ll 2 project

Accident under Employee’s State Insurance Act,1923


Project submitted to

Mrs. Balwinder Kaur

(Faculty of Labour Law)

Project Submitted by

Vinay Kumar Sahu

(Sociology Major)

Semester Five

Roll No - 169

HIDAYATULLAH NATIONAL LAW UNIVERSITYRAIPUR, C.G.

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ACKNOWLEDGEMENTS

I am highly elated to carry out my research on this topic, ‘Accident under Employee’s State Insurance Act,1923’. I would like to give my deepest regard to my course teacher Mrs. Balwinder Kaur, who held me with his immense advice, direction and valuable assistance, which enabled me to march ahead with this topic. I thank my parents, who gave me moral and mental support. I would like to thank my friends, who gave me their precious time for guidance and helped me a lot in completing my project by giving their helpful suggestion and assistance. I would like thanks to my seniors for their valuable support. I would also like to thank the library staff and computer lab staff of my university for their valuable support and kind cooperation.

VINAY KUMAR SAHU

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Table of Contents

Research methodology .................................................................................................04

Objectives ....................................................................................................................04

Introduction ..................................................................................................................05

Employment Injury .......................................................................................................06

Accident ........................................................................................................................06

Accidents happening while acting in breach of Regulations, etc. ……………...06

Accidents happening while travelling in employer's transport …………………07

Accidents happening while meeting emergency ………………………………..08

The Employment must be Insurable …………………………………………….09

Section 51(A). Presumption as to accident arising in course of employment................09

Benefits available under this Act ……………………………………………………...11

Disablement Benefit …………………………………………………………………..12

Permanent total disablement ………………………………………...………...13

Permanent Partial Disablement ………………………………………...……...13

Temporary Disablement ……………………………………………………….13

Conclusion .....................................................................................................................15

Bibliography ..................................................................................................................16

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RESEARCH METHODOLOGY

The researcher has followed the non doctrinal method for research design. The research is

based on both primary and secondary sources. Literature review has been done extensively in

order to make a comprehensive presentation. Books from the university’s library have been

used. Computer from the computer laboratory of the university has been used for the purpose

of secondary research and is the main source of project.

OBJECTIVES

To discuss accident under Employee’s State Insurance(ESI) Act,1923. To discuss benefits available under this act.

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Introduction

Employees' State Insurance is a self-financing social security and health insurance scheme

for Indian workers. For all employees earning 15000(US$230) or less per month as

wages, the employer contributes 4.75 percentage and employee contributes 1.75 percentage,

total share 6.5 percentage. This fund is managed by the ESI Corporation (ESIC) according to

rules and regulations stipulated therein the ESI Act 1948, which oversees the provision of

medical and cash benefits to the employees and their family through its large network of

branch offices, dispensaries and hospitals throughout India. ESIC is an autonomous

corporation under Ministry of Labour and Employment, Government of India. But most of

the dispensaries and hospitals are run by concerned state governments. In March 1923 before

Indian independence B. N. Adarkar economist and later Governor of the Reservce Bank of

India, was appointed by the Government of India to create a health insurance scheme for

industrial workers. A year later the report he submitted became the basis for the Employment

State Insurance (ESI) Act of 1948. The ESI Act was enacted in India in 1948, but come into

reality from 25 February 1952, established in Kanpur and Delhi. Initially intended for

workers working in factories and companies only. It is now applicable to all establishments

having 10 or more workers including educational institutions, hospitals, etc., covering 15.5

million employees working with about 450,000 employers. Total beneficiaries as of 2011-12

are above 65.5 million.

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http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/Health_insurance


Employment Injury-

For claim of benefit under ESI Act, 1948 there must be an employment injury. The following

are the ingredients of an employment injury1:

1.the injury must be personal to an employee.

2.the injury must be caused by an –

i.accident; or

ii. occupational disease.

3.the accident must arise out of and in the course of employment.

4.the employment must be insurable.

