1973 (2) TMI 142 - HC - Indian Laws

Casual Employees Excluded from Employees' State Insurance Act, 1948

Employees State Insurance Corporation Versus Gnanambikai Mills Limited

The Madras High Court held that casual employees are not covered under the Employees' State Insurance Act, 1948. The Court interpreted the term 'employee' ... - Issues: Interpretation of the term 'employee' under the Employees' State Insurance Act, 1948 regarding the inclusion of casual employees.Analysis:1. Definition of 'employee' under Section 2(9) of the Act:The Court examined the definition of 'employee' under Section 2(9) of the Employees' State Insurance Act, 1948, which includes individuals employed for wages in connection with a factory or establishment. The definition encompasses those directly employed by the principal employer, as well as those employed through an immediate employer on the premises of the factory. The term also covers individuals employed for wages related to factory administration or the distribution of products. However, certain categories of persons are expressly excluded from the definition.2. Purpose and provisions of the Act:The Court considered the purpose of the Employees' State Insurance Act, which provides benefits such as sickness, maternity, and employment injury to employees. The Act establishes the Employees' State Insurance Corporation and outlines provisions for finance and audit. Section 38 mandates the insurance of all employees in applicable factories, with contributions from both employers and employees. The contributions serve as payment for benefits like sickness cover.3. Exclusion of casual employees from the Act:Despite the broad definition of 'employee,' the Court opined that casual employees may not fall within the purview of the Act. The Act aims to extend benefits to employees, including sickness cover. However, the Court questioned whether it was the legislative intent to require casual employees, engaged for short periods, to contribute and be insured if they may not qualify for sickness benefits. The Court emphasized that contributions should correspond to the benefits received, and it found no clear indication in the Act to include casual employees.4. Practical interpretation and conclusion:Taking a practical approach, the Court concluded that casual employees should not be encompassed by the Act. The contributions made by employers and employees are linked to the benefits provided under the Act. The Court highlighted that the Act does not specify the inclusion of casual employees for minimal contributions to access benefits. After analyzing the Act's provisions and scheme, the Court affirmed the lower court's decision that casual employees are not covered by the Employees' State Insurance Act, leading to the dismissal of the appeal with costs.This detailed analysis of the judgment from the Madras High Court provides a comprehensive overview of the interpretation of the term 'employee' under the Employees' State Insurance Act, 1948, specifically concerning the exclusion of casual employees from the Act's purview.