I would like to high light some points regarding the issue. That is when a casual worker is engaged (not employed) for a work not directly connected with the business of the establishment, the payments made to him shall not attract ESI contribution. The verdicts in ESIC, Trichur Vs. Poopally Foods, Alleppy [1985 (1) LLJ 10(Ker)] , Parle Bottling Co (P) Ltd Vs. Regional Director, ESIC, Bombay [ 1995 III LLJ (suppl) 394(Bombay] and ESIC Vs. Premier Clay Products [2001 III LLJ (suppl) 1356 (SC)], show that coolies and others who help permanent workmen and salesmen in loading and unloading of materials and other goods can not be regarded as employees.
I would like to draw the following interpretation of the terms ‘employed’ and ‘engaged’ of Punjab and Haryana High Court in Employees State Insurance Corporation v. Malhotra and Co., Chandigarh, (1981 Lab I.C. 475),
“In fact, a clear distinction must be made between a casual worker and a person engaged for a specific item. The distinction is between employment and an engagement. If a person is engaged casually for a process unconnected with the operations of the establishment or some work which does not form integral part of such operations, he will not be an employee. There is no relationship of employer and employee. The employer has no control to take disciplinary action. He would only be engaged for the purpose”.
The Kerala High Court in the case of Regional Director, E.S.I. Corporation v. P. R. Narahari Rao, (1986 Lab I.C. 1981) took note of this distinction and held as under:
"The oft repeated distinction is that between an "employment" and "engagement". If a person is engaged casually for a process unconnected with the operations of the establishment, or some work which does not form the integral part of such operations, he may not be an employee since there would be no employer-employee relationship between them only in consequence of the casual engagement for purposes unconnected with the main operations of the establishment. On the other hand, if a person is employed, though casually and for a very short period of time, but in connection with the processes which are integral and connected with the incidental or preparatory to the operations of the establishment, then he may be an employee entitled to coverage under the Act. The Courts have made a still further distinction to the effect that in case of employment, however, short it be, the employer shall have the right of disciplinary control, right of supervision and oversight of the quality of and the manner in which the work is to be performed etc. Further ramifications have been evolved by the decisions to the effect that the employer shall have control over the employee in the sense that the latter shall be obliged to report for duty at specified working hours and seek and obtain permission for absence on any account, and that the employer shall have the power to grant or refuse leave etc."
Therefore, a casual labour who has no fixed time for reporting or in respect of whom no disciplinary action can be taken by the employer or who is free to do do work of his own once he completes the work for which he is engaged by the employer, is not a worker and for whom the employer has no liability to pay contribution.
Regards,
Madhu.T.K
I would like to draw the following interpretation of the terms ‘employed’ and ‘engaged’ of Punjab and Haryana High Court in Employees State Insurance Corporation v. Malhotra and Co., Chandigarh, (1981 Lab I.C. 475),
“In fact, a clear distinction must be made between a casual worker and a person engaged for a specific item. The distinction is between employment and an engagement. If a person is engaged casually for a process unconnected with the operations of the establishment or some work which does not form integral part of such operations, he will not be an employee. There is no relationship of employer and employee. The employer has no control to take disciplinary action. He would only be engaged for the purpose”.
The Kerala High Court in the case of Regional Director, E.S.I. Corporation v. P. R. Narahari Rao, (1986 Lab I.C. 1981) took note of this distinction and held as under:
"The oft repeated distinction is that between an "employment" and "engagement". If a person is engaged casually for a process unconnected with the operations of the establishment, or some work which does not form the integral part of such operations, he may not be an employee since there would be no employer-employee relationship between them only in consequence of the casual engagement for purposes unconnected with the main operations of the establishment. On the other hand, if a person is employed, though casually and for a very short period of time, but in connection with the processes which are integral and connected with the incidental or preparatory to the operations of the establishment, then he may be an employee entitled to coverage under the Act. The Courts have made a still further distinction to the effect that in case of employment, however, short it be, the employer shall have the right of disciplinary control, right of supervision and oversight of the quality of and the manner in which the work is to be performed etc. Further ramifications have been evolved by the decisions to the effect that the employer shall have control over the employee in the sense that the latter shall be obliged to report for duty at specified working hours and seek and obtain permission for absence on any account, and that the employer shall have the power to grant or refuse leave etc."
Therefore, a casual labour who has no fixed time for reporting or in respect of whom no disciplinary action can be taken by the employer or who is free to do do work of his own once he completes the work for which he is engaged by the employer, is not a worker and for whom the employer has no liability to pay contribution.
Regards,
Madhu.T.K