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Dear Expert, I'm working in Govt. Company which is a gas major in India, dealing in Transmission ,Distribution, Marketing Of Natural Gas, CNG in Agra region. Some % of Natural gas is imported at Gujarat port from Qatar while some % is extracted from Bombay high off-shore. Both imported as well as indigenous gas mixes at Hazira terminal and then transported through underground PIPELINE to all over india including Agra. At Agra we do nothing but reducing the Pressure of incoming gas at 90 Bar to 16 Bar ( Bar is unit of pressure measurement) for distribution to individual consumers in the region. At Agra Station we are 6 regular employee on pay-roll of co. while rest 18 are contract employees. Grid Power as well as Gas Generator is used for operation and functioning of various equipments, Meter, lights, fans etc. Q-1: Whether we are doing any manufacturing activity at Agra or not in the light of Factory Act? (Since we are only filtering gas and reducing pressure from 90 bar to 16 bar) Q-2: Whether we are using power for manufacturing as per factory act to arrive at minimum numper of employee ( 20 or 10 ) engaged in the activity?( first of all we are manufacturing nothing and secondly power is used for illumination, fan, meter, equipments etc.) Q-3: Is contractor required to take ESIC coverage for its employee??( Since number of contractor's employee is 18 which is less than mandatory 20 ( without power case). However no. of regular (Permanent) employee on Company's pay roll is 05 and if added to 18 contract-employee exceeds 20) Q-4: At Mathura, Dholpur,Firozabad and Babrala there are stations that are exact replica of Agra Station. Same Contractor has deployed same no.of employees there also. Taken together all the stations Contractor has deployed 80 employees. Can the contractor take coverage of all employee from single ESIC Office or not. Note: It is to be noted that Contractor has been awarded this job by all India Tender for carrying out Maintenace Job and not for deployement of manpower. This contract is not a manpower contract. There is no mentioning of manpower in the contract signed between our co. and contractor. Only maintenance activities which are to be done are quantified and payment is made on this ground only.
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By virtue of section 2 (k) of the Factories Act, manufacturing process means......making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal, or .......". Here your operation comes under manufacturing process since you treat the gas with a view to using it by the ultimate consumers. Therefore, the operation being carried on is manufacturing in nature. Secondly, in order to find whether Factories Act is applicable or not, the number of employees engaged directly and through contractor should be taken in to account because, the employees engaged through contractor are also engaged in the primary or secondary process or business of the factory. Since the total number of employees engaged is more than 10 ESI will be applicable because it is a factory. For other establishments it is 20 workers. For coverage purpose the total number of employees means employees directly employed and through contractor. For the purpose of coverage all the branches/ units of the same organisation set up at other places where the ESI is applicable will be taken. As such, there is no meaning in saying that ESI will not be applicable. An establishment is said to be run with the aid of power, if it is run at least with a motor. There can not be a station meant for filtering of gas and reducing pressure where no power is used. For ESI coverage, separate registration would be advisable. Not only ESI, the establishment will also be covered by EPF. Regards, Madhu.T.K
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