How Can We Safeguard Against Accidents with External Workers in Our Factory?

How to Cover Against Mishaps with Outside Workers in a Factory

In order to address potential risks associated with outside workers conducting repair work in our factory, it is essential to implement comprehensive safety measures. Firstly, we should ensure that all external workers are adequately trained in relevant safety protocols before commencing any work on-site. Additionally, it is advisable to conduct thorough risk assessments to identify and mitigate any potential hazards that may arise during the repair process.

Communication and Monitoring

Furthermore, having a clear communication plan in place between the external workers and our internal team can help in coordinating activities effectively and ensuring everyone is aware of safety procedures. Regular monitoring and supervision of the repair work can also help in preventing any mishaps and maintaining a safe working environment for all involved parties.

Further expanding on the query, how can a factory secure itself for worker social benefits?

Since the person is working inside your premises, you need to cover them under the Employees' State Insurance Act, 1948, if applicable. Otherwise, cover all individuals inside the premises with a comprehensive accident insurance policy. Ultimately, it is your responsibility to create insurance coverage.

I would recommend that you introduce a Work Permit System.

There should be a provision in the Work Permit System to review whether the external worker holds a valid ESI number and is covered under ESI by the service provider who deploys him/her inside your premises to carry out work.

If the service provider claims that he/she is outside the purview of ESI coverage due to the fact that he/she draws wages exceeding Rs. 21,000 and hence excluded from ESI purview, then you should seek Personal Accident cover (PA) or Workman Compensation (WC) Insurance policy that covers the external worker.

Having said this, I would still recommend coverage under WC Insurance, as the liability under WC Insurance will be wide and will be statutorily compliant.

If he/she is neither covered under the ESI act nor covered under the WC policy, it would be better to obtain an ESI form duly filled by him/her giving all his/her particulars, and we can recover 3.25% + 0.75% of Employer and Employee contribution from the bill payable to the service provider and remit this amount to ESI.

Once the service provider recognizes that there will be a 4% reduction in their billing amount, they are more likely to cover their employees under PA or WC policy to maximize their profit margin.

Regards,

MVK