Industrial Relations And Labour Laws
General Manager, Corporate Hr

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I have an query

I work in Public Sector. In my plant we have few employees , whose gross salary is lower than 15000. ie they fall in the purview of ESI, remaining employees are out of the coverage as they have higher salary.

Now the problem is suppose the gross salary of an employee is 14000, now we pay for his ESI contribution as per ESI act.but after wage revision in may month, his salary increases to 18000. Now automatically he gets out of coverage, but as per law we will contribute till the end of the contributory period ie, October.

Nowdue to absenteeism the employee withdraws a gross of 14000, in the month of july and net pay around 13500. . now will this employee come back in the purview of ESI, as his salary gets lower than 15k???. will this monthly change in salary due to absenteeism will come into effect? My question is once the gross crosses 15k , can the employee again return under esi if the salary for any respective month falls below 15k , if he is absent??? Please give me the section where it is written in ESI ACT.

2. Another case is...

We pay statutory bonus @ 8.33% at the month of oct. Now all the employees have basic + DA around 25k . So naturally they will not come under bonus act , as basic + da is higher than 10k. Now suppose for any month an employee comes for 5 days in a month due to sickness or domestic problem, and he withdraws a salary of 9k, will i have to pay him bonus for those months? bonus in our plant is paid annually ie 8.33*3500*12,

So if someone withdraws less salary for any month will he come into bonus act??? which section defines it , can any one help..

From India, Calcutta
In both the cases, you have to take the nominal wages, the salary he would have earned if he had worked for 30/31 days. Therefore, if an employee out of ESI coverage earns less salary due to leave without pay, he will not come under ESI for that particular month. At the same time, if a covered employee earns higher than Rs 15000 in any month by way additional work done and getting overtime payments for the additional work, he will not go out of ESI cover also. (The ESI qualifying salary is going to become Rs 25000 for which announcement has already been done by the Govt.)
In the same manner you have to work out the eligibility for bonus according to the actual salary and not according to salary earned. Therefore, if normal wages increased beyond Rs 10000 during the year, then bonus shall be payable till the month in which his salary remained Rs 10000 or less. Any decrease in actual salary earned shall not be taken into account.

From India, Kannur
These employees are monthly rated and the salary is fixed for a month. The ESI and Bonus Act talks about monthly salary/wages, hence daily rate count is meaningless.
Hence, the both Act will apply on monthly slary not daily.
Mritunjay Nath Sahu

From India, Vadodara
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