Exemption from ESI through Better Benefits
If you are able to provide better medical and other benefits to your employees, certainly, you will get an exemption from the operation of ESI. However, you must ensure that the facilities provided by you are superior in all respects. This includes taking care of employees in the event of their accident on duty, offering 90 or more days of leave, providing medical benefits to dependents of the employees, offering a pension in case of permanent incapacity due to employment injury, and compensation to dependents in the event of an employee's death. These benefits should not generally be covered by any mediclaim policy in practice. There may be numerous insurance policies, each with hidden points. If you examine them, you may find that ESI is a better choice for an employer.
Role of the Workmen's (Employees') Compensation Act
The Workmen's (Employees') Compensation Act is a general enactment directing employers to pay compensation in case of death or permanent incapacities caused to employees while on duty. No one can predict when an accident will occur or when the liability will arise. If, at the time of death or accident, the employer finds that they do not have enough money to meet the liability, the purpose of the enactment will not be met. To ensure the employer is financially sound, a policy to cover such untoward happenings has been incorporated into the Act itself. While the employer may be financially sound enough to meet unexpected expenditures, this cannot be predicted or assumed by law enforcement authorities.
ESIC's Role in Workmen's Compensation
The role of ESIC in workmen's compensation is similar to that of any other insurance company. The ESI Corporation assumes the entire responsibility of the employer regarding the payment of compensation in case of death or injury, against a consideration paid or payable monthly. Therefore, if the employer is operating in a notified area, ESIC will absolve all the liabilities of the employer concerning workmen's compensation, as well as maternity benefits payable under the Maternity Benefits Act. Conversely, if the employer is not in a notified area, ESIC cannot intervene, and the employer must find a solution, such as taking a suitable policy that will provide sufficient funds to pay off its liability towards compensation without affecting its working capital. Since the ESI Act also imposes some restrictions regarding coverage based on the salary of the insured employees, the employer must find an alternative for those who are outside the purview of ESI.
Regards,
Madhu.T.K