Dear Seniors, Kindly let us know whether construction Company is coming under the preview of ESI Act Please provide the notification if have Regards, Rajesh
From India, Hyderabad
Acknowledge(0)
Amend(0)
4From India, Hyderabad
Acknowledge(0)Amend(0)
Dear Rajesh, Yes, a construction company comes under coverage of ESIC act if deploys 20 or more employees.
From India, Gurgaon
Acknowledge(0)Amend(0)
From India, Gurgaon
Acknowledge(0)Amend(0)
Dear Aniltoexcel, Can you please elaborate your answer as to how and why the construction company comes under ESIS?
From India, Mumbai
Acknowledge(0)Amend(0)
From India, Mumbai
Acknowledge(0)Amend(0)
Sir,
If the construction agencies are employing 10 (or 20 depending on State Govt. notification under section 1(5)) employees in their offices, and the office is situated in an implemented area, it is coverable. However, workers engaged by these agencies and working on the site of the construction project should not be considered either for the coverage of the establishment or for their own coverage as employees. If these construction workers are engaged in a covered factory or establishment, they are to be considered the employees of that covered factory/establishment which engaged them.
From India, Noida
Acknowledge(0)Amend(0)
If the construction agencies are employing 10 (or 20 depending on State Govt. notification under section 1(5)) employees in their offices, and the office is situated in an implemented area, it is coverable. However, workers engaged by these agencies and working on the site of the construction project should not be considered either for the coverage of the establishment or for their own coverage as employees. If these construction workers are engaged in a covered factory or establishment, they are to be considered the employees of that covered factory/establishment which engaged them.
From India, Noida
Acknowledge(0)Amend(0)
Dear Harsh Kumar ji,
I completely agree with the first part and the last part of your answer. However, the middle part which deals with the construction project site has some ambiguity. There are three issues, in my opinion. First, where is it written in the Act that construction project sites are excluded from ESIS? Secondly, can a circular like 4/99 change any enactment? And thirdly, where is it stated in circular 4/99 that construction project sites are excluded from the coverage of ESIS?
The circular 4/99 is interpreted differently by many inspectors, and they serve demand notices to construction project employers for ESI contributions of construction employees other than casuals and temporary laborers, even though the practice of the law states that ESI is not applicable to construction project sites. This legal practice is even accepted by the Central Ministry.
Please note that if an RMC plant is installed at a project site, ESI is made applicable since the RMC plant falls under the Factory Act.
From India, Mumbai
Acknowledge(0)Amend(0)
I completely agree with the first part and the last part of your answer. However, the middle part which deals with the construction project site has some ambiguity. There are three issues, in my opinion. First, where is it written in the Act that construction project sites are excluded from ESIS? Secondly, can a circular like 4/99 change any enactment? And thirdly, where is it stated in circular 4/99 that construction project sites are excluded from the coverage of ESIS?
The circular 4/99 is interpreted differently by many inspectors, and they serve demand notices to construction project employers for ESI contributions of construction employees other than casuals and temporary laborers, even though the practice of the law states that ESI is not applicable to construction project sites. This legal practice is even accepted by the Central Ministry.
Please note that if an RMC plant is installed at a project site, ESI is made applicable since the RMC plant falls under the Factory Act.
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Korgaonkarji,
Thank you for expressing your concern about the non-coverage of construction sites under the provisions of the ESI Act, 1948. In this connection, I may submit that the said Act initially covers only "factories" as defined under Section 1(3). However, it enables and empowers the appropriate Governments to extend the provisions of the said Act to other classes of establishments as per Section 1(5). You may also be well aware that different State Governments have exercised their powers under this enabling provision and have extended the provisions of the Act to other classes of establishments, including "shops". By virtue of various court judgments, the offices of the builders/construction agencies that fall within implemented areas and employ a minimum number of employees, as mentioned by me in my previous comments, are treated as shops and are coverable under the said Act. Therefore, I must mention that the said Act nowhere states about the coverage or non-coverage of "construction project sites", and therefore, one cannot find an answer to this question in the Act.
I personally feel that the instructions issued by the ESIC via Circular 4/99, as referred to by you, are correct due to the reasons explained in the circular itself. In case there is any deviation from the said circular at any level - locally or regionally, any employer or their official can point out the violation, in my opinion, to the highest authorities in ESIC.
Furthermore, I believe the main reasons for the non-coverage of "construction site projects" are that such establishments are treated as a separate class of establishments and generally fall under the unorganized sector. The construction sites that start today will likely mean that the employees engaged therein will be from the unorganized sector in groups and will not be found once the project is completed. In social security schemes, the existence of contributions, clarity on eligibility conditions of insurable employment, satisfying the terms and conditions of payments for different benefits under such schemes are essential factors. Therefore, difficulties are faced by the social security providing organization in claiming contributions, maintaining records regarding payments and eligibility conditions, and ensuring the eligibility of benefits payments. The situation where the payments of contributions for any employee are difficult to ascertain and where the terms and conditions to satisfy the eligibility for benefits payments under social security schemes are not adhered to, makes the schemes financially unviable.
