Navigating ESIC Rules in Tamil Nadu: How Do Employee Counts and Seasonal Status Affect Us?

Hi, I am working in the private sector agricultural industry, which has several branches in all states, including the State of Tamil Nadu. Recently, we received a notice from the ESIC Inspector in Trichy, who insisted that we pay the ESI contributions of the employees. As far as I know, a minimum of 10 employees is required for the applicability of this Act.

We have a total of 14 employees at the Trichy location, out of which 5 employees work in other districts as Marketing executives. However, their muster rolls are maintained at the Trichy location. Additionally, 2 staff members are on voucher payments, but their muster is also maintained in the common staff attendance register.

Furthermore, we employ 10+ casual laborers at this plant for our plant activities and seed processing work. They are paid weekly wages, and their separate attendance register is maintained under the provisions of the Factories Act.

My queries are as follows:

1. Are the provisions of ESIC applicable to our establishment?
2. Can we argue that the employee count is less than 10, considering that 5 employees work outside the district?
3. Are casual laborers who are paid weekly wages also covered under ESIC?
4. Can we claim that our unit is a seasonal unit? Please provide me with the definition of a seasonal unit and confirm whether any certificate is required from the Labor Department for a seasonal industry.
5. What kind of response should I provide to the ESI Department? I would be grateful if someone could provide me with a draft.

Kindly address this issue and guide me promptly. I look forward to your favorable feedback.

Thank you,
Manoj Pallod

Dear,

The coverage of ESIC will not only take the strength of your location into consideration. The total strength of all locations will be considered while deciding the applicability of the act. Your marketing executive, casual labor, all will be included to decide the applicability of the act. Seasonal industry does not have any relaxation from taking ESIC code.

So, ESIC act is applicable to your establishment, and you should obtain the code.

Thank you.

J. S. Malik

The ESIC Inspector is right. Many companies in the north with branches in the south are erring with the same mistake. It is very difficult to make them understand that ESI/PF contribution is not an expense but a tax rebate to the employer. I came across a Finance Director in Mumbai saying, "Why should we remit before the 20th? Arraey ESI is for a chota company, and why should we follow?"

My ESIC Inspector friend used to lament on such unwillingness exercised by many companies in the north. Oops, things will not change if employers keep their eyes closed. Gone with the wind and wipe the droppings away...!!!!

Regards, Chandru