Category Archives: Benefits

July 5, 2013 · 2:31 am

ESIC: A review in Heavens! – Episode 1

It so happened that we had a chance, recently, to visit the Heavens,  and come back too. What we saw and heard there were found to be worth-sharing. Hence this attempt. 

When we were wandering ‘lonely as a cloud’ in the Heaven, we came across a person sitting under a tree in a pensive mood for a long time. How could there be a man so sad when he was in Heaven? We went nearer to see who he was. What a pleasant surprise! The unpleasant person was Prof. B.P. Adharkar, the Father of Social Security in India. We were just watching him, without his being aware of our presence. All of a sudden, there was a flash in his eyes when he looked in a particular direction. We could then see  the reason for his lit up eyes. He got up and cheerfully welcomed the person who came near him and shook hands. He was Sir William Beveridge.

“Good Morning, Mr. Beveridge! How are you? Happy to see you here.”

“Good Morning, Mr. Adharkar! I wanted to meet you for a long time. I could make it only today. I saw you sitting as if you were lost in thoughts. What is on in your mind?  May I know that?”

“Oh, sure! I was just thinking about the way the Social Security system is functioning at present in India. How marvellous the scheme was, when you prepared the blue print for it!”

“It is okay! All of us had done our bit for the society. But what made you to be lost so much  in your thoughts today?”

“A lot, A LOT!. I do not know how to describe or where to start from. But, the only positive thing is that the present CEO of the ESI Corporation really wants to bring the organisation back on rails. But, there are many vested interests working against that objective. I do not know what the future holds for the ESIC. It is the backbone of the nation’s economy. But, people do not seem to realise its importance.Things had gone awry for quite some time. The after-effects are felt, still. The organisation must recover from those effects.”

“Oh, no! What do you say? It was you who were instrumental in preparing the ESI Act. It was prepared on the basis of the report given by you on 15.08.1944. Was there anything wrong in your report?”

“I do not know! I just prepared the report as per the standards of the 1940s. I did not know that things would move this way.”

“Can you please elaborate?”

“That is what I said. I do not know where to start. There are so many things that we have to discuss. I am just flabbergasted at the way things had gone astray for some time that it has become a Herculean task for the present day Administrators to clean the Augean Stable.”

“Mr. Adharkar, you are just increasing my anxiety and worry with all these statements. You please start from somewhere, anywhere. We are not writing a book here to narrate things in an orderly fashion. Do share what comes to your mind, and whatever you feel like saying. We can revisit the same issue again and again during our discussion, and there is no statutory bar of any kind to it.”

“Yeah, that’s true! Mr. Beveridge. Let me tell you about the Standing Committee and the ESI Corporation. I conceived of them as autonomous bodies consisting of people who would exhibit real and sincere interest in the welfare of the working population. I thought these bodies would function like brain-storming centres and decisions would be taken after no-holds-barred discussion. But, contrary became the reality. Discussions were managed. You can see the article “Executive Powers of the Chairman, Standing Committee” published in the website ‘flourishingesic.info’ in this regard.  Except a very few, the other members are not evincing keen interest and involvement in the state of affairs. Take for example, the officers who are on these Bodies as members representing their respective State Governments. Do they take part in any discussion on important matters? Do they, at least, want to get things clarified, when information that affects the System, is made available to them? No!”

“But, why? After all, they are there in these Elected Bodies as representatives of their State Governments. If there is nothing to represent for their States, why should they speak?”

“No, the meetings of these Bodies are not like the meetings of Chief Ministers for allocation of funds, where they need not bother themselves about anyone except their own States and where they do not really know much about the area of the others. These members in the Standing Committee and the ESI Corporation have voting rights. The resolutions passed by these Bodies are shown to have been passed with their approval too. Their silence gives room to declare that every resolution was passed with majority support. Nobody has barred them from voicing their opinion as members of the Standing Committee or ESIC  on any issue placed before them on the Agenda. Yet, they maintain silence, presuming that it was courtesy. But, it is really indifference. Likewise, many representatives of  employers and employees too do not bestow adequate attention to details. The Bureaucrats Vs. Political leaders episodes of the serial ‘Yes, Minister’ are re-enacted on many occasions.”

“I am simply surprised. How does it happen?”

