Tag Archives: social security

Maternity Benefits under SS Code : Piloting it the wrong way ! – Part 1

 

Maternity Benefit slide_page-0001 (2)

The year was 1983. The ESI Corporation wanted to make some path-breaking changes and to bringing in suitable amendments. The Contribution Card system with stamps had already been replaced with the Contribution Card system with cash. The issue now was that the classification of employees into three sets, viz., A, B and C, was to be given a go by. Common Contribution Period and Benefit Period was being contemplated. The Hqrs. Office of the ESI Corporation asked the Regional Directors to offer their opinion. The Regional Directors asked, in turn, the field officers the Managers of the Local Offices and the Insurance Inspectors to explain their stand. The outcome was the evolvement of law which ensured the introduction of new system providing for all the practical difficulties in its implementation.  The opinions offered ensured that the procedure evolved was not only not cumbersome but also one that advanced the purpose of the Act.

Hear the subordinates

Such a practice of obtaining opinions from subordinates in the field was followed, again in the year 1988, before certain vital amendments were made in the ESI Act, in the year 1989. The management principle recommended by Mr. Gordon M.Bethune, former Chief Executive of the Continental Airlines was to ‘hear the subordinates’. For, he knew that they knew more about the work and the weak-spots.

Gordon Continental Airlines

Mr. Bethune said, “I was a mechanic in the Navy. And mechanics in the Navy are like mechanics in airlines. You may have more stripes than I do, but you don’t know how to fix the airplane. You want me to fix it? You know how much faster I could fix the airplane when I wanted to, than when I didn’t want to? So I’ve always felt that if you treat me with respect, I’ll do more for you.”…”And we never lied. You don’t lie to your own doctor. You don’t lie to your own attorney, and you don’t lie to your employees.” (Corner Office -Adam Bryant – 02.01.2010 – New York Times).

Legislative Policy,  kept a mystery

But, here is a bureaucracy, now, at the centre, especially in the Ministry of Labour & Employment and in the Ministry of Law & Justice, which does not hear even the Corporation, the supreme body of the ESI Corporation, let alone its Director General or his subordinates. Because many of the provisions in the Bill No. 375 of 2019 are intended to destroy the well-conceived social security network that provides social insurance and enable the private players to loot the masses in the name of commercial insurance. The bureaucracy is, therefore, afraid of the proper law-making process.

What is more? Even the Director General of the ESI Corporation and the Central PF Commissioner of the EPFO were not made aware beforehand and at every crucial stage, what was being drafted by the Drafting Team of the Labour Code, although the Ministry of Labour enacted a drama of roping in some junior officers from these organisations to be part of the team. More of this can be read in the following links:

https://flourishingesic.info/2017/05/25/slave-labour-code-unlimited-rights-to-the-drafting-team/
https://flourishingesic.info/2017/05/26/the-drafting-committee-of-the-constitution-vs-the-drafting-team-of-the-labour-code/
https://flourishingesic.info/2017/05/29/drafting-team-was-trying-to-finish-off-the-epfo-was-the-cpfo-aware/

These two ministries have been made captives by their political masters, and have been made to prepare a law that is intended to serve only those private interests and not public interest. In the absence of publication of the Legislative Policy, the Bill No. 375 of 2019 deserve only be categorised as a Private Bill dressed up as a Bill mooted by the government.

Innumerable dubious words, phrases and clauses inserted on the sly at various places for wrong reasons in the said Bill, indicate clearly that the intention of these Ministries is not to give priority to run the ESIC corruption-free  but to destabilise it and provide a ground for the private players to cheat and loot the public. These bureaucrats forget or suppress that the ESI Act does not prevent private players from operating even now on the same field, provided they are ready to provide benefits which are superior or substantially similar to the ones provided by the ESI Corporation. That they are not interested in giving priority to eradicate corruption would become evident from the manner in which the CAG himself has not filed counter-affidavit in the W.P. 35184 of 2016 pending before the Hon’ble High Court of Madras for the past four years.

