Applicability of ESI for multi location establishment? - CiteHR
Harsh Kumar Mehta
Consultant In Labour Laws/hr
Sr. Hr Executive
Labour Law Compliances
Korgaonkar K A
+1 Other

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Hi Experts and Seniors,
I have a question on the applicability of ESI Act to a company.
An establishment has Head Office in Shirdi, Maharashtra and a sub unit for
rendering services at Bhopal, Madhya Pradesh. The number of employees
at HO that is located in ESI implemented area, is 4 and at Bhopal, located in
ESI non implemented area, is 20.
Is the Act applicable to such establishment?
If the act is applicable, then should the company apply for sub code number for its bhopal branch?
kindly reply.
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ESI act applies to the establishment in the ESI implemented area wise and thus no need to count the employees in the branches. Only for EPF the head office count & branch counts are taken into account as per Sec 2A of EPF Act, Establishments to include different departments and branches.
From your reply I understand that ESI Act is neither applicable to the Head Office ( as employee count is only 4) nor
applicable to sub unit in Bhopal as it is located in a non implemented area.
1. Sir, since some time, the appropriate govt. i.e. Central Govt. had/is extending the provisions of ESI Act, 1948 to all districts of States, where the said Act is already applicable. You can find some such notification from the website of ESIC.I am not sure whether the said Govt. has extended the said implementation to all districts of MP or other states where you have branch offices. Therefore, when the appropriate govt. has issued such notification for a State, I think, there remains to be no none-implemented area in said State.
2. In my opinion, it will be more better to approach the appropriate regional/sub-regional offices of ESIC where you have head office as well as branch offices and confirm in writing from them regarding status of your establishment so far as coverage issue is concerned.
Harsh ji,
Thanks very much for your reply.
I shall visit the ESI office to confirm about the non notified areas.
However, I request you to reply to my question on applicability of ESI Act (as above) based on the
information about the 'Number of employees' and 'Notified or non-notified area'.
If an organisation has strength of Minimum 20 employees and falls under notified area is covered under ESIC. You need not count employees working in non-notified areas for your organisation while counting 20 numbers of employees.
1. Sir, I think, you can get all type of information from the appropriate Branch Office of ESIC as well as Regional/Sub-Regional Office of ESIC.
2. In Madhya Pradesh, so far as I understand, the threshold for coverage under ESI Act, 1948 in respect of factories as well as for notified establishment is engagement/employment of 10 or more persons on any day.
Dear Learner,
As rightly said by Harsh Kumar ji that in MP threshold for ESI coverage is 10.
But, in MP you are in non implemented area. In Maharashtra you have only 4 employees.
Under the circumstances, ESI Act is not applicable to you.
1. Sh. Korgaonkar ji, I may submit that as per notification of the central govt., dated 9/8/2016 ( which I have traced out from website of ESIC), ESIS has been extended to the entire district of Bhopal (MP) including other districts w.e.f. 01/9/2016. Online link of the said notification is mentioned as follows:

Perhaps this was the reason that I had suggested in my earlier note that the position may be confirmed from the concerned Regional Offices/SROs.

2. However, I feel that once the Branch Office located in district Bhopal of the establishment becomes covered/coverable from a particular date, the employees posted in their Head Office in Shirdi (Maharashtra) if located in implemented area, will automatically be coverable/covered under ESI Act, 1948 right from that very date. I hope, your goodself will correct me if I am wrong in any aspect.
Dear Harsh Kumar ji, In that case you are absolutely correct, Sir. Establishment of queriest at MP is coverable. And once any establishment is covered then the Act is applicable throughout India.

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