Alternatives and options to the workmen and unions to ESI: Rejected by Trade Unions

The move by the Finance Minister, Mr. Arun Jaitley to provide alternatives and options to the workmen and unions in the matter of health insurance has been spurned by the Unions. The Central Trade Unions strongly opposed the proposals during a tripartite consultation on the Employees’ State Insurance (Amendment) Bill 2015, which was chaired by the Labour Minister Mr. Bandaru Dattatreya in New Delhi on August 13, 2015. Trade unions including BJP-backed Bharatiya Mazdoor Sangh rejected the proposal to provide an option to workers between Employees’ State Insurance (ESI) scheme and health insurance offered by private companies. “There is no explanation regarding as to why the amendment is required. There is no rationale behind this proposal. We reject this proposal outright.”, said the BMS Secretary, Ajit Shripad Kulkarni during the meeting, very clearly indicating that the party has not taken its own trade union wing into confidence on the proposals of the Finance Minister. The meeting was attended by stakeholders including trade unions, employers’ representatives, officials of state governments and officials of different central ministries. The minister has now called for another tripartite meeting on the bill and asked the stakeholders to come up with their point of view, which can be substantiated.

The present bill was drafted after the Finance Minister Arun Jaitley had made an announcement regarding providing option to formal sector workers to choose between ESI and other such products available in the market in this year’s Budget speech. “It has been remarked that both EPF and ESI have hostages, rather than clients. With respect to ESI, the employee should have the option of choosing either ESI or a Health Insurance product, recognised by the Insurance Regulatory Development Authority (IRDA),” Jaitley had said in his speech. 

During the meeting, All India Trade Union Congress Secretary and member of ESIC board Amarjeet Kaur said: “The ESI scheme is a social security and not a product. The proposal is in contravention with recommendations of the Indian Labour Conference on social security. ILC has recommended strengthening of the ESI scheme.

If there are better services available than ESI scheme, the workers will themselves go for it. There is nothing better than ESI available in market”. The unions had earlier as well rejected the same proposal during Employees’ State Insurance Corporation (ESIC) meeting in April.

At present, ESI scheme has around two crore subscribers and it covers nearly eight crore beneficiaries under its health insurance. The employer’s representatives supported the proposed amendment and asked to do a pilot project before amending the law for the purpose.

There is some disconnect between the views of the trade unions and the members who are covered. Many of them feel that the ESI is mainly a tax for them as they do not avail of the free treatment from the ESI Doctors and prefer to get themselves treated by their family physician. They go to the panel doctor only for getting the sickness benefits under the Act.

Jaitley is trying to provide the ultimate customer with the options to choose from, where he would like to get the service. He is in favour of giving such option to the employees covered under the Employees Provident Fund Act, to the Employees Pension Scheme as the investments and financial decisions of the Pension Scheme are in the hands of Professionals, whereas the Employees Provident Fund Organisation has been lackadaisical in its investment strategies, giving very poor returns for the investments that are garnered by the organisation. The reference of a choice from Hostage to client shows that in the present era, the consumer must be inundated with options and choices, and not confined to accepting whatever is dished out by the Government Organisation. Workers will certainly like to look at such options much to the chagrin of the Union leaders, and the Government is thinking of kick-starting such options. More discussions on this are expected as the government will not give up on bringing about these changes.


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