Can We Seek Exemption from the Employees' Compensation Act, 1923 for Better Coverage?

Hi,

We have a large number of employees in our organization. Almost all of our employees are outside the purview of the ESI Act, 1948. We have covered them under a Personal Accident Policy with one insurance company. The benefits resulting from this policy are much better than those mentioned in the Employees' Compensation Act, 1923. Furthermore, our plant is situated in a non-implemented area, and hence the employees at that plant are not covered under the ESI Act.

Given this background, can we apply for an exemption from the provisions of the Employees' Compensation Act, 1923? We kindly request all stakeholders to provide their input on this matter.

Regards,
Omkar

Dear Omkar, I would suggest you go through the provisions of Sec. 87, 88, and 89 of the Act to find your answer. Additionally, in a non-implemented zone where staff are stationed for more than 7 months, your staff are required to submit individual applications to the IR Branch of the Ministry of Labour under the State Government. The application form needs to be obtained from there and endorsed by the employer.

Regards,

No, there are no provisions for exemption as the insurance policies are restricted to a fixed sum assured only. Under the Employees' Compensation Act, 1923, the benefits are calculated based on the 'Relevant Factor,' considering factors such as age, loss of earning capacity, etc., by the EC Commissioner. The amount can vary depending on the merit of the cases. Although the ceiling for calculation is Rs. 8000/- wages per month, there is no mention in the law of whether any equivalent Medical Certificate or Personal Accident Policy would suffice. Therefore, EC coverage is a necessity.