Case Note & Summary
The dispute concerned coverage of employees of a municipal committee under the Employees' State Insurance Act, 1948. The appellant, Municipal Committee, Abohar, operated water works known as Patel Water Works. The respondent, Regional Commissioner, Employees' State Insurance Corporation, sought to cover employees working in the water works department. The ESI Corporation issued a notice to the appellant, who objected to coverage. Consequently, an order was passed under Section 45-A of the Act. The appellant challenged the order by filing an appeal under Section 75 of the Act before the Insurance Court. The Insurance Court confirmed that the employees were covered under the Act. The appellant then filed a first appeal before the High Court of Punjab & Haryana, which dismissed the appeal in limine by order dated 5 October 1993 in FAO No.589 of 1993. The appellant filed a special leave petition before the Supreme Court. The central legal question was whether employees of a Municipal Corporation or Committee, who were governed by statutory rules and provided with a health scheme and medical reimbursement facilities, were also covered under the Employees' State Insurance Act, 1948. The appellant contended that its water works employees were governed by statutory rules and in some cases in other States benefits of government scales of pay had been extended; they were provided with a health scheme, eligible for medical facilities, and reimbursement of amounts spent. The respondent Corporation had sought coverage and obtained an order under Section 45-A. The Supreme Court observed that employees of the Corporation were governed by statutory rules made under the Act and in some cases in other States the benefits of government scales of pay had been extended. The fact remained that they were provided with a health scheme and also eligible to medical facilities and reimbursement of amounts spent by the concerned employees. Under these circumstances, the Court held that coverage of employees under the Act was per se illegal. The Supreme Court allowed the appeal, set aside the orders confirming coverage, and held that the employees were not covered under the ESI Act. No order as to costs.
Headnote
A) Labour Law - Employees' State Insurance Coverage - Exclusion of Employees Covered by Existing Health Scheme - Employees' State Insurance Act, 1948, Sections 45-A, 75 - The Municipal Committee's water works employees were sought to be covered under the ESI Act and an order was passed under Section 45-A; appeal under Section 75 confirmed coverage - The Supreme Court held that since employees are governed by statutory rules, provided with a health scheme, and eligible for medical facilities and reimbursement, coverage under the Act is per se illegal - Held that the appeal is allowed and the coverage order is set aside.
Issue of Consideration
Whether employees of a Municipal Committee/Corporation who are provided with a health scheme and medical reimbursement facilities are covered under the Employees' State Insurance Act, 1948.
Final Decision
Appeal allowed. The order of the High Court and the coverage under the ESI Act were set aside; no costs.
Law Points
- Employees' State Insurance Act
- 1948
- coverage of municipal employees
- existing health scheme
- medical reimbursement
- per se illegal coverage
- Section 45-A order
- Section 75 appeal