“I am also puzzled. But, they do happen. Please take the issue of I.T. Roll-out. Every department that wants to computerise its activities starts it only as a pilot project in a small area. That way the trials and errors would not affect the routine of the organisation even for  a single day. Take for example, the Railways.  Did they stop any train even for a single day, to computerise their activities? But, in the ESIC the inspection work and the work in many other areas came to a standstill for long, even for the preparation and supply of Identity Card. Did anyone assess the cost-benefit ratio of this kind of approach, as this work was done simultaneously throughout the nation. So many wrong orders were issued affecting not only the office work but also the insured persons and their family members for the photo sessions. Yet,these ID cards have not become fully functional. These cards must prevent duplication, in the ideal situation. But, that ideal situation has not yet come, in spite of the passage of more than four years. The finger prints and the other bio-metric data are not used for de-duplication process. Employers and Employees have found various methods to circumvent the System. The mounds and mounds of ID cards returned undelivered speak volumes of the flaw in the planning. If only there had been pilot project, the damage would have been limited only to a small area. You know, I have, so far, told you only about the ID card matter. I have not told you anything about the defect in the System in preparing Payment Dockets in the Branch Offices or processing the Inspection Report in the Insurance Branches, or others.”

“Mr. Adharkar, you, surely, have reason to feel worried. But, it does not matter much, I think. After all, you can dump the I.T. Roll-Out and go back to the time-tested manner in which your Scheme was functioning earlier with pen and paper. Take heart! Not much has been lost.”

“I agree with you Mr. Beveridge. The Airforce of the USA provides a precedent in this regard. I saw one article titled ‘BOOTS or COTS’ in this regard in the website ‘flourishingesic.info’.’ But, the white elephants, the ESIC Medical Colleges worry me so much. The way the construction work was started even before the Parliament amended the Act, the way Deans were appointed, the way money was spent, the way some projects were abandoned midway, the way the authorities have been left to wonder now, how to make use of the buildings constructed for the abandoned Medical Colleges are really making me apprehensive.”

Mr. Adharkar continued. “While formulating the ESI Scheme, I had, very consciously, specified eleven Fundamental Principles. They are, in fact, sound directive principles to be kept in view by the Government not only for any social security measure to be introduced through the ESI Scheme but also on any labour-welfare related matter. One of the Fundamental Principles is that the proposed scheme “must not be too ambitious in the beginning”. But, this fundamental thing has not been examined on record before starting I.T.Roll-Out all over the nation or before starting construction work for so many medical colleges.”

“I do understand. …(Looking off into the distance)  Oh, you see there comes the trio, Mr. Wagner, Mr.Murray and Mr.Dingell, the architects of the Social Security Scheme in the USA. Let us hear them too.”

These three gentlemen arrive on the scene. They join the discussion after exchange of courtesies.

“It is not just these things”, continues Mr. Adharkar, “The way the Ministers wanted to interfere in the day-to-day administration of the autonomous body by influencing the transfers of officers is more worrisome. The evil effects of such interferences had been felt in the past and had been narrated in detail in the agenda for the Standing Committee in the year 2004. It was only Mr. Chandrasekar Rao who allowed the Rule of Law to prevail in the matter of transfer of officers. His period as Chairman of the ESI Corporation was short. But, it had a telling effect in establishing Rule of Law in the matters of transfer of officers. He said in the open meeting of the ESI Corporation that there would be no interference from the Minister or Ministry in the matter of transfer of officers and the Director General would, as the Team Leader, be free to decide the issues. The Transfer Policy assuring equality for all, was enforced thenceforth. But, as I said, his tenure was short. Again interference in the matter of transfers started. There became so many power-centres de facto. Such interference by the Ministers and other power-centres would sink the organisation and we can discuss about it in detail later”.

“Yes, yes. What you told, so far, appears to be only an introduction of various things that had taken place. The burden on the shoulders of the well-meaning administrators of the present  to put things again in proper shape and perspective is just enormous.    But, I feel not only worried but also tired just by hearing these things. Anyway, what about the financial aspects, especially with so many medical colleges? There would be heavy running costs without any income from these medical colleges. Was that issue analysed on file before the proposals were submitted? What would be the long term effect?”, said Mr. Beveridge.

At this moment, Mr. Wagner chipped in. “Friends, have you heard of a scheme in the USA started by one Mr. P….?”

(Continued in Episode 2.)

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Filed under Amendments 2010, Benefits, For Trainees, Transfers

March 21, 2013 · 5:23 pm

Appellate Authority u/s 45 AA of the ESI Act – Part I

The following are excerpts from the application sent by Mr. P. Ramar on 10.10.2009 to the Ministry of Law on the amendment then proposed for having an Appellate Authority under the ESI Act:

  1. Sec. 74 of the Principal Act provides for a full-time domestic tribunal as part of the ESI Corporation exclusively for deciding the cases pertaining to the ESI Corporation. The expenditure pertaining to that Tribunal was intended to be met from the ESI Fund as per Sec. 28 (vii) of the ESI Act, 1948 which authorises that the ESI Fund shall be expended for “defraying the cost (including all expenses) of the Employees’ Insurance Courts set up under this Act”. Accordingly, full time E.I.Courts had been set-up and were functioning upto the mid-seventies, although the expenditure of such E.I.Courts had been met only by the concerned State Governments. At that time, the disposal of the cases was fast and the E.I.Courts functioned as specialized institutions on matters pertaining to the ESI Act.

