Arati
Let me recapitulate the factual matrix of your question
1. It is a trading concerned, No manufacturing activity.
2. Total 38 Persons are working.
3. Of the 38 person working wage of 10 person is Rs 10000 or below and rest 28 person are getting more than Rs 10000.
With the above facts, I am sorry to say that all our friends who answered to you are wrong. Your Shop is not coverable under the ESI Act.
As lots of people are having this doubt, and some of the ESI officials are not advising the Employers corrctly, I wish to to give below a reply given by me to Mr Malik, today. It is as follows.
I left ESIC in 2006. No amendment has come till then. I just checked with ESI Department, and no amendment has been made in the law so far and SC judegment in Suri case is the law of the land till amended by Pariliament. I believe the department suggested amendment but Government was not inclined.
Regards.
O. Abdul Hameed
My reply to Mr malik -
Mr Malik
SC has finally ruled that for coverage it should 20/10 "employees" as defined under ESI Act and Not total Persons working in the factory/Establishment. Please refer to SC judment reported in the case of E.S.I Corporation Vs M.M. Suri and Associates Private Limited, judgement dated 28 Oct 1998 pronounced by Justic D.P. Wadhwa. The Court concluded in that case (para 5) "In our view, therefore, the Act would apply to an establishment only when number of employees is 20 or more and all those employees answer the description of employee contained in Section2(9) of the Act.".
The court further observed that "To controvert the argument that even though majority of the persons employed are 'employees' and their number is less than 20 they should not be deprived of the benefit under the Act, it was submitted that what will happen when the 'employees' falling within the definition of Sec. 2(9) of the Act are only 2 or 3 though the total strength in the establishment is more than 20. How can it be said in that case that the Act should nevertheless apply to such an establishment ? The answer is obviously in negative that Act cannot apply.
The confusion persisted only because before amendment of ESI act in 1968, the definition of factory stated on as "Person working", and there was no seperate definition of "Person". In 1968 when the word factory was amended, the definition stated " Person employed for Wage" (instead of earlier words Person working). Court felt that, when word "Wage" is defined, then that definition has to be followed and hence "person employed for Wage" is same as "Employees" as defined under the Act.
The ESI department could not do any thing further in court, and a revision failed. I think department has gone to Central Govt for amendment but no amendment has come.
It is one of those few occasion when Supreme Court did not give a liberal and beneficial construction, in case of ESI and other labour laws, and went by the literal interpretation.
Therefore the law of the land is that the reckong number for deckiding coverage has to be 20/10 "Employees" as defined under the ESI act, and not total employment.
Hope I made the position clear. you can get in touch with me at [Login to view]
O. Abdul Hameed