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    Friday, 6 November 2015

    Compulsory Group Insurance

    1. Introduction
    The provisions of Industrial and commercial employment (Standing orders) ordinance, 1968 makes it compulsory for the employers that they shall have the group insurance of all the permanent workmen working under their administration against the natural death and disability and death and injury arising out of contingencies.

    2. Relevant provisions
    Following are the relevant provisions of industrial and commercial employment (Standing orders) ordinance, 1968 regarding the concerned topic

    Standing order 10-B

    3. Object of Order 10-B
    The object of order 10-B is to provide financial assistance to the workmen or to his legal heirs and secure the life of workmen.

    4. Compulsory Group Insurance
    Under Order 10-B the employers are required to have all their permanent workmen insured against natural death and disability and death and injury arising out of contingencies not covered by the workmen’s compensation Act 1923 or provincial employees social security ordinance, 1965.

    i. Essential to claim group Insurance
    Claim of group insurance is enforceable only where relationship of employer and employee subsists and not terminated.

    ii. Workman entitled to Insure
    Only permanent workmen are entitled to insure.

    a. Meaning of Permanent Workman
    A permanent workman is a workman who has been engaged on work of permanent nature likely to last more than nine months and has satisfactorily completed 3 months probationary period in the same or another occupation in the Industrial or commercial establishment and includes a badly who has been employed for continuous period of 3 months or for 183 days during any period of twelve consecutive months.

    b. Insurance of Risks
    The employer shall insure the workmen against the following risks.

    i. Natural Death
    The purpose is to provide financial assistance to the legal heirs of the deceased workman. Where the death of worker was not natural but due to over intoxication, legal heir is not entitled to insurance.

    ii. Disability
    Word disability means incapacity to act or move. Falling health could not constitute disability.

    iii. Death or injury arising out of contingencies
    Workmen shall be insured against any death or injury arising out of contingencies not covered by the workmen’s compensation act, 1923 or the social security ordinance 1965.

    5. Responsibility of employer

    i. Payment of Premium

    The employer is responsible for the payment premium in group insurance of workmen.

    ii. Administrative Arrangement
    The employer is responsible for all administrative arrangements of group insurance whether carried out by himself or through an insurance company.

    6. Amount of Insurance
    The amount for which each workmen shall be insured shall not be less than the amount of compensation specified in schedule IV to the workmen’s compensation Act, 1923.

    7. Liability of employer when workmen not insured
    If the employer fails to insure all workman as prescribed, the employer shall pay in the case of death ot the heirs or in the case of injury ot the workman, such sum of maoney as would have been payable by the insurance company, had such worker been insured.

    8. Manner of Recovery
    All claims of a workman or his heirs or recovery of money from the employer u/sec 4 shall be settled in the same manner provided under workmen’s compensation Act 1923.

    9. Jurisdiction Entertaining Claims of compulsory Group insurance
    The commissioner for workmen’s compensation has jurisdiction to entertain and adjudicate claim under standing order 10-B.

    10. Order of commissioner is not Appealable
    The order of commissioner regarding group insurance amount is not appealable.

    11. Remedy against order of commissioner
    Remedy could be availed of in constitutional jurisdiction of High Court.

    12.Applicablity of order 10-B
    The provisions of standing order 10-B shall not apply the first instance, to any industrial establishment not more than forty nine persons were employed on any day during the preceding 12 months but Govt. may by notification in the official Gazette extend it ot any such industrial establishment or class of such establishments.

    13. Conclusion

    To conclude, I can say, that the insurance policy is obtained to ensure payment in respect of risk covered thereby. By virtue of standing order 10-B, duty is imposed on employer to insure all his permanent workmen against all four risks set out is S.O. 10-B, and the object is to provide financial assistance to the workmen or his heirs.
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    Item Reviewed: Compulsory Group Insurance Rating: 5 Reviewed By: Usman Ali
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