs that the
State shall endeavour to secure to all workers, by suitable legislation of economic
organization or any other way, a decent standard of life and full enjoyment of leisure and
social and cultural opportunities.

As far as the global scenario with respect to employees’ health is concerned, Article 25(2)
of the Universal Declaration of Human Rights promises the right to a standard of adequate

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living for health and well-being of the individual including medical care, sickness and
disability. Article 2(b) of the International Covenant on Political, Social and Cultural
Rights protects the right of worker to enjoy just and favourable conditions of work ensuring
safe and healthy working conditions.

As regards health care, Section 10 of the Factories Act lays down that a State Government
may appoint qualified medical practitioners as ‘certifying surgeons’ to discharge the
following duties:
a) Examination and certification of young persons and examination of persons engaged in
‘hazardous occupation’.
b) Exercising medical supervision where the substances used or new manufacturing
processes adopted may result in a likelihood of injury to the workers.
c) Exercising medical supervision in case of young persons to be employed in work likely
to cause injury.

Schemes for Organised and Government Sector Employees

There are two schemes, the Central Government Health Scheme (CGHS) and the
Employees’ State Insurance Scheme (ESIS), sponsored by the central and state
governments, respectively, which extend free medical care for both inpatient and outpatient
services on co- payment basis to the orgaised workforce. ESIS also extends cash benefit
towards loss of wages due to sickness as well as cash compensation towards permanent
physical impairments.

Employees' State Insurance Scheme

The Employee State Insurance Corporation (ESIC) runs the ESIS, which provides both
cash and medical benefits. The scheme (launched in 1948) is essentially a compulsory
social security benefit to workers in the industrial sector. The original legislation required it
to cover only factories using power and employing 10 or more employees, and was later
extended to cover factories not using power and employing 20 or more persons. Persons
working in mines and plantations are specifically excluded from the ESIS coverage. Any
organisation offering benefits as good or better than the ESIS is obviously excluded from
the coverage. Expenditure for medical benefits constitutes 70 per cent of the total benefits

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paid under the ESIS. These medical benefits are provided primarily through hospitals and
dispensaries. As on 31 March 1997, there were 32.8 million beneficiaries spread over 617
ESI centres across states. Under the ESIC, there were 125 hospitals, 42 annexes, and 1443
dispensaries with over 23,334 beds facility. The total state government expenditure on
ESIS was about Rs. 3300 million and the expenditure per insured person worked out to be a
little under Rs. 400.

The ESI Act, provides for medical care to registered employees in cases not just of
accidents and occupational diseases but also of ordinary illnesses. The scheme extends to
the families of the employees. The Act does not cover ‘seasonal employments’. It defines
‘employment injury’ as personal injury to employees, caused by accident or occupational
diseases, in an insurable employment. The Act lays down provisions to set up an ESI
Corporation, to promote measures to improve health and welfare of insured persons and a
Medical Benefit Council to advise the Corporation on medical benefits, certification, etc.
The Medical Boards have to ascertain the percentage of disability of injured workers before
submitting their report to the Corporation in order to grant compensation to the workers.
An injured worker has to wait for months before the Medical Board calls him for a check-
up.1

Employees Contribution2

The ESI Scheme runs like the most of the social security schemes. It is a self-financing
health insurance scheme and the contributions are raised from covered employees and their
employers as a fixed percentage of wages. The payments are to be made on a monthly
basis. An employee covered under the scheme has to contribute 1.75% of the wages
whereas; an employer contributes 4.75% of the wages payable to an employee. The total
contribution in respect of an employee thus works out to 6.5% of the wages payable.
However, employees earning less than Rs 50/- a day are exempted from payment of
contribution.

