Understanding ESIC vs. WC: Can You Explain the Key Differences?

Dear all, please suggest to me what the difference is between ESIC and WC.

Regards,
Shivanand

Understanding ESI and ESA

ESI provides for an employee's insurance to enable them to enjoy a package of benefits such as treatment for sickness, maternity, disablement, or death due to injury in connection with employment. It also includes benefits for dependents of the deceased employee, funeral expenses, etc.

Comparison with the Employees' Compensation Act (ESA)

The Employees' Compensation Act (ESA - previously the Workmen's Compensation Act) provides for monetary compensation to an employee or their legal heirs only in case of death or disablement, whether temporary or permanent, due to any injury or accident occurring in connection with employment. Thus, the ESI Act is broader in scope than the ECA. An employee covered under ESI cannot claim benefits under ECA.

To add to what Mr. Saikumar has said, I would like to mention that the ESI Act is applicable only in the areas notified by the Government. Units employing 10 or more workers, situated in a notified area, are covered under the ESI Act. In such units, only workers paid a salary of Rs. 15,000 or less are covered under the ESI Act. All others will be covered by the EC Act. Under the ESI Act, since it is an insurance scheme, both the employer and employee have to pay the premium jointly. Like all insurance schemes, there are limitations and conditions for the benefits.

Comparison Between ESI Act and EC Act

In contrast, under the EC Act, there is no contribution to be paid. The EC Act has a much wider scope than the ESI Act. It is applicable to workers engaged in occupations listed in the Schedule of the Act. Even agriculture is included in the list, and there are several case laws where agriculture workers have successfully claimed compensation for injuries arising in the course of and out of employment.

The ESI Act has multiple benefits for the covered members, while the WC Act only covers major injuries or compensation amounts in the event of an untoward incident or death occurring while on duty or at work. The WC Act does not apply if the ESI Act covers the situation.

Regards,
D. Gurumurthy
HR/IR Consultant