The case of "construction project sites" is not an isolated case. A similar situation exists regarding the coverage of "home workers" generally employed in beedi manufacturing units. Such home workers in the beedi manufacturing industry are also not covered under the Act, even though there may be court judgments declaring such home workers, working under the supervision of the principal employer, as qualified to be considered as "employees" under other enactments such as the EPF & MP Act, 1952.
I believe that policymakers may be considering the working conditions of construction workers and may feel an urgent need for social security benefits for such workers. However, given the prevailing conditions in India, it may take a long time to reach a stage where social security benefits will be available to all the working class.
As a practitioner and expert in labor laws, I encourage you to share your views with the appropriate authorities on the coverage of "construction project sites" for the welfare of such workers.
From India, Noida
Acknowledge(0)Amend(0)
Thank you for expressing your concern about the non-coverage of construction sites under the provisions of the ESI Act, 1948. In this connection, I may submit that the said Act initially covers only "factories" as defined under Section 1(3). However, it enables and empowers the appropriate Governments to extend the provisions of the said Act to other classes of establishments as per Section 1(5). You may also be well aware that different State Governments have exercised their powers under this enabling provision and have extended the provisions of the Act to other classes of establishments, including "shops". By virtue of various court judgments, the offices of the builders/construction agencies that fall within implemented areas and employ a minimum number of employees, as mentioned by me in my previous comments, are treated as shops and are coverable under the said Act. Therefore, I must mention that the said Act nowhere states about the coverage or non-coverage of "construction project sites", and therefore, one cannot find an answer to this question in the Act.
I personally feel that the instructions issued by the ESIC via Circular 4/99, as referred to by you, are correct due to the reasons explained in the circular itself. In case there is any deviation from the said circular at any level - locally or regionally, any employer or their official can point out the violation, in my opinion, to the highest authorities in ESIC.
Furthermore, I believe the main reasons for the non-coverage of "construction site projects" are that such establishments are treated as a separate class of establishments and generally fall under the unorganized sector. The construction sites that start today will likely mean that the employees engaged therein will be from the unorganized sector in groups and will not be found once the project is completed. In social security schemes, the existence of contributions, clarity on eligibility conditions of insurable employment, satisfying the terms and conditions of payments for different benefits under such schemes are essential factors. Therefore, difficulties are faced by the social security providing organization in claiming contributions, maintaining records regarding payments and eligibility conditions, and ensuring the eligibility of benefits payments. The situation where the payments of contributions for any employee are difficult to ascertain and where the terms and conditions to satisfy the eligibility for benefits payments under social security schemes are not adhered to, makes the schemes financially unviable.
The case of "construction project sites" is not an isolated case. A similar situation exists regarding the coverage of "home workers" generally employed in beedi manufacturing units. Such home workers in the beedi manufacturing industry are also not covered under the Act, even though there may be court judgments declaring such home workers, working under the supervision of the principal employer, as qualified to be considered as "employees" under other enactments such as the EPF & MP Act, 1952.
I believe that policymakers may be considering the working conditions of construction workers and may feel an urgent need for social security benefits for such workers. However, given the prevailing conditions in India, it may take a long time to reach a stage where social security benefits will be available to all the working class.
As a practitioner and expert in labor laws, I encourage you to share your views with the appropriate authorities on the coverage of "construction project sites" for the welfare of such workers.
From India, Noida
Acknowledge(0)Amend(0)
Hi,
If I am not wrong, the below act sheds some light on the welfare of workers engaged in construction activities. Also, Section 22 provides an idea about the assistance/benefits that can be extended to such workers.
However, I wonder if employers follow this act or not because I have not seen any workers in this domain receiving benefits accordingly.
Please enlighten us to advocate for the welfare of these workers.
THE BUILDING AND OTHER CONSTRUCTION WORKERS (REGULATION OF EMPLOYMENT AND CONDITIONS OF SERVICE) ACT, 1996
22. Functions of the Boards.- (1) The Board may-
(a) provide immediate assistance to a beneficiary in case of an accident;
(b) make payment of a pension to beneficiaries who have completed the age of sixty years;
(c) sanction loans and advances to a beneficiary for the construction of a house not exceeding such an amount and on such terms and conditions as may be prescribed;
(d) pay such an amount in connection with premiums for the Group Insurance Scheme of the beneficiaries as it may deem fit;
(e) give financial assistance for the education of children of the beneficiaries as may be prescribed;
(f) meet medical expenses for the treatment of major ailments of a beneficiary or such dependant as may be prescribed;
(g) make a payment of maternity benefits to female beneficiaries; and
(h) make provision for the improvement of other welfare measures and facilities as may be prescribed.