2. Now, all of a sudden a provision is attempted to be made for having an Appellate Authority with reference to the orders issued under Sec. 45-A pertaining to Contribution. The Statement of Objects and Reasons for the Bill do not explain the problems, if any, faced by the organization for want of such an Appellate Authority and the necessity for such an amendment.

3. The Bill is totally silent with reference to Sec. 85-B under which the same ESI Authorities issue orders regarding Damages by exercising the same powers and extending the same opportunity to the employers as per the principles of natural justice.

4. The fact is that there is no need for an internal appellate authority under Sec. 45 and the present proposal as per Clause 9 is only intended to preclude the E.I.Courts from playing their legitimate role.

5. All that the ESIC has to do, under Sec. 74 is

  1. a)to ask the State Governments to make the E.I. Courts as full-time courts to attend only to the cases pertaining to the ESI matters;
  2. b)to ask the State Governments to nominate judges for these courts with reference to the EI Court rules already framed by them,
  3. c)to inform the State Governments that the ESI Corporation would meet the entire cost of running the courts from the ESI Fund.

6. But, the ESI Corporation had, over a period of time, simply left it to the concerned State Governments to do whatever they pleased. No money has been spent from the ESI Fund for running the E.I. Courts. So, the State Governments have, instead of appointing full-time EI Courts simply allotted the work to the Labour Courts. The judges of the Labour Courts, overloaded already with their main work, began to consider the ESI work as a part of their other works. Because of this overload, there is significant delay in the disposal of cases.

7. The prime factor for consideration is that the authors of the Principal Act had very wisely understood the need for having an appellate authority who will not be a civil court but in-house tribunal. But, later, because of the ignorance and inaction of the ESI Authorities of the nuances of the subject-matter, the State Governments had not been informed of the financial assistance available to them as per Sec. 28 (viii). As a result, the ESI Corporation had been suffering all along because of the delay in the disposal of cases.

8. Delay in the disposal of cases cannot, therefore, be a reason for moving an amendment as per Clause 9 of the ESI (Amendment) Bill, 2009. Proper understanding of the significance behind Sec. 74 and Sec. 28 would help set-up full-time EI Courts and clear the arrears. The present amendment is an attempt to make things chaotic without enforcing Sec. 28.

The Clause 9 of the ESI (Amendment) Bill, 2009 introduced in the Lok Sabha is reproduced below:
9. After section 45A of the principal Act, the following section shall be inserted, namely:—

“45AA. If an employer is not satisfied with the order referred to in section 45A, he may prefer an appeal to an appellate authority as may be provided by regulation, within sixty days of the date of such order after depositing twenty-five per cent. of the contribution so ordered or the contribution as per his own calculation, whichever is higher, with the Corporation:

Provided that if the employer finally succeeds in the appeal, the Corporation shall refund such deposit to the employer together with such interest as may be specified in the regulation.”.

Para 2 of the Memorandum Regarding Delegated Legislation is reproduced below:

2. Clause 9 of the Bill seeks to empower the Employees’ State Insurance Corporation to provide an appellate authority by regulation for hearing appeal from an employer against the determination of contribution payable in respect of employees and to specify the interest on the deposit made by the employer in case the employer is finally succeeds in the appeal.

Para 5 of the Memorandum Regarding Delegated Legislation is reproduced below:

5. The matters in respect of which the rules or regulations, as the case may be, to be made, are of administrative and procedural details and it is not practicable to provide for them in the Bill itself. The delegation of legislative power is, therefore, of a normal character.

9. There is no provision in the Bill to provide for a Section similar to Sec. 45 – A (2) to make the orders of the Appellate Authority enforceable.

10. Moreover, the Amendment Bill seeks to vest the power in the ESI Corporation to decide the (a) Constitution and appointment of Appellate Authority, (b) Powers and (c) procedure to be followed by the said authority. These matters have been left to the purview of delegated legislation.

11. If the ESI Authorities had moved the proposal by giving the impression that the EI Court is a Civil Court and that there is a requirement for an intra-departmental remedy for reviewing the orders issued under Sec. 45 A, their contention is wrong.

