Understanding Benefits for Contract Workers: What Happens When a Worker Dies on Duty?

If one contract laborer, who is covered under the ESI Act of 1948, dies while on duty (electrical operation), are they entitled to receive benefits under the Employee Compensation Act of 1923? If not, besides the funeral benefits and family pension under the ESI Act, what other benefits are the legal heirs entitled to receive?

The Employees' State Insurance (ESI) Act and Employer Liability

The Employees' State Insurance (ESI) Act takes care of the liability of the employer that would have come upon them under the Employees' Compensation Act (formerly known as the Workers' Compensation Act). Once covered under ESI, no benefits or compensation are allowed under the EC Act. The legal heirs, namely the spouse and minor children, receive a monthly pension from ESI.

Thank you.

Apart from funeral expenses and pension under the P.F. Act, he is also entitled to compensation if the death is caused by an accident arising out of and in the course of employment.

Regards,
B. Saikumar
HR & Labor Law Advisor

There is no compensation in addition to the monthly pension under the ESI Act. Only a monthly pension.

By compensation, I mean the dependent benefit provided under Sec. 52 of the ESI Act, read with Rule 58 and relevant regulations, which is admissible to dependents of the deceased insured person. If this dependent benefit is also called a pension, then there is no benefit other than funeral expenses and dependent benefit or pension.

Regards,
B. Saikumar
HR & Labour Law Advisor

Dependents' Benefits Under Section 52 of the ESI Act

Dependents' benefits under Section 52 of the ESI Act are paid as a Family Pension to the dependents of a deceased insured person in the event of death due to employment injury or occupational disease.

Choosing Benefits Under Section 65 of the ESI Act

Section 65 of the ESI Act specifies that where a person is entitled to more than one benefit, he/she shall be entitled to choose which benefit he/she will receive. Hence, receiving two benefits is not possible.

ESI Coverage for Injured Workers

Whether the worksite is covered under ESI or not, if the injured individual is covered under the ESI scheme and contributions have been paid, they will receive the benefit. Nothing in the ESI Act prevents an employer from including site workers in the ESI scheme along with their office workers.

Regards,
[Name Removed For Privacy Reasons]

Dear Kulkarni & others,

I find all your comments valuable and worth appreciating. I am from an Electrical Distribution Company and have to face day-to-day accidental hazards. There are certain touts in the field who inspire the deceased family to file court cases under the WC Act (WC Court) even though they are receiving family pension under the ESI Act of 1948 (both the spouse and minor children), although there is a clear bar under Section 53 of the ESI Act. Please suggest something if the wage exceeds ₹15,000.00 per month, then whether the WC Act shall come into the picture.

Regards,
R Misra

Entitlement Under ESI and EC Acts

If employees are covered under ESIS, they are entitled to benefits under the ESI Act only, not under the EC Act. If employees are not covered by ESI, they will be entitled under the EC Act if they are considered 'employees' under the EC Act.

Regards,
Varghese Mathew
[Phone Number Removed For Privacy Reasons]

I do not agree with the statement of Sh. Vijay Dhinga Ji that "If you are working in the construction industry and the worker was working at the site, then the ESI is not applicable." As far as I understand, if your worksite is located in an area where the ESI scheme is not implemented, which is, in other words, called a 'Non-implemented Area,' then only the Employees' Compensation Act of 1923 will be made applicable.

Clarification on ESI Act and Employee Compensation Act

Regarding the first query of Sh. R Mishra, Section 53 of the ESI Act of 1948 clearly debars insured persons from receiving compensation under any other law. Members have already explained the benefits to which the dependents/legal heirs are entitled concerning the deceased employee. In reference to your second query, it is clarified that where the wage of an employee exceeds Rs. 15,000.00 per month, then the Employees' Compensation Act of 1923 shall come into the picture.

Regards,
BS Kalsi
Member since Aug 2011

Yes, your question is very correct. The employer cannot escape from their liability when the employee is drawing wages above the ESI limit. In respect of such employees, the Employee Compensation Act will certainly come into play. The bar is for receiving dual benefits for the same cause. Incipiently, the ESI Act does not exempt the employer from their liability in respect of workers drawing above the limit. So, I think the employer should make arrangements for those workers who are out of ESI coverage.