Bijay
From India, Vadodara
Acknowledge(0)Amend(0)
If I am not wrong, the below act sheds some light on the welfare of workers engaged in construction activities. Also, Section 22 provides an idea about the assistance/benefits that can be extended to such workers.
However, I wonder if employers follow this act or not because I have not seen any workers in this domain receiving benefits accordingly.
Please enlighten us to advocate for the welfare of these workers.
THE BUILDING AND OTHER CONSTRUCTION WORKERS (REGULATION OF EMPLOYMENT AND CONDITIONS OF SERVICE) ACT, 1996
22. Functions of the Boards.- (1) The Board may-
(a) provide immediate assistance to a beneficiary in case of an accident;
(b) make payment of a pension to beneficiaries who have completed the age of sixty years;
(c) sanction loans and advances to a beneficiary for the construction of a house not exceeding such an amount and on such terms and conditions as may be prescribed;
(d) pay such an amount in connection with premiums for the Group Insurance Scheme of the beneficiaries as it may deem fit;
(e) give financial assistance for the education of children of the beneficiaries as may be prescribed;
(f) meet medical expenses for the treatment of major ailments of a beneficiary or such dependant as may be prescribed;
(g) make a payment of maternity benefits to female beneficiaries; and
(h) make provision for the improvement of other welfare measures and facilities as may be prescribed.
Bijay
From India, Vadodara
Acknowledge(0)Amend(0)
Dear all,
Workers engaged in actual construction work are not covered under The ESI Act. We are consultants for a client in the business of construction. The employees are covered under an Employee Compensation policy. There has been no inspection in the last 5-6 years. I am attaching a circular issued by the Corp.
Shrikant Prabhudesai
From India, Mumbai
Acknowledge(0)Amend(0)
Workers engaged in actual construction work are not covered under The ESI Act. We are consultants for a client in the business of construction. The employees are covered under an Employee Compensation policy. There has been no inspection in the last 5-6 years. I am attaching a circular issued by the Corp.
Shrikant Prabhudesai
From India, Mumbai
Acknowledge(0)Amend(0)
As Mr. Bijoy Majumdar said, the gap left by ESI in coverage of construction labor seems to have been filled by the BOCW Act by enacting certain welfare provisions for the migratory labor engaged in construction sites.
B. Saikumar
In-House HR & IR Advisor
From India, Mumbai
Acknowledge(0)Amend(0)
B. Saikumar
In-House HR & IR Advisor
From India, Mumbai
Acknowledge(0)Amend(0)
Hi,
As Ramesh states, it is the prerogative of the state governments. In Tamil Nadu, the coverage ceiling for shops has been reduced from 20 to 10, whereas in Maharashtra, it remains at 20.
In Tamil Nadu, new sectors such as hospitals and educational institutions have been brought under the ambit of ESI coverage through the extension of the ESI scheme by the TN state government. However, Maharashtra has not yet issued such a notification, resulting in educational institutions not being covered in Maharashtra.
Similarly, the scheme could be extended to the agricultural sector, but no state government has taken steps in that direction. Likewise, construction workers, plantation workers, etc., have yet to be included in the coverage due to the lack of notification by the state governments.
It is possible that the top policymakers have considered the nomadic nature of jobs in these sectors and deemed it impractical to bring them under the ESI ambit. Additionally, state governments have already developed specific schemes (as mentioned by Ramesh above) that serve as viable alternatives to the ESI scheme, ensuring that social security is not withheld from workers in these sectors.
Regards,
Ramesh
From India, Madras
Acknowledge(0)Amend(0)
As Ramesh states, it is the prerogative of the state governments. In Tamil Nadu, the coverage ceiling for shops has been reduced from 20 to 10, whereas in Maharashtra, it remains at 20.
In Tamil Nadu, new sectors such as hospitals and educational institutions have been brought under the ambit of ESI coverage through the extension of the ESI scheme by the TN state government. However, Maharashtra has not yet issued such a notification, resulting in educational institutions not being covered in Maharashtra.
Similarly, the scheme could be extended to the agricultural sector, but no state government has taken steps in that direction. Likewise, construction workers, plantation workers, etc., have yet to be included in the coverage due to the lack of notification by the state governments.
It is possible that the top policymakers have considered the nomadic nature of jobs in these sectors and deemed it impractical to bring them under the ESI ambit. Additionally, state governments have already developed specific schemes (as mentioned by Ramesh above) that serve as viable alternatives to the ESI scheme, ensuring that social security is not withheld from workers in these sectors.
Regards,
Ramesh
From India, Madras
Acknowledge(0)Amend(0)
Dear All,
To bring more clarity to the subject matter, I submit / re-submit as follows:
1. I completely agree with Harsh Kumar ji that the construction agencies employing 10 (or 20 depending on State Govt. notification under section 1(5)) employees in their offices, situated in an implemented area, are to be covered.
