Special Correspondent

BANGALORE: Workers insured with the Employees State Insurance Corporation (ESIC) will receive six months of wages in 12 monthly instalments if they are retrenched by their employers in view of the global economic recession.

Addressing presspersons after laying the foundation stone for a hi-tech ESIC Hospital in Peenya here on Tuesday, Union Minister of State for Labour and Employment Oscar Fernandes said all insured employees, who had put in a minimum of five years of service, were entitled to this unemployment allowance under the Rajiv Gandhi Shramik Kalyan Yojane.

“Though we had a scheme for providing three months’ salary in six monthly instalments, we took a decision on January 29 to enhance the unemployment allowance,” he said.

Pointing out that there were a total of 1.21 crore workers insured with ESIC all over the country, Mr. Fernandes said the government would process the applications quickly. However, the ESIC had not received many applications.

Mr. Fernandes said the number of job losses in the organised sector in the country could not have been many if the number of applications the ESIC had received for unemployment assistance was any indication. “There have not been many job losses in the organised sector,” he said. Though exports had been affected in view of the global financial crisis, the economy in the country did not appear to have been hit as hard as the U.S. and the countries in Europe. Mr. Fernandes said he had an interaction with the German Labour Minister at a recent conference on economic recession. When he asked his German counterpart about the measures they had taken to tackle the slowdown, he learnt that Germany was reducing production by asking its employees to go on long leave with six months’ salaries payable in 12 monthly instalments.

“We had a provision to pay three months’ salary in six monthly instalments, but we decided to adopt the German model and hence the decision to pay six months’ salary in 12 months,” he said.