Navigating Workers' Compensation vs. ESIC: How to Resolve Contractor Disagreements at Jejuri

We have one manufacturing site at Jejuri, so we need a Workers' Compensation (WC) policy instead of ESIC. The reason is that according to the Government zone classification, Jejuri falls under the Employee Compensation Policy, not ESIC. However, one of our contractors is not willing to take WC; he prefers ESIC for quick claim settlements for his workers over WC.

What is the solution?

If ESI is not applicable to your establishment in Jejuri, you need to opt for an Employees' Compensation policy. There is no provision under the ESI Act for voluntary coverage.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai

There is no choice. It is as simple as that. If ESI is applicable to your area, then coverage under ESI is required. If your area is not notified, the Employee Compensation Act applies. Either you ask him to take a policy, or you take a policy and recover from his bill.

Regards,
Sivasankaran

We have a manufacturing site at Odhav, and the area is covered under ESIC. We have covered all workers in ESIC, but in the plant, we have 10 to 12 casual workers, and for them, we plan to take a WC policy. Can we go ahead? Is it legal?

Legal Considerations for WC Policy

1. Legally, can we pay compensation to workers under the WC policy if the area is covered under ESIC?
2. Currently, what is the wage limit under the WC policy?
3. Can we take a WC policy for a retainer?

Please advise.

Regards,
Ketan

If your plant is covered under the ESI Scheme, then the contract workmen should also be covered under ESI. Taking a Workmen Compensation Policy will not be sufficient. Please understand that the facilities under ESI and the Workmen Compensation Act are not similar. There are provisions for a pension in case of death and pension in case of partial disablements under ESI, whereas the Workmen Compensation Act provides for one-time payments. Hence, the benefits are not similar. Even if you take a policy, the amount needs to be settled before the Workmen Compensation Commissioner, who will not take up the case as the employees are covered under ESI.

If your factory is covered under ESI, cover all employees below Rs 15,000 under ESI. There is no other choice for you.

Regards,
Sivasankaran