Labour secretary rules out using ESIC’s funds for paying workers’ wages

By: |
April 22, 2020 8:10 PM

During a webinar organised by industry body FICCI, Samariya said, "ESIC (fund) is a money of insured persons and employers who are contributing (to this social security scheme). It already has a provision that if an employee is unemployed then 25 per cent of wages can be paid."

Labour secretary, Labour secretary rules, ESIC, ESIC funds, workers wages, EPFO, antionwide lockdown, Pradhan Mantri Garib Kalyan YojanaCentral trade unions had strongly condemned the idea of diverting funds of the EPFO as well as ESIC for giving relief to workers under the lockdown.

Labour Secretary Heeralal Samariya on Wednesday ruled out appropriating funds of the Employees’ State Insurance Corporation (ESIC) for payment of wages to workers or to employers to meet their salary bill during the coronavirus lockdown.

There has been lobbying for sometime for using funds of the retirement fund body EPFO as well as ESIC for providing relief to workers to help them sustain themselves during the nationwide lockdown. Earlier this month, a labour ministry spokesperson had also denied any such move to appropriate funds of the ESIC and Employees’ Provident Fund Organisation (EPFO) to give relief to workers under the Pradhan Mantri Garib Kalyan Yojana or any other scheme.

During a webinar organised by industry body FICCI, Samariya said, “ESIC (fund) is a money of insured persons and employers who are contributing (to this social security scheme). It already has a provision that if an employee is unemployed then 25 per cent of wages can be paid.” “…but diverting money (of the ESIC) to somebody else or paying the wages is not at all advisable because we want to reduce the contribution further so that it (ESI scheme) can run in better way in future,” he added.

He also told the industry representatives that ESIC in July last year reduced the contribution towards its insurance scheme ESI from 6.5 per cent to 4 per cent of pay. “Now we are thinking about reducing the contribution further. We would be able to take all these steps if we have money,” he pointed out.

Central trade unions had strongly condemned the idea of diverting funds of the EPFO as well as ESIC for giving relief to workers under the lockdown. They had demanded that the government should pay for relief from its own budget rather than dipping into the reserves or surplus of the two social security bodies.

“Let us not give this idea that ESIC money can be diverted for (payment) wages or to employers…it is the poor man’s money. Let it be with them. With great difficulty we are saving it so let us not do it,” Samariya said during the webinar.

At present, an employer contributes 3.25 per cent and employee contributes 0.75 per cent of gross salary towards ESI. About taking steps to give relief to industry as well as employees, he said the EPFO and ESIC have deferred the payment of contributions towards the social security schemes run by them in view of the lockdown.

Talking about labour reforms, he said the Parliamentary Standing Committee on Labour has given its report on the Code on Industrial Relations and it would soon submit a report on the Code on Social Security. Earlier last year, the Code on Wages got Parliament nod. The codes on occupational health safety, industrial relations and social security were introduced in the Lok Sabha and sent for standing committee scrutiny.

The government wants to concise 44 labour laws into four broad codes. Samariya also agreed with the industry that industries should not be booked by law enforcement agencies if their workers get COVID-19. He assured them that he will take up the matter with higher authorities.

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