2. I also completely agree with Harsh Kumar ji that if the construction workers are engaged in a covered factory or establishment, they are to be considered employees of that covered factory/establishment which engaged them and are to be covered.
3. Now the question is, whether the construction workers engaged at construction sites in an implemented area are to be covered under the Scheme or not?
In regards to Serial No. 3 above, I reiterate:
1. The prevalent practice is that construction workers are not covered under the Scheme, invariably.
2. However, there is a difference of opinion on this matter.
3. I have come across cases wherein the Corporation is claiming contributions from construction companies in respect of construction workers.
Some construction companies have made representations at various stages, including during inspection, personal hearings (C-18), and in matters under section 75(2B) on the following points:
1. By virtue of Circular 4/99, ESIS is not applicable to construction workers on-site.
2. The Central Ministry is well aware of the non-implementation of ESIS for construction workers, and the proposed decision for its implementation is pending due to the lack of notification in this regard.
3. No such demand was raised by the corporation in previous inspections, so why now?
4. And many more.
Despite strong prima facie cases presented by construction companies in their favor, courts have not granted exemption from depositing 50% of the claim amount or less in court.
Some construction companies have made representations to the ESIC Headquarters and the Central Ministry before filing an application under section 75(2B), but to no avail.
I understand that this information is not meant for public sharing, but I believe it is essential for my professional colleagues to understand the applicability of ESIS to construction workers.
Experts are encouraged to provide value additions to this.
Thank you.
From India, Mumbai
Acknowledge(0)Amend(0)
To bring more clarity to the subject matter, I submit / re-submit as follows:
1. I completely agree with Harsh Kumar ji that the construction agencies employing 10 (or 20 depending on State Govt. notification under section 1(5)) employees in their offices, situated in an implemented area, are to be covered.
2. I also completely agree with Harsh Kumar ji that if the construction workers are engaged in a covered factory or establishment, they are to be considered employees of that covered factory/establishment which engaged them and are to be covered.
3. Now the question is, whether the construction workers engaged at construction sites in an implemented area are to be covered under the Scheme or not?
In regards to Serial No. 3 above, I reiterate:
1. The prevalent practice is that construction workers are not covered under the Scheme, invariably.
2. However, there is a difference of opinion on this matter.
3. I have come across cases wherein the Corporation is claiming contributions from construction companies in respect of construction workers.
Some construction companies have made representations at various stages, including during inspection, personal hearings (C-18), and in matters under section 75(2B) on the following points:
1. By virtue of Circular 4/99, ESIS is not applicable to construction workers on-site.
2. The Central Ministry is well aware of the non-implementation of ESIS for construction workers, and the proposed decision for its implementation is pending due to the lack of notification in this regard.
3. No such demand was raised by the corporation in previous inspections, so why now?
4. And many more.
Despite strong prima facie cases presented by construction companies in their favor, courts have not granted exemption from depositing 50% of the claim amount or less in court.
Some construction companies have made representations to the ESIC Headquarters and the Central Ministry before filing an application under section 75(2B), but to no avail.
I understand that this information is not meant for public sharing, but I believe it is essential for my professional colleagues to understand the applicability of ESIS to construction workers.
Experts are encouraged to provide value additions to this.
Thank you.
From India, Mumbai
Acknowledge(0)Amend(0)
Dear All,
I just want to add that we must read Circular 4/99 very carefully and interpret where it mentions that construction sites or all construction workers are exempted from ESIS coverage.
From India, Mumbai
Acknowledge(0)Amend(0)
I just want to add that we must read Circular 4/99 very carefully and interpret where it mentions that construction sites or all construction workers are exempted from ESIS coverage.
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Bijay ji,
The ESI Act and BOCW Act are two different enactments with entirely different objectives. The benefits under ESIS, therefore, cannot be substituted by the medical benefits or benefits under the BOCW Act. The benefits under both enactments are separate in nature.
From India, Mumbai
Acknowledge(0)Amend(0)
The ESI Act and BOCW Act are two different enactments with entirely different objectives. The benefits under ESIS, therefore, cannot be substituted by the medical benefits or benefits under the BOCW Act. The benefits under both enactments are separate in nature.