1
Vijay Kanhere, The Clemenceau Debate and Occupational Health, Indian Journal of Medical Ethics, Vol 3,
No 2 (2006)
2
http://www.archive.india.gov.in/spotlight/spotlight_archive.php?id=18 visited on April 2nd, 2018

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Benefits of the ESI Scheme

All insured persons and dependants are entitled to free, full and comprehensive medical
care under the scheme. This medical care is provided through a network of ESI
dispensaries, panel clinics, diagnostic centres and ESI hospitals. Super speciality facilities
are also offered through empanelled advanced medical institutions. Currently, six types of
benefits are provided. These are:

i. Medical:
This benefit consists of the cost of full and expanded medical care. It includes the
charges for hospitalisation, drugs and dressings, special diet, laboratory tests and
consultation fees of specialists. Immunisation and sterilisation procedures are also
provided for through this scheme. This benefit also comprises the supply of free
artificial aids such as limbs, cervical collars, crutches, wheel chairs and cardiac pace
makers.
ii. Sickness:
The periodical cash payments made to an insured person during a period of certified
sickness when the employee was absent from work is called 'sickness benefit'. The
maximum duration for sickness benefit is 91 days. Extended sickness benefit is
available to those who are suffering from specific diseases such as tuberculosis and
leprosy. Enhanced sickness benefit equal to their daily wage is payable to those who
undergo sterilisation operations for family planning purposes. The rate of benefit is
compensation at the Standard Sickness Benefit rate of not less than 50 per cent of daily
wages.
iii. Maternity:
This benefit is payable to insured women for a confinement period of 12 weeks as well
as for miscarriages, medical termination of pregnancies and sicknesses arising out of
pregnancy. The rate of benefit is double the Standard Sickness Benefit rate and not less
than full wages.
iv. Disablement:
This is a payment available to those insured employees who become disabled as a result
of workplace injuries. Those who have temporary disabilities receive benefits till they

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 are healed while those with permanent disabilities are paid lifelong benefits. The rate of
benefit is upto 140 per cent of the Standard Sickness Benefit rate and not less than 70
per cent of daily wages of the insured.
v. Dependants:
The dependants of employees who lose their lives as a result of workplace injuries are
paid 'Dependants' Benefit'. The rate of benefit is a daily allowance, which is increased
from time to time. The rate of benefit is upto 140 per cent of the Standard Sickness
Benefit rate and not less than 70 per cent of daily wages of the insured.
vi. Funeral Expenses:
This benefit is a lump sum of up to a maximum of Rs. 2500 for the settlement of
expenses incurred at the funeral of a deceased insured person. It is given either to the
eldest surviving member of the family or to the person who actually paid for the
funeral.

The ESI Act which has replaced the Workmen's Compensation Act, 1923 in the fields
where it is made applicable is far more, wider than the Workmen's Compensation Act and
enlarges the scope of compensation. Section 38 provides that all employees in factories or
establishments to which the ESI Act applies shall be insured in the manner provided in it.
Under Section 39 the employer is also made liable to pay contribution.

Section 42 provides for circumstances under which the employee need not pay his
contribution. Section 46 provides for the benefits which the insured persons, their
dependants and the persons mentioned therein shall be entitled to get on happening of the
events mentioned therein. Sections 51A to 51D create certain fictions in favour of the
employee so as to have wider coverage for him. In case of an employment injury Section
46 provides periodical payments to him or to his dependants in case of his death.
Employment injury is defined by Section 2(8) to mean a personal injury to an employee
caused by accident or an occupational disease arising out of and in the course of his
employment, being an insurable employment, whether the accident occurs or the
occupational disease is contracted within or outside the territorial limits of India.

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Section 2(9) defines employee to mean any person employed for wages in or in connection
with the work of a factory or establishment to which the ESI Act applies. It includes other
persons but it is not necessary to refer to that part of the definition. Insured person is
defined by Section 2(14) to mean a person who is or was an employee in respect of whom
contributions are or were payable under the Act and who is by reason thereof, entitled to
any of the benefits provided by the ESI Act.

