Is ESI Act Applicable to Our Multi-Location Company with Different Employee Counts?

Hi Experts and Seniors, I have a question on the applicability of the ESI Act to a company. An establishment has its Head Office in Shirdi, Maharashtra, and a subunit for rendering services in Bhopal, Madhya Pradesh. The number of employees at the Head Office, located in an ESI-implemented area, is 4, and at Bhopal, located in a non-implemented ESI area, is 20.

Is the Act applicable to such an establishment? If the Act is applicable, should the company apply for a sub-code number for its Bhopal branch?

Kindly reply.

Thanks, Learner

The Employees' State Insurance (ESI) Act applies to establishments in the ESI-implemented areas. Therefore, there is no need to count the employees in the branches. Only for the Employees' Provident Fund (EPF), the head office count and branch counts are taken into account as per Section 2A of the EPF Act. Establishments should include different departments and branches.

Thanks for your response! Based on your reply, I understand that the ESI Act is not applicable to the Head Office (as the employee count is only 4) and is also not applicable to the sub-unit in Bhopal as it is located in a non-implemented area.

Applicability of the ESI Act to All Districts

Sir, for some time now, the appropriate government, i.e., the Central Government, has been extending the provisions of the ESI Act, 1948, to all districts of states where the said Act is already applicable. You can find such notifications on the website of ESIC. I am not sure whether the government has extended this implementation to all districts of Madhya Pradesh or other states where you have branch offices. Therefore, when the appropriate government issues such a notification for a state, I believe there are no areas left unimplemented in that state.

Confirming ESI Coverage with Regional Offices

In my opinion, it would be better to approach the appropriate regional/sub-regional offices of ESIC where you have both the head office and branch offices. Confirm in writing with them regarding the status of your establishment concerning the coverage issue.

Harsh ji,

Thank you very much for your reply. I shall visit the ESI office to confirm about the non-notified areas. However, I request you to reply to my question on the applicability of the ESI Act (as above) based on the information about the 'Number of employees' and 'Notified or non-notified area'.

Regards,
Learner

If an organization has a minimum of 20 employees and falls under a notified area, it is covered under ESIC. You do not need to count employees working in non-notified areas for your organization when counting the 20 employees.

1. Sir, I think you can get all types of information from the appropriate Branch Office of ESIC as well as Regional/Sub-Regional Office of ESIC.

2. In Madhya Pradesh, as far as I understand, the threshold for coverage under the ESI Act, 1948, in respect of factories as well as for notified establishments is the engagement/employment of 10 or more persons on any day.

Dear Learner,

As rightly said by Harsh Kumar Ji, in Madhya Pradesh, the threshold for ESI coverage is 10. However, in Madhya Pradesh, you are in a non-implemented area. In Maharashtra, you have only four employees. Therefore, under the circumstances, the ESI Act is not applicable to you.

Thank you.

Sh. Korgaonkar ji, I may submit that as per the notification of the central government dated 9/8/2016 (which I have traced from the website of ESIC), ESIS has been extended to the entire district of Bhopal (MP) including other districts w.e.f. 01/9/2016. The online link to the said notification is mentioned as follows: http://esic.nic.in/backend/writeread...fa296ba5c5.pdf

Perhaps this was the reason I suggested in my earlier note that the position may be confirmed from the concerned Regional Offices/SROs.

However, I feel that once the Branch Office located in the district of Bhopal of the establishment becomes covered/coverable from a particular date, the employees posted in their Head Office in Shirdi (Maharashtra), if located in the implemented area, will automatically be coverable/covered under the ESI Act, 1948 right from that very date. I hope your good self will correct me if I am wrong in any aspect.

Dear Harsh Kumar Ji,

In that case, you are absolutely correct, sir. Establishment of queries at MP is coverable. Once any establishment is covered, the Act is applicable throughout India.

Hi, Keshav ji.

I am not clear with your reply that reads "And once any establishment is covered, then the Act is applicable throughout India." Please explain.