Pulling wool over the eyes of law-makers

The Statement of Objects and Reasons and the Notes on Clauses, justifying the Bill No. 375 of 2019 are full of half-information, misinformation, disinformation and no-information on various core issues. They are intended to deceive the parliamentarians and get them vote for this dubious Bill to make it a law. The method of manipulation adopted by them in meddling with the Maternity Benefit provisions, through this ill-conceived Bill would give real shock to every well-meaning citizen. The unholy nexus between the ‘educated’ officers in these Ministries and the ‘private interests’, causes the former to assist the latter by subverting the due process of law, and enacting laws which are clearly against the interests of the working women whose living conditions do not matter for these high-paid officials.

Their actions bring into existence a law that would never attain its proclaimed goal but would ensure that the society is made chaotic and insecure. There is no explanation anywhere as to why and by whom and at whose instance various unlawful tinkerings have been made in the ESI Scheme, without any written direction to anyone by anyone. What has happened is a conspiracy by the top officials against the large masses of the nation whose voice cannot be heard and whose living conditions do not matter for these officials. All these officials are required to be made accountable for such commissions and omissions. They are the persons responsible for piloting the highflying aircraft to disastrous crash.

Clause 32 (1) (b) and Clause 32 (3) of the Chapter IV read with the entire Chapter VI of the Bill on the Code on Social Security, 2019 (Bill No. 375 of 2019) in the matter of Maternity Benefit provide a classic example of collusion of various vested interests to deny the large multitude of workingwomen of the nation the Maternity Benefit that was available to them under the existing provisions of the ESI Act for decades and decades.

Shock ad infinitum

The manner in which questionable words, phrases and clauses have been inserted at various places, in the Bill No. 375 of 2019, with the intention of cheating the workforce, causes a lot of depression and annoyance even for a reader. One wonders how the educated bureaucrats could stoop so low to deceive the poor people of the nation and to please the rich anti-labour elements and prepared such a draft Code to make patently unlawful things lawful. It is very sad and it causes depression and annoyance in the reader. One has to take a lot of efforts to motivate oneself to come out of such depression, before and for writing about the social impact of such cunning insertions in the Code.

The text of the Bill No. 375 of 2019 shows that the persons behind the Bill wanted to drastically reduce the quantum of Maternity Benefit available to the working women and make it just a farce. And the bureaucracy obliged willingly (Details in Part 2).

ESI Act and MB Act do not go together

When the ESI Act 1948 is in force in a factory or establishment, there is be no need or scope for the Maternity Benefit Act, 1961 to be applied to the Insured Women of that unit. For example, when the wage ceiling for coverage under the Maternity Benefit Act is Rs. 15000 pm, and the wage ceiling for coverage under the ESI Act is Rs. 21000 pm, there will be no need for the Insured Women covered under the ESI Act to seek benefit under the Maternity Benefit Act. The Maternity Benefit Act, therefore, does not operate and is not applicable to the said factory or establishment, as had been made clear in the Statement of Objects and Reasons of the Maternity Benefit Act in the year 1961 itself.

Yet there was the need for the Maternity Benefit Act to be in existence, as all the factories and establishments everywhere in the nation were not covered or coverable under the ESI Act.  The ESI Act could not be implemented and is not implementable everywhere, in practice, unless there was a cluster of factories or establishments justifying the setting up of a dispensary with doctors, nurses and para medical staff ( or at least a mobile dispensary ) before implementing the provisions of the ESI Act in that area. Consequently, the factories and establishments in outlying areas were made to enforce the Maternity Benefit Act, 1961, for the women working there. In other words, whenever the ESI Corporation wants to extend its operation to a new area where there are adequate number of factories and establishments and the families of insured persons, it is required to notify through the gazette of its intention to implement the scheme in that area. Such an area is called as “Implemented Area”. The ESI Act can thus be extended only in phases.

That was the reason the phrases, “different dates” and “different parts” have been inserted in Sec. 1 (3) of the ESI Act, in the year 1951 itself very thoughtfully.  But the present Bill on the Code on Social Security does not show that it took into account the concept of “Implemented Area” at all, when its Clause 1 (3) it refers to the applicability of the Code which is pending consideration of the Lok Sabha now.