The Second Schedule to the ESI Act specifies the injuries deemed to result in permanent
total disablement or permanent partial disablement. Rule 54 of the Employees' State
Insurance (Central) Rules, 1950 provides the daily rate of benefit which the employee
would get if an employment injury is suffered by him. Rule 57 provides for disablement
benefits. Rule 58 provides for dependant's benefits in case the injured person dies as a
result of an employment injury. Rule 60 provides for the medical benefits to an insured
person who ceases to be in an insured employment on account of permanent disablement.
Other benefits are also conferred by the ESI Act and the Rules but it is not necessary to
refer to them for deciding the point which arises in this case. Two other provisions in the
ESI Act to which it is necessary to refer are Sections 53 and 61. The present Section 53 was
substituted by Act No. 44 of 1966 with effect from 28-1-1968. Section 61 has been there in
the Act since it came into force. It provides that when a person is entitled to any of the
benefits provided by the ESI Act he shall not be entitled to receive any similar benefits
admissible under the provisions of any other enactment. Thus, by enacting Section 61 the
legislature has created a bar against receiving similar benefits under other enactments.

MEDICAL INSURANCE FOR EMPLOYEES – JUDICIAL ASPECT

In Vincent v. Union of India3, it was held that in a welfare State, it is the obligation of the
State to ensure the creation and the sustaining of conditions congenial to good health.

In Consumer Education and Research Centre vs. Union of India,4 the Supreme Court was
concerned with rights of employees in theasbestos manufacturing industry. It was a public

3
Vincent v. Union of India, (1987) 2 SCR 468
4
Consumer Education and Research Centre vs. Union of India , AIR 1995 SC 992

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interest litigation filed concerning conditions of work and health affects on workers. The
Supreme Court went on to observe that the right to human dignity, development of
responsibility, social protection, right to rest and leisure are fundamental human rights to a
worker assured by the Charter of Human Rights, in the Preamble and Arts. 38 and 39 of the
Constitution. The Employees State Insurance Act and Workmen’s Compensation Act
provide for payment of mandatory compensation for the injury or death caused to the
worker while in employment. Since the Act does not provide for payment of compensation
after the cessation of employment, it becomes necessary to protect such persons from the
respective dates on cessation of their employment. It was also observed that Liquidated
damages by way of compensation are accepted principles of compensation.

In Satya Sharma v. ESI Corporation5, where a laid-off employee after signing the lay-off
register was coming out of the factory premises and when crossing the road was hit by a
scooter, injuries sustained by him were taken as covered during the course of employment
on the basis of theory of notional extension.

Who is an employee?

If the work by the employee is conducted under the immediate gaze or overseeing of the
principal employer or his agent, subject to other conditions as envisaged being fulfilled he
would be an employee for the purpose of s. 2(9).6 A work that is conducive to the work of
the factory or establishment or that is necessary for the augmentation of the work of the
factory or establishment will be incidental or preliminary to or connected with the work of
the factory or establishment. The casual employees shall also be brought within it and are
entitled to the benefits which the Act grants. The casual labour employed to construct
additional buildings for expansion of the factory are the employees under the Act.7
Employees engaged for repairs, site clearing, construction of buildings, etc. of the principal
employer are employees within the meaning of s. 2(9) of the Act.8

5
Satya Sharma v. ESI Corporation, 1991 (63) FLR 339
6
CES Corporation Ltd. v. Subash Chandra Bose 1992 (1) LLJ 475.
7
Regional Director, ESIC v. South India Flour Mills Ltd. 1986 (53) FLR 178
8
Kirloskar Pneumatic Co. Ltd. v. ESI Corporation 1987 (70) FJR 199

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It was observed in ESI Corporation v. Suvarna Saw Mills,9 that there is no such difference
as that of casual or temporary or permanent employee for the expression "employee" as
defined under s. 2(9) of the Act. It is so wide as to include even a casual employee who is
employed just for a day for wages. The test being whether the person is employed for
wages on any work which is connected with the work of a factory or establishment which
bears the application of the Act except those exempted by the definition.

