Facing False Reports and ESI Act Confusion: How Should I Respond to C18 Notices?

I would like to share a problem with you and need your expert opinion.

Issue with SSO Report

A team of SSO visited and prepared a false and fabricated report without any authority letter, which was then signed by the marketing person.

ESI Act Applicability

Is the ESI Act applicable to hospitals?

Response to C18 Notices

I have already submitted a reply requesting calculations as per the balance sheet, but received C18 actual for directly engaged employees and C18 adhoc for a contractor whose entry was shown in the survey. The contractor has refused to provide their records.

Next Steps and Advice Needed

Now, they are demanding money. What should I do and what should I avoid doing? Another chance has been given to file a reply. Please help.

If a contractor worker is engaged by the establishment, they have to ensure their ESIC/EPF/Professional Tax liability is paid by the contractor before the clearance of their bills. If the contractor is not maintaining the procedure, then the principal employer stands liable for the same.

Get in touch with a consultant nearby. They will examine the issue and submit a suitable reply.

I take this opportunity to comment on each and every query to the best of my knowledge as follows:

1. It is difficult to prove the report of the SSO team, who prepared and might have obtained certain documents duly stamped and signed, as false and fabricated even after labeling corruption charges.

2. Yes, ESIC is applicable to hospitals as well.

3. Before issuing C18, ad hoc/actual, the ESIC Regional office must have exercised applicable remedies. In the absence of compliance or a proper reply from your side, they seem to have proceeded further. It is also brought to your notice that C18 ad hoc cannot be reviewed for actual unless there are proper reasons and even deposition of a certain amount out of the demand.

4. As stated above, after issuing C18, your reply may not have been considered. The same is the case for your contractor.

5. Without going through the compliance and relevant documents, one cannot comment on what to do.

Regards, P K Sharma

[Phone Number Removed For Privacy Reasons]

Assessment of Contribution Under Section 45A of the ESI Act

In addition to the remarks of Sh. P.K. Sharma ji mentioned above, I would like to submit that the process of assessing contributions under Section 45A of the ESI Act, 1948 is a time-bound process. Furthermore, the initiator of the thread is not clear about the compliance of the contractor employees. Therefore, it is difficult to offer any comments in this case.

Challenging the Preliminary Inspection Report

The findings and recommendations of the Preliminary Inspection Report/Inspection Report by any Social Security Officer are generally accepted by ESIC concerning the coverage of a unit. Such reports can be challenged (if there are valid reasons) only in the Employees' Insurance Court, which is locally established. Therefore, I suggest the initiator of this thread contact an experienced advocate who handles cases locally in the designated EI Court to challenge the decisions/demands of ESIC, their reports, etc., if found suitable on merit.

Regards

Not all states have extended coverage to "Educational and Medical Institutions under ESIC...". Some states like TN and Kerala have done so; as such, the situation may differ from state to state. Therefore, it will be necessary to find out whether hospitals are included in the notification by the state under Section 1(5) of the ESI Act.

Sir, the appropriate government had already extended the provisions of the said Act under section 1(5) via a notification dated 23/3/2011, effective from 01/04/2011, in the National Capital Territory, Delhi to medical institutions (including corporate, joint sector, trust, charitable, and privately owned hospitals, nursing homes, diagnostic centers, pathological labs).

Dear Dr. Dinesh Ahuja,

Kindly refer to the circulars (Inspection Policy) under ESI issued by the Insurance Commissioner, HO, dated 1.08.2014, 25.08.2014, and 18.06.2015. Please make representations to the above authority.

Kindly convey to the forum about the outcome.

Regards.