Dear Seniors,
I work for an organization where everyones basic+DA was not less than ten thousand and so it was not coming under ESIC act as the ceiling earlier was Rs. 6500. Now, as the limit has been raised to Rs 15000 from Rs 6500, there are some employees who falls in this bracket and hence becomes eligible for ESI benefits.
Out of 70 employees, there are almost 16 employees whose basic+DA is less than Rs. 15000. Now, my question is, will my organization come under this act? If yes, what is the procedure to enroll or register under ESIC act?
Thank you for your time and look forward to your valuable advise.
Regards,
J P Das
From India, Delhi
1I work for an organization where everyones basic+DA was not less than ten thousand and so it was not coming under ESIC act as the ceiling earlier was Rs. 6500. Now, as the limit has been raised to Rs 15000 from Rs 6500, there are some employees who falls in this bracket and hence becomes eligible for ESI benefits.
Out of 70 employees, there are almost 16 employees whose basic+DA is less than Rs. 15000. Now, my question is, will my organization come under this act? If yes, what is the procedure to enroll or register under ESIC act?
Thank you for your time and look forward to your valuable advise.
Regards,
J P Das
From India, Delhi
Dear All
Here is a new question to the seniors on ESI applicability:
A construction company is constructing a factory and is engaging more than 20 labours to construct this factory.
The company/principal employer has paid cess as required under Building and construction workers welfare Cess Act.
Please give your inputs from your real experiences (not assuming or presuming) as to whether
1. ESI is applicable to these persons?
2. If so, whether construction company is liable to pay contribution (if covered under ESI) and
3. whether principal employer is liable to pay contribution (if construction company has not covered under ESI)
4. Please substantiate with any recent circulars, amendments, notifications from ESI.
Regards
K.Ramachandra
Bangalore
Here is a new question to the seniors on ESI applicability:
A construction company is constructing a factory and is engaging more than 20 labours to construct this factory.
The company/principal employer has paid cess as required under Building and construction workers welfare Cess Act.
Please give your inputs from your real experiences (not assuming or presuming) as to whether
1. ESI is applicable to these persons?
2. If so, whether construction company is liable to pay contribution (if covered under ESI) and
3. whether principal employer is liable to pay contribution (if construction company has not covered under ESI)
4. Please substantiate with any recent circulars, amendments, notifications from ESI.
Regards
K.Ramachandra
Bangalore
Dear K. Ramchandra, i am attaching herewith a letter of clarification of ESI authority, which is very useful to u and u can follow the same. KIRAN KALE
From India, Kolhapur
From India, Kolhapur
Dear J P DAS,
IN accordance ur information it looks like that ur unit is not covered under the ESI Act, as even if there r 70 employees working in the unit, and getting more than celling limit of ESI When it was in the tune of Rs. 6500/- or and 10000/- so, because only ur unit is not covered,
Now, 16 of ur employees r getting less than Rs.15000/-(pls. remember i am prsuming this salary as gross salary and not only Basic,D.A.) in this case ur unit still stands uncovered and need not be covered or registered under ESI Act. My explanation is based on the information given by u and it shall be changed if the situation is different.
Regards,
KIRAN KALE
From India, Kolhapur
IN accordance ur information it looks like that ur unit is not covered under the ESI Act, as even if there r 70 employees working in the unit, and getting more than celling limit of ESI When it was in the tune of Rs. 6500/- or and 10000/- so, because only ur unit is not covered,
Now, 16 of ur employees r getting less than Rs.15000/-(pls. remember i am prsuming this salary as gross salary and not only Basic,D.A.) in this case ur unit still stands uncovered and need not be covered or registered under ESI Act. My explanation is based on the information given by u and it shall be changed if the situation is different.
Regards,
KIRAN KALE
From India, Kolhapur
Dear Mr Kiran Kale
Thank you for your input. I have got a copy of the letter by ESI commissioner written to the Regional Directors/All ESIC branch offices, indicating the following points. However, if we go through the content, following two points creates ambiguity and is contradictory.
•
Such workers who are engaged by construction agencies and are working on the site of the project should not be considered for the purpose of coverage of an establishment dealing with construction activities.
•
Such construction workers are to be taken into consideration for coverage under Section 2(9) as 'employee' who are engaged directly in a covered factory by the principal employer or through an immediate employer.
The first point says, the workers engaged by construction agencies on the site of the project should not be considered for the purpose of coverage.
The second point says, such construction workers are to be taken into consideration for coverage under Sec 2(9) as 'employee' by pincipal employer or through an immediate employer. Here the principal employer is the factory who is engaging the construction company and the construction company becomes immediate employer. It means that the workers need to be covered under ESI.
This point is contradictory. Seniors may please clarify - is it that if companies have no ESI code, they should not cover the employees and if they have code, they have to cover workers under ESI or what actually it means?
Regards
K.Ramachandra
Bangalore
Thank you for your input. I have got a copy of the letter by ESI commissioner written to the Regional Directors/All ESIC branch offices, indicating the following points. However, if we go through the content, following two points creates ambiguity and is contradictory.