  1. a)“The E.I. Court is not a Civil Court but a domestic tribunal specially constituted for the purposes of deciding any controversy that may arise and the matters enumerable in Sec. 73 A”. (ESIC Vs. Zeckra 1969 (36) FJR 110.).
  2. b)Punjab High Court has held that the E.I. Court is not an ordinary civil court but a domestic tribunal specially constituted for the purpose of deciding any controversy that may arise in the matters enumerated in Sec. 75 of the Act.(ESIC Vs. Ram Lakhan, AIR 1960 Punj.559). The Bombay High Court has described the E.I.Court as a persona designate.
  3. c)In Virendra Kumar Vs. State of Punjab (AIR 1956 SC 153), the Supreme Court has made the following observations: “It is a familiar feature of modern legislation to set up bodies and tribunals and entrust them with the work of judicial character, but they are not courts in the accepted sense of that term though they may possess some of the trappings of a Court.”
  4. d)The mere fact that a judicial officer presiding over a Civil Court is appointed a judge would not, while he is performing his functions as a judge of the E.I. court, make him a civil court. “All the powers of a Civil Court cannot be exercised by an E.I. Court and only such power has been conferred by sub-section 1 of Section 78 upon it as are common with the powers of a civil court.” (ESIC vs. Shashi Kant Arc Khandi and another 1983 (47) FLR 269). There are only deeming premises made by Sec.78 (4) for the enforcement of orders of the EI Court in the same manner as done for the orders of Civil Court.

12. The “Commentaries on ESI Act, 1948” by M.R. Mallick published by the Eastern Law House, Kolkata in the year 1974 analyses the issue in depth and you could find more references in that book. It would thus become clear that the Principal Act has already placed a Domestic Tribunal for immediate remedy with reference to any issue that may arise between the employers and the ESI Corporation.

13. There is, therefore, no need for an additional departmental authority to become an appellate authority to decide any issue that may arise between the employers and the ESI Corporation under Sec. 45A. Yet, the Ministry of Law has become a party to the decision to vest some arbitrary powers in the ESI authorities to nominate the Appellate Authorities even without examining the fact that the ESI Corporation is not utilizing the powers vested in it to establish a full-time Tribunal under Sec. 74 meeting the required expenditure for it under Sec. 28.

14. The present bill aims at obtaining the approval of the Hon’ble Members of the Parliament to appoint an Appellate Authority in the ESI Corporation for the purpose of revising and reconsidering the orders under Sec. 45-A without informing the Hon’ble Members the manner in which such Appellate Authority is going to be appointed. The Bill aims at delegating arbitrary power to the Corporation to do as it pleases in such an important quasi-judicial matter.

  1. 1.Please, therefore, intimate, with reference to your office records, the details of the difficulties faced by the ESI Corporation, at present, because of the absence of any departmental officer to function as an Appellate Authority.
  2. 2.Please intimate whether the Ministry of Law had actually examined beforehand the manner in which the ESI Corporation is going to frame the delegated legislation regarding the appointment and powers of the proposed Appellate Authority.
  3. 3.Please intimate whether an Appellate Authority can be appointed and vested with powers as per Delegated Legislation when the Inspector and the Quasi-Judicial Authority and the E.I. Courts are appointed under Sec. 45 and Sec. 74 respectively and are deriving powers as per the Principal Act.
  4. 4.Please intimate whether the Ministry of Law is aware that the same officers who pass the orders under Sec.45-A regarding contribution happen to pass orders under Sec. 85-B regarding damages also following the same principles of affording the opportunity of principles of natural justice. In that case, please intimate whether you had examined the reason behind the fact that the ESI Authorities did not bother themselves about having the same Appellate Machinery regarding the Damages ordered under Sec. 85-B of the ESI Act, 1948.
  1. 5.Please intimate whether the orders of the proposed Appellate Authority under Sec. 45 AA are enforceable without there being any provision under the said Sec. 45 AA, corresponding to the Sec. 45-A (2) available under Sec. 45 A.

A sum of Rs.10 towards fee under the Right to Information Act,2005 has been paid in the form of Indian Postal Order for Rs.10/- drawn in favour of Secretary, Ministry of Law payable at New Delhi the details of which are asunder:

 

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Filed under Administration, Benefits, E I courts, For Trainees, Inspections

March 10, 2013 · 11:23 pm

ESIC must monitor ESIS in the States

The ESIC provides five main benefits to the insured population. There are many other additional facilities provided. The Medical Benefit is provided mainly through the State Governments. Adequate funds are provided to the State Governments in advance every quarter.

