The Employees’ State Insurance (Amendment) Act, 1989

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The Employees’ State Insurance (Amendment) Act, 1989 (Act no. 29 of 1989) dated 23rd August, 1989, was enacted with the view to amend the provisions of The Employees’ State Insurance Act, 1948 (Act no. 34 of 1948). The Employees’ State Insurance Act, 1948 was amended for many times including its amendment on 1951, 1966, 1975, 1984 and this Amendment of 1989. The original Act was recently amended by The Employees’ State Insurance (Amendment) Act, 2010.

Section 2 of this Act provides for amendment of Section 1 of the principal Act by inserting sub Section (4) a proviso clause dealing with extension of the Act not upon factories or establishments belonging to Government.

Further, Section 3 of the Amendment Act in its early part omits certain clauses including clause (2) and (5) of Section 2 of the principal Act, however it amends the clause(6A) of that Section dealing with definition of ‘Dependant’, by adding in clause (i) of that Section, the word ‘daughter’ in place of the word ‘daughter or widow mother’. The Original Act under Section 2, sub Section (7) defines and include certain persons in the term ‘Employee’ and also provides for list of persons not to be included in the term. The Amendment Act added the person engaged as an Apprentice not being apprentice under the Apprentices Act, 1961.

The definition of Family for the purpose of the Principal Act is changed by this Amendment Act by providing a substitute definition to the term, which includes spouse, minor legitimate or adopted child, other children, dependent parents, etc. The term ‘Factory’ is also amended by this Amendment Act by providing changed definition to it. Similarly, a new term to the Principal Act is provided by this Amendment Act as Sub Section (19A) to Section 2, namely, ‘Seasonal Factory’ which meant a factory engaged in given manufacturing processes for the period of seven month not more than that in a year.

Further, this Amendment Act amends the provision contained in Chapter II of the Principal Act relating to Establishment of Corporation, Standing Committee and Medical Benefit Council. The Amendment Act says that the word ‘Nomination’ whenever occurs in the chapter should be replaced by another word ‘Appointment’, which means every authority either Chairman or Co-Chairman, should not be nominated but should be appointment by Central Government.

The Staff or officers employed by Employees’ State Insurance Corporation should be paid monthly salary exceeding such salary prescribed by Central Government, which prior to this amendment taken place, was in excess of rupees 2250/- only. Moreover, Section 23 of the Principal Act amended with the view to include the name of Director General and Finance Commissioner in place of Principal Officers.

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The Chapter III of the original Act deals with finance and audit where, Section 28A is added by this Amendment Act dealing with Administrative Expenses and percentage of amount to be spent on such expenses are to be determined and prescribed by the Central Government.

Section 39 of the Principal Act deals with provisions as to contributions payable in respect of an employee by an employer and also by an employee. The Section is amended by an Amendment Act and substituted sub Section (2) of the said Section with another one, providing such contributions to be paid at such rates which Central Government prescribes in this behalf.

Under Chapter V of the original Act relating to Benefits extended to insured persons under that Act, the Section 49 is added, with the view to extend Sickness benefit to the persons who is qualified under this section on such conditions and rates and period which the Central Government prescribes. Similarly, Section 50 is amended relating to extension of Maternity Benefits to insured women under the Act.

The Section 63 of the Principal Act is replaced by another one, which makes provision for persons who is not entitle to receive sickness, disablement benefit for temporary disablement for the days on which he works and in respect of which he receives wages. The section further prohibits extension of such benefits to the persons who remains on strike.

The Amendment Act further amends the provisions relating to penalties, wherein Section 84 of the original Act amended in so far as it relates to punishment for false statement which  was extending to three months imprisonment, now it is extending to six months imprisonment and the fine which was extending to 500 rupees and now it is extending to 2000 rupees. Similarly, some other provisions has also been amended by this Act. Moreover, this Act provides for another new provision relating to offences by Companies under new Section 86A. Besides all these amendments the Amendment provides for some other alterations or changes in other existing provisions  of the original Act and also added many other provisions deemed necessary to carry the purposes of the Original Act.

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by Faim Khalilkhan Pathan