Is the ESI Act Applicable for Contract Laborers Covered by Workmen Compensation?

Dear Friends,

Could someone who is an expert in the above field clarify or advise me whether the ESI Act is applicable if the contract laborers are working either in an interior contract or civil contract work while they are covered under the Workmen Compensation policy by the contracting company?

Appreciate your inputs.

Regards,
L R Suresh
+91-98440 65825 / 96202 65825

Dear Suresh,

First, let me know whether the principal employer is covered under ESIC or not. Secondly, the area where the work is being carried out is covered under ESIC or not. If the principal employer and the area are covered under ESIC, then the contractor has to ensure compliance under the ESIC Act.

Regards,
Mohan Chauhan

Dear Mohan,

Let me clarify my question: If the contractor engaged in civil/interior contracts at different locations takes a workmen compensation policy cover on the people employed at a particular project, does he have to again cover these laborers under ESIC also and contribute? Or can the workmen compensation policy act as an alternative to ESIC cover?

Regards,
L R Suresh

Dear Suresh,

I understand what Mr. Mohan is saying. Even though the contract has obtained workmen's compensation policy, if the area/site/industry/shop where the contract workmen are working is covered under the ESI Act, then irrespective of their coverage of WCA, the contractor has to complete all formalities under the ESI Act and cover all the contract workers under ESI.

No way is the WC policy an alternative for ESI. If ESI coverage is not there, then to avoid risks, the contractor or any employee is better off being covered under the WC policy. If any unwanted situation occurs, the contractor or employer has to pay huge amounts towards compensation; hence, the WC policy.

I believe your question is answered.

Regards,
Kameswarao

Dear Friends,

There are the latest amendments from ESIC, instruction no. 4/99 addressed to all Regional Directors/Jr. Directors that:

Coverage was examined at HO office in New Delhi. In the construction industry, work is carried out by construction workers at construction sites where the projects are situated. The workers engaged in this industry are mobile and migratory in nature. The criteria and duration of employment also vary from job to job. Due to the nature of employment and workplace involving construction workers, enforcing the ESI Act and organizing medical and other facilities for them, which are normally available under the ESI Scheme, will be difficult. Therefore, the existing scheme under the ESI act is neither applicable nor suitable for workers engaged in construction agencies or offices of builders.

In the case of employees who are regularly employed by a construction agency but remain on tour at construction sites in non-implemented areas for more than 7 months in a year, contributions may not be charged, subject to the employer seeking exemption under Sec. 88 of the ESI Act for those employees.

Tapan

Can anybody let me know if an organization needs to have a different WC policy for different project sites, or if only one common policy can cover all the site employees.

Regards

Please go through the following link: http://esic.nic.in/CIRCULARS/standar...0111230911.pdf, which will give you a clear idea about Section 87 of the ESI Act.

Thank you, Bhaskar, for the reply, but sorry to correct you; my name is Anupma. At this link, information is given, but I want to know whether exemption from the ESI Act is applicable only for Central/State level organizations. Also, if we are providing a Workmen's Compensation Policy, is it necessary to provide ESI as well in an oilfield service provider company? Kindly reply.