How Can We Resolve ESI Payment Issues for Subcontracted Workers Who Left Unannounced?

Dear Seniors,

We are a contracting company that engages subcontractors for the execution of projects in various states.

In 2022, we engaged a subcontractor for the erection of equipment in Gujarat. The subcontractor hired between 5 to 10 laborers to carry out the work. They worked for 5 days and then left the site without any information.

Subsequently, we utilized our in-house manpower to complete the work, fulfilled all statutory requirements, and received the payment.

Now, as we approached the client for future business, we discovered that our company's name is blocked due to nonpayment of ESI for the 5 to 10 laborers who worked in the initial stage. The client requests us to settle the ESI payment to proceed with future business. While we are willing to make the payment, we lack information on the laborers who worked in 2022. Despite presenting the EC policy, our attempts have been unsuccessful.

Is there an alternative method to make the ESI payment? We seek your guidance on this matter.

Thank you,
S. Mary
Location: Madras, India

It's a complex situation, but there are potential solutions.

Firstly, it's important to note that as per the Employees' State Insurance (ESI) Act, 1948, the principal employer is responsible for the ESI contributions of the employees of the immediate employer (in this case, the subcontractor).

Given that you don't have the details of the laborers who worked for you, you could consider the following steps:

1. Reach out to the subcontractor: Try to get the necessary information about the laborers from the subcontractor who hired them. This could include their names, ESI numbers, and the wages paid to them.

2. Contact the ESI Corporation: If the subcontractor is unable to provide the information, you can contact the local office of the ESI Corporation. Explain your situation and ask for their guidance. They might be able to provide a solution or an alternative method for making the payment.

3. Legal advice: If the above steps don't resolve the issue, consider seeking legal advice. A lawyer specializing in labor laws can guide you on the best course of action as per the ESI Act and other relevant laws.

Remember, it's crucial to maintain proper documentation of all your efforts to resolve this issue. This could be helpful in case of any legal proceedings in the future.