Industrial Relations And Labour Laws
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Thread Started by #AS

Dear All,
Our Company has got a new project due to which, the company had to hire some labour through a contractor.
The client requires those labour dealing with the project should be required to covered under ESIC and not under any kind of mediclaim policy
Now the contractor has less than 10 employees so therefore has not registered nor has any of the employee covered under ESIC.
I had checked with few people and they suggested to take those labour on our rolls ( that is issue appointment letters )and then cover under ESIC,
The issue is they will be required for the project for less than a month. Secondly, taking them on rolls may pose a risk to the Company, in case any of those labour are involved in any kind of crime or any accident. ( verifying their details is bit difficult for such labour)
Is there any way we can cover them under ESIC without they being employee or any other alternative.
Please advise.
26th November 2013 From India, Mumbai
We have done this for one of our supllier. They had only 8 people on rolls and we insisted them to register in PF & ESI. Since they dont have enough numbers. We suggested them to include excess number of employee's to reach the count required by PF & ESI and they got registered. Then in the consecutive month they have showed the rest of ppl (we added in excess) as left and now with 8 members they are continuing without any problem. So if you think you have to cover your employee's under PF & ESI, one month you have to bear few hundreds and from then on you could cover them in actual.
26th November 2013
Dear Christopher
Thanks for the reply.
The supplier does not want to get registered.
We have ESIC registration, but to cover those labour, they have to be our employees, is there any way out where in they are not taken on rolls but are covered under ESIC
27th November 2013 From India, Mumbai
If you have genuine contract with the contractor for supply or deployment of manpower, then why do you worry? If the contractor is not having ESI and EPF registration, you can register his employees under your ESI and PF Registrations. For that the employees of the contractor need not be brought under your rolls but just register them under your number and just by registering the employees under your registration will not make them your direct employee so long as the contract is not sham one.
27th November 2013 From India, Kannur
presently you cant do that, ESI authorities have instructed us to give work for contractor's who have ESI code. Earlier there is an option of Omitted wages, where we use to pay all ESI deduction but employees covered were not able to get any benefit because they are not registered. We dont have contractor's in our process but we are trying to get a sub code where we can include all the contractor (non process) who dont have ESI code. Let me come to you with all relavent detail in a days time.
27th November 2013
I am not clear about what Christopher has put in. What I have pointed out is that if your contractor does not have ESI registration, being the Principal Employer it is your duty to register the contractor's employees under your registration. By doing so you are complying to both ESI Act and CLRA Act. And there is no risk as long as the contract is genuine. Creating a sub code exclusively for enrolling the contractor's workers is not possible because sub code is allotted when the original plant/ establishment has a branch in another area which is not under the jurisdiction of the Local Office where the establishment is registered.
28th November 2013 From India, Kannur
Mr. Madhu, I am slightly defer from your thought process.
The duty of the employer is to ensure the Payment of ESI is made for the any contractual work carried out. Why the principal employer has to be register on behalf of an contractor. instead the employer could hire contractor with ESI code which will be more safer. Who can we trust in this aspect? No one will be genuine and no employer will accept to do this too. May be few but not all.
Anyways i will accept your thoughts as you are a senior member and super moderator of this forum. Let me check once again with the local office and get back you if there is an update in this regard.
28th November 2013
Dear Sir,
As a Principal Employer we have to deduct the ESI Contribution 6.5% from the Contractor bill we have to Pay the same to ESIC. What Mr. Chirstopher Sir said is correct, now the Omitted Wages we cant able to pay. You just Log on ESIC Account, in that you can find Contractor Mapping option click and then create Contractor List. You just Enroll the the Employees in your Code, after that you can get the IP No for the person. Just Map the IP in Contractor List, this way only we are following in our company.
28th November 2013 From India, Sriperumbudur
In respect of contract labour, the primary responsibility of payment of ESI and PF lies on Principal employer only and it is on the basis of this responsibility that the Acts have made him pay the contributions in the first instance and then recover it from the contractor.

As Christopheer said, the Employer should engage only those contractors who have their own ESi and EPF registrations. Also, we should engage only those contractors who can get a valid contract licence. But things will not work as we wish. If we are to follow the law, we will not engage contract labour in perennial nature of activities. We will not engage them in such types of operations which are directly connected with the business of the company. If you take the case of new generation establishments, most of them are doing it knowingly. Even Banks engage contract employees to do the main operations. Sometimes, the public sector companies may be the No.1 in engaging contract labour in operations of perennial nature. But once the Contract Labour (Regulation and Abolition) Act is properly enforced, the system will change and probably the contract labour engaged in perennial works shall get regularisation also depending upon why the contract was created or whether the contract was just a camouflage/ smoke screen. In such situation the contract labour will become the baby of the employer even if the ESI and EPF have been deposited by the contractor separately under his own registrations. That means, it is not the remittance of ESI or PF but the purpose behind the contract that is important in deciding the risk involved. And that was why in my posts I had categorically said that there is no risk provided the contract is genuine.

28th November 2013 From India, Kannur
hi their is a way as u can take a medical insurance group policy for the 10 members i think it will be the best way regrd srihari
28th November 2013 From India, Hyderabad
For a group insurance/mediclaim policy, you need to have minmum of 100 nos to enroll. anyways you have deduct ESI for the work carried out by them. Why dont try the method as suggested by gandhi in the earlier thread.
28th November 2013
Dear Christopher, I will be applying Gandhi’s method. Thanks everyone. Will keep you posted if there is any changes. Once again, thanks each one for your suggestions. Regards AS
29th November 2013 From India, Mumbai
Dear Sir, The same problem was occured in our company, regarding this issue i approached ESIC Regional Office. They only instructed Me to follow this method.
29th November 2013 From India, Sriperumbudur
Dear amby let know first whether your establishment is covered under esic act
11th April 2015 From India, Mumbai
Hi all
Same issue. Contractor not having esic and epf reg8stration. These ate the one time and only few days job.
Pls let me know -
1) the method told by Gandhi works. If yes then it may resolve the esic issue.
2) what to do with epf registration as a principal employer. Any possibility to get sub code with same address?
12th June 2018 From India, Kolkata
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