As a result, one has to presume that the persons who drafted the Bill No. 375 of 2019 intended to enforce the provisions of the present ESI Act everywhere throughout India at one go, through the aforesaid Clause 1 (3) and Chapter IV of the said Bill. Well, but one does not understand the need, then, for the enforcement of the provisions of MB Act, 1961 anywhere in India, through Chapter VI of the same Bill.

ESI Act and MB Act can go together

Still, it is possible to enforce the enforce the provisions of the Maternity Benefit Act, 1961 (proposed Chapter VI of the Bill No. 375 of 2019) in the same factory in which the ESI Act, 1948 (proposed Chapter IV of the same Bill) is in force, if the wage ceiling for coverage of working women under the Maternity Benefit Act (proposed Chapter VI) is more than the wage ceiling prescribed under the ESI Act (proposed Chapter IV). But such decisions had never been taken by the government during the last 59 years, after the Maternity Benefit Act came into force. The liability to pay the Maternity Benefit under the ESI Act, 1948, is taken over by the ESI Corporation while the liability to pay the same benefit under the MB Act, 1961, is on the shoulders of the employers, with varies consequences.   The wage ceiling for coverage under the MB Act, 1961 had, therefore, been kept always below the ceiling provided under the ESI Act, 1948.

In other words, the ESI Act and the MB Act cannot apply to the same factory or establishment as long as the wage ceiling for coverage under the MB Act remains lower than the ceiling provided under the ESI Act.

In other words, the ESI Act and the MB Act cannot apply to the same set of working women at one and the same time. Consequently, Chapter IV of the Bill No. 375 of 2019 and Chapter VI thereof cannot apply to the same set of working women at one and the same time. The provisions of Chapter IV would alone prevail.

Definitions and absence of definitions

While these are vital technical incongruities in the Bill No. 375 of 2019, with reference to the definition and absence of definition for crucial words, which do have far-reaching consequences, the definition of the term ‘wages’ given in the said Bill and is made applicable for Chapter IV and VI make the entire Code a chimera. The Code simply pretends to provide Maternity Benefit to working women while it actually reduces drastically the benefit now available to them both under the ESI Act, 1948 and the Maternity Benefit Act, 1961. (This happens not only to the Maternity Benefit but also to all other benefits provided under the ESI Act, at present).

\The significance of such lapses in the Bill will be placed before the readers in the upcoming pieces, pertaining to Maternity Benefit, separately one by one, with reference to various court verdicts under the MB Act, 1961. They are stories of human tragedies showing the conflict of interest in the functional relationship between the benefit-needing employees and the profit-seeking employers (who prefer donating hefty amount to the political parties and bribing the politicians and officials while, at the same time, reducing the wages and total strength of their staff). Numerous instances of such cruelties are on record throughout the world indicating the uncivilised nature of the Strong against the Weak and Meek.

It would be appropriate in the context to recall an incident that had happened more than a century ago when an employer did not want to pay Disablement Benefit to his employee who was suffering from life-threatening employment injury sustained by him during the course of and out of his employment in the factory of the employer concerned. The employer chose rather to pay a hefty fee to a ‘clever’ lawyer, who used all the dishonest means to enact a drama in the court and had, sadly but successfully, helped the employer deny the legitimate dues payable to the poor workman. The present Bill No. 375 of 2019 is, directly, leading the Indian society in that undesirable direction.

Employee Vs. Employer

It was the 19th century England when Commoners chose to sit and suffer injustice in silence than to stand up and fight against in the costly courts. Not every employer in England was the noble George Cadbury. The money power of merciless employers and the cleverness of dishonest lawyers worked against the workmen.   As a result, cases were decided not on facts.

There was an employee of a railroad company who had sustained injury during the course of employment. He was denied compensation by the employer-company. He approached the court seeking remedy. His case was that the accident had resulted in his becoming a victim of neurasthenia or nervous prostration. The evidence produced by him showed that because of that problem, his mental and physical health had deteriorated rapidly. It was also proved during the cross-examination of an expert doctor that the workman was suffering from neurasthenia. The expert witness informed the Court that the workman suffered no pain when pricked with a pin on top of the head and that was a sure sign of his suffering from neurasthenia.