It was held in Director General, ESI Corporation v. Scientific Instrument Co. Ltd.,10 that
the expression "employed for wages or in connection with the work of a factory or
establishment" is of very wide amplitude and its generality is not in any way prejudiced by
the expression and includes any person employed for wages or any work connected with
the administration of the factory or establishment or in connection with sale or distribution
of the products of the factory or establishments. The word "includes" in the statutory
definition of a term is generally used to enlarge the meaning of the preceding words and it
is by way of extension and not with restriction. In order to determine whether the
employees of the company working at its branch sales offices and carrying on acts of sale
and distribution of goods manufactured by the company as well as the goods produced by
the foreign company are "employees" what is pertinent is not whether they are
"principally" and primarily engaged in sale and distribution of the products of the company
but whether the business of sale and distribution either "principally" or "marginally" of the
products of the foreign company is being done on behalf of the company. If the main
business of the company itself at the branch sales offices, is to sell and distribute products
of foreign company and the employees working have been employed by the company
basically in connection with this work, it would be difficult to hold that the employees at
branch sales offices are not "employees" within the meaning of the term defined in s. 2(9)
of the Act notwithstanding the fact that the sale and distribution of the products of the
company at such offices are only marginal.

9
ESI Corporation v. Suvarna Saw Mills, 1980 (57) FJR 154
10
Director General, ESI Corporation v. Scientific Instrument Co. Ltd. 1995 Lab. IC 651

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Powers of ESI Corporation-
The ESI Corporation is conferred with the power to recover arrears of contributions from
the employer along with damages/interest on the contribution that remained due.
Correspondingly it is under an obligation to pay with interest the arrears of benefits to the
insured employees or his dependents.-- ESI Corporation v. Bhag Singh 1989 (2) LLJ 126.

Bar against receiving or recovery of compensation or damages under any other law-
Section 53 of the ESI Act does not bar the remedy under s. 110A of the Motor Vehicles
Act, 1939.-- Deputy General Manager KSRTC v. Gopal Mudaliar 1983 (46) FLR 194. In
this background and context I have to consider the effect of the bar created by Section 53 of
the ESI Act. Bar is against receiving or recovering any compensation or damages under the
Workmen's Compensation Act or any other law for the time being in force or otherwise in
respect of an employment injury. The bar is absolute as can be seen from the use of the
words shall not be entitled to receive or recover, 'whether from the employer of the insured
person or from any other person', 'any compensation or damages' and 'under the Workmen's
Compensation Act, 1923 (8 of 1923), or any other law for the time being in force or
otherwise'. The words 'employed by the legislature' are clear and unequivocal. When such a
bar is created in clear and express terms it would neither be permissible nor proper to infer
a different intention by referring to the previous history of the legislation. That would
amount to bypassing the bar and defeating the object of the provision. In view of the clear
language of the section I find no justification in interpreting or construing it as not taking
away the right of the workman who is an insured person and an employee under the ESI
Act to claim compensation under the Workmen's Compensation Act.

Taxation11
In the case, Yoshio Kubo Vs. Commissioner of Income Tax, the main issue was whether,
amounts paid by employers to pension, or social security funds or for medical benefits were
perquisites under section 17(1)(V) of the Income Tax Act and liable to be taxed – It was
held that the assessee does not- in any appeal, get vested right at time of contribution to
fund by employer and amount standing to credit of pension fund account, social security or
medical or health insurance would continue to remain invested till assessee became entitled
11
Yoshio Kubo Vs. Commissioner of Income Tax (2013)261CTR(Del)374

13
to receive it. Amounts paid by employers to pension, or social security funds, or for
medical benefits, were not perquisites under Section 17 (1) (v), therefore, amounts paid by
employer in that regard not taxable in hands of employee - assessee.