As the ESI Corporation collects the contribution from the workforce and the employers, the beneficiaries make only on the ESI Corporation answerable for the proper administration of Medical Benefits. But, the ESIC does not, practically, have any monitoring mechanism to oversee the exact manner in which the funds released by it are spent by the State Governments.

There are many dispensaries where even the essential medicines are not available, when the procedure demands that the medicines must be indented for in advance to meet the requirements of subsequent quarter and the funds are released in advance.

The ESI Corporation must, therefore, arrange to have a Monitoring Committee of four officers, two from the State Government concerned and two from the ESIC, one of them being the Deputy Director (Finance) of the concerned Regional Office. That system will ensure that the funds released are utilized only as per the ESI norms. Releasing the advance must be with reference to the clearance given by this Monitoring Committee.

 

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Filed under Benefits

December 13, 2012 · 8:56 am

Medical personnel for ESIC Medical Colleges

A Medical graduate who passed the examination for recruitment of Insurance Medical Officer Gr. II in the ESI Corporation presents himself before an officer in the ESI Corporation and says, “ Sir, I have been selected for recruitment in the ESI Corporation. I have also been selected for admission to the PG course in the PGI, Chandigarh. What shall I do?”  Without any hesitation, the well-meaning officer advises him to join the PGI. It happened years ago.

In the same year another Medical graduate enters into the office of the Railway authorities. He has also passed two examinations. One, the examination for recruitment as Medical Officer in the Railway hospital and two, the examination for admission in a Post Graduate Medical course. He seeks advice from the Railway authorities. He is advised by the authorities to join the Railways first. And, immediately, thereafter, he is sanctioned Study Leave and permitted to undergo the post-graduation course, keeping lien in the Railways.

Are there provisions in the Leave Rules? Apparently, there is no provision at — first sight. An employee should have put in, at least, three years of service to be given Study leave without pay. So, a new entrant cannot eve n think of doing post-graduation. But, there is a provision for relaxation in Rule 65 of the CCS (Leave) Rules. The Railway authorities invoked the similar provision in the Indian Railway Establishment Code to permit that new entrant to prosecute higher studies.  Rule 557 in Chapter 5 of that Code contains Leave Rules for the Railway employees. The authorities there got a bond executed by that candidate as provided in Rule 530(3)(a)(b) therein.

The candidate has nothing to lose. Railways have everything to gain. They would get a P.G. level doctor after three years who will be with the Railways for a minimum period of five years and draw the salary of only an entry level doctor without the PG qualification. Continue reading →

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Filed under Administration, Benefits, Medical College Bond

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October 14, 2012 · 10:08 pm

Mr. K.V. Ramana Murthy, former D.D,on the Benefit Rates

(Mr. K. V. Ramana Murthy has given comprehensive reply to the Post titled ‘Enigmatic Amendment of 2011 that affects the Benefits’. His response is displayed here as a separate Post)

The amendment was based on the recommendations of the Venkatesh Committee  on ” Simplification of forms and procedures”, which reads as follows:Sub: – Simplification of Forms and Procedures- Suggestion for replacing the   “Standard Benefit Rate table’ in Rule 54 of the ESI (Central) Rules, 1950”

With simple procedure for calculation of ‘Daily rate’ of Cash benefit.

Continue reading →

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Filed under Amendments 2010, Benefits

September 27, 2012 · 12:16 pm

Enigmatic Amendment 2011 that affects the Benefits

There was, all of a sudden, an amendment, which came into force from 01.07.2011, stating that it was intended to simplify the term ‘average daily wages’ mentioned  in Rule 2 (1) (1-A) of the ESI (Central) Rules, 1950.  The definition in this sub-rule is meant for regulating the rates of various Benefits provided under the Act while the definition in in sub-rule 1-B is for deciding coverage.

The need for such simplification, after the vigorous efforts to computerize all works of the Branch Offices is not clear. But, the fact is that that amendment has reduced the rates of benefits which were available to the insured population up to 30.06.2011.

After 01.07.2011,

  1. the employees receiving wages at the lower level like Rs. 5000 or Rs. 8000 etc., p.m. get less amount when they seek two benefits, Sickness and Maternity;
  2. the employees in higher income group get less amount of benefit only for Maternity;
  3. but, all of them get more benefits for Disablement.

Natural justice demands that no amendment should result in reduction of benefits, unless such reduction is actually contemplated and discussed openly before making such amendment.

Can there be reduction of benefits through indirect amendments without making the public aware of it through categorical proclamations, beforehand?

How can the bar under Sec. 61 of the ESI Act be justified, hereafter?

Readers are welcome to share their enlightened opinions!

Please Click on the small Presentation on Amendment that affects Benefits

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Filed under Amendments 2010, Benefits, Powerpoints

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