The lawyer for the defendant-company of the employer began his argument. He was “an ex-judge, somewhat advanced in years and exceedingly resourceful”. Incidentally, “he was as bereft of hair as the oft-cited billiard ball. When it came time to argue the case to the jury, he proceeded to expound the facts with clearness and vigour for a considerable length of time and finally approached the subject of neurasthenia.”

He paid his respects to the learned doctor who was called in as an expert witness. He then expressed his surprise and astonishment at the conclusion arrived at during the examination that “one who did not experience pain by the prick of a pin on the top of the head was a neurasthenic and rapidly progressing to complete mental decline.”  He, then, informed the jury that he was under the impression that he was a man of reasonable physical vigour and had always supposed that he was still possessed of his normal mental faculties. But he became afraid that he discovered that he himself was a hopeless neurasthenic as per the evidence given by the expert doctor. If he was a patient suffering from neurasthenia, he had no business trying lawsuits, but “should be preparing rapidly to meet his Maker”, he added.

“Thereupon he turned back the lapel of his coat and extracted good-sized needles, which he promptly stuck in the top of his head. He kept this up until he had some ten or twelve needles sticking in the top of his bald head and looked like an animated pin cushion”. He finished his argument.” Everyone was stunned.  The verdict returned was “in favour of the defendant”, i.e., the employer.

But what had happened was that the lawyer had got a portion of his scalp injected with cocaine with the help of a physician to avoid feeling pain when sticking the pins on his head. He had thus cheated the Judge, the Jury and the Law with the only aim of denying the legitimate compensation payable to the workman who was actually suffering from neurasthenia as a result of the employment injury sustained by him.

In later years, the lawyer confided to the same judge, Mr. Justice Faville, “that the last needle got outside the area of the cocaine which his physician had hypodermically injected into his scalp just before he began his argument and had almost unmasked the hoax”. He had to pretend hard that there was no pain although the last needle gave him very sharp pain.  (Ref: Oxford Book of Legal Anecdotes – Michael Gilbert – Oxford University Press –Pages 10-11). The hapless worker simply suffered and there was no one to help him.

The Questions and the Answers

Who will save such workers from the tentacles of such employers and advocates, if not the State? What else should be the responsibility of the State? Why should the State abdicate its Constitutional responsibility and privatise the social security in India? Why should the people of a nation allow its rulers to make the State abdicate its responsibility to provide Social Security?

In the Indian context, which employee of the nation asked for lesser Maternity Benefit than what is being provided under the ESI Act? Should not the bureaucrats be made to give reply to this question in the appropriate forum?

Will these ‘educated’ bureaucrats who give all impressions that they prepared the draft Code without any legislative policy given by anyone, and have exercised unlimited discretion to prepare the Code as they pleased, allow the already evolved democracy in India to survive and allow the ESI Corporation to flourish?

Atifete 2

 

  • Let the Indian government hold a survey among the Insured Persons and the beneficiaries of the ESI Corporation first in a honest and transparent manner. A cursory survey done in Mumbai in the latter 1990s showed that 85% of the insured persons wanted the ESIC while 85% of the employers did not want. That sums up the entire picture.
  • Let them make the CAG, who is shying away from the W.P. 35184 of 2016 for the past four years, to file counter-affidavit at least now, that the bureaucratic cartel that colluded together in mismanaging the funds involving thousands of crores would come to light.
  • Let them allow the ESIC to be run corruption-free! The ESIC will, then, reach greater heights!!

(Contd.)

Images; Courtesy: Web.

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Labour Code on Social Security 2.0 : Conference on Building and other Construction Workers at Vijayawada – August 2019 !

The Labour Code on Social Security 2.0 released in March 2018 does not show that the central bureaucrats who prepared it developed any empathy with the  working population, even after they received inputs from the people with reference to their earlier code released in 2017. That they are acting as per the directions of some power-brokers becomes clear from the directionless draft.