From India, Mumbai
Acknowledge(0)Amend(0)
I appreciate the efforts made by learned members Harsh Kumar and Keshavji to clarify the issue of coverage of construction workers under ESI with reference to the circular 4/99. My views on the interpretation of the circular are as follows:
If one goes by the language of Sec.1(5), which empowers the appropriate government to cover an establishment other than a factory by a notification, it makes it clear that the coverage is only in respect of an establishment, but not with reference to the employees. However, the question of whether all persons employed in a covered establishment are to be admitted to ESI benefits or not is to be decided with reference to the definition of 'employee' under Sec.2(9) read with Rule 50, which lays down the wage and the employment nexus criteria. Thus, there are cases where the courts have held that labor engaged casually or on a daily wage basis can also fall within the purview of the definition of 'employee'. If so, the question that arises is why not construction labor? In my view, the object of a welfare legislation like ESI is to implement the various schemes under it successfully by ensuring that the employees covered under the Act shall be able to avail them in times of need, but not merely covering as many employees as possible. This is possible only where the employees are identifiable. Probably the ESIC must have found it difficult to implement the schemes with reference to construction labor because of their migratory and highly mobile nature. In this part, the conditions of minimum contributions for certain benefits might also be difficult to comply with in respect of migrant labor. The ESIC thus referred to these factors in the said circular to exempt construction workers at project sites.
As Keshavji pointed out, I have not come across the use of any language in circular 4/99 that specifically exempts project sites or all employees working at project sites from coverage. This is obvious from the language that the permanent employees of the construction agencies like Engineers or supervisors at project sites are very much covered.
This is my interpretation. Any other view is welcome.
B. Saikumar
In-House HR & IR Advisor
From India, Mumbai
Acknowledge(0)Amend(0)
If one goes by the language of Sec.1(5), which empowers the appropriate government to cover an establishment other than a factory by a notification, it makes it clear that the coverage is only in respect of an establishment, but not with reference to the employees. However, the question of whether all persons employed in a covered establishment are to be admitted to ESI benefits or not is to be decided with reference to the definition of 'employee' under Sec.2(9) read with Rule 50, which lays down the wage and the employment nexus criteria. Thus, there are cases where the courts have held that labor engaged casually or on a daily wage basis can also fall within the purview of the definition of 'employee'. If so, the question that arises is why not construction labor? In my view, the object of a welfare legislation like ESI is to implement the various schemes under it successfully by ensuring that the employees covered under the Act shall be able to avail them in times of need, but not merely covering as many employees as possible. This is possible only where the employees are identifiable. Probably the ESIC must have found it difficult to implement the schemes with reference to construction labor because of their migratory and highly mobile nature. In this part, the conditions of minimum contributions for certain benefits might also be difficult to comply with in respect of migrant labor. The ESIC thus referred to these factors in the said circular to exempt construction workers at project sites.
As Keshavji pointed out, I have not come across the use of any language in circular 4/99 that specifically exempts project sites or all employees working at project sites from coverage. This is obvious from the language that the permanent employees of the construction agencies like Engineers or supervisors at project sites are very much covered.
This is my interpretation. Any other view is welcome.
B. Saikumar
In-House HR & IR Advisor
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Sai Kumar ji,
You are absolutely right, Sir. Also, the Construction Industry is accident-prone.
Yes. This circular is interpreted this way only. Not only Engineers or Supervisors but also the Carpenters, Masons, Fitters, Welders, etc. are to be covered under ESIS. Only the helpers, male coolie, and female coolie who are engaged on a purely temporary basis are to be excluded.
From India, Mumbai
Acknowledge(0)Amend(0)
You are absolutely right, Sir. Also, the Construction Industry is accident-prone.
Yes. This circular is interpreted this way only. Not only Engineers or Supervisors but also the Carpenters, Masons, Fitters, Welders, etc. are to be covered under ESIS. Only the helpers, male coolie, and female coolie who are engaged on a purely temporary basis are to be excluded.
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Mr. Keshav,
I agree that the enactments are different, as are the benefits. The concept of the welfare of these employees was being considered, so I mentioned the BOCW Act. I also want to draw your attention to how the benefit part is often neglected. Nonetheless, I appreciate your efforts in educating us. Thanks to citehr as well.
Thanks to all.
Bijay
From India, Vadodara
Acknowledge(0)Amend(0)
I agree that the enactments are different, as are the benefits. The concept of the welfare of these employees was being considered, so I mentioned the BOCW Act. I also want to draw your attention to how the benefit part is often neglected. Nonetheless, I appreciate your efforts in educating us. Thanks to citehr as well.
Thanks to all.
Bijay
From India, Vadodara
Acknowledge(0)Amend(0)
Dear All,
ESIC is applicable for all construction workers effective from 01/05/2011. There is an official letter from ESIC (X-II/14/1/2008-P&D dated 27/08/2010) and it has been notified in the Gazette of India Notification No-501.
From India, Bengaluru
Acknowledge(0)Amend(0)
ESIC is applicable for all construction workers effective from 01/05/2011. There is an official letter from ESIC (X-II/14/1/2008-P&D dated 27/08/2010) and it has been notified in the Gazette of India Notification No-501.
From India, Bengaluru
Acknowledge(0)Amend(0)
Dear Praveen446,
Can you please provide the forum with the said notification? Such an important notification; how is the HR fraternity not aware of it? The circular to which you referred here, I request you to read it carefully.