Accident - The accident has not been defined under ESI Act, 1948 and also under

Workmen’s compensation Act, 1923 but under WC Act, 1923 it has been defined as any

unexpected mishap. Accident means an unexpected happening causing any loss or injury

which is not due to any fault on the part of the person injured but from the consequences of

which he may be entitled to some legal relief.2 The accident may result into total or partial

disablement or even in death. For claiming disablement benefit under the heading accident it

is presumed to have arisen out of and in the course of employment in the following

circumstances –

(1) Accidents happening while acting in breach of Regulations, etc— An accident shall be

deemed to arise out of and in the course of an insured person's employment notwithstanding

that—

(i) he is at the time of the accident acting in contravention of the provisions of any law

applicable to him; or

(ii) he is acting in contravention of any orders given by or on behalf of his employer; or

(iii) that he is acting without instructions from his employer if—

1 Mishra .S.N, Labour and Industrial Laws, Central Law Publications, Twenty-Fifth Edition.

2 Goswami .V.G, Labour and Industrial Laws, Eighteenth Edition.

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(a) the accident would have been deemed so to have arisen had the act not

been done in contravention as aforesaid or without instructions from his

employer as the case may be; and

(b) the act is done for the purpose of and in connection with the employer's

trade or business.3

It means that any accident sustained by an insured employee is considered to have

arisen out of and in the course of his employment even if it has occurred due to violation of

given instructions or orders or violation of provisions of any law applicable to such an

employee if such act would have deemed so to have arisen had the act not been done in

contravention as aforesaid or without instructions from his employer as the case may be. It

also includes the accident which may have been sustained by an employee while he is doing

any act for the purpose of or in connection with his employer's trade or business. As a

matter of fact, any person who acts in contravention with the statutory provisions or

instructions or orders given by the employer in connection with the conduct of trade or

business cannot claim even damages from the employer but the special protections have

been given to employees under this Act as indicated above and in all these aforesaid

circumstances an employee can claim benefits under this Act.

(2) Accidents happening while travelling in employer's transport.—An accident

happening while an insured person is, with the express or implied permission of his

employer, travelling as a passenger by any vehicle to or from his place of work shall,

notwithstanding that he is under no obligation to his employer to travel by that vehicle, be

deemed to arise out of and in the course of his employment, if—

(a) the accident .would have been deemed so to have arisen had he been under such

obligation; and

(b) at the time of accident, the vehicle (i) is being operated by or on behalf of his

employer or some other person by whom it is provided in pursuance of

arrangements made with his employer and (ii) is not being operated in the

ordinary course of public transport service. The vehicle referred to include a

vessel and an aircraft.4

3 Employees State Insurance Act, 1948, Section. 51-B.

4 E.S.I. Act, 1948, Section 51-C.

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On the ultimate analysis one finds that any accident which occurs while an employee

is going or coming back with the express or implied permission of his employer by any

vehicle is deemed to have arisen out of and in the course of his employment even if he is

under no obligation to his employer to travel by that vehicle. Any person who is not under

legal obligation to travel for his employer is also protected in case of such accident but the

vehicle by which he travels must have been operated by or on behalf of his employer or

some other person in pursuance of an arrangement made by the employer. However, if an

accident takes place by a vehicle which is being operated in the ordinary course of public

transport service such an accident is not deemed to have arisen out of and in the course of

employment. The term vehicle here includes a vessel and an aircraft.

(3) Accidents happening while meeting emergency.—An accident happening to

an insured person in or about any premises at which he is for the time being employed for

the purpose of his employer's trade or business shall be deemed to arise out of and in the

course of his employment, if it happens while he is taking steps, on an actual or supposed

emergency at those premises, to rescue, secure or protect persons who are, or thought to be

or possible to be injured or imperilled, or to avert or minimise serious damage to property.5

This clause provides for protection against various accidents which may happen in

emergency such as fire, flood or other such abnormal situations. It may be pointed out for

the purposes of this Act, an accident arising in the course of an insured person' employment

shall be presumed, in the absence of the evidence to the contrary, also to be arisen out of

that employment. It means that burden of proof lies upon the employer to prove that such an

accident has not arisen out of his employment.

