Harsh Kumar Mehta
Consultant In Labour Laws/hr
Hr Professional
Korgaonkar K A
Abdul Quadir Awate
Hr & Admin Head
+1 Other

Dear All,
One of my friend has stated that ESI Authorities have Covered his establishment based on the inspection report of the ESI Inspector. No copy of the inspection report is issued to the establishment.They have allotted the ESI Code Number and Local office and directed him to remit the contribution. Kindly clarify whether any authorities can take such decision with out giving an opportunity to an establishment/Company to explain its stand ?

From India, Bangalore
Dear Sir, It is helpful if any body express their views with suggestions on this issue please.
From India, Bangalore
1. Dear Mohan ji, the action taken by ESIC authorities, as narrated by you in the thread appears to be in order so far as procedural aspect is concerned. The initial inspection of the establishment is popularly called "survey" , but in official terms the same is called as "Preliminary Inspection Report", the purpose of which is to see whether the unit is coverable under ESI Act, 1948 and rules/regulations framed thereunder ?

2. The Social Security Officer has full powers to visit any establishment under section 45 of the Act, verify the records of employer and recommend the coverage of the same, if the unit is found coverable. The employer can ask for copy of the said "preliminary inspection report." The same can also be obtained through RTI.

3. However, if the employer feel that his unit is not coverable under said Act, he can contest the same through a representation/letter to the authority which have issued the said code number. The employer can request for re-inspection/verification of his records, if considered suitable by furnishing all facts on form 01.

4. In case, the authorities will not be willing to re-open the coverage issue, there is no alternative, in my opinion, except to approach the Employees' Insurance Court of the area, having jurisdiction as constituted under section 74 of said Act. However, the above actions need to be taken at the earliest in order to avoid prosecution, levy of interest, damages as well as adhoc assessment under section 45-A of said Act.

From India, Noida
Dear N.Mohan ji,
When the ESI code number is allotted to you on the basis of Inspection report, why you did not demand the inspection report? Or, there was no such inspection?
Is your establishment not coverable under the Act? If not, you can contest the order, as suggested by our learned member Harsh Kumar, at the earliest.
You can also take a stand that the inspection report is not provided to you which amounts to violation of principles of natural justice. But ensure before taking such stand that no inspection report is provided to you.

From India, Mumbai
Dear Korgaonkarji, He has not issued any report. But later received a letter from ESIC covering the establishment and directing to remit the contribution.
From India, Bangalore
Dear Mr. MadanaGopala Swamy, Request you for a copy of the High Court Order as it is more useful to me. It is fine,even if you tell me where can I get the copy of the Order.
From India, Bangalore
1. Dear Mohan ji, in my opinion, may please like to trace out/search the copy of hon'ble High Court judgment as mentioned by one of participants in above remarks in order to enhance the knowledge on the subject and if found, may like to place in this thread online link for general awareness of the participants.

2. However, it will be more better if the employer may evaluate his own particulars or facts to assess whether the coverage of his firm/unit is correct or not. If the employer is employing minimum/more persons as required under ESI Act, 1948 and rules/regulations framed thereunder by including all i.e. regular, temporary, casual, through contract etc. etc., I think, there is hardly any relevancy to get the copies of said order, Inspection Report etc. as suggested by various participants in their remarks as above. "Giving an opportunity to an establishment/Company to explain its stand" as mentioned by you in your thread is required only in actions stipulated under section 45-A of the said Act (determining of contribution on adhoc basis), though in said opportunity of hearing, the employer can also raise the issue that his unit was wrongly covered under said Act.

From India, Noida
Dear All,
I beleive the above issue is not full of facts.
A. The Inspection must have been carried in Industrial Zone,therefore whole industrial zone may have been notified by them.
B. If not so then, nearby industries in the vicintiy must coming under purview of ESIC and possible you were escaping the ESIC.
Further ESIC has the full power to inspect and notifiy the area. You may ask for the copy under Right of Information. Authorities may have inspected your factories and have notified this company. The data i.e. wages, no of employees must of have shared by you department.
Hence entering into any mode check the facts and data.

From India, Nagari
In my opinion, the only principle and rule governing the coverage is number of employees in that unit and not the complex, surroundings, etc.
While on the subject, I wud like to know :
i) whether ESI falls under the Consumer Protection Act since it charges for the services provided ?
ii) whether it is appropriate to even charge a daily wage person, but not providing him benefit, since the benefit starts only after 3 months lapse of continuously paying for 6 months' contribution period (i.e. total 9 months !). In other words, if you join the organization in April, first you will have to pay till September then wait for another 3 months' period and from January of the next year you will be eligible for the ESI benefit !
iii) Whether the points raised by me in (ii) and (iii) above stand as bad in law and can be challenged ?
iv) Is the ESI Court in existence ?
- Abdul Quadir.

From India, Pune
Dear All,
Though the employment strength is less than 10 on any day, Now, my friend has made compliance as per the ESI notice. This he has made keeping the future expansion plans of his business. Thank you all for your views and suggestions which helped him to take the decision.

From India, Bangalore
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