Friend,
The Workmen's Compensation Act was enacted in 1923, a decade before the ESI Act was enacted in 1946 and implemented from 1950. The earlier act placed the onus entirely on the employer in case of an accident, but the later act was more modern and based on insurance principles, placing the onus on an independent agency under government control, thus removing all liability for the employer who pays a small contribution. The ESI Act also included various other benefits, such as medical care for oneself and family members, cash compensation in case of normal sickness, maternity, funeral expenses, and more in addition to injuries and death. Below is a clarification provided in response to a specific question raised by an individual.
The moment your factory or establishment is covered under the ESI Act, there is no liability whatsoever under the Workmen's Compensation Act for those earning 15000K or below, even if you have failed to register or pay contributions for such employees covered under the ESI Act. Therefore, if you have included such employees in an insurance contract with insurance companies to meet Workmen's Compensation claims, it is simply a waste of the premium paid. It would be better to remove such employees from the insurance contract and limit private or contractual insurance only for those not covered under the ESI Act.
Dear Shri Manoj Dixit,
If a person is covered or coverable under the ESI Act (whether actually registered or not), such person or his dependents are barred from claiming benefits under any other act, including the Workmen's Compensation Act, and they can only receive benefits from the ESI Act. Section 53 of the ESI Act specifically bars claims under the Workmen's Compensation Act.
"53. Bar against receiving or recovery of compensation or damages under any other law - An insured person or his dependents 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 under the Workmen's Compensation Act, 1923 (8 of 1923), or any other law for the time being in force or otherwise, in respect of an employment injury sustained by the insured person as an employee under this Act."
"61. Bar of benefits under other enactments - When a person is entitled to any of the benefits provided by this Act, he shall not be entitled to receive any similar benefit admissible under the provisions of any other enactment."
In the instant case mentioned by you, the deceased met with an accident outside the factory. If he was traveling on official work, then he is on duty and will receive ESI benefits. Check the FIR and other records to determine whether he was on duty travel. The company may have paid for the duty travel, and the mahzar may show documents to support this.
If he was commuting from his residence to the workplace in the normal route and time or returning home without deviation, it is also considered an "employment injury" by virtue of an amendment in 2006. Death pension is available in such cases after this amendment.
There have been several judgments from the Supreme Court and High Courts on this issue, stating that Workmen's Compensation is barred, and only ESI compensation can be claimed from the ESI Corporation. The ESIC itself has accepted this and filed affidavits accepting such claims. Please refer to:
1. Bharagath Engineering vs. R.Ranganayaki and another reported in (2003) 2 SCC 138.
2. HALLMARK INDUSTRIES vs. TAHSILDAR TAMBARAM DEPUTY COMMISSIONER OF LABOUR -1 EMPLOYEES STATE INSURANCE CORPORATION by Madras HC on 8 Jan 2011 in W.P.No.21622 of 2009.
Personally, I feel this provision is very unjust and unfairly benefits insurance companies. Once the insurance premium is paid, there is no reason to give insurance companies an unfair advantage. However, that is the law as it stands now.
O. Abdul Hameed Formerly Additional Commissioner ESIC, New Delhi