Thank you.
From India, Mumbai
Acknowledge(0)Amend(0)
Can you please provide the forum with the said notification? Such an important notification; how is the HR fraternity not aware of it? The circular to which you referred here, I request you to read it carefully.
Thank you.
From India, Mumbai
Acknowledge(0)Amend(0)
Dear All,
I am extremely sorry for referring to the wrong official letter. Kindly refer to Circular No. P-12/11/11/60/2010-Rev-II dated January 03, 2011, issued by the ESIC, New Delhi.
Best Regards,
Praveen Bhosale
9204959753
From India, Bengaluru
Acknowledge(0)Amend(0)
I am extremely sorry for referring to the wrong official letter. Kindly refer to Circular No. P-12/11/11/60/2010-Rev-II dated January 03, 2011, issued by the ESIC, New Delhi.
Best Regards,
Praveen Bhosale
9204959753
From India, Bengaluru
Acknowledge(0)Amend(0)
Dear Mr. Praveen Bhosale,
Thank you for quoting the correct Circular issued by ESIC, New Delhi.
I wish to inform all concerned HR/IR fraternity members through this forum that upon reviewing the mentioned circular (No. P-12/11/11/60/2010-Rev-II, Dt. 03-Jan-11), I promptly met with Mr. Sanjay Sinha, the then Jt. Director, ESIC, Wagale Estate, Thane. He clarified my genuine doubts regarding the extension/implementation of the ESIC Scheme to construction site workers.
Mr. Sinha elaborated on the Central Govt's intention as stated in the circular and advised us to await the final circular regarding the implementation of the ESIC Act at construction sites. However, as of today, ESIC has not issued any such circular for the implementation/extension of ESIC Schemes to construction sites, hence the Act is not applicable at the site.
The last paragraph of the circular explicitly requests all RDs/Directors/Jt. Director Incharges to conduct a survey in the first phase of Public Limited Companies engaged in construction activities in the covered areas and submit a report no later than 31-Jan-2011.
To date (more than three years have passed), we are unaware of any survey report submitted by ESIC RDs/Directors/Jt. Director in this regard. If such a report was submitted, we have not received any official communication from ESIC, New Delhi.
Therefore, I urge all concerned individuals not to panic upon reading any Government Circulars/Notifications. It is essential to read them carefully, discuss with your team members and other HR fraternity forums, and then decide on the course of action based on consensus.
By providing the above explanation, I aim to eliminate any further ambiguity/confusion on this matter. I encourage members to share their comments for a productive discussion from an HR/IR fraternity perspective.
Thank you,
Anil Sharma
From India, Pune
Acknowledge(0)Amend(0)
Thank you for quoting the correct Circular issued by ESIC, New Delhi.
I wish to inform all concerned HR/IR fraternity members through this forum that upon reviewing the mentioned circular (No. P-12/11/11/60/2010-Rev-II, Dt. 03-Jan-11), I promptly met with Mr. Sanjay Sinha, the then Jt. Director, ESIC, Wagale Estate, Thane. He clarified my genuine doubts regarding the extension/implementation of the ESIC Scheme to construction site workers.
Mr. Sinha elaborated on the Central Govt's intention as stated in the circular and advised us to await the final circular regarding the implementation of the ESIC Act at construction sites. However, as of today, ESIC has not issued any such circular for the implementation/extension of ESIC Schemes to construction sites, hence the Act is not applicable at the site.
The last paragraph of the circular explicitly requests all RDs/Directors/Jt. Director Incharges to conduct a survey in the first phase of Public Limited Companies engaged in construction activities in the covered areas and submit a report no later than 31-Jan-2011.
To date (more than three years have passed), we are unaware of any survey report submitted by ESIC RDs/Directors/Jt. Director in this regard. If such a report was submitted, we have not received any official communication from ESIC, New Delhi.
Therefore, I urge all concerned individuals not to panic upon reading any Government Circulars/Notifications. It is essential to read them carefully, discuss with your team members and other HR fraternity forums, and then decide on the course of action based on consensus.
By providing the above explanation, I aim to eliminate any further ambiguity/confusion on this matter. I encourage members to share their comments for a productive discussion from an HR/IR fraternity perspective.
Thank you,
Anil Sharma
From India, Pune
Acknowledge(0)Amend(0)
Dear Anil ji,
With all due respect, Sir, I do not agree with the sentence you quoted.
There is indeed ambiguity and confusion. I have encountered numerous cases where the Corporation is requesting contributions from Construction Employers regarding construction workers. I have come across such cases in court as well. Additionally, representations have been made to bureaucrats at various levels and to the central ministry. One of the esteemed members of this forum, Sai Kumar ji, has also mentioned that he has not found any language in circular 4/99 that explicitly exempts project sites or all employees working at project sites from coverage. The subject title of circular 4/99, which reads "coverage of construction agencies/offices of builders under ESI Act - Clarification thereof," can be interpreted differently in my opinion.