(4) The Employment must be Insurable.—The employment in a factory or

establishment is said to be insurable where provisions of this Act apply, viz.,

Employment specified in III Schedule. The person who claims benefits under this

Act must be insured. An insured person means a person who is or was an employee

in respect of whom contributions are or were payable under this Act and who is, by

reason thereof, entitled to any of the benefits provided by this Act. It may be pointed

out that if the above conditions are fulfilled the person concerned may avail benefits

under the Act and it does not matter whether the accident occurs or occupational

disease is contracted within or outside the territorial limits of India.

5 E.S.I. Act, 1948, Section 51-D.

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The Act provides for benefits against employment injury, sickness and maternity.

Therefore, in addition to sickness and employment injury, it would be appropriate to

discuss the nature of insecurity caused by maternity. Maternity literally means the

quality or state of being a mother or, mother in the making, maternity results into

confinement. The term 'confinement' means labour resulting in the issue of a living

child, or labour after 26 weeks of pregnancy resulting in the issue of a child whether

alive or dead. Thus mature birth or premature birth both are covered under the

contingency of maternity. However, abortion and other losses of pregnancy are

excluded. It may, however, be pointed out that if abortion is preceded by sickness,

the woman is entitled to sickness benefits under this scheme.

Section 51(A). Presumption as to accident arising in course of employment – if it is

shown that the accident arose in the course of employment of an insured person, it would be

presumed also to have arisen out of employment. But the presumption is a rebuttable one and

applied to this act only.

The injury must have been arisen out of and in the course of his employment—

Really speaking the term employment' presupposes relationship between employer and

employee through the contract of service. Therefore, in order to claim benefit, it must be

proved that at the time of injury the person was in service. So, employment is a contract of

service between the employer and employee where the employee agrees to serve the

employer in accordance with the terms and conditions of service contract under control and

supervision of the employer.6 The expression 'arising out of and in the course of

employment' has been explained in Regional Director, E.S.I. Corpn v. Rariga Rao and

others7. In this case one Sudhindra Kumar was working as a Refrigerator Operator in M/s.

Mysore Breweries Ltd., Bangalore. One day when he was on his way to the factory to join

duty he was run over by a motor vehicle causing his death on the spot. The appellants moved

E.S.I. Court under Section 75 of the Act claiming the benefits payable on the ground that

their son died as a result of an employment injury. It was argued that employee was killed in

6 Chintamani Rao v. State of M.P.( AIR 1958 S.C 388)

7 (1982) I L.L.T. 29 (Karnataka).

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a road accident while walking on a public road and not travelling in a vehicle provided by

the employer and, therefore, his death was not out of and in the course of employment. But

the E.S.I. Court did not accept the contention of the Regional Director and held that death

was in the course of employment, and the dependents were entitled to benefits under the Act.

In appeal, the High Court held that after the amendment to Section 2(8) in 1966 it is not

material where the accident occurred, whether it was inside the factory or outside. It is

equally not relevant about the time of the accident whether it was during the office hours or

after. In view of the definition of the employment injury. It may now be sufficient if it is

proved that the injury to the employee was caused by an accident arising out of and in the

course of his employment, and no matter when it occurred or where it occurred. There is not

even geographical limitation. The accident may occur within or outside the limits of India.

The place or time of the accident, however, should not be totally unrelated to his

employment. There should be a nexus or a casual connection between the accident and

employment.

The Supreme Court in B.E.S.T. Undertaking v. Agnes8 has said thus, "The question,

when does an employment begin and when does it cease depends upon the facts of each

case. But the courts have agreed that the employment does not necessarily end when the

down- tool signal is given or when the workman leaves the actual workshop where he is

working. There is a notional extension of both the entry and exit by time and space. The

scope of such extension must necessarily depend on the circumstances of a given case. An

employment may end or may begin not only when the employee begins to work or leaves

his tools but also when he uses the means of access and egress to and from the place of

employment."

In Regional Director ,ESI Corpn. v. Batulbibi9 the workman of Textile Mill died in

the mill canteen of mio-cardiac infraction during short recess. The widow and the son of the

deceased successfully claimed benefits under the ESI Act before the ESI Court. Aggrieved

by the decision the ESI Corporation went in appeal mainly on the ground that the death did

not arise out of and in the course of employment. The High Court of Gujarat held that the

8 (1963) II L.L.J. 615.