Those power brokers pretend that they are working in the interests of the employers. They do not even pretend that they are interested in the welfare of the working class. As brokers they are interested only in themselves. And, the bureaucrats who do not apply their mind before acting at the behest those power brokers and have prepared this second version of the labour code on social security, are creating chaos in the nation. A team of power brokers feel that the social security system has been leased out to it.

Let them know that Sec. 1 (4) & 1 (5) of the ESI Act are intended to cover all the segments of the working population , tackling all problems with practical solutions, gradually. This Labour Code on Social Security is totally unwanted and unnecessary.

 

A responsible society would not keep such a law on record .

Vijayawada Presentation 2019

 

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Labour Code: Plea for publicising Draft Rules, Regulations, Schemes & License !

05.04.2017

To

The CPIO (Labour Law Reforms),

Ministry of Labour & Employment,

New Delhi – 110001

Sub: Application under RTI Act – Draft Labour Code on Social Security & Welfare – copies of Rules, Regulatios and Schemes – requested.
Ref: Memo No. No. Z-13025/ 13 /2015-LRC dated 16.03.2017 of the Ministry of Labour & Employment.

Sir,

I invite your kind attention to the reference cited in which the Draft Labour Code on Social Security & Welfare was put on public domain on 16.03.2017,  in the website of  the Ministry of Labour and Employment, Government of India, New Delhi. The Draft Labour Code published is not an all-inclusive document and there are many grey areas. As the nature and the quantum of various benefits (except the Disablement Benefits and Dependants Benefits) have not been specified in the Code/ Act itself, the relevant subordinate legislations (the Schemes, Rules and Regulations including licenses and essential formats) should be put in the public domain along with the Code. But, it has not been done so.

  1. I, therefore, request you to kindly furnish the following information under Sec. 6 of the Right to Information Act, 2005 or put them in public domain in the website of the Ministry along with the Draft Labour Code concerned.
  • Kindly supply the copies of the format of the proposed License (containing the Terms and conditions imposed by the Government on the agencies) referred to in Sec. 88 and 89 of the said Draft Labour Code on Social Security & Welfare;
  • Kindly supply the copies of the proposesd Regulations and the Schemes referred to in Sec. 24 of the said Draft Labour Code on Social Security & Welfare.
  1. I have to state that although it is not necessary to provide, the reason why a citizen asks for certain information as per the RTI Act, 2995, I feel that the facts narrated in the Appendix would facilitate the authorities to supply the information requested for besides highlighting the extent of public interest involved in making the contents of the aforesaid documents public.
  2. I send herewith Postal Order for Rs. 10 being the fee payable under the RTI Act, drawn in favour of the PAO(MS), Ministry of Labour & Employment, New Delhi.

Yours faithfully,

Encl: Appendix and Postal Order

=========================================================================== 

Appendix

Facts that necessitate seeking information regarding the proposed Subordinate Legislations, the Rules, the Regulations (including the license formats) and the Schemes

The Act of 1948 Vs. The Code of 2017:

1. When the ESI Act was enacted in the year 1948, it was venturing into a new area. So, the Act itself assured the people, through its Sec. 46, of the five major kinds of benefits and also the quantum of those benefits that would be made available through the enactment. It was later, in the year 1989, that the quantum of benefits, quantum of contribution and wage limit  were taken to the Rules to facilitate easy revisions. When, the present piece of legislation, the proposed Labour Code, is intended to replace the existing social security machinery, people become apprehensive and want to know whether they stand to gain or lose by that new system.

2. The Executive, therefore, cannot bring in a truncated version of the proposed system in the form of Code and ask the MPs to vote. But, that, exactly, is what the bureaucracy has, exactly, done through this Draft Labour Code. Sec. 24.5 of the Code enumerates the nomenclature of the benefits that would be made available to the workforce. But, the quantum of benefits and the nature of machinery through which such benefits would be provided have not been made known. These issues have been kept reserved for the Executive to make Subordinate Legislations later.