Therefore, there exists ambiguity and confusion. You may disagree with me, and that is acceptable.
Ambiguity and confusion are prevalent in our entire legal system, and the ESI Act is not immune to it. In fact, there are many ambiguities and confusions within the ESI. Uniformity is lacking across the country in various aspects.
My query to you and the HR community is: how should we proceed under such circumstances?
I pose this question in the hope that we can collectively work towards establishing uniformity in the legal system.
A similar question was raised by me in another thread regarding the Coverage of Petrol Pumps under the Factories Act, where multiple interpretations exist. The link to this thread is https://www.citehr.com/492917-covera...ct-1948-a.html
From India, Mumbai
Acknowledge(0)Amend(0)
With all due respect, Sir, I do not agree with the sentence you quoted.
There is indeed ambiguity and confusion. I have encountered numerous cases where the Corporation is requesting contributions from Construction Employers regarding construction workers. I have come across such cases in court as well. Additionally, representations have been made to bureaucrats at various levels and to the central ministry. One of the esteemed members of this forum, Sai Kumar ji, has also mentioned that he has not found any language in circular 4/99 that explicitly exempts project sites or all employees working at project sites from coverage. The subject title of circular 4/99, which reads "coverage of construction agencies/offices of builders under ESI Act - Clarification thereof," can be interpreted differently in my opinion.
Therefore, there exists ambiguity and confusion. You may disagree with me, and that is acceptable.
Ambiguity and confusion are prevalent in our entire legal system, and the ESI Act is not immune to it. In fact, there are many ambiguities and confusions within the ESI. Uniformity is lacking across the country in various aspects.
My query to you and the HR community is: how should we proceed under such circumstances?
I pose this question in the hope that we can collectively work towards establishing uniformity in the legal system.
A similar question was raised by me in another thread regarding the Coverage of Petrol Pumps under the Factories Act, where multiple interpretations exist. The link to this thread is https://www.citehr.com/492917-covera...ct-1948-a.html
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Mr. Korgaonkar,
For the purpose of coverage, you can refer to the Bare Act that elaborates on the coverage of ESIC. Nowhere in the Act are construction companies excluded from the coverage. Referring to instruction no: 4/99, it also states that "Such construction agencies employing 20 or more persons in their offices, situated in implemented areas, are coverable under the scheme." Only the workers located at remote sites where ESIC benefits cannot be extended are excluded.
I have had my own experience with this when we received written NOC from the regional ESIC office in Rajasthan to exclude workers posted at a site for a Highway project from ESIC coverage.
Secondly, all such construction companies situate their registered offices in metro locations or big cities covered under the Shops & Establishments Act as well as ESIC. However, work sites are required to obtain separate licenses under the Factories Act in cases such as installing an RMC plant or under the Mining Act for quarrying activities.
From India, Gurgaon
Acknowledge(0)Amend(0)
For the purpose of coverage, you can refer to the Bare Act that elaborates on the coverage of ESIC. Nowhere in the Act are construction companies excluded from the coverage. Referring to instruction no: 4/99, it also states that "Such construction agencies employing 20 or more persons in their offices, situated in implemented areas, are coverable under the scheme." Only the workers located at remote sites where ESIC benefits cannot be extended are excluded.
I have had my own experience with this when we received written NOC from the regional ESIC office in Rajasthan to exclude workers posted at a site for a Highway project from ESIC coverage.
Secondly, all such construction companies situate their registered offices in metro locations or big cities covered under the Shops & Establishments Act as well as ESIC. However, work sites are required to obtain separate licenses under the Factories Act in cases such as installing an RMC plant or under the Mining Act for quarrying activities.
From India, Gurgaon
Acknowledge(0)Amend(0)
Dear Aniltoexcel,
Thank you for your participation. May I request a copy of the NOC from the regional ESIC office in Rajasthan to exclude workers posted at the site for a highway project from the coverage of ESIC? This may assist me in the cases I am handling.
Thank you.
From India, Mumbai
Acknowledge(0)Amend(0)
Thank you for your participation. May I request a copy of the NOC from the regional ESIC office in Rajasthan to exclude workers posted at the site for a highway project from the coverage of ESIC? This may assist me in the cases I am handling.
Thank you.
From India, Mumbai
Acknowledge(0)Amend(0)
Dear All PFA copy of Circular dated 02 01 2011 regarding extension of ESI coverage to the Construction workers for information. N Nataraajhan
From India, Bangalore
Acknowledge(0)Amend(0)
From India, Bangalore
Acknowledge(0)Amend(0)
Dear Mr. N Nataraajhan It is an internal circular of ESIC , not for general public.So the old circular is still in force.
