Rahul Sethi
Neelam Nand
Hr Generalist
Labour Law Practitioner, Consultant
Korgaonkar K A
Ram K Navaratna
Hr Consultancy
Gm (hr)
Rakesh Pd Srivastav
Chief Manager - Hr (plant Head Hr)
Anilkumar Nair
Compliance Officer
Personnel Executive
+15 Others

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Dear all seniors,
We are a Construction Company based at delhi and as a practise in construction industry most of work is carried out by subcontracting. Now being a compliance guy im looking after the issues relating to labour laws.
If contractors are being asked to cover their employees under ESIC scheme their first answer would be that ESIC is not applicable to civil Contractors. Is That So ?
As a second option they say that they are taking diffrent insurance policies like CAR (Contractors All risk Policy) and Policy under Workmen's Compensation Act. Is it Sufficient enough to cover all the risks of Employement?
Kindly put in ur Valuable Inputs.
Rahul Sethi
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Dear Rahul,

ESIC Scheme protects all “employees” engaged on a monthly remuneration not exceeding Rs. 6500/- in a factory/establishment to which the Act applies. Persons employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or purchase of raw materials, or distribution or sale of the product of a factory or establishment are also covered. Mines, Railway Running Sheds, Naval, Military and Air Force Workshops and specified seasonal factories are excluded. The scheme also provides full medical cover to the dependants of insured persons. In the event of death of an insured person due to employment injury dependants become eligible to cash benefit.

Rahul ur second question is CAR policy is sufficient or not? Its ans is no becuae this policy is covered only accident and death cases.ITs not covered sick benefit for the employee.ESIC covered many benefits thats why the contractors arguing for ESIC.

Dear Dipali,
Thanks for reply.
Now contractors have started arguing on this matter.None of them is ready to get theirselves enrolled on ESIc. Their Latest Answer is that They are also Covered Under Building & Construction Act 1996 and people are Getting Benefits out of It.
Anybody From Same industry or Consultancy Pls. Confirm A Simple Question Are Building Contractors In diffrent construction industry paying ESIC iF YEs Is it Irrespective of No. Of Empoyees . If No Do they are needed to Provide Any Kind of Exemption Certificate.
The answer to the qusetion raised can be submmited appropriated some body from constrction industry.
However in case of construction of the new factory ESIC will not be applicable till factory is not covered under the scope of work i.e manufacturing process and requiste minimum nos. Till the time ESIC is not applicable though cite falls under the coverage limit of ESIC.
Dear Rahul ESIC is not applicbale in constrction company .you can take insurance policy and these workers will be covered under workmen compensation act. tks j s malik
Hai rahul !
This is haritha, working in Prasiddhi group of companies(Banglore) as a HR. ours is a Property development, Infrastructures, layouts Business.
We are also go for sub contracting. We also faced same situation in our company. then our Auditor (specilized in labour Law) suggested to go for ARC(Accident Relief Care).
It is better go for insurance under Labour Act that and register your company as a Principle employer. the same the sub contractor will do. He will file retun of FORM-V.
If my reply is confusing then consult any civil lawyer or auditor who was good at labour Laws.ALL THE BEST.

ESI coverage is applicable where the numbers of employees are more then 10 or 20 depending on whether the factory/establishment is using power or not. Construction workers are generally not covered under ESI ACT

BOCCA ACT is something different. 1% CESS which we are deducting from Contractors bills are submitted to the labour department. This amount is to be utilised for the welfare of the workers. This is still not as effective in practice.

Subcontractors automatically get registered under the BOCCA act when they apply for Labour Licenece.

Ideally a workmens compensation policy is the best soluction in a construction site. Apart from this it would be good if we could also provide accident policy coverage which is very cheap and should the worker die then his family can be appropriately compensated.

CAR or construction All Risk policy is expensive and can be opted for also, it is comprehensive and ideally the principal employer should have a CAR policy
Use of safety measures at site is critical but must say that it is difficult to implement in practice.
Dear Mr.Rahul
ESI will not be applicable to construction sites where the green field project is going on. But if the construction is taking place in the existing factory (which is covered under ESI or in the notified area) / for the factory expansion work the contractor should pay ESI.
The CAR policy and WC policy are all general coverage policies. As per the contract labour act WC policy is must and the CAR policy is nothing but insurance coverage.
If you want the ESI notification regarding the applicablity to construction sites I will send it to you.
Dear Friends,
All the members who are quoting here that, ESI Act is not applicable to the construction companies; my request is to all of them to give us some relevance / case laws / section which will support your comments.
This is a nice subject. Should improve the knowledge of all concerned.
Thanks Rahul for initiating the thread.
Thanks & regards,
Dear all,
I appreciate the comments of all the People who answered the Querry.
I fully agree with Mr. datta that whatever we quote on the site or answer a thread, it will be always helpful and supportive to make a proof like Description or reference of a case.
more Suggestions are welcome.
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