The Employees’ State Insurance Fund, established under the Employees’ State Insurance Act, 1948, serves the purpose of providing financial support to employees working in factories and establishments as defined in the Act, with 10 or more employees (20 or more in some states).
However, only employees with monthly wages not exceeding Rs. 21,000 (Rs. 25,000 for persons with disabilities) are covered under the scheme. The Act extends coverage to various establishments such as shops, restaurants, hotels, cinema theatres, road motor transport undertakings, newspaper establishments, educational institutions, and medical institutions.
Section 26 of the Act mandates that all contributions paid under the ESI Act, 1948, and any other contributions received on behalf of the Corporation shall be settled into the ESI Fund. Contributions can be in various forms, including grants, donations, and gifts from the Central or any State Government, local authority, or any individual or body, whether incorporated or not.
Section 28 of the Act outlines the permissible expenses that can be derived from the Fund. These include:
1. Payment of benefits and provision of medical treatment to the insured persons.
2. Provision of medical benefits to the families of insured persons where such benefits are extended to their families.
3. Defraying charges and costs related to medical treatment and attendance for insured persons.
4. Payment of fees and allowances to members of the Corporation, standing committee, Medical Benefit Council, Regional Boards, Local committees, and Regional and Local Medical Benefit Council.
5. Payment of salaries, leave, joining time allowance, travelling and compensatory allowances, gratuities, compassionate allowances, pensions, and contributions to the Provident or any other benefit fund of officers.
6. The operation and maintenance of healthcare facilities, including dispensaries and hospitals, in addition to the delivery of auxiliary and medical services for the advantage of the insured persons and their families who are eligible for medical benefits.
7. Payment of contributions to any State Government, local authority, or private body or individual towards the cost of medical treatment and attendance provided to insured persons and their families, including the cost of any building and equipment, as per any agreement entered into by the Corporation.
8. Defraying the cost of auditing the accounts of the Corporation and the valuation of its assets and liabilities.
9. Defraying the cost of Employees’ Insurance Courts set up under the Act.
10. Payment of any sums under any contract entered into for the purposes of the Act by the Corporation, the Standing Committee, or any authorised officer.
11. The Corporation or any of its officers or servants may be held liable for any amount paid in accordance with a decree, order, or award of a court or tribunal. This also applies to payments made in compromise or settlement of any legal proceeding or claim brought against the Corporation.
In the case of Bai Malimabu v. State of Gujarat [AIR 1978 SC 515], the Supreme Court held that the construction of staff quarters for the employees of the dispensary and other employees working under the Employees’ State Insurance scheme does not violate Section 28 of the Act. The construction of such quarters will undoubtedly be for public purposes, and such construction is closely connected with the workings and the implementation of the scheme.
Done By: Seethala B , BBA., LL.B (Hons.),
Junior Legal Consultant
For Origin Law Labs