I was thinking, instead of excluding the higher-salary workers from ESI, they should be covered under ESI, and their contribution be restricted to the limit in operation. This will cover all employees of the establishment drawing any salary, but for the purposes of ESI contributions, a certain limit, say 20,000, should be fixed.

I hope this sheds due light on the point.

With Regards,
Adv. K. H. Kulkarni

Applicability of ESI and Employee Compensation Act

Where the ESI Act is applicable, the Employee Compensation Act is not applicable. Now the question arises: when an employee earns more than Rs. 15,000/- in a month, what will happen if he dies due to an employment injury? In such a case, his claim will be settled in accordance with the Employee Compensation Act. We recommend that our management consider obtaining insurance coverage, such as personal accident with medical coverage, as per the compensation parameters set by the Employee Compensation Act.

Regards,
A.K. Hati
[Phone Number Removed For Privacy Reasons]

Your discussion is very valuable to people like us who are novices in this field. I request you to please shed some light on the following questions:

1. Who can be considered an employee under the WC Act?

2. As per ESI, can a person in an administrative capacity drawing a salary of less than 15,000 be covered under the ESI Act, WC Act, or company insurance?

3. If an employee is covered under the ESI Act and meets with an accident, will he receive PF? Will his heir be eligible to receive a pension under the EPF Act and a family pension under the ESI Act?

4. In the case of the EC Act, how will the employee's heir benefit if there is an accident/death? Is there a provision for a pension scheme in case of death?

5. Workmen's compensation is calculated as 50% of basic and the relevant factor of Schedule IV in the case of death, and 60% of basic and the relevant factor in the case of permanent disablement. How is it calculated in the case of partial disablement, and what is the maximum limit?

Thanks

Regards, A. Rodrigues

I would like to know by whom the benefits need to be claimed under the following circumstances.

CASE-1

A company engages a contractor to complete certain work, such as the installation of electricity poles. The company enters into an agreement stating that full compliance needs to be maintained on the site as well as with regards to the workers. The contractor agrees to this and begins the work.

Meanwhile, the principal employer takes out a Workers' Compensation (WC) policy for that project, with a projected/estimated workforce of around 60 workers. After a few days of work, a worker on the site was involved in an accident while installing a pole and unfortunately passed away. The principal employer filed a WC claim with the insurance, citing an accidental death on the site, and the contractor did the same with the Employee State Insurance Corporation (ESIC).

My question is, where will the claim be handled, and how can the company take out a WC policy when the workers under the contractor are already covered under ESIC?

Please note that this is a real incident that occurred, although the WC claim was rejected with the explanation that two claims cannot be filed for the same individual. I may be mistaken in my understanding of the reason for the rejection of the claim as I do not work in that department, but I was informed about the incident by the claims department.

Thank you.

Handling Non-ESI Employees' Grievances Related to Accidents

What should I do in the case of non-ESI employees to avoid any kind of grievance from the workers' side related to accidents or accidental death?

I implement a policy called "Personal Accident cum Medical Expenses" in the name of each employee who does not fall within the purview of ESI due to a wage exceeding Rs. 15,000 per month.

It is certain that where ESI is implemented, the Employee Compensation Act is not applicable as ESI provides larger benefits than the Employee Compensation Act. Both are social security benefits that address health hazards.

Recently, a case under the Employee Compensation Act was filed with the Commissioner of Employee Compensation by a lawyer on behalf of the relatives of a workman. The reason for filing was that the concerned contractor had taken a policy from an insurance company in line with the Employee Compensation Act, and the lawyer argued that since the workman was covered under that policy, the insurance company was obligated to provide death compensation.

The management was also made a party to that case, and they argued that the case was not maintainable in the court of the Workmen Compensation Commissioner. This was because the concerned workman used to work in an area covered under the ESI Act, and the injury leading to death occurred in a factory also covered under the ESI Act, with the deceased being an insured person.

Upon considering this argument, the Workmen Compensation Commissioner outrightly rejected the case as not maintainable.

Regards,
A.K. Hati
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