How Will ESIC's New Coverage Impact Construction Workers' Safety and Benefits?

Important Update on ESIC Coverage for Construction Workers

Dated: 17.07.2015

The Employees' State Insurance Corporation (ESIC) will cover construction workers, enabling them to avail themselves of medical care benefits and a range of cash benefits during exigencies such as injury, death, disablement, maternity, and unemployment.

Construction workers are considered part of the unorganized sector. However, given their high risk of accidents and sickness, the Central Government has decided to extend ESIC's social security coverage to them, according to an official statement released today.

Construction activities have been covered by the ESIC under Section 1(5), treating them as a commercial establishment. The coverage under ESIC will also be extended under Section 2(12) if any part of the construction unit carries out a manufacturing process, as defined under the Factory Act.

The Corporation is now proceeding with the coverage of construction workers.

It is also noteworthy that the Aam Aadmi Party (AAP) Government in Delhi and the Karnataka Government have previously requested ESIC to extend its coverage to construction workers.

Regards

Request for News Link on ESIC Proposal for Construction Workers

1. Sir, kindly link the copy of the news item on the above subject in which it is published about the proposal of ESIC to cover the construction workers.

2. As far as I understand, construction workers/employees working in already covered units/factories are already covered under Section 2(12) of the ESI Act, 1948. However, construction workers working purely in construction units on sites are not covered under the said Act because ESIC treats such establishments as separate establishments, i.e., neither shops nor cinemas, etc., as already notified in the majority of States.

3. In addition, I think the Maharashtra Government is not showing any interest in extending the scheme under Section 1(5) of the said Act except as already notified in the years during, I think, 1975-1980. Therefore, as per the delegation of powers, only State Governments are empowered to extend the scheme under Section 1(5) of the said Act. The Central Government has no locus standi to extend the provisions of the ESI Act to construction units under Section 1(5).

Dear Korgaonkar ji, thanks. I have also searched out the said Press Note dated 17/7/2015 of ESIC from their website. I am doubtful if the proposal to cover construction workers (on sites) under the ESI Act, 1948 will be successful or accepted by the State Governments, which are appropriate governments under section 1(5) of the said Act. The reasons being the construction workers/employers (builders) are covered under the Building & Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996. This Act is a complete code in itself and also provides for safety and health measures for the construction workers. In addition, the builders are also required to pay about 1% as cess on the total cost of construction. Therefore, no builder will like to pay both, i.e., employer's contribution under the ESI Act as well as the above cess under BOCA. In addition, I think no State Government will like to stop its own source of revenue in the form of cess as mentioned above. Let us wait.

Dear Sumit ji,

May I know the reason for posting the old circular 4/99 by ESI dated 14.06.1999 here in this thread?

Dear Harsh Kumar ji,

The ESI Act and BOCW Act are two different enactments with different and separate objectives. There is no substitution for ESIS or the ESI Act. I hope you will agree with this.

In light of this, I would like you to review your above statement. I wanted to write about it, but I am unable to do so right now as I am undergoing some health therapy.

ESI to cover construction workers

Extract:

Employees' State Insurance Corporation (ESIC) will cover the construction workers to enable them to avail benefits of medical care as well as a range of cash benefits in times of exigencies of injury, death, disablement, maternity, and unemployment.

The construction workers are considered to be part of the unorganized sector, but keeping in view the fact that they are highly prone to accidents and sickness, the Central Government has decided to go ahead in extending the coverage of ESIC’s social security to them, an official statement said here today.

http://www.esic.nic.in/CIRCULARS/RevII-030111.pdf

The matter of extending the benefits under the ESI Act, 1948 to construction site workers:

The matter has been examined extensively, and it is decided to revisit Instruction No. 4/99 circulated via letter no. P-12(l1)-11127/99-Ins.IV dated 14th June 1999.

The construction site workers who were kept out of the coverage of the ESI Act till date can now be covered with the implementation of IT Roll Out "Any time, Anywhere." ESIC services will be available to these mobile and migratory workers with no geographical barrier.

Whether ESI Applicable to Construction Workers engaged by

This move is good as such the workers have no real protection from death and disease. Many construction sites remain dangerous, though for namesake, placards are displayed—wear helmet, use belts, etc. Children keep playing amidst the work in dust, open pits, etc.

Mandatory Implementation of ESI for Construction Workers

Mere press notes will not make it mandatory. We have to await the Official Gazette extending the scheme to construction workers.

Furthermore, the extension of the scheme to unorganized sector workers under the ESI Act is not as easy as one might think. Employers are required to maintain attendance and wage registers. The wages component should also be accurately reflected in their books of accounts, as it plays a vital role during inspections of the respective units. It is very challenging for any construction company to maintain or monitor such records for these workers.

No doubt, it's a good move, but we have to assess how practical it is.

With regards,

There are and will be difficulties in extending the scheme to construction workers. But the very fact that it is being done will be beneficial to workers who are left at the mercy of the contractor in case of illness, etc.

We read of deaths due to slab collapse and injuries, etc. Slowly but surely, the workers will start getting some sort of cover and treatment.

Instruction No. 4/99 circulated via letter no. P-12(l1)-11127/99-Ins.IV dated 14th June 1999.

Any updates on this?

Are construction workers eligible for ESI? Please share any notifications.