Understanding ESIC vs. Workmen's Compensation Act: When Does Each Apply?

Applicability of Workmen's Compensation Act

Where an employee is covered under the ESIC Act, is the Workmen's Compensation Act applicable to him?

NO. There are some places where ESIC is not available. The WC Act of 1923 is applicable there.

Concrete Provision for Employee Coverage

Let us have the concrete provision about 'The employee not covered under ESI has to be covered under Employees covered under the Employee Compensation Act'.

Definition of Employee under Amended ECA

Please share the concrete provision. If anybody has a PowerPoint presentation to show the differences considering the various amendments under both acts.

Regards.

There is no need to have a separate notification because the Workmen's Compensation Act (renamed as Employees Compensation Act recently) is an Act that has been in existence even before the ESI Act was passed.

Applicability of the Workmen's Compensation Act

The Workmen's Compensation Act is applicable to any scheduled employment. With various amendments, the scope of the Act has been widened, and virtually almost all employment comes under its purview.

ESI and Workmen's Compensation

ESI is an arrangement whereby employers in the notified area can make use of the facilities for their employees, and workmen compensation is one of such facilities. Therefore, by means of ESI (please note that it is an insurance scheme), the employer can insure its workmen compensation liabilities for some employees in return for a contribution payable.

For employees not covered by ESI, due to the fact that they earn a salary exceeding the eligible limit (currently Rs 15,000), and on whom the employer is not contributing anything, the employer must find an alternative insurance method. That's all.

Regards,
Madhu.T.K

Clarification on Employee Coverage Under ESI and EC Act

Your query is: "Let us have the concrete provision about 'The employee not covered under ESI has to be covered under Employees covered under Employee Compensation Act'."

This query has to be answered in a roundabout way.

1. Please see section 61 of the ESI Act. This reads as "Bar of benefits under other enactments.-When a person is entitled to any of the benefits provided by this Act, he shall not be entitled to receive any similar benefit admissible under the provisions of any other enactment." Conversely, this means that if a person is not entitled to any of the benefits under the ESI Act, he is entitled to receive similar benefits admissible under the provisions of any other enactment. Therefore, if a person, whether male or female, is not entitled to get the benefits under the ESI Act, he/she can get the benefits of the EC Act provided the EC Act is applicable to him. Similarly, a woman who is not entitled to get the maternity benefit under the ESI Act is entitled to get the benefits of the Maternity Benefit Act provided the Maternity Benefit Act is applicable to her.

2. An employee may not be entitled to receive the benefits under the ESI Act because of the non-applicability of the ESI Act. The non-applicability of the ESI Act may arise because (a) the place of employment is in an area to which the ESI Act is not made applicable or (b) though the ESI Act is applicable to the industrial establishment, still the ESI Act may not be applicable to the employee in question as he/she draws wages exceeding Rs. 15,000/- per month.

3. For the EC Act to be applicable, the employer should come within the definition of the term "employer" as defined under section 2(e) of the EC Act, and the individual should come within the definition of the term "employee" as defined under section 2(i)(dd) of the EC Act read with Schedule II to the Act.

With regards,

Thank you, Mr. Madhu and Mr. Harikrishnan, your answers are rightly focused on the issue. Still, I would like to get clarity about whether a "Trainee" (not registered under the Apprentice Act) is covered or not under the ECA. If yes, then which provision? Please clarify.

Thanks and Regards.

Coverage of Trainees Under ESI and Compensation Acts

Trainees, other than those engaged under the Apprentice Act, are covered by the ESI Act if the stipend paid is not more than Rs 15,000 per month. In the case of establishments in non-notified areas not covered by ESI, the Employees Compensation Act will apply. Regarding trainees under the Apprentice Act, the provisions of the Workmen's/Employees Compensation Act will be applicable since they are not covered by the ESI Act.

Regards,
Madhu.T.K

Definition of "Employee" Under the EC Act

Please see the definition of the term "employee" as defined under Section 2(dd) of the EC Act. The main thrust of this definition is on the term "employed." It is silent as to the status of the individual employed, whether temporary, casual, permanent, or trainee. The "trainees" are also employees of the employer. Even apprentices who are taken in as apprentices not under the Apprentices Act but under a scheme of apprenticeship formulated by the employer are "employees." Therefore, "trainees" are employees subject to the provisions of Section 2(dd) of the EC Act read with Schedule II to the EC Act.

Regards.