Queries
VIPUL 1
A vendor has been awarded job in an organisation where ESIC is applicable, but nature of job is such that the service provider workman is required for specific time period of less than hour on daily basis in an organisation.
Now , whether for such service remmitance of ESIC contribution is required or not ?
Kindly provide expert opinion on this.
regards,
Vipul
15th May 2012 From India, Thana

PARTICIPATING IN DISCUSSION:
Alphonse
Manager -hr&a
VIPUL
Service
+1 Other

saiconsult 1676
What is the nature of job and waht is the activity of the organisation? B.Saikumar Hr &Labour Law advisor Mumbai
15th May 2012 From India, Mumbai

VIPUL 1
NAture of job is for only 01hr. chemical addition to cooling towers of the plant . and paid services is also well below min. wages also.
the vendor is doing chemical supply business and he has provided this services on request of plant. the cost is very less Rs.18000/- P.A. for this job.
About company activities company is mnfg. of chemicals .
kindly advice urgently.
regards,
Vipul Rana
17th May 2012 From India, Thana

saiconsult 1676
It appears that he is an independant service provider providing you a service for some fixed amount under an annual service contract.In my view the relation between your establishment and his unit is business to business and therefore the amount paid by you, in my view, does not acquire the character of wage and hence no contribution is payable. However you should not treat him at any time as employee and pay him time rate wages.
B.Saikumar
Mumbai
18th May 2012 From India, Mumbai

VIPUL 1
Dear Sir
I agree with you, but now the query raised by Corporate Compliance and Safety dett. is that, is something happend to that fellow, while rendering service to our plant, who will be responsible? , second, When ESIC is applicable he can be covered under for W.C. Act by taking insurance policy ? since he has to work only 01hr
18th May 2012 From India, Thana

Alphonse 127
Dear vipul
We have to recover the ESI contribution for even 1 hr job of the contractor or employee .Since he is doing hazardus job that too for every day you have to register his name in the ESI by on line and recover the ESI. If the wage is below Rs.100.00 please contribute the Employeer contribution of 4.75% with out fail which may safeguard you while he met with an employment injury. Hence better register his name and recover the ESI or pay the employer contribution.
regards
alphonse
9443625359
19th May 2012 From India, Madras

saiconsult 1676
Mr.Vipul

When the service provider is an independant contractor and is not your employee under the ESI Act or not an employee within the meaning of Employees Compensation Act on the same ground that he is an independant service provider, the question of your liability as an employer for an employment injury does not arise.However you should be able to argue so on the facts if any dispute arises in future. There is no harm in covering him under ESI by way of an abundant caution to meet any risk of compensation arising out of employment injury. Then, you will be accepting him as your direct employee on part time-basis since he is not employed through any contractor and may possibly have to face any consequences arising out of employer-employee relationship. You can also explore the possibility of covering him under an accident policy with an Insurance company independantly.You may take a prudent decison keeping in view the costs and benefits of covering him under ESI.You can consult a consultant should need arise.

B.Saikumar

Mumbai
19th May 2012 From India, Mumbai

VIPUL 1
Thanks a lot, for your expert opinion, we are going to cover him undre ESI, and we will also take care that, in future direct relationship as Employer and employees, does not arise in future , since we are only making payment to the contractor( Chemical Supplier) for supply of chemical and dozing .
In case where on call base services are there, as a company we are not seeing whether they are having valid ESIC , PF code . for e.g. ZErox M/c Reparing on call, in such case something happend to the service enggineer at our site
1 It is responsibilty of Site Employer ?
2. In such case what about the compensation payable to that fellow.
regards,
Vipul
19th May 2012 From India, Thana

saiconsult 1676
Dear Vipul
As explianed by me in my earlier reply, it is a safer proposition to enter into an annual servcie contract for providing service on call basis for a fee to be paid yearly basis since such contarct acquires the character of principal to principal but not Principal employer and contractor or employer-employee so that you have no liability as employer for any injury caused to such person on your premises.However , by way of abundant precaution, you may explore the possibility of covering him under an independant accident policy on yearly basis.
B.Saikumar
Mumbai
19th May 2012 From India, Mumbai

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