Thanks very much for your reply and thanks everybody for your response.

Your point no. 2 matches our profile. We run the canteen in our name and we serve food to in patients, visitors and staffs. We get paid in cash from out patients and visitors and hospital reimburses for In patient food. [in turn Hospital collects some fixed amount per day from patients which is not under our purview]. We have an agreement with hospital on food rates. We pay to the hospital for utilities like water and electricity. Instead of rent for the premises, we got into an arrangement where we pay 10% of daily revenue to the hospital. we have an option of paying rent also instead of revenue share if we like to.

Hospital does not interfere in our operations except for Service issues.

Now what are the options available to us. The staffs are not positive for any deductions like PF or ESIC. Also the attrition rate of helpers and service boys is quite high. If we happen to pay for PF and ESIC through our principal [Hospital in my case] as suggested by many people, we don't know how much practical it will be to inform the Hospital HR every time when some body quits and some body joins, etc

Friends, please share your thoughts

From India, Chennai
In this case the canteen is no way connected with the hospital and the hospital has no control over the operations of the hotel/ canteen. Moreover, it is not a statutory canteen since the hospital will not come under the purview of Factories Act and under no state's Shops and Commercial Establishments Act, setting up of canteen has been incorporated as an obligation of the employer,ie, the hospital in this case, though Kerala state by means of inserting a new section to the Kerala Shops and Commercial Establishments Act has made it mandatory to provide hostel facility to the employees in the shops and commercial establishments employing more than 50 employees. Therefore, there is no need for coverage of the canteen as an establishment under ESI or EPF.

From India, Kannur
Thanks so much for your quick reply.
is there any proof or reference points which I can show to the hospital management, to explain them about this issue.
or can you guide me where to search for qualified information on this issue. Thanks.

From India, Chennai
Dear Mr Ganesh
We are professional Outsourcing Service providers for many big Group Companies in South India. We can help you in complying with EPF and ESI for all the canteen employees through our PF / ESI code numbers. Pl contact us for any further details / clarification.
N Nataraajhan, Sakthi Management Services (Mob : + 91 94835 17402 ; e-mail : )

From India, Bangalore
Dear Jganesh,

There are a lot of verdicts and contradictory statements in favour and against the concepts of Contract FOR Service and Contract OF service. I don't know which statement would satisfy your need for 'qualified information'. If you are not okay with the posts above referred to decide where you stand, you can search the relevant sites, labour law reporter, labour law journals or similar other journals and make yourself confirmed that your case will not come under Contract Labour and your employees will not come under the purview of PF/ESI.

Please remember that there are verdicts which say that workers of a statutory canteen should be covered by ESI/EPF as if they are contract workers. This will not apply to you because the canteen you run is not a statutory canteen or a facility which is provided as per statute but a canteen in a factory employing a certain number of workers (250 workers) is a statutory canteen and the work the workers perform in such canteen in something incidental or something required for the main operation of the factory.



From India, Kannur
Dear Ganesh,

What is required is that you should buy copies of relevant BARE ACTs of ESI & EPF Act. and discuss with the hospital authorities about the applicability of ESI & EPF to your employees. Person with minimum knowledge of these acts and proper understanding will easily come to terms about the applicability. Therefore this should not pose big problem to you. For your immediate requirement, you may as well obtain a legal opinion from a well known advocate who is practising in labour laws in your place should suffice and satisfy the hospital authorities. For your ready reference some relevant portions are extracted and attached. The hitch in your contract with the hospital is a clause to provide "sharing of your 10% of daily revenue" with them, in my opinion, in effect, it could be interpreted to 'the hospital come into your shoes as a co-owner of the canteen or a restaurant. Try to modify this clause and make into all inclusive "rent". I don't think you'll have any problem thereafter.

From India, Bangalore

Attached Files
File Type: docx Legal provisons on the applicability of ESI ACT.docx (18.1 KB, 135 views)

Thanks guys for your answers. I am overwhelmed by the kind of effort you guys put to help each other and to solve somebody's problem.
Now I have got good idea on how to handle this issue. I will take care of it myself from here on.
once again, thank you all.

From India, Chennai

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