Reimbursement to Retired Employee12

In this case, petitioner was a retired bank employee and had suffered a heart problem
after his retirement. However, medical reimbursement to Petitioner was denied by
Respondent bank on ground that there was no such scheme of reimbursement of medical
expenses to retired employees. Therefore, the issue of the case was whether, decision of
Respondent to denied reimbursement to Petitioner was in violation of Articles 14 and 21
of Constitution of India? It was held that petitioner was not a civil servant and was not
holding a civil post being a bank employee. However, he was not entitled to same
protection as a civil servant was entitled to under Article 309 of Constitution of India –
Bank employees were bound by bipartite settlements which took place from time to time
governing service conditions of bank employee. Thus, there was no provision to extend
medical facilities to bank emplyees after their retirement. Petitioner had not placed any
material on record to show on what basis he had claimed his right of grant of medical
reimbursement after retirement. Thus, Petitioner could not complain that by denying
medical reimbursement, his fundamental rights had been violated.

ESI Act vis a vis Employees’ Compensation Act

A comparison of the relevant provisions of the two Acts makes it clear that both the
Acts provide for compensation to a workman/employees for personal injury caused to
him by accident arising out of and in the course of his employment. The ESI is a later
Act and has a wider coverage. It is more comprehensive. It also provides for more
compensation than what a workman would get under the Workmen's Compensation Act.
The benefits which an employee can get under the ESI Act are more substantial than the
benefits which he can get under the Workmen's Compensation Act. The only
disadvantage, if at all it can be called a disadvantage, is that he will get compensation
under the ESI Act by way of periodical payments and not in a lump sum as under the

12
J.K. Sawhney Vs. Punjab National Bank, SLP (Civil) No.18757 of 2011

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Workmen's Compensation Act If the legislature in its wisdom thought it better to
provide for periodical payments rather than lump sum compensation its wisdom cannot
be doubted. Even if it is assumed that the workman had a better right under the
Workmen's Compensation Act in this behalf it was open to the legislature to take away
or modify that right. While enacting the ESI Act the intention of the legislature could
not have been to create another remedy and a forum for claiming compensation for an
injury received by the employees by accident arising out of and in the course of his
employment.13

ANALYSIS
The Employees’ State Insurance Act, 1948 provides a scheme under which the employer
and the employee must contribute a certain percentage of the monthly wage to the
Insurance Corporation that runs dispensaries and hospitals in working class localities. It
facilitates both outpatient and in-patient care and freely dispenses medicines and covers
hospitalization needs and costs. Leave certificates for health reasons are forwarded to the
employer who is obliged to honour them. Employment injury, including occupational
disease is compensated according to a schedule of rates proportionate to the extent of injury
and loss of earning capacity. Payment, unlike in the Workmen’s Compensation Act, is
monthly. Despite the existence of tripartite bodies to supervise the running of the scheme,
the entire project has fallen into disrepute due to corruption and inefficiency. Workers in
need of genuine medical attention rarely approach this facility though they use it quite
liberally to obtain medical leave. There are interesting cases where workers have gone to
court seeking exemption from the scheme in order to avail of better facilities available
through collective bargaining.

Advantages of Employers on Coverage under ESI

 The employers will be absolved of all their liabilities of providing medical
facilities to employees and their dependants in kind or in the form of fixed cash
allowance, reimbursement of actual expenses, lump sum grant or opting for any

13
Ashok Yadav & Another Vs. Shakur Mohammed & Others, [2012(133)FLR281]

15
 other medical insurance policy of limited scope unless it is a contractual
obligation of the employer.
 There will be exemption from the applicability of the Maternity Benefit Act and
the Workmens' Compensation Act in respect of employees covered under the
ESI Scheme.
 The employers will absolved of any responsibility in times of physical distress of
workers such as sickness, employment injury or physical disablement resulting
in loss of wages, as the responsibility of paying cash benefits shifts to the
Corporation in respect of insured employees.
 The sum paid by way of contribution is deducted in computing 'income' under
the Income-tax Act.
.

