Applicability Of Employees Compensation Act VS ESIC Act

Hello,

Please resolve the below query:

1) Is there any mention of the applicability of the Employees' Compensation Act when the ESIC Act (for eligible employees with a salary of Rs 1500 and below) is not applicable in either of these two acts?

2) Is there a wage ceiling for the inclusion of employees under the Employees' Compensation Act?

3) If the answer to Pt (2) is Yes, then do all employees under that wage ceiling fall under the coverage limit, or only those who are involved in a manufacturing process are covered (i.e., mostly workmen category)?

4) Will the employees (e.g., employees in managerial and supervisory roles) who are above the wage limit of Rs 15,000 and are not directly involved in any manufacturing process (e.g., HR, Finance, Purchase, IT, Materials, Warehouse, etc., typically in support functions) also be covered under the Employees' Compensation Act.

Thank you.

Dear Sunnydays,

In question 1: The ESI Act, Section 53 states that a person insured under the ESI or their dependents cannot make a claim under the Employees' Compensation Act. Based on this section, an employee covered by ESI or their dependents cannot claim compensation under the Employees' Compensation Act.

In question 2: There is no wage ceiling for the inclusion of employees under the Employees' Compensation Act. However, when calculating the compensation payable under the EC Act, the salary/wage is limited to Rs. 8,000 per month. Please refer to Section 4(I-B). This section empowers the Central Government to specify the monthly wages of an employee for the purposes of subsection (1) of Section 4. The Central Government has notified the wage as Rs. 8,000 per month.

In question 3: All employees not covered by ESI are included under the Employees' Compensation Act.

In question 4: All employees listed in Schedule II of the Employees' Compensation Act are covered.

With regards,

Sir,

The individuals from HR, Finance, Purchase, IT, Materials, Warehouse, etc., typically in support functions, whose existence is incidental to the manufacturing process, aren't they employees under the definition of EC Act? How will they be compensated if personal injury is caused to them during the course of employment? What is your opinion about this, sir?

Thank you.

Dear Mr. Sunnydays,

Please go through the contents of Schedule II to the Employees' Compensation Act. If the work they do or their employment is specified in it, then they are covered, subject to the condition that they are not covered by the ESI Act. Their work need not be connected with the manufacturing process; it could be even incidental to the work done. Furthermore, even casual workers are covered by the provisions of the Employees' Compensation Act. If you provide specific information about the designation and job description of the concerned individual employee, I may be able to give my views.

With regards,

Dear Mr. Sanjay,

Please see my last post in this thread. It contains the answer to your query.

With regards,

Dear Nauhwar,

The limit of Rs. 8000/- is for the purpose of calculating the compensation payable under the EC Act (formerly WC Act). This is stated in section 4(1-A) of the EC Act. This section gives power to the Central Government to notify the monthly wages for the purposes of Section 4 of the EC Act. The Central Government has notified that for the purpose of section 4 of the EC Act, the monthly wages cannot exceed Rs. 8000/-. Please read section 2(dd) of the EC Act. This section is an open-ended section in that while defining the term "employee," it does not prescribe the wage limit. Therefore, an employee as defined under section 2(dd) of the EC Act, irrespective of the monthly wages drawn by him, is entitled to get the benefits of the Act. However, while calculating the compensation payable, the monthly wages of the employee over and above Rs. 8000/- cannot be reckoned for calculating the compensation payable.

With regards

Mr. V. Harikrishnan,

Sir, thank you for sharing such important information. In connection with this, I need some information from you.

Under the EC Act, Section 4 (d), "Where temporary disablement, whether total or partial, results from the injury, a half-monthly payment of the sum equivalent to twenty-five percent of the monthly wages of the workman, to be paid in accordance with the provisions of sub-section (2).

Subsection (2): The half-monthly payment referred to in clause (d) of sub-section (1) shall be payable on the sixteenth day: (i) from the date of disablement where such disablement lasts for a period of twenty-eight days or more, or (ii) after the expiry of a waiting period of three days from the date of disablement where such disablement lasts for a period of less than twenty-eight days; and thereafter half-monthly during the disablement or during a period of five years, whichever period is shorter...

Could you please elaborate on this with an example? We have a WC policy for the compensation benefits for all our employees, but for temporary disablement, sometimes it becomes an issue for the compensation through the insurance policies. So, I request you to please explain the correct calculation method with respect to section 4(d) with subsection (2) so that I can further present the concerned cases to the insurance for their prompt settlements.

Hoping for a response at the earliest...

Regards,

Atul S Malve

Manager - HR & Admin

Dear sir,

Please calculate the compensation if the salary is $8000 per month, the age of the worker is 20 years, and the occupation is a fitter. The worker has been declared dead.

Question 1: The ESI Act Section 53 states that a person insured under the ESI or his dependents cannot make a claim under the Employees' Compensation Act. Based on this section, an employee who is covered by ESI or his dependents cannot claim compensation under the Employees' Compensation.

Question 2: There is no wage ceiling for the inclusion of employees under the Employees' Compensation Act. However, while calculating the compensation payable under the EC Act, the salary/wage is restricted to Rs. 8,000 per month. Please refer to Section 4(I-B). This section empowers the Central Government to specify the monthly wages of an employee for the purposes of subsection (1) of Section 4. The Central Government has notified the wage as Rs. 8,000 per month.

Question 3: All the employees who are not covered by the ESI are covered by the Employees' Compensation Act.

Question 4: All the employees listed in Schedule II to the Employees' Compensation Act are covered.

Regards

Dear sir,

Is the Employees' Compensation Act applicable to employees employed under the Shops and Commercial Establishment Act? Please clarify.

Chethan