The New Labour Codes recently came into force. With this huge development, several changes in the labour laws seek implementation. One of the four Labour Codes is the Social Security Code, 2020. A few changes have been introduced to expand the scope of who are dependents for ESI – Employees’ State Insurance. This is crucial in deciding who is eligible for receiving Dependants’ Benefit if an insured person dies as a result of an employment injury. Let us explore where we get our answers to define dependants.
Dependants under Social Security Code
The Social Security Code amply defines who all are included as dependants for the purpose of State Insurance. Section 2 of the Code is definition clause, which defines several terms used in the same. Sub-Section 24 of the Social Security Code defines “dependants”. Let us have a look at the definition itself:
Who are dependants for ESI?
“Section 2 — (24) “dependant” means any of the following relatives of deceased employee, namely:—”
Comment: The very first line to define who are dependants for ESI clarifies that it is a list of relatives of deceased employees. In other words, it is not a list of beneficiaries who can be benefitted from health insurance policies of an employee. Wherever the term “dependants” has been used under the Code, the same is discussing about an insured person who died as a result of an injury during subsistence of his/her employment.
“(a) a widow, a minor legitimate or adopted son, an unmarried legitimate or adopted daughter or a widowed mother:”
Comment: The first persons entitled to be considered as dependants of a person are his widow. Legitimate children include a minor son born in a valid marriage, an adopted son, an unmarried daughter born in a valid marriage or an adopted daughter. It further includes a widowed mother.
“Provided that for the purposes of Chapter IV, a legitimate adopted son, who has not attained the age of twenty-five years, shall be dependant of the deceased employee;”
Comment: The first clause including widow, children and widowed mother has a proviso as a condition. It lays that for the purpose of provisions related to Employees State Insurance Corporation (ESIC) under Chapter 4, the age limit for a legitimate or adopted son is 25 years. This makes it clear that for all purposes, an unmarried daughter is eligible to be considered a dependant. For a son, while it has to be a minor son (till 18 years age) for other aspects, for ESIC the age limit is extended to 25 years.
“(b) if wholly dependant on the earnings of the employee at the time of his death, a legitimate or adopted son or a daughter who has attained the age of eighteen years and who is infirm; except for the purposes of Chapter IV wherein the word “eighteen” occurring in this sub-clause shall be deemed to have been substituted by the word “twenty-five”;”
Comment: The age of son and daughter has been discussed above in detail. That is about a legitimate or adopted – son and daughter. However, clause (b) here makes an exception for a child who is totally financially dependent upon the deceased employee. In such a case, even a child who has attained the age of 18 years, but infirm (physically or mentally weak), can be considered a dependant. Chapter 4 related to ESIC is excluded from the age scenario described hereunder.
“(c) if wholly or in part dependent on the earnings of the employee at the time of his death,—
(i) a widower;
(ii) a parent other than a widowed mother;
(iii) a minor illegitimate son, an unmarried illegitimate daughter or a daughter legitimate or illegitimate or adopted if married and a minor or if widowed and a minor;
(iv) a minor brother or an unmarried sister or a widowed sister if a minor;
(v) a widowed daughter-in-law;
(vi) a minor child of a pre-deceased son;
(vii) a minor child of a pre-deceased daughter where no parent of the child is alive, or;
(viii) a grandparent if no parent of the employee is alive.”
Comment: Clause (c) hereby lays the list of relatives who are dependants for ESI due to whole or partial financial dependency upon the deceased employee. These include a widower, a parent, illegitimate minor son, illegitimate unmarried daughter or a minor married daughter or widowed minor daughter. It further includes a minor brother or an unmarried/widowed minor sister, a widowed daughter-in-law. In addition, a minor child of pre-deceased son or daughter (if neither daughter nor son-in-law is alive), and a grandparent (in case deceased employee’s parents are dead).
“Explanation.—For the purposes of sub-clause (b) and items (vi) and (vii) of sub-clause (c), references to a son, daughter or child include an adopted son, daughter or child, respectively;”
Comment: The explanatory clause hereby seeks to bring clarity to sub-clause (b), (c)(vi) and (c)(vii). For removal of age bar in case of infirm and financially dependant child, it shall include adopted child as well. Similarly, in context with the grandchildren, adopted children have to be considered equivalent to a legitimate child.
Inference
We had a discussion above to understand who are dependants for ESI purposes. It is important to understand because those insured under Social Security Code schemes have to comply with the legalities. If the applicant does not fall within the aforementioned relations, he/she may not get dependants’ benefits.
The provisions related to State Insurance and dependants for ESI were earlier covered under the Employees’ State Insurance Act, 1948. Now that the New Labour Laws are in force, several legislations related to social security schemes have been consolidated into one – The Code on Social Security, 2020. Hence, the provisions under the Code define who are dependants for State Insurance purposes.
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