Understanding Labor Benefits in Zone C: Can You Help Clarify PF, ESI, and Compensation?

Hi all,

Which of the following are applicable for laborers in Zone C?
1) PF
2) ESI
3) Workmen's Compensation Policy.

Please reply to me as soon as possible.

Thanks,
Sankar

Dear,

PF and Workmen's compensation policy are compulsory. For ESI, you have to find out whether the scheme is existing in your area or not. If existing, it is also applicable, provided you have the minimum number of workers required.

I do not think WC is compulsory as stated. You may kindly refer to the thread https://www.citehr.com/575067-workme...red-under.html where I have discussed in detail that Section 53 creates a bar on the recovery of compensation under any other law in cases where the insured person has received an employment injury and is covered under ESIC. If your workplace is in an ESIC Zone, you are not left with much choice but to cover your workmen under the ESI Act. In that case, taking a WC policy would be superfluous, and the premium paid would be a wastage of company funds.

Regards,

A small corrigendum in my earlier statement.

Yes, that is right, workers need to be covered either under WC or under ESI. If they are covered under ESI, then WC is not required.

Tks,

PL Kanthan

Understanding Zone C and Its Implications

The concept of Zone C probably refers to the division of the state into categories as stated in the minimum wages notification in your state. It only does so for the purpose of deciding the minimum wages, as those in urban areas have a higher cost of living compared to those in backward areas. It has no impact on labor laws other than deciding the minimum wages.

Applicability of PF, ESIC, and Workmen's Compensation

The applicability of PF is to all companies that have more than 19 workers. Location does not matter.

ESIC applies to all areas notified by ESIC, including many Zone C areas. However, it applies to factories and offices with more than 10 employees at that location and to employees with gross earnings of ₹15,000 or lower (expected to be revised soon).

Where ESIC is not applicable and for all employees outside the limit, the Workmen's Compensation Act applies. Again, the zone is immaterial.

Regards

If I have correctly understood, you are referring to Zone C, which is categorized for the purpose of payment of minimum wages. Different rates of minimum wages are fixed, keeping in view the cost of living index, with Zone C being the lowest. When it comes to the implementation of existing labor laws, such as PF, ESI, or the Employee's Compensation Act, there is no relaxation. It is to be treated at par with Zone A or Zone B.

I agree with Sh. Saswata Banerjee that the Workman's Compensation Act (now Employee's Compensation Act) is applicable where ESIC is not in existence due to the following reasons:
1. The establishment is in a non-implemented area of the ESI Scheme, or
2. The existing employees are outside the coverage limit of the ESI Act.

Regards, BS Kalsi