•
Such workers who are engaged by construction agencies and are working on the site of the project should not be considered for the purpose of coverage of an establishment dealing with construction activities.
•
Such construction workers are to be taken into consideration for coverage under Section 2(9) as 'employee' who are engaged directly in a covered factory by the principal employer or through an immediate employer.
The first point says, the workers engaged by construction agencies on the site of the project should not be considered for the purpose of coverage.
The second point says, such construction workers are to be taken into consideration for coverage under Sec 2(9) as 'employee' by pincipal employer or through an immediate employer. Here the principal employer is the factory who is engaging the construction company and the construction company becomes immediate employer. It means that the workers need to be covered under ESI.
This point is contradictory. Seniors may please clarify - is it that if companies have no ESI code, they should not cover the employees and if they have code, they have to cover workers under ESI or what actually it means?
Regards
K.Ramachandra
Bangalore
Dear ramachandra
The ESI act 1948 is not appilicable for employees in the construction company, they are covered under Workmens compesation act. provided that the emplyees working in the corporate/regional offices of the construction company who draws the salary(basic+da) of 15000 or below are covered under ESI act.
(the employees who coverd under ESI act will not cover by Workmens compensation act)
From India, Mumbai
The ESI act 1948 is not appilicable for employees in the construction company, they are covered under Workmens compesation act. provided that the emplyees working in the corporate/regional offices of the construction company who draws the salary(basic+da) of 15000 or below are covered under ESI act.
(the employees who coverd under ESI act will not cover by Workmens compensation act)
From India, Mumbai
Dear K.Ramchandra,
Just think that urs is construction co. having many employees on site work, as well in the office. but no. of employees in the office r around 8. ur unit is not covered as per the provision.
Now, think u have employed 20 or more persons in the office, which is registered under shops & comm.estt. act, obviously ur unit is within the ambit of ESI Act even though it is construction,
Secondly, suppose ur unit is not covered, and u accept a work order of a factory covered under the ESI act, ur employee working in that premises positively covered and so liability to remit contribution to esi goes to principle employer and naturally PE obtained both emp,emr contribution from ur bill.
But when u accept to construct the building of new factory where production is yet to start and no applicability of ESI commenced, then u r free from all the liabilities under the act.
Hope u r at the satisfaction,
Regards,
KIRAN KALE.
From India, Kolhapur
Just think that urs is construction co. having many employees on site work, as well in the office. but no. of employees in the office r around 8. ur unit is not covered as per the provision.
Now, think u have employed 20 or more persons in the office, which is registered under shops & comm.estt. act, obviously ur unit is within the ambit of ESI Act even though it is construction,
Secondly, suppose ur unit is not covered, and u accept a work order of a factory covered under the ESI act, ur employee working in that premises positively covered and so liability to remit contribution to esi goes to principle employer and naturally PE obtained both emp,emr contribution from ur bill.
But when u accept to construct the building of new factory where production is yet to start and no applicability of ESI commenced, then u r free from all the liabilities under the act.
Hope u r at the satisfaction,
Regards,
KIRAN KALE.
From India, Kolhapur
Dear Mr Kale,
Thank you for your inputs.
You have tried your best to clarify the point.
I could infer from your point that as the factory is not covered under ESI Act and also as the factory being constucted is a new factory where ESI Act is not applicable due to the definition of Factory under ESI Act (as manufacturing activity has not begun), and as the construction company also has no ESI code, ESI Act is not applicable to the construction company in this case. As such, I safely conclude that ESI will not be applicable to these persons.
I thank you again for your inputs.
Regards
K.Ramachandra
Bangalore
Thank you for your inputs.
You have tried your best to clarify the point.
I could infer from your point that as the factory is not covered under ESI Act and also as the factory being constucted is a new factory where ESI Act is not applicable due to the definition of Factory under ESI Act (as manufacturing activity has not begun), and as the construction company also has no ESI code, ESI Act is not applicable to the construction company in this case. As such, I safely conclude that ESI will not be applicable to these persons.
I thank you again for your inputs.
Regards
K.Ramachandra
Bangalore
Dear Bhanu Kalinga
I thank you for your inputs. Though I have worked enough on the ESI issues and am well aware of its applicabililty, somehow this construction workers prior to commencement of factory was bothering me.
Just for your information, the ESI'ble salary is all components (except washing allowance) and not Basic+DA only.
I agree with you that those who are covered under WC Act are not covered under ESI Act; however, those whose salary is Rs.15000 will automatically have to come under ESI Act (provided such companies have eligible no.of persons).
Thank you once again,
Regards
K.Ramachandra
I thank you for your inputs. Though I have worked enough on the ESI issues and am well aware of its applicabililty, somehow this construction workers prior to commencement of factory was bothering me.
Just for your information, the ESI'ble salary is all components (except washing allowance) and not Basic+DA only.
I agree with you that those who are covered under WC Act are not covered under ESI Act; however, those whose salary is Rs.15000 will automatically have to come under ESI Act (provided such companies have eligible no.of persons).
Thank you once again,
Regards
K.Ramachandra
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