Dear All, Is any statutory obligation towards Residential Building Construction Company to be registered under ESIC Act. for their workers. Secondly is applicable to their Official Staff. MK Verma
From India, Ahmadabad

Dear mkverma,

I will give answer to your second question first. I suppose you are from State of Gujrat.

If you are having more than 10 employees in your office, ESI is applicable to your office / establishment / organisation / company.

Now, as regards to your construction site whether it is residential or otherwise, my views are as under:

1. If your project plot is having encumbrance of ESI, you can not escape from ESI liability. Meaning of this, if earlier there was a covered factory or establishment in the place of your project plot and the code is not surrendered properly to the corporation before start of your project, the ESI Act is applicable to your project.

2. If your project plot is not having any encumbrance of ESI as stated above, you can exclude the construction labours under certain conditions. You are requested to refer the circular by ESI Corporation bearing Construction No. 4/99 dated 14.06.1999 and interpret it carefully and properly. I have seen some cases wherein the Corporation has demanded the ESI contribution from Construction sites. If your construction site is having batching plant installed, ESI is applicable.

Lot of ambiguities exists in applicability of ESI to construction sites. On the one hand the Corporation accept by issuing various circulars that the ESI is not applicable as on date to construction site employees and intent to cover them, on the other hand some of the construction companies have received notices of demand of ESI contribution by the Corporation. Once you get such a notice, either you have to pay it or go for litigation by paying 25% or 50% of demand in the court.

I have discussed on this subject earlier also. In Act, no where there is a exclusion of ESI to Construction Industry. My question is, can a circular by Corporation exclude the Construction Industry from implementation of ESI? If the circular is implemented by the Corporation then why there is no uniformity?

I came across one case wherein the Corporation has rejected the death claim of IP who was employed at construction site saying that the deceased is not coverable. Why then the demand notices as mentioned above are being issued?

I have one more question. What is the actual reason to bring out the circular bearing Construction No. 4/99 dated 14.06.1999? Is it not that the construction sites are accident prone?

The forum like this raise the voice against such practices.

From India, Mumbai
Thanks for the updation.
But there is any provision for alternative . BOCW Act.and Workmen Compensation Act.
Is any statutory excuses is being registered with BOCW Act then ESI Act is not applicable.
for workers.

From India, Ahmadabad
Dear Verma ji,
Employer has a right to seek exemption from the applicability of ESI scheme in case benefits provided by the management are similar or superior to those available under the ESI Scheme.
ESI Act and BOCW Act are two different enactments though both are Social Security Enactments, the objects and benefits under the both are different. Benefits under BOCW are not identical and not superior than of ESI scheme. Therefore, you can not seek exemption from ESIS, in my view.
However, I am suggesting the construction employers to make representation to the Govt. that the 1% cess on project value under BOCW Act is very huge amount through which superior benefits than ESIS can be given and exempt from ESIS. Contribution towards ESIS at 6.5% of wage bill is also a very huge amount. This forum should discuss on such issues rather than discussing un-professional way.

From India, Mumbai
The ESI Act is not applicable to construction site ,but applicable to its Co office if it has 10 or more persons employed.EC act is applicable to construction site.BOCOW Act will not nullify the ESI Act.
Varghese Mathew

From India, Thiruvananthapuram
Dear Mr.Keshav Ji,
Thanks for the reply.
Those not falling under the ESI Scheme Salary Above Rs.15000/- for them, how the benefit can be given / availed.
Secondly under ESI medical /sick leave can be availed with salary, but those are not covered under ESI what are the provision can be made.
Thanks & Regards
MK Verma

From India, Ahmadabad
Dear Verma ji,
Greetings of the day to you as well all viewers.
Employees those gross rate per month is less than Rs. 15000/- are covered under the ESIS. Such covered employees only are eligible for benefits under ESIS.
Employees who are not covered under ESIS are governed by rules and regulations as framed by the company.

From India, Mumbai
The above is not fully correct.If the establishment/employee is not covered under ESI Act and is covered under Factories Act/Shop & Establishment Act the leaves are governed by that respective Acts.Women employees will get maternity benefits under Maternity benefit Act.Persons who suffers employment injury will get benefits under EC Act,if they are employees and working in scheduled employment under the Act.They will be entitled for some benefits under the Welfare Fund Acts applicable to them.Hence benefits are not srictly as per policy of the Co.
Varghese Mathew

From India, Thiruvananthapuram
Dear Varghese ji,
With due respect to you, my comments to your response are as under:
I do not agree with you. I support posting by Anonymous.
I agree with you. Even posting by Anonymous is on same line.
EC Act is applicable to those who are not coverable under ESIS. I support the views by Anonymous on applicability of ESIS to construction site workers.
I agree with you. Still I support the suggestion given by Anonymous on representation to Government.

From India, Mumbai
Dear Mr. Verma,

Sh Keshav Korgaonkar has rightly pointed out that ESI Act and BOCW Act are two different enactments though both are Social Security enactments but the objects and benefits under the both are different. In my opinion, if an establishment carrying out construction activities employing ten or more employees then it is certainly covered under ESI Act.However employees drawing more than 15000/- are out of the purview of the coverage of ESI Act.Similarly BOCW Act is applicable where ten or more employees are engaged in the construction activities. The employer requires to get himself register with the competent authorities and pay 1% of the value of the construction as cess. As regards the coverage of construction of residential building is concerned, the same is exempted from under the Act, if the total cost of such construction is less than Rs 10 Lakhs. Any person,who is employed mainly in managerial of administrative capacity or in supervisory capacity and drawing more than 1600/- is exempted under the Act.The employees who are engaged in the construction activities and are between the age of 18- 60 years are supposed to get themselves register with the labour deptt. for availing the benefits framed by the state govt.

BS Kalsi

Member since Aug 2011

Secondly is applicable to their Official Staff.

From India, Mumbai

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