Rule 26: Employees’ State Insurance Society

Finin2min analysis — operative rule mechanics

Full notified text — Rule 26

26. Employees’ State Insurance Society.– (1) The State Government may establish such
organisation as an Employees‘ State Insurance Society (hereinafter refer to as the Society), which
shall serve as a managerial and health care body, in terms of sub-section (5) of section 40.

(2) The Society shall consist of the Governing Body, the Executive Committee, the Chief Executive
Officer and the Secretariat.

(3) The Society shall be registered under the State specific Societies Registration Act or the State
specific Public Trust Act.

(4) The Governing Body of the Society shall consist of the following members, namely: -

       (i)      Chief Secretary of the State as Chairperson;
       (ii)     Additional Chief Secretary or Principal Secretary or Secretary (Labour or Health)
       whosoever is overseeing the Employees‘ State Insurance Services in the State as Vice-
       Chairperson;
       (iii)    Additional Chief Secretary or Principal Secretary or Secretary (Health or Labour)
       other than appointed under clause (ii) as member;
       (iv)     Additional Chief Secretary or Principal Secretary or Secretary (Finance)as member;
       (v)      Director, Employees‘ State Insurance Services of the State as Chief Executive
       Officer-cum-Member Secretary;
       (vi)     Corporation‘s Nominee as member;
       (vii)    three Employers‘ Representative nominated by the Corporation as member;
       (viii)   three Employees‘ representatives nominated by the Corporation as member;
       (ix)     Regional Director, Employees‘ State Insurance Corporation as member;
       (x)      State Medical Officer, Employees‘ State Insurance Corporation or any other Medical
       Officer nominated by the Corporation as member.

(5) The management of the affairs of the Society shall be entrusted to the Governing Body and the
property of the society shall be vested in the Governing Body and the Society shall be responsible for
repair and maintenance of the properties in the possession of the Society and vested in the Governing
Body.

(6) The Society shall have an Executive Committee which shall act for and discharge functions on
behalf of Governing Body, consisting of the following members, namely:–

      (i) Additional Chief Secretary or Principal Secretary or Secretary (Labour or Health) overseeing
      the Employees‘ State Insurance Directorate in the State as Chairperson;

      (ii) Additional Chief Secretary or Principal Secretary or Secretary (Health or Labour) other than
      the Chairperson as Vice Chairperson;

      (iii) Additional Chief Secretary or Principal Secretary or Secretary (Finance) as member,

      (iv) Director-in-Chief of Directorate of Health and Family Welfare of State as member,

      (v) Regional Director of Employees‘ State Insurance Corporation as member;

      (vi) State Medical Officer of Employees‘ State Insurance Corporation or any other Medical
      Officer nominated by the Corporation as member;

      (vii) One Employer Representative as member;

      (viii) One Employee Representative as member;

      (ix) The Director, State Employees‘ State Insurance Directorate shall be the Chief Executive
      Officer-cum-Member Secretary.

 (7) One third or at least three, whichever is higher, of the filled in posts of the members of the
Governing Body or the Executive Committee, shall form the quorum for their meeting and every
matter coming up for decision before a meeting of the Governing Body or the Executive Committee,
as the case may be, shall be decided by the majority of persons present and voting at the time of
meeting and in case of equality of votes, the Chairperson of the meeting shall have an additional
casting vote.

 (8) The Governing Body shall hold meeting at least twice a year and the Executive Committee shall
hold meeting at least once in every three months

(9) The Chairperson, or in his absence, the Vice Chairperson of the Governing Body or the Executive
Committee, as the case may be, shall preside at the meeting.

 (10) The Society shall establish a secretariat which shall be responsible for day to day management of
the Society‘s activities.

 (11) The Chief Executive Officer may be authorised by the Governing Body to execute such
contracts on behalf of the Society as it may deem fit in the conduct of the business of the Society,
subject to the State Government norms.

(12) The Society shall submit its budget by 10th December of each year and the accounts of the
Society shall be audited annually by the Comptroller and Auditor General of India.

(13) The financial year of the Society shall be from 1st April to 31st March.

 (14) The financial statement for the year ending 31st March shall be prepared by 31st May of the year
and an annual report along with annual accounts shall be submitted to the Corporation within six
months of the closure of financial year.

 (15) It shall have a bank account in the name of the Society to be opened in a Nationalised Bank or
any scheduled bank authorised for government agency business and the Society shall be entitled to
receive grants, donations, contributions, subscription, bequests, fees, loan or contingency in cash or
kind, either in Indian or foreign currency, subject to the approval of Governing Body of the Society.

(16) The tenure of non-official members of the Society shall be two years and no non-official
member shall be entitled to more than two terms as a member of the Society.

 (17) The Society may sue or be sued in the name of Chief Executive Officer of the Society or of such
other members as shall, in reference to the matter concerned, be appointed by the Governing Body for
the occasion.

 (18) The Society shall engage employees on deemed deputation from the State Government or the
Public Sector Undertaking or the Central Government or the Corporation and their pensionary
liabilities, if any, shall rest with respective appointing authorities.

 (19) The Society shall carry out any other activity as may be specified by the Central Government or
as may be directed by the Corporation.

(20) The non-official members of the Governing Body, and the Executive Committee, of the Society
shall be allowed travelling allowance and daily allowance for attending its meetings at the rates
admissible to the officers of the Central Government holding a post in level 12 in the pay matrix.

Application and evidence

1. Primary statutory test — (1) The State Government may establish such organisation as an Employees‘ State Insurance Society (hereinafter refer to as the Society), which shall serve as a managerial and health care body, in terms of sub-section (5) of section 40.
2. Additional operative limb — (2) The Society shall consist of the Governing Body, the Executive Committee, the Chief Executive Officer and the Secretariat.
3. Numerical or timing control — (8) The Governing Body shall hold meeting at least twice a year and the Executive Committee shall hold meeting at least once in every three months (9) The Chairperson, or in his absence, the Vice Chairperson of the Governing Body or the Executive Committee, as the case may be, shall preside at the meeting.
4. Code Section mapping — 40. Read the mapped provision together with this text rather than treating the concordance as a substitute for it.
5. Evidence file — retain facts and records proving the role/status of: Employer, Employee / worker, Central Government, State Government, Corporation / EPFO / Board.

Cross-references & prescribed forms

Worked example

Q&A — Rule 26

Primary sources