3. But, in all probability, the draft subordinate legislations, (a) the Rules, (b) the Regulations including the termns of conditions of license and (c) the Schemes would, already, have been prepared and kept in the Ministry. The non-publication of those drafts along with the Draft Code, for public debate gives the bona fide impression that the forces which are behind  this move, want to hide many vital aspects of the proposed social security system away from public knowledge until they get the Code passed by the Parliament and acquire power to do whatever they want through Subordinate Legislation. Or, i.e., if they have not yet prepared those draft Rules, draft Regulations, draft Schemes and draft licences, it would imply that these forces want to destabilise the present social security structure and bring in something which is not known even to themselves.

A service organisation is converted into business organisation:

4. I submit that the ESI Corporation is not a business organisation preparing profit and loss account. It is a service organisation preparing income and expenditure statement. But, the very wordings of Sections 2.58, 2.68, 2.101, 2.109, 2.123 and Sec. 88. show that the intention behind the Code is to handover the operative side of the scheme to private businessmen who enter into the field with profit motive.

5. Sec. 88.1 of the Code says that the “Director General may, by granting a License under this Code, permit any organization or person to act as an intermediate agency for all or any of the purposes” mentioned against each of the six agencies enumerated therein. Those agencies are: (a) Fund Manager Agency, (b) Point of Presence Agency, (c) Service Delivery Agency, (d) Benefit Disbursement Agency, (e) Record Keeping Agency and (f) Facilitation Agencies.

6. Sec, 88.3 of the Code says that “an intermediate agency shall function in accordance with the terms of its License and the Regulations”. Sec. 88.4 implies that the terms and conditions of such a license will be “in accordance with the provisions of this Code and the Regulations”.  Sec. 88. 5 says that the application for such a license will be in a specified form.

7. So, the public must be informed of the concept and intricacies of these Agencies-system, and the contents of the Schemes proposed on all the Social Security benefitis. Because, that alone would provide a holistic view of the ‘reforms’ proposed. Because, that alone would make the people know about the real and consequential effect of the proposed Code.

“Obamacare” was allowed threadbare discussion for three years:

8. There cannot be meaningful public debate when all the draft subordinate legislations are not placed before the public. In the USA, when the Obamacare was introdued in 2009 and made law on 23.03.2010, through the Patient Protection and Affordable Care Act (ACA), there had been extensive public debate over it for more than three years  (from 2009 to 2012) before it was enforced after the Supreme Court upheld it on June 28, 2012.

9. It is essential for the Executive to place in public domain a comprehensive Bill covering all aspects of the subject-matter, including the proposed Schemes, Rules  (that would be framed by the Government)  and the tentative Regulations  (that would be framed by the National Council) with reference to the aforesaid Sec. 24.5 to explain the quantum of benefits made available to the workforce and the manner in which the delivery machinery would function.

10. Please therefore, supply the information requested for in Para 2 of the Applicaton either individually to me or by hosting all of them in the website of the Ministry.

11. In the context, I think it appropriate to bring on record the observations of C.K. Allen, in his book Law and Order, (1945). He agrees with the universal fact that Subordinate legislations provide for convenience, flexibility and efficiency with respect to the delegation of such powers. But, he says, that all these arguments regarding convenience, flexibility and efficiency are “sound arguments for delegation within due limits, the kind, in fact, which has always been recognized as a practical and necessary part of our governmental system. But they become unsound and dangerous if they are used to justify the indefinite extension of executive powers. Speed and efficiency may be bought at too high a price, and indeed we should have learned from many examples that the State which makes efficiency its highest god is very apt to become an all-devouring monster.

Apparent defects indicative of unseemly hurry:

12. Apparent defects of various kinds in numerous places in the Bill show unseemly hurry on the part of the authorities to bring out this Draft Code. Besides, the fundamental flaw with this Draft Labour Code is that the Government of India, is trying to make provisions for “private assistance” and absolve itself of its Constitutional responsibility of providing “public assistance” as mandated as per Art. 41 of the Constitution of India.

