HC restrains industries from deducting insurance

May 1: The Bombay High Court has temporarily restrained three industrial units from deducting insurance amounts from workers' salaries. The...

May 1: The Bombay High Court has temporarily restrained three industrial units from deducting insurance amounts from workers’ salaries.

The interim stay on the deductions was granted by the division bench of Justice V P Tipnis and Y S Jahagirdar. The three Nasik-based units include Messrs BCL Forgings, XLO India Limited and Business Combine Limited.

Employees, unionised under the banner of Kamgar Sabha, filed a writ petition against the three units, state Industries department and the regional (Nasik) director for Employees State Insurance Corporation (ESIC). As per the petition, the employees had alleged that while the ESIC authorities, state government, had not even considered the workers’ plea for exemption under the Sections 87 and 88 of the ESIC Act, the three units already started the deductions. The workers, therefore prayed for a stay on the deduction until their exemption plea is decided upon by the authorities.

Story continues below this ad

According to government pleader U G Kerkar, the exemption application will be disposed of on or before June 15.

The exemption has been sought on the ground that employees avail of better facilities under their respective wage agreements and therefore they cannot avail of the allowances and other benefits accruing under the ESIC Act. The workers have challenged the law stating that state insurance is an inferior scheme as compared to the facilities and security offered by their respective managements. Therefore they have objected to setting aside 1.75 per cent of their salaries for ESIC.

Like Kamgar Sabha, four other unions including Chemical Employees Union and Engineering Mazdoor Sabha have secured the exemption from ESIC. Around 250 units are covered under these four exempted employees’ unions.

In the present case, the court ruled that the three units will not effect deductions from workers’ salaries until the disposal of the exemption application and further two weeks are granted from the date of communication to the union. This order will, however, apply to the workers earning more than Rs 3,000 per month as wages from January 1997.

Story continues below this ad

Workers’ advocate J P Cama gave an undertaking to the court that in the event of dismissal of exemption application, the union will not object to deduction of the amount of arrears from the future salaries in “reasonable instalments”. The court accepted the undertaking.

The petition gains importance even for several other industrial units which have not granted exemption to their employees.