ESIC Facility's Subsitute - CiteHR
Partner - Risk Management
R B Yadav
Advocate & Management Consultant On Labour
Korgaonkar K A
Raj Kumar Hansdah
Shrm, Od, Hrd, Pms
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Dear Friends,
I need a small Help.
ESIC is a mandate requirement for a factory. Incase a factory do not want to go for ESIC and provided Equivalant Facilities via Health Insurance, would that comply Compliances?

Dear Neha ji,
If employees in your factory are in receipt of benefits substantially similar or superior than benifits under ESIS, then only you can seek an exemption as per section 87. This is not possible so please don't think of. You can not have similar or superior benefits than ESIS. To my knowledge, only TELCO has this exemption.
This exemption is granted for max.1 year and renewed for max.1 year at a time upon application.

but as the facilities committed by ESIC are not up to the mark and the purpose of doing ESIC is not solved. So wat can be a best way possible. Kindly suggest
Not only telco, many others like L&T also got for specific factories.
However, a small hospital has no way of meeting the requirement.
The cost for you to set up and pay for such a facility will be too high in any case,
Health care insurance means mainly hospitalisation benefit. Esic has much more. Are you in a position for providing full OPD, medicines and complete hospitalisation facility for entire family of the employee to unlimited amounts ? Plus full cost of maternity expenses and leave salary to unlimited amount ?

It is not a obligatory premium paid scheme. ESIC is providing social security to the IP and their family members both in Cash as well as in Medical term benefits. If you are deploying with 10 and more employees in your company, it is but obvious to get your company registered under the provisions of the ESI Act. As far as question of exemption belongs, it is not very easy to get exemption from the Government. I am duly agree with the view of Mr Banargee as posted above.
R B Yadav

Dear All
As indicated here; there are many companies who have been exempted from ESI; as they offer better facilities.
These are big companies in Public and Private sector which employs thousands of employees; have their own township and Medical facilities including several Health Centres/Dispensaries; ful fledged hospitals with more than hundred beds, OPD; ICU, Emergency/casualty; ambulance services; several specialized departments like Surgery, Orthopaedics, Burn unit, Opthalmology, Cardiac, Gynaecology, Paediatrics etc.
For small companies employing a few hundred employees and not having its own full-fledged Hospital & Medical services; it is unthinkable of getting exemption.
Warm regards.


Most have answered more or less correctly. Let me clarify that ESI is not merely medical care for entire dependents, but also up to 91 days of sick leave, higher level of sick leave compensation for long terms sickness for longer period, disability pension and death pension and so on. If you have a contractual scheme covering all these benefits comparable or superior to benefits under ESI scheme, for all regular and temporary and contractual workers, you are entitled to get exemption. You need to establish availability of all these benefits to all categories of workers, as a matter of right, that is under a contract, you can definitely get exemption. As for exemption grated to some PSUs and very few private companies, none of them really had comparable benefits on benefit to benefits basis, though they had fairly good medical care, but those exemption were always political in nature and due to pressure from the trade union at a time the ESIC facilities were too poor in those area. Such political motivated exemption have also come down since the delivery of ESI medical care and other benefits have improved and trade unions also realized that in case of genuine suffering for long terms, only ESI care can meet the needs.

It is not worth chasing the exemption. Instead educate your workers, get them multiple identity card for self and family residing elsewhere, give the brifing and handout about various benefits and how to avail them in case of any misfortune and collectively take up shortcomings in ESI facilities with higher up.

O Abdul Hameed

Formerly Addl Commissioner ESIC

[COLOR="Navy"]Dear sir,
Can you cite a few examples wherein genuine exemptions were granted based on benefits including dependents benefits extended.
eg.KSEB,whether contract employees are having dependent benefit?
Did any of the union challenge the exemptions granted? If not as an authority did you educate them to take up etc.
anil narayan,adv

Dear Mr Anil Narayan

I agree with you that the exemption granted from ESI Scheme has always been illegal, improper and against all the norms. This was my experience as Director of Scheme in four different States from W.Bengal to Kerala. Please note that exemptions are granted by State Government and in Central sector by Central government and role of ESI department is only to give their comments. In almost all cases ESI department has objected to exemption based on comparative statements filed the employers. I have not seem a single case where exemption was eligible based on the statutory norms, since in none of the cases, including Central and State PSU or such good employers like TELCO had all the benefits comparable to ESI Scheme and whatever is eligible to regular workers, were not available for contract and casual employees. I know of KSEB where contract workers are working for years together and are not eligible to those benefits available to KSEB regular employees or benefits under ESI or EPF, flouting the Supreme court judgements. In fact all the difficulty and dangerous job like line shifting and laying lines are done by these contract employees. In fact exemption has been political or under suspected corrupt motives or such influece. For eg I know of one case where a PSU was fighting against ESIC for years together till Supreme Court on question of coverage and finally they lost the case and when arrears were due they filed for exemption and HC directed them to Government, as laid down in the act, and the Government in spite of strong written objection, granted exemption. DLO or even the Regional boards have no role in exemption but State government use them as shield. In many of the cooperative textile units in Kerala, exemption were granted denying employees the ESI benefits, when they were not even getting annual bonus or decent wages, since all these units were controlled by one or other political parties. At least recent amendment in law has restricted retrospective exemption.

In fact role of trade Union has been very disappointing whether it is exemption, demanding satisfactory benefits, or stopping child labour in Sivakasi ! The trade Union represented only the regular employees in well established companies and focused only on monetary benefits. I am not aware of any tade union agitation against the very poor primary medical care facilities under ESIC scheme in states like W.Bengal or Kerala, where trade union is known to be strong. The primary medical care in state like Kerala, West Bengal and Hindi belt continue to be extremely poor even though the workers are paying for it, and in many places the free primary care hospital of State Government is much better. I failed to understand why this situation when the ESIC has a huge surplus and over 12000 Crores are being spend to set up Medical colleges all over India, when setting up medical college is not the duty of ESIC.

Not withstanding many shortcomings and maladministration, I hold he view that ESIC scheme combined with EPF is two finest social security benefits comparable to the best in the world. What I expect from Trade Union is to ensure that all the workers including temporary, casual and contractor workers are brought under scheme as stipulated in law, force government to extend the scheme to new areas and new sectors and then fight locally to ensure that the committed benefits are available to workers at all times and in decent manner concentrating more on primary medical care, and fight against wasteful and needless expenditure and corruption.

O. Abdul Hameed

Formerly Addl.Commissiner ESIC

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