13. ESI Act is a great provision aimed at rendering distributive justice to the people of the nation. But, that is attempted to be belittled by this Labour Code. Hon’ble High Court of Madras has, in ESIC Vs. S. Savithri 2003 (3) LLJ 250, observed that “The Scheme of the (ESI) Act, Rules and Regulations spelled out that the insurance covered under the Act is distinct and differs from the contract of insurance in general….The Division Bench of the Madras High Court observed that the Act in fact tries to attain the goal of socio-economic justice enshrined in the Directive Principles of State Policy”.

14. Even The Hindu conceded editorially on 01.01.2005 that “The package (of benefits provided by the ESIC) can rarely be matched by private employers on their own because of the heavy costs involved – not to mention the disinclination among employers, with honorable exceptions, to operate health care systems for their workforce”

Fundamental Principles laid down by Prof. Adharkar:

15. Prof.Adharkar, the Father of Social Security in India, had laid down the following as Fundamental Principles, when  a scheme on social security is introduced;

(a). The proposed scheme must not be too ambitious in the  beginning;

(b). It must be simple, clear and straightforward,

(c). It must be financially sound, economical in working and actuarially balanced;

(d). It must minimize disputes and litigation;

(e). It must be workable in the peculiar circumstances of Indian labour and industry;

But, the proposed Labour Code ignores all these principles, which necessitate one to go through the proposed Subordinate Legislations also before arriving at an opinion whether the proposed changes would be an all-encampassing one, workable really  and beneficial to the workforce.

ESI Act itself has the potential for coverage of even homeworkers:

16. The importance of the ESI Scheme to a nation would become evident from this observation. The Act provides security-net to the working population in the organised sector and its long-term goal, as spelt out in Sec. 1 (5) of the Act is to extend the security-net not only to the factories but also to the establishments, industrial, commercial, agricultural or otherwise.

Public Interest and the RTI Act:

17. I submit that I am asking only for the information to which I am entitle to ask as a citizen of the nation. This information asked for by me in para 2 supra is  required in public interest. Hon’ble High Court of Madras has observed, “Public Interest means an act beneficial to the general public. Means of concern or advantage to the public, should be the test. Public interest in relation to public administration, includes honest discharge of services of those engaged in public duty. To ensure proper discharge of public functions and the duties, and for the purpose of maintaining transparency, it is always open to a person interested to seek for information under the Right to Information Act, 2005” (The Registrar, Thiyagarajar College of Engineering, Madurai Vs. The Registrar, Tamilnadu Information Commission – 30.04.2013).

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Overview of ESI Scheme: Powerpoint

The Powerpoint Presentation regarding the Overview of the ESI Scheme is now made available, in public interest, in this website for the benefit of the employers and employees of the factories and establishments, because of specific demands from them. This presentation does not contain all the details pertaining to every issue, which are explained during the lecture. Presentation-slides are prepared only to aid and supplement the delivery of lecture by highlighting certain aspects for clarity and understanding. There need not be continuity between the contents of the slides, as Presentation is different from Write-up.

esi-scheme-overview-for-training-of-employers-and-emplyees

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Social Security in Europe: Warnings & Examples

Successful social security assures successful economy of a nation. West Germany’s economic miracle of the 1960s was, mainly, due to the successful implementation of social security measures.

Some interesting facts pertaining to the 1990s that highlight the important role played by social security measures in Europe and the manner in which the benefits are utilized or misused are given in this article. The relevant snippets are also made available as image files.

East Europe: 1994

Romania:

The dispensary conditions are not conducive and are very unhygienic.

Government was not ready to spend on hospitals and medicine, as they were “not productive”.

Financially strapped governments had neglected health care and this resulted in unprecedented crisis.

Health situation was so bad in much of Eastern Europe that it was beginning to affect the ability of some countries to compete effectively on the world market.

Patients bring basic medical equipments to the hospitals.

Bribe in single case is much more than salary.

Doctors must cope with run-down equipment.

Czech:

Attempts were made to change the medical system from communist model. But, it was basically free, in the communist era. One had only to bribe which was not more than a box of chocolates or flowers.

Poland:

The director of the hospital threatened that he would close it, as there was no essential facility to treat patients.

