Can Our Company Use a Non-ESIC Zone Address to Avoid ESIC Applicability?

Dear All,

Our company deals in trading pharmaceutical products. Its registered office, as per the Companies Act, 1956, is in Ahmedabad (HO). However, the office registered with the drug authority is located in Aslali (Warehouse), which is a Non-ESIC zone, meaning ESIC has not been implemented in the Aslali Area.

Therefore, can the company argue that the office registered with the drug authority is in Aslali (Non-ESIC Area) to avoid the applicability of ESIC?

Regards,
Vishwang Jadeja

If your Head Office is in Ahmedabad or any other location within the ESI implemented area, and you have 10 or more employees in total, you need to register your establishment under ESI.

We are already registered with the ESIC department. However, the question is, we have more than 1,500 employees (150 HO staff and others are medical representatives all over India on our payroll). Can we claim that our office, as per the Drugs Act, is registered at Aslali, which is a Non-ESIC zone, and therefore, we are not liable to pay any ESIC?

If we cannot claim this, could you please provide the reference explaining why we can't claim?

Regards,
Vishwang Jadeja

Dear Vishwqang Ji,

Your Head Office (HO) is an establishment employing 150 or more employees. Therefore, Employee State Insurance (ESI) is applicable to your HO. The Act also applies to employees working in your other establishments/branches/departments as these employees are involved in work connected with your HO or your business.

Please refer to the definition of "employee" as per Act 44 of 1966. Additionally, you may find the case ACC Vs Regional Director, ESIC, Mumbai 1981 Lab IC 1409 helpful.

Only employees working in non-implemented areas will be excluded from coverage. You cannot claim that your office, as per the Drugs Act, is registered in a non-implemented area, and therefore the Act does not apply to you.

Mr. Kargoanker has rightly answered your query.

Regards,
[Name Removed For Privacy Reasons]