one esi inspector has surprised my company by examining our accounts of the years 99-00 and 00-01. He demands the following:
1. we have paid overtime to employees but not paid contribution
2. many times we engage autorickshaws to bring materials to the company. The amount paid to such sundry drivers is to be considered as wages and contribution to be paid.
3. We are outsourcing dtp and photocopying to some small time shops in the city. The payments made to such parties are to be calculated and contribution paid to esi.
4. we have paid stipend to trainees for which contributions are to be paid
Can somebody tell me if all these demands are legal? As far as my information goes, even overtime was not considered for esi contribution in 1999 or 2000. It was introduced later. Can anybody throw some light on how to proceed now? They have send us notice for revenue recovery also. Pls help

From India, Ernakulam
ESI Corporation/Inspector is right to demand the contribution on the following:-

1. Overtime:- The overtime have always been included in the Wages for payment of contribution there was nothing that it was introduced after 1999-2000 or something like that.

2. Autoricshaw Driver:- The ESI is not right to demand contribution on the payment booked on this particular head, as the ricshaw puller are not contracted for "Contract of Service" they are contracted as "Contract for Service" and hence they cannot be deemed as the employees of the company. The ESI is to payble when the company engages an employee, irrespective, of the fact that is is full time/part time/through a contractor or employed for only a particular small job like white wash in the company premises etc.

3. DTP/Photocopying Job:- What is true for Autoricshaw is also true for Outsourcing of DTP and Photocopying Job too. There is no "contract of Service" it is only Contract For Service". The DTP operator/the photocopier people do not work for your company only they have tens of other client so ESI cannot deem the employees employed by them as the employees of your company as you do not have any control over them, you cannot control the manner they complete the job or their attendance so how can one deem them to be your employee and if they are not your employee how can they claim contribution on the amount paid to them. Its simple logic. There have been departmental instructions on both the above and also decided legal cases. So you need not worry it is just that you'll have to fight it out first with the ESI Inspector , if he doesn't listen, then in the ESI Office and even if they didn't listen then in the ESI court and you'll get justice.

4. Trainees:- Anyone who has been engaged for any work in the company in any capacity is considered an employee ,by whatever name he is called, however, Trainees will not become an employee if they are sponspered by a Goverment Recognised Educational Institute like ITI, CA, ICWAI, etc. All other institutes, which are not Govt.Recognised if you employ any student of theirs in your company, ESI Corporation will deem them as your employee and will surely claim wages on the amount paid to them.

Hope you got answere to all of your queries.

Sincerely,

Amit

From India, Delhi

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