Doctors who treat patients privately get them operated in State hospitals and do not pay for the service and equipment.

Eastern Europe:

Entitlement of the people to wide range of medical services that was available in the communist era had begun to diminish and got eroded.

State-run medical institutions paid doctors less than bus drivers.

(Refer to the uploaded article, ‘Creaking Health Care’ –The Hindu: 3.12.1994)

West Europe: 1996

Social Security costs became enormous and the E.U. government exchequers were bleeding, because of unemployment benefits.

The reason was that because of the high economic growth and the generous social security benefits, the West European workers began to imagine that their services were costlier and starting demanding very heavy amount as wages.

The European goods had, thus, lost competitive edge.

Employers and Trade Unions could not agree on terms of revival.

West European manufacturers shifted their factories to east Europe.

Social security system encourages workers with less talent and large families to remain unemployed and live off social security hand-outs.

Foreign workers are seen as blocking jobs for indigenous workers.

High taxation affects the workers and they do not have access to common luxuries.

In smaller economies people set up their own businesses.

“Germany’s entry into the United States system of hire and fire” is described “as socially obscene”.

( Refer to the uploaded article ‘Germany, Belgium resist ‘Alliance for Jobs’ –The Hindu: 2.5.1996 )

2007

Malingering in Temporary Disablement Benefit in Germany.

One has to see to believe it.

( Refer to the uploaded news item with photo in the Times of India: 20.1.2007 )

This, in a country where the general level of honesty is admirable, as could be from one incident cited by Mr. Rahul Singh in the Outlook 27.08.2001.

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Inspection of factories

An article published in the Business Standard in December, 2010 brought out how the employees of the factories in Vellore felt that their legitimate rights would be protected only when the factories were inspected by the inspectors periodically. Long working hours, penalty for visit to toilets more than twice during a day, etc., were highlighted in that article.

As far as the ESIC is concerned, numerous cases of concealed employment are not detected because of absence of availability of information, lacunae in the Inspection Policy and lack of adequate number of Social Security Officers with reference to the actual work-load in such cases.

The ESIC has permitted the employers to register themselves online and get Employer’s Code Numbers generated. As a result, various kinds – repeat various kinds – of further problems have cropped up.

Monetary liability for the ESIC is, at present, created in respect of every TIC generated online by an employer or by a person posing as an employer even when the organisation is not sure whether the case is genuine and whether contribution as per rules would be forthcoming or not.

The EPFO is also facing only some of these problems. For more on this issue, please visit

http://www.business-standard.com/india/news/epfo-to-begin-endinspector-raj/466476/

But, the laxity in inspection does not  result in incorrect financial outgo as the EPFO pays benefits only with reference to the contribution paid, while the ESIC pays benefits not only on the basis of contribution paid but also on the basis of contribution payable but not paid.

The ESIC has not put in place adequate monitoring mechanism. The availability of man-power in the cadre of Social Security Officers is very very less when compared to the magnitude of the work in hand.

The government wants to do away with inspections, of course, for certain legitimate reasons. Please visit the following link:

http://www.thehindubusinessline.in/2002/12/14/stories/2002121402500100.htmB

But, controlling corruption and doing away with inspection are not synonymous. The government should also find a way and convince the working population how the problems faced by them would be located and solved.

Periodical and proper inspection of all factories and establishments will, alone, ensure coverage and protection of the workforce.

The very concept of compliance under the ESI Act is based on mutual trust and that was why the word ‘may’ is used instead of ‘shall’ in Sec. 45 (2) of the ESI Act, 1948.

But, the concept of Public Administration is “You do not get what you expect; you get only what you inspect’.

In other words, “Do not expect what you do not inspect”.

It would be helpful to the insured population if the inspection system of the ESI Corporation is streamlined to be ‘employee-friendly’ so that all employees are covered in time and contributions made to be paid on all items of wages as defined  under Sec. 2 (22) of the ESI Act, 1948.

ESI Corporation can ensure willing participation of labour in the making of the nation.

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ESIC Medical Colleges

Are they necessary? And, if so, how many?

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Filed under Amendments 2010