Harsh Kumar Mehta
Consultant In Labour Laws/hr
Management Consultants Legal & Hr
Esi & Pf Consultant
Advocate And Labour Laws Consultant
Korgaonkar K A
Agm - Hr
+3 Others

Thread Started by #kilarumeher

Dear Folks, If the Company is covered under ESI Act, whether ESI is applicable to its contractors who are having employees less than 20? Can clarify? MK Kilaru
22nd July 2014 From Germany, Zell
1. ESI Act, 1948 and rules/regulations framed thereunder do not make any distinction between regular/casual or employees engaged through contractor (immediate employer).
2. Minimum number of employees required for coverage under said Act is 10 in respect of factory and 20 in respect of certain notified establishments.
22nd July 2014 From India, Noida
Dear Harsha Even though contractor is having less than 20 emp[loyees, they are eligible for esi code because now the rulle is 10 employees are enough V.Subbarao
22nd July 2014 From India, Madras
Dear MK Kilaru ji,
Any Social Security Enactment, if it is applicable to any factory / establishment, all the employees employed by / under it including contract labours are covered under such Social Security Enactment.
Even for counting number of employees for coverage of such Social Security Enactments, all the employees including contract labours are taken in to consideration.
Accordingly, if company is covered under PF / ESI etc., contractor's labours are coverable under PF / ESI etc. Even any contractor is having only one employee, he is to be covered.
22nd July 2014 From India, Mumbai
Thanks to all. If we give consultancy rather than maintenance or deploying of manpower for gardening in your work order, even though statutory obligations will be applicable? Regards MK Kilaru
23rd July 2014 From Germany, Zell
Dear MK Kilaru ji,
You may give any nomenclature to a contract. That is not important. Important is the natural of work, work is of perennial nature or not, daily hours of work, supervision and control etc.
If we adopt the practice of consultancy everywhere, the very purpose of labour law will be defeated.
23rd July 2014 From India, Mumbai
Dear all, The ESI ACT has since been amended and the ESI Scheme is now uniformly applicable to a Factory or Estt who is employing/has employed 10 or more persons on any day in last 12 months.
23rd July 2014 From India, Gurgaon
Dear Mahivir Dahiya / Subbarao,
Threshold limit of number of employees for coverage of ESI is well discussed in this forum several times. Still to correct you, this threshold number is not uniformly applied throughout our country. Except in Maharashtra, Assam and HP there is an uniformity. Please find some of the discussions on this topic.
23rd July 2014 From India, Mumbai

1. I will like to point out to Sh. Mahabir Dhaiyaji that the provisions of section 1(5) of ESI Act, 1948 were not amended making it at par with provisions of Section 1(3). To implement ESI Scheme in selected establishments is well within the powers of the appropriate State Govt. under section 1(5). Still there are some State Governments viz.-Maharashtra which have not so far issued fresh notification under above provisions bringing coverage of certain establishments at par with the provisions of section 1(3). There may be few more such States.

2. I will also like to correct Sh. Korgaonkarji that perhaps State Govt. of Assam had issued notification u/s 1(5) in the year 2012 reducing threshold of coverage of certain establishments u/s 1(5) to 10. If desired, I will make further search on this issue. I may also submit that to my knowledge, there are certain States namely- Gujarat, Pondicherry etc. which had not issued notification u/s 1(5) covering medical or educational institutions. Therefore, in my opinion, so far as coverage of medical and educational institutions is concerned, there is no uniformity. The position is required to be verified from the concerned Regional/Sub/Divisional Office of ESIC.
23rd July 2014 From India, Noida
The Contract employee are applicable for ESI because the factory is already covered.
As such it is immaterial that the contractor is having the workers below 10.
The ESI authorities will see the factory workers+contract workers for the purpose of ESI Coverage.
The employer has to cover in his code No. if the contractor is not having the ESI Code.
23rd July 2014 From India, Hyderabad
Dear Friend,

Your question is if a Company is covered under ESI Act, in that case whether ESI is applicable to its Contractors' employees having less than 20 employees.

As far as legal position is concerned,my respected senior coleagues have already explained in clear terms as regards its applicability.

In a simple language for your understanding ,I would like to submit that ESI is applicable for employees engaged through Contractors in the even they employ less than 20 employees since they have been working in your Establishment/Factory.

If Contractors are registered and obtained ESI code from ESI Authorities, then liability of paying ESI on the part of Principal Employer is excluded. It is advisable, being a Principal employer, you should keep strick vigil to the effect that ESI contributions are deposited by Contractors under their respective codes.

If Contractors fail to deposit the ESI contribution for employees engaged by them in your Establishment/Factory, it will be the responsibility on the part of Principal to deposit the same.
24th July 2014 From India, Calcutta
Dear Friends,
Additions with still in simple words:
A company covered under ESI Act is liable to cover all the coverable employees working under it including contractor's employees.
Company should ensure that no coverable employee including contractors' should enter its premises with out covering him under ESI Scheme.
24th July 2014 From India, Mumbai
Dear seniors i have doubt about as under contractor there are workers more than 50 employees. Can we cover some of the workers under esi only without PF.Please suggest me .can we cover....
1st August 2014 From Kuwait, Kuwait
You need to take a session first on basics of PF & ESI, then only you will get an answer to your query.
If you try to search in this forum, will will get number of posts on PF and ESI but I have a doubt whether you will get correct answer yourself reading it.
1st August 2014 From India, Mumbai
Dear Sir, if company is covered under PF / ESI etc., contractor’s labours are coverable under PF / ESI etc. Even any contractor is having only one employee, he is to be covered.
9th August 2014 From India, Vadodara
Dear Pal, My simple answer is yes, even any contractor is having only one contract employee , he must be covered under PF / ESI etc. as per law of the land.
10th August 2014 From India, Calcutta
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