Respected seniors, this is Ramu working in a manufacturing unit. I need clarification about the coverage of PF and ESI for loading and unloading workers, even if the work is not done regularly. In our unit, loading and unloading work is performed once every 3 or 4 days, and it is completed within 4 or 5 hours. Is it necessary to provide PF and ESI coverage for these workers if the work is done incidentally?
Kindly provide your valuable advice on this issue.
With regards,
Ramu
From India, Vijayawada
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6Kindly provide your valuable advice on this issue.
With regards,
Ramu
From India, Vijayawada
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If the loading and unloading work is carried out by a registered toli under the Mathadi Board, and payment is made by you to the Mathadi Board, you are not liable for compliance under PF and ESI. However, if the loading and unloading work is carried out by a non-registered toli or by any other persons who are not registered as Mathadi, and you are making the payment directly to the employed persons, you are liable for PF as well as ESI.
In such a case, i.e., incidental loading and unloading, you have no escape from ESI Contribution. You have to pay the Corporation at the rate of 6.50% of the total bill amount as ad-hoc payment. However, you can get relief under PF. I use the word "CAN" here, and that too in capital, which you need to note.
From India, Mumbai
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In such a case, i.e., incidental loading and unloading, you have no escape from ESI Contribution. You have to pay the Corporation at the rate of 6.50% of the total bill amount as ad-hoc payment. However, you can get relief under PF. I use the word "CAN" here, and that too in capital, which you need to note.
From India, Mumbai
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It's true that more often than not, ESI authorities assess contributions based on the charges/wages paid to hamalies, loading, and unloading personnel, citing certain provisions under the ESI Act. We have to carefully study these provisions and conduct ourselves accordingly to avoid any intricacies. I would like to refer to our own case where similar demands were contested by us:
Instances of Loading and Unloading Charges as Points of Contention
It would be appropriate to consider the following instances where loading and unloading charges have been a point of contention similar to ours. You would appreciate our views as also vindicated by the following rulings of various courts rendered in similar contexts. We hereby quote some of the relevant cases:
Payment Made to Rickshaw Pullers, Hathrairy Pullers, and Truck Operators
Rickshaw pullers, Hathrairy pullers, and truck operators (who bring labor with them) do not require any contribution to be paid on the lump sum amount, including loading/unloading charges, if no separate wages are paid by the employer. A similar view was held by the Bombay Division Bench in 1990 in the case of Raisaheb Tekchand, Mohate Mills Vs. R.D. ESIC.
Hamalies/Coolies Employed at a Particular Time
Where hamalies and coolies are employed at a specific place and time, outside the premises of the factory/establishment to perform a specific job on the spot, in such cases no contribution is payable on the amount paid to such coolies/hamalies. However, the contribution is payable on the amount paid to the coolies and hamalies for services rendered within the employer's premises. The Bombay High Court in the case of Parley Bottling Co. Ltd. Vs. ESIC, Bombay 1989, and the Supreme Court in the case of ESIC Vs. Premier Clay Products have held this view.
Pertinent Questions to Address
Here you need to address these pertinent questions:
1) Whose employees are those personnel who were utilized for the purpose?
2) Where were their services utilized, i.e., within the 'premises' or outside?
3) Under whose supervision did they perform the services?
If they were supervised by you within your premises, then there is no escape, even if they are not on your own pay/muster rolls. Alternatively, you should ensure that these personnel are covered by your contractor. If not, there is a chance they are added among your manpower, and ESI contributions may be demanded.
Much also depends on how often they have been engaged, whether repeatedly, directly, or indirectly. It would be reasonable to have a labor contract on a piece-rate basis with them. It's advisable to consult your advocate considering your circumstances.
Regarding EPF, we need to study the applicability of the Act to your firm.
Regards.
From India, Bangalore
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Instances of Loading and Unloading Charges as Points of Contention
It would be appropriate to consider the following instances where loading and unloading charges have been a point of contention similar to ours. You would appreciate our views as also vindicated by the following rulings of various courts rendered in similar contexts. We hereby quote some of the relevant cases:
Payment Made to Rickshaw Pullers, Hathrairy Pullers, and Truck Operators
Rickshaw pullers, Hathrairy pullers, and truck operators (who bring labor with them) do not require any contribution to be paid on the lump sum amount, including loading/unloading charges, if no separate wages are paid by the employer. A similar view was held by the