Wc Applicability To Esic Covered Employees

Hello all,

Can we cover employees under employees' compensation policy who are already covered under ESIC?

Regards,
Parag

Dear Parag,

While taking Employees' Compensation policy, you must keep in mind Section 53 of the ESI Act, 1948. Discuss this provision with the Insurance Company. If they agree to provide benefits of the EC policy without prejudice to the rights of the employees under the ESI Act, then you may proceed further in the matter.

Opinion submitted as requested.

R.N.KHOLA
Welcome Skylark Associates

Hello to all,

I am looking for a job in the HR department and in business development. Please help me. I am an MBA HR (results awaited) and I have completed a master's in public administration (PG).

As per my understanding, ESI provides health care benefits to the insurer and his/her family and also offers monetary benefits. Compared to WC, ESI provides more benefits. Therefore, if you are registered under ESI, WC is not applicable as no one will question why you are providing more benefits.

Hello Khola, please guide me if I am wrong.

Dear Shaikh Abedeen,

You are right in saying that where the employee is covered under the ESI Act, 1948, then in accordance with sec. 53, the injured employee or the dependants are not in a position to claim compensation under any other law, including the Employees' Compensation Act, 1923. By the amendment of the WC Act, although the coverage and benefits are enhanced, it seems that the benefits under the ESI Act are on the higher side. Thus, you cannot be stated to be wrong.

R.N. KHOLA

Welcome Skylark Associates

Hello Khola,

One query: If the principal employer is covered under workers' compensation, can the contractor still apply for ESI coverage even if that area is already notified under ESI coverage?

Dear Mr. Parag Kawale,

With reference to your query, in cases where the Workmen's Compensation Act of 1923 is applicable, the following acts do not apply:

1. ESI Act of 1948
2. Maternity Benefit Act of 1961

Regards,
V R RAO PULIPAKA

Hi,

As per my knowledge, WC policy is applicable when employees are working in an area that is out of ESI coverage. Please inform me if this is incorrect.

Thanks & Regards, Tejashri

Mr. Rao,

One correction in your quote, please note that wherever the ESI Act of 1948 applies, the following acts do not apply:

1. Workmen's Compensation Act of 1923
2. Maternity Benefit Act of 1961

A. Alagarsamy.

Yes, I concur with your view. I would also like to state that employees working in an ESI covered area, who are earning more than the prescribed wages as defined in the ESI Act, will be covered under the WC Act.

A. Alagarsamy

The query is not precise and hence there are misleading answers.

Firstly, you have to comply with the law. In case the ESI Act is applicable, then you have to comply with ESI Act provisions. But once the ESI Act is applicable, the WC Act is not applicable. Hence, it is not necessary to cover those employees who are registered members of ESIC under the WC policy.

However, you can still take a WC policy covering employees already covered under ESIC to provide additional benefits or to offer easy benefits to employees, and nobody will object to it. Obviously, there will be an added cost of insurance (maybe your management or accounts department may object since there is duplicity of cost and expenses for the same purpose).

Nobody will, and nobody can object in case you are giving more benefits than what the law prescribes. Many companies have their own Medical and Hospitalization reimbursement schemes for employees already covered under ESIC.

Dear Mr. Khola,

Establishments covered under ESIC can implement the ESI scheme for regular/contract staff and workers involved in production. For other types of work such as construction/fabrication, which may involve limited periods of work for two or three months, we are providing coverage through workers' compensation with insurance companies. In cases where ESIC requires coverage, considering that workers frequently change and may only work for a day or two, it is challenging to enroll them and make ESI contributions. High worker turnover is common in construction/fabrication projects.

In this context, can we opt for insurance under workers' compensation and assess its applicability?

Regards,

AVGN Vara Prasad
Charoen Pokphand India Pvt Limited
Vizianagaram District (AP)

Dear AVGN Vara Prasad,

This is to inform you that while working with Skylark Associates, I do not deal with ESI and PF matters. However, based on what I have learned so far, even if we opt for WC/EC policy for workers in units covered under the ESI Act, we are not exempt from complying with the ESI Act. Therefore, we are required to deduct ESI contributions and fulfill other necessary compliance measures under the ESI Act, even if the worker is employed for just a day.

Submitted as requested.

Regards,
R N KHOLA

Dear,

It is noted that most of the labor contractors do not have ESI and PF licenses but still engage workers, claiming they have less than 20 workmen. However, even in cases where there are more than 20 workmen, they are assigned petty specific jobs. Thus, it is acceptable to consider a WC policy in the absence of ESI and PF in the implemented area. What are the consequences of this approach?

Furthermore, can the workmen demand permanent employment with the principal company if their ESI and PF contributions are deposited under the employer's code at a later stage?

Is it mandatory to have ESI and PF for the construction industry?

Regards,
Ashish Banka
9748094316

Dear Mr. Ashish,

Thank you for your response. My query is related to the risks involved in fabrication/construction works. If something goes wrong and the contractor fails to fulfill statutory obligations, the Principal Employer will be at risk. In such circumstances, if the contractor does not comply with ESI, can the PE insist on WC? Is this valid or not?

Thank you,
Vara Prasad AVGN