Special Incentives Cannot Be Treated As Part Of Wages: Delhi HC Directs ESIC To Grant Covid 19 Relief Scheme Benefits To Widow
The Delhi High Court has directed ESIC to grant the relief under ESIC Covid 19 Scheme to a widow observing that such special incentives cannot be treated as part of the wages of a workman.
The Court quashed the rejection of a widow’s (Petitioner) claim under the Covid-19 Relief Scheme and directed the Employees' State Insurance Corporation (ESIC) to grant the benefits holding that the deceased workman’s special incentive during the Covid-19 pandemic could not be included in his wages for determining eligibility under the scheme. The Covid-19 Relief Scheme aimed to provide financial support to dependents of insured persons who died due to Covid-19.
A Single Bench of Justice Girish Kathpalia held, “The purpose of paying such special incentives during those harrowing days of Covid pandemic was to enable the working class to bear additional expenditure in the form of masks, gloves, sanitizers and other necessary articles including those related to travel to work, so that the work could go on, ensuring minimum damage to economy of the country. That special incentive also was only a temporary one, aimed at dealing with the working in the Covid environment. Such special incentives cannot be treated as part of wages thereby depriving relief under the scheme to the widows of such Covid warriors who continued to work during such unprecedented pandemic.”
Advocate Jitender Nath Pathak appeared for the Petitioner, while Advocate K.P. Mavi represented the Respondents.
The Petitioner filed the writ petition after her claim for benefits was denied on two occasions by ESIC. Her husband succumbed to Covid-19. Despite his being an insured person under the Employees' State Insurance Act, 1948 (the Act), ESIC denied the claim on the grounds that his gross salary, including a special incentive, exceeded the monthly limit under Section 2(9) of the Act.
The High Court noted that ESIC had deducted contributions from the workman’s salary consistently until his death, and his status as an insured person was undisputed. The contentious issue was whether the incentive would qualify as ‘wages’ under Section 2(22) of the Act.
“Keeping in mind the benevolent nature of the Covid Scheme, coupled with the nomenclature of the monthly payment of Rs. 2,674/-, I find it not acceptable to add the said amount to the monthly wages so as to throw the petitioner out of the social welfare ambit of the scheme. Evidently, the said amount of Rs. 2,674/- was a special incentive granted to the workman during Covid pandemic, that too for only four months preceding his death and even during those four months, the respondents continued to deduct ESI contribution from his salary,” the Court remarked.
The Court pointed out that the ESI Act was a social welfare legislation, and its provisions must be interpreted with a benevolent tilt in favour of dependents. The Bench remarked that the special incentive was a temporary measure aimed at enabling workers to bear additional costs during the pandemic, such as masks, sanitizers, and transportation, ensuring continuity of work during the crisis.
Consequently, the Court held that “the petitioner being widow of the workman who admittedly succumbed to Covid cannot be denied benefit of Covid Scheme…In view of above discussion, the petition is allowed and the impugned action of the respondents, denying benefit of the Covid Scheme to the petitioner is quashed. The respondents are directed to grant all benefits under the Covid Scheme to the petitioner within four weeks.”
Accordingly, the High Court allowed the petition.
Cause Title: Godambari Raturi v. Employee State Insurance Corporation Ltd. & Anr. (Neutral Citation: 2024:DHC:8647)
