Adjudication of Disputes and Claims, Penalties in Employees State Insurance Act, 1948

Employees’ State Insurance Act, 1948 includes provisions for the adjudication of disputes and claims that arise under the Act, as well as penalties for non-compliance or violations of its provisions. These mechanisms ensure the enforcement of the Act and protect the rights and interests of the insured individuals and their dependents.

Adjudication of Disputes and Claims

Disputes and claims under the ESI Act may relate to the coverage of an establishment under the Act, the applicability of the Act to specific employees, contributions payable, benefits claimed, and so on. The Act provides a structured process for the resolution of such disputes:

1. Employees’ Insurance Court (EIC):

The Act provides for the establishment of Employees’ Insurance Courts (EICs) by the state governments. These courts have the exclusive jurisdiction to adjudicate disputes and questions under the ESI Act. Matters such as the rights to benefits, recovery of contributions, and the applicability of the Act to an establishment or individual can be brought before an EIC.

2. Procedure:

The procedure for bringing a matter before an EIC is prescribed under the Act. Typically, a claim or dispute must be filed within a specified period from the date on which the cause of action arose. The EIC follows a summary procedure for the trial of cases, intended to ensure swift resolution.

3. Appeals:

Decisions of the EIC can be appealed in the High Court, subject to the conditions and limits specified in the Act or under the relevant rules framed by the state governments.

Penalties

The ESI Act prescribes various penalties for offences such as failure to pay contributions, failure to submit returns or maintain necessary records, and falsification of records, among others. These penalties are intended to ensure compliance with the Act and the protection of the insured persons’ rights:

• For Default in Payment of Contributions:

Employers who fail to pay the contributions within the prescribed time frames may be liable for damages at prescribed rates. Serious offences, such as the reduction of an employee’s wages with respect to ESI contributions or non-payment of any benefit payable under the Act, can lead to imprisonment and fines.

• For False Statements and Representations:

Making false statements or representations to avoid any payment or to enable any person to receive benefits under the Act can attract fines and imprisonment.

• Other Offences:

The Act provides for penalties for other offences, such as obstructing an official in the discharge of duties, violation of regulations or rules, etc., with each attracting fines or imprisonment, or both, depending on the severity of the offence.

• General Provisions:

For offences not specifically provided for, the Act includes general penalty provisions. Additionally, companies and other corporate entities can be held liable for offences under the Act, with specific provisions for the liability of directors, managers, secretaries, and other officers.