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 CONCLUSION

The Employees' State Insurance Scheme has definitely revolutionized our economic angst
by providing the health protection and income preservation in unforeseen contingencies
like sickness, disablement, death due to employment injury and other issues that need
medical aid such as like maternity. Through this scheme, the government displays its
commitment to the welfare of workers and the creation of a safe and healthy workplace
environment in the Country.

But at the same time, we need to understand that on paper these laws appear very effective.
Even otherwise, to a limited extent for the organized work force they do provide certain
amount of succour. Even the Government employees have a number of schemes and
provisions concerning medical benefits and care. But by and large they have been
ineffective in dealing with the unorganized sector. To begin with, these laws do not apply
to small scale industries. Also, implementation of these laws in many of the establishments
to which they apply is also difficult. For instance, if the employer has not deducted or
deposited the ESI contribution, the employee becomes disentitled to avail of the benefit.
Similarly, many occupational diseases are not covered by the Act and at times it has
become difficult to prove in courts that a disease occurred because of employment at a
particular place. According to survey by Marsh Insurance brokers, while 60 per cent of the
corporates were providing employer-sponsored cover for parents of employees in 2009,
this number was down to 36 per cent in 2012. Faced with a rising outgo on account of
higher health insurance premiums, many companies are either withdrawing health cover for
parents or making it voluntary for the employee to pay separately for parental cover in
group medi-claim policies. The main advantage for policyholders under group mediclaim is
that pre-existing diseases are covered from day one, unlike individual health insurance
policies, which have a waiting period of up to 4 years. However, for insurers, the selective
cover for parents has made it a loss-making proposition, with claim ratios exceeding 140
per cent.14

14
http://www.thehindubusinessline.com/industry-and-economy/companies-tell-employees-sorry-no-more-
health-cover-for-parents/article5463148.ece; visited on April 5th, 2018.

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Courts role has also not been laudatory especially in recent times. For instance, in 2006, the
Supreme Court held that a casual workman was not entitled to the benefit of the
Workmen’s Compensation Act. Therefore, we basically have to make further improvement
in legislations so that both organized and unorganized sector mandatorily come under the
purview of Medical Insurance of Employees. This is necessary for the spirit of the
fundamental rights and directive principles of State Policy in our constitution.

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 BIBLIOGRAPHY

Cases
Ashok Yadav & Another Vs. Shakur Mohammed & Others, [2012(133)FLR281] .............. 16
CES Corporation Ltd. v. Subash Chandra Bose 1992 (1) LLJ 475 ..................................... 12
Director General, ESI Corporation v. Scientific Instrument Co. Ltd. 1995 Lab. IC 651 .... 13
ESI Corporation v. Suvarna Saw Mills, 1980 (57) FJR 154................................................ 13
J.K. Sawhney Vs. Punjab National Bank, SLP (Civil) No.18757 of 2011 .......................... 15
Kirloskar Pneumatic Co. Ltd. v. ESI Corporation 1987 (70) FJR 199 ................................ 13
Regional Director, ESIC v. South India Flour Mills Ltd. 1986 (53) FLR 178 .................... 13
Satya Sharma v. ESI Corporation, 1991 (63) FLR 339....................................................... 12
Vincent v. Union of India, (1987) 2 SCR 468 ...................................................................... 12
Yoshio Kubo Vs. Commissioner of Income Tax (2013)261CTR(Del)374 ........................... 15

Journals
Vijay Kanhere, The Clemenceau Debate and Occupational Health, Indian Journal of
Medical Ethics, Vol 3, No 2 (2006) ................................................................................... 7

Websites
http://www.archive.india.gov.in/spotlight/spotlight_archive.php?id=18 .............................. 7
http://www.thehindubusinessline.com ................................................................................. 18

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