Are Our Family-Owned Garage and Service Center Considered One Unit for ESI Coverage?

Ownership and Location Details

A is a three-wheeler garage under proprietorship with the Father.

B is an authorized service center (of a manufacturing company) for two-wheelers, under proprietorship with the Daughter.

Both Unit A and Unit B are situated on the same plot jointly owned by the Father, Mother, and Son. (The Daughter does not own the plot).

ESI Coverage Query

Are these two units/establishments liable to be clubbed for the purpose of ESI? On what grounds?

One unit is a "Three-Wheeler Garage" and the other is a "Two-Wheeler Authorized Service Centre." Will this be a valid point for non-coverage?

Authorities will say that the stakeholders are the same, and as such, this arrangement is done to escape from provisions of PF & ESI Act and pass an order of clubbing. It is very cumbersome and time-consuming to fight such an order.

Names and types of businesses do not matter; stakeholders matter.

Shrikant_pra ji,

Proprietors of both units are related to each other but they are two different individuals. Even then, authorities will say that the stakeholders are the same? How and why?

The authorities under both acts have powers to address situations where separate entities are created to circumvent the legislation. It is important to understand that these authorities do possess the necessary powers. As mentioned earlier, it may prove challenging for you to have the order vacated.

Whether there is functional integration between the units will be the criteria for combining both organizations from the point of view of statutory authorities.