Court’s Decision:
The Delhi High Court allowed the writ petition, directing the Employees’ State Insurance Corporation (ESIC) to grant benefits under the ESIC Covid-19 Relief Scheme to the petitioner within four weeks. The court quashed ESIC’s decision denying the claim on the grounds that the employee’s income exceeded the threshold due to a temporary Covid incentive. The court held that the incentive, given solely due to the pandemic, should not be considered part of the employee’s regular wages, thus qualifying him as an employee under Section 2(9) of the Employees’ State Insurance Act (ESI Act) for Covid Scheme benefits.
Facts:
The deceased employee, insured under the ESI Act, was employed with the petitioner’s husband and passed away from Covid-19 in July 2020. The petitioner sought benefits under the ESIC Covid-19 Relief Scheme. However, the Assistant Director of ESIC denied the claim, asserting that the employee’s monthly income exceeded the wage limit set under Section 2(9) due to a monthly incentive paid during the pandemic. The petitioner contested this decision, arguing that the incentive, given only in response to the pandemic’s additional burdens, should not factor into the wage threshold for benefits.
Issues:
- Whether the deceased employee qualified as an “employee” under Section 2(9) of the ESI Act.
- Whether the Covid-related incentive should be included in the employee’s monthly wages when determining eligibility for the ESIC Covid-19 Relief Scheme.
Petitioner’s Arguments:
The petitioner argued that the Covid incentive was a temporary relief measure and should not be added to the employee’s salary for calculating the monthly wage threshold for the scheme’s eligibility. They contended that the regular salary was below the limit, qualifying the employee for the scheme.
Respondent’s Arguments:
ESIC argued that the combined amount of the regular salary and Covid incentive exceeded the statutory wage limit, disqualifying the employee. ESIC pointed to Sections 2(9) and 2(22) of the ESI Act, arguing that the incentive was part of the “wages.”
Analysis of the Law:
The court analyzed Sections 2(9) and 2(22) of the ESI Act, defining “employee” and “wages,” along with Rule 50 of the ESI (Central Rules) 1950, which caps wages at Rs. 21,000 for non-disabled employees. It examined the purpose and interpretation of the Covid Scheme as a social welfare measure under the ESI Act.
Precedent Analysis:
The court emphasized a welfare approach, considering the benevolent intent of both the ESI Act and the Covid Scheme, which aim to support the underprivileged sections of society. It relied on past interpretations favoring beneficiaries under social welfare laws.
Court’s Reasoning:
The court reasoned that the Covid incentive was given in response to extraordinary pandemic conditions to support employees in meeting increased living costs. It noted that continuing to deduct ESIC contributions despite the incentive indicated the deceased’s continuing employee status. Excluding this temporary incentive from wages aligns with the social welfare spirit of the scheme, allowing dependents of Covid victims to receive financial relief.
Conclusion:
The court concluded that the deceased’s regular wages fell within the threshold of Rs. 21,000, excluding the temporary Covid incentive. The petitioner, as a dependent, qualifies for the Covid Scheme benefits.
Implications:
This judgment underscores a welfare-centric approach in interpreting employee benefits, especially under social welfare legislation. It sets a precedent that temporary incentives or relief payments made under extraordinary circumstances should not exclude employees or their dependents from government welfare schemes.
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