Can Employers Register Themselves as Employees in ESIC? Seeking Clarity on Rules and Experiences

I am a consultant. Last week, I added one of my clients as an employee. However, the ESIC officers did not agree to add him as an Insured Person (IP) in ESIC.

What is the rule regarding adding the employer as an IP in ESIC?

Your description is not clear to me. However, I could guess you had employed a person who was (or is?) once your client, but he's not now your client. Am I correct? So what?

Definition of 'Employee'

As per the definition, an 'employee' means:

Section 2(9) in The Employees' State Insurance Act, 1948. (9) "employee" means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and—

(i) who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere; or

(ii) who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or

(iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service; and includes any person employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of raw materials for, or the distribution or sale of the products of, the factory or establishment;

or any person engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961, and includes such person engaged as an apprentice whose training period is extended to any length of time.

Now, find your answer yourself on how your 'client' does not fit into this category.

It seems to me that the querist is a Labour Law Consultant. He is in a fix due to inadequate knowledge in his field and is asking for help from us.

Understanding the Issue

My understanding is that the querist enrolled his client, i.e., the owner of the establishment, as an IP under ESIS, and the authority objected to it. You can enroll the director or owner of the company as an IP under the ESIS provided he is paid remuneration, and such remuneration should be less than Rs. 21,000/- per month.

Legal Reference

Ref: Supreme Court in Apex Engineering. If the Director of a Company is receiving remuneration for the discharge of any duty, then the Director will come under the definition of "employee" under Section 2(9) of the ESI Act, 1948.

I hope I have made the issue very clear to all. Any deviation from it is welcome with direct supporting.