9(1988) II L.L.J. 29. The expression 'arising out of and in the course of employment' including Motional extension' has been fully discussed under the Workmen's Compensation Act, 1923. The development of law in that area is also applicable to E.S.I. Act. It is suggested to be read for proper understanding.

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workman joined duty and he was still on duty when he died at the canteen. He had gone to

canteen during the short recess to take tea but that period is not so long as to disrupt the

continuity of the employment. The appeal was dismissed holding that the death has arisen

out of and in the course of his employment.

In Regional Director, ESI Corpn. v. Francis De Costa and mother10 where the

respondent, an employee while going on his bicycle to join duty on road leading to the

factory at a distance of 1 Kilometre the company's lorry hit him and knocked him down on

the road. He was permanently and totally incapacitated to work in the factory. He therefore,

laid claim before the ESI Court. The ESI Court held him entitled to the benefits under the

Act. On appeal the High Court confirmed these findings. In appeal to the Supreme Court the

crucial but ticklish question of considerable importance was whether the injury caused by an

accident on a public road, while on his way to join the duty just 15 minutes before reporting

to duty at a distance of 1 Kilometre from the factory premises arising out of and in the

course of employment ?

It was observed that literal construction of the phrase 'arising out of his employment'

conveys the idea that there must be some sort of connection between the employment and

the injury caused to a workman due to the accident. But it is wide enough to cover the case

where there may not necessarily be a direct connection of the workman. There may be

circumstances tending to show that the workman received personal injury due to the

accident that arose during the course of or out of his employment.'

Benefits available under this Act—

The E.S.I. Act, one of the most important social legislations had been enacted to provide for

various benefits in different contingencies such as employment injury, sickness and

maternity. The scheme contained under E.S.I. Act makes provisions for the following

benefits :

(1) Sickness benefit;(2) Maternity benefit;(3) Disablement benefit;(4) Dependent's benefit;(5) Medical benefit; and

10 1994 SCC (L & S) 195, per K. K. Ramaswamy J. However, Justice B. P. Jeevan Reddy expressed contrary view.

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(6) Funeral expenses.

Disablement Benefit—

An accident is an unfortunate occurrence resulting in cessation of work by worker or a group

of workers. More often than not, every accident also inflicts on worker.11 The E.S.I. Scheme

provides for benefits to be paid to persons who are covered under this scheme. The workers

who sustain employment injury as defined under the provisions of this Act and discussed

earlier, are entitled to claim benefits. Periodical payment to an insured person suffering from

disablement as a result of an employment injury sustained as an employee under this Act,

certified to be eligible for such payments by an authority specified in this behalf by

regulations, is referred to as the disablement benefit.

Section 51 of E.S.I. Act provides for disablement benefit in case of temporary and

permanent disablement. The disablement benefit shall be payable to an insured person. The

amended Section 51 makes provisions for the disablement benefit in two contingencies :

(1) where a person sustains temporary disablement for not less than three days

excluding the day of accident;

(2) where a person sustains permanent disablement, whether total or partial.

The rate and the conditions of eligibility were governed by First Schedule before

amendment made in 1989 but now the First Schedule and some provisions of old Section 51

have been omitted. In place of these provisions now the Central Government has been

empowered to prescribe rates, periods and conditions subject to which such benefit shall be

payable.

The claimants of disablement benefit have to observe certain conditions laid down for

recipient of sickness benefit regarding treatment and rest as directed by the physician.12

However, such conditions are not to be observed by the person who are entitled to benefit

on account of permanent disablement.

It would be desirable to discuss the definition and requirements of permanent total

disablement and permanent partial disablement since the disablement benefit is payable

under these situations.

11 V.V. Giri, loc. cit., p. 310.12 E.S.I. Act, 1948, Section 64

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(i) Permanent total disablement.—

Permanent total disablement means such disablement of a permanent nature as incapacitates

an employee for all work which he was capable of performing at the time of the accident

resulting in such disablement.13 Thus when an employee sustains injury and becomes

incapable permanently to perform duties which he was capable to perform at the time of the

accident, he is said to be in the condition of permanent total disablement.

Thus the essence of permanent total disablement is first, that the employee becomes

permanently incapable to perform duties and secondly there is loss of earning capacity

totally, that is, loss of earning capacity amounts to one hundred percent or more.

Thirdly, it reduces the earning of an employee in every employment which he was

capable of undertaking at the time of accident. Fourthly, the accident by which such an

injury has been sustained by an employee has arisen out of and in the course of this

employment.

It would be worth mentioning that the injuries specified in Part I of Second Schedule

are deemed to result into permanent total disablement. Some of the specified injuries therein

are for example, (a) loss of both hands, (b) loss of hand and a foot, (c) very severe facial

disfigurement, (d) absolute deafness.

Any combination of injuries specified in Part II of the Second Schedule shall also be

deemed to result into permanent total disablement where aggregate percentage of loss or

earning capacity amounts to one hundred per cent or more, for example.

1. Loss of a hand or of the thumb and four fingers of one hand or

amputation from 11.43 c.m. below tip of olecranon—loss of earning capacity

2. Amputation through shoulder joint, loss of earning capacity 90%

Total loss of earning capacity

It makes clear that in such a case these injuries result into permanent total disablement.

(ii)Permanent Partial Disablement—

It means such disablement of permanent nature, as reduces earning capacity of an employee

in every employment which he was capable of undertaking at the time of the accident

resulting in the disablement. It is further provided that every injury specified in Part II of the

13 E.S.I. Act, Section 2 (15-B).

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Second Schedule shall be deemed to result in permanent partial disablement. However, if due

to injuries more than one, it reduces the earning capacity upto 100% or more the disablement

becomes Permanent Total Disablement. The point of distinction between them is that in

permanent total disablement rll there is total loss of earning capacity that is loss of earning

capacity up to 100% or more whereas in Permanent Partial Disablement there is loss of

earning capacity below one hundred per cent. In other words, in Permanent Partial

Disablement the earning capacity is reduced only and it does not turn into incapacity. Thus

percentage of loss of earning capacity is the distinctive feature on the basis of which both

types of disablement may be distinguished.

(iii)Temporary Disablement—

It means a condition resulting from an employment injury which requires medical

treatment and renders an employee, as a result of such injury, I temporarily incapable

of doing the work which he was doing prior to or at the time of injury. It makes clear

that in temporary disablement employee becomes incapable to work or perform his

duties of a limited period which he was doing before such injury. After treatment the

person becomes fit for doing his work. The E.S.I. Act does not specify conditions of

temporary disablement because the affected person due to injury becomes fit for work

after proper treatment14.

14 Goswami .V.G, Labour and Industrial Laws, Eighteenth Edition.

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Conclusion

The Employee State Insurance Act, 1948, is a piece of social welfare legislation enacted

primarily with the object of providing certain benefits to employees in case of sickness,

maternity and employment injury and also to make provision for certain others matters

incidental thereto. The Act in fact tries to attain the goal of socio-economic justice enshrined

in the Directive principles of state policy under part 4 of our constitution, in particular

articles 41, 42 and 43 which enjoin the state to make effective provision for securing, the

right to work,to education and public assistance in cases of unemployment, old age, sickness

and disablement. The Act is social security legislation. It is settled law that to prevent

injustice or to promote justice and to effectuate the object and purpose of the welfare

legislation, broad interpretation should be given, even if it requires a departure from literal

construction. The Court must seek light from loadstar Articles 38 and 39 and the Economic

and Social Justice envisaged in the preamble of the Constitution which would enliven

meaningful right to life of the worker under Article 21. The State enjoined under Article

39(e) to protect health of the workers, under Article 41 to secure sickness and disablement

benefits and Article 43 accords decent standard of life. Right to medical and disability

benefits are fundamental human rights under Article 25(2) of Universal Declaration of

Human Rights and Article 7(b) of International Convention on Economic, Social and

Cultural Rights. Right to health, a fundamental human right stands enshrined in socio-

economic justice of our Constitution and the Universal Declaration of Human Rights.

Concomitantly right to medical benefit to a workman is his/her fundamental right.

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Bibliography

Mishra .S.N, Labour and Industrial Laws, Central Law Publications, Twenty-Fifth

Edition.

Goswami .V.G, Labour and Industrial Laws, Eighteenth Edition.

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