From India, Kolkata
Acknowledge(0)Amend(0)
From India, Kolkata
Acknowledge(0)Amend(0)
Apart from what Soubhik said, the circular of 2011, in my view, does not seem to be the final word on the coverage of construction sites since it proposes to conduct a survey and collect necessary data to examine whether it should review the position taken in the circular 4/99. And until then, the circular 4/99 rules the subject.
B. Saikumar In-House HR & IR Advisor Navi Mumbai
From India, Mumbai
Acknowledge(0)Amend(0)
B. Saikumar In-House HR & IR Advisor Navi Mumbai
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Friends,
Most of the arguments are < >, so it is better to engage any contractor who has all ESI and PF registration code numbers. There is a lack of clarity among government departments from state to state. As HR professionals, we cannot disobey the orders of authorities, nor can we engage in arguments with them. The PF and ESI circulars are frequently issued or changed; initially, there is not a single circular on STAND.
Regards,
PBS KUMAR
From India, Kakinada
Acknowledge(0)Amend(0)
Most of the arguments are < >, so it is better to engage any contractor who has all ESI and PF registration code numbers. There is a lack of clarity among government departments from state to state. As HR professionals, we cannot disobey the orders of authorities, nor can we engage in arguments with them. The PF and ESI circulars are frequently issued or changed; initially, there is not a single circular on STAND.
Regards,
PBS KUMAR
From India, Kakinada
Acknowledge(0)Amend(0)
Sir(s),
With reference to remarks of seniors and experienced HR officials and advisors as mentioned above, I may submit as follows:
(1) In my opinion, there is no ambiguity, or it is also wrong to say that there is no clarity in the circulars issued by ESIC on coverage of construction sites.
(2) The correct position, in my opinion, has been mentioned by me in my remarks in this thread earlier. "Construction sites/agencies" are treated as a separate class of establishments under section 1(5). Only the employees of construction agencies doing (a) repair/extension work in covered establishments/factories (as per section 2(9)) and (b) their offices located in implemented areas (u/s 1(5)) are coverable as shops under said Act. This is what the circular No. 4/99 dated 14/6/99 of ESIC tries to explain.
(3) If there is no proper implementation of policy guidelines, the issue can be contested either at a higher level or in honorable courts. The policy guidelines are required to be interpreted with reference to provisions of Act/rules/regulations and notifications issued under section 1(3) or 1(5) of ESI Act, 1948. Some of the contributors are interpreting the circular dated 3/1/2011 as a notification for the coverage of construction sites, which is not correct. The circular dated 3/1/2011 is just an internal circular of ESIC and is not relevant for the general public.
(4) The appropriate governments have never issued any notification covering "construction sites" under the provisions of ESI Act, 1948. It is another aspect that by virtue of judicial interpretations, the offices of such construction companies are treated as "shop", hence coverable in view of notifications issued under section 1(5) by the appropriate governments.
(5) I hope that on account of my this submission, seniors, HR officials, etc., may kindly reconsider their opinion so that they may be able to form a proper opinion to avoid any wrong interpretation and unnecessary litigation in the matter.
From India, Noida
Acknowledge(0)Amend(0)
With reference to remarks of seniors and experienced HR officials and advisors as mentioned above, I may submit as follows:
(1) In my opinion, there is no ambiguity, or it is also wrong to say that there is no clarity in the circulars issued by ESIC on coverage of construction sites.
(2) The correct position, in my opinion, has been mentioned by me in my remarks in this thread earlier. "Construction sites/agencies" are treated as a separate class of establishments under section 1(5). Only the employees of construction agencies doing (a) repair/extension work in covered establishments/factories (as per section 2(9)) and (b) their offices located in implemented areas (u/s 1(5)) are coverable as shops under said Act. This is what the circular No. 4/99 dated 14/6/99 of ESIC tries to explain.
(3) If there is no proper implementation of policy guidelines, the issue can be contested either at a higher level or in honorable courts. The policy guidelines are required to be interpreted with reference to provisions of Act/rules/regulations and notifications issued under section 1(3) or 1(5) of ESI Act, 1948. Some of the contributors are interpreting the circular dated 3/1/2011 as a notification for the coverage of construction sites, which is not correct. The circular dated 3/1/2011 is just an internal circular of ESIC and is not relevant for the general public.
(4) The appropriate governments have never issued any notification covering "construction sites" under the provisions of ESI Act, 1948. It is another aspect that by virtue of judicial interpretations, the offices of such construction companies are treated as "shop", hence coverable in view of notifications issued under section 1(5) by the appropriate governments.
(5) I hope that on account of my this submission, seniors, HR officials, etc., may kindly reconsider their opinion so that they may be able to form a proper opinion to avoid any wrong interpretation and unnecessary litigation in the matter.
From India, Noida
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
ESI - Construction site workers.pdf