Amith R Murthy
Hr Executive
Hiren Chheda
Labour Law Advisor
Kiran Arora
Self Employed
+1 Other

Of late, esi inspectors here at chennai are charging esi contributions on amonts paid on jobworks done outside the employer's premises.
Is this action is accepted at others towns/cities?
Is there any way to come out of this problem?

From India, Madras
Dear Ramesh
Though you have not mentioned clearly the details
Yes thats true in othercities also
But there are certain manipulations that one has to do
while doing job works outside employers premises which may be carried
out by Incharge where they are working otherthan employers premises.
Besides One has to provide certain declaration on one's behalf.such declarations vary from place to place and the type of work,no of emplyees ,skill of employees etc

From India, Srinagar
Hi Ramesh
Coverage of workers engaged by the outside agencies / job contractors in connection with the work of the principal employer.
The Hon’ble Karnataka High Court
Hon’ble Madhya Pradesh High Court
Hon’ble Supreme Court of India
Hon'bel Madaras High Court
have given their clear cut judgments that the workers of the outsourcing agencies / job contractors does not come under the definition of section 2 (9) of the ESI Act and no contribution is payable.
If u want any further info let me know.

From China, Beijing
hi ramesh
at present all the actions on outside labour charges are stayed by the DG ESIC
kindly prove to inspector that there was no supervision of the company during the process at outside
needs any further information pl contact me on 09821078457
hiren chheda

From India, Mumbai

Attached Files
File Type: doc hc_fb_mad_240707_outside_642.doc (45.0 KB, 83 views)

Dear Friends,
I think it is a good topic for discussion, but i am not getting it clearly so can anyone help me to understand. According to me it is about employee working outside the premises of employer, so clarify on this and make me to understand your replies also for the question that is being posted.
Amith R.

From India, Bangalore
Hi Amit

The topic is really very serious and intersting

If principal employer have engaged some workers through contractor or outside agencies it is the responsibility of the outside agency to deposit the ESI Contribution of the workers engaged by contractor.

But what the ESI authorities are doing they issue the notice to the principal employer for not submitting the ESI Contribution of the workers engaged by outside agencies. In fact this is the responsibility of the Outside Agencies / job contractor but in ESI nobody bother about it.

In the case the outsourcing of the work/ job work entrusted to outside parties where no supervision is involved either by the principal employer or by his agent , the persons whom the outsourcing has been done or their employees will not become the employees of the principal employer automatically and hence any amount paid to the contractors whom the job work is entrusted , no contribution is payable on the said amount by the principal employer.

But ESI authorities are not taking care of the judgements given by the vaiours high court and Hon'ble Supreme Court of India they are only minting the money by issuing the notices to the principal employer.

I hope that the matter is now clear to you.

Best Regards


From China, Beijing
Dear Sushma,
Thanks a lot for making me clear on this. But in such cases what is remedy friends what can be done to help the employer come out of such cases, because it might be the same with anyone of our company tomorrow. Come lets find out what can be done in such cases and post that here so that all will be aware of such things or if anyone is knowing this can you post the reply. Waiting for your reply.
One more thing can the employer maintain all related documents submitted by the contractor and produce it at the time of inspection from the ESI inspector. Clarify me on this and also confirm me what will be the outcome in instances.
Amith R.

From India, Bangalore
Hi Amit

In the case of my company we are fighting against the ESIC in High Court and The Hon’ble Court was pleased to order deposit of 50% of the demand.

Our Labour Law Consultant is preparing to fight against ESIC in the Hon’ble Supreme Court of India and for this purpose he is contacting with the employers.

Amit as you are talking about remedy so dear all the judgments of various Hon’ble High Court and Hon’ble Supreme Court are there. But they (ESI Corporation) are not ready to listen or see anything. They are just minting the money and harassing the employer mentally and physically.

I think you are interested in this topic. So for your reference here is the copy of circular. I think it will be useful for most of the cite members.

Respected Members

We feel pleasure to announce that the ESI Authorities at Head Quarter, Kotla Road, New Delhi-110001 has agreed to implement the judgments of the Hon’ble High Court and Hon’ble Supreme Court of India for not claiming ESI contribution on job work got done by outsourcing agencies and independent contractors doing work for the principal employer outside the premises. We also thank to Sh. Mangat Ram Singhal, Minister of Industries and Labour N.C.T Delhi who was kind enough to take up the matter with the Director General on our behalf and convinced the Director General and high official of the ESI Corporation for implementation of the judgments the Hon’ble High Court and Hon’ble Supreme Court of India that ESI Contribution is not payable by the principal employer for the work executed by outside agencies/ Labour Contractor. It has been reliably learned that ESI authorities at Kotla Road have instructed the Regional Directors not to proceed with claiming contribution as stated above. However final notification from the ESI Head Quarter is expected soon. We will appraise further developments shortly.

We thank our Labour Law Advisor Sh. R.C. Malhotra- Ex Officer of ESI Corporation for his cooperation / knowledge for drafting all correspondence on our behalf with the higher authorities.

With Regards

Yours Sincerely

H.D. Joshi

Hony. General Secretary

Thanks & Regards


From China, Beijing
hi sushma esic issued final directions on outside labour charges and i am h/w attaching the scan copy of the same, however if the same is not clear then contact me on 09821078457 regards hiren chheda
From India, Mumbai
Hi Hiren I also have the same and want to upload that notification for amit but not able to upload that. Thanx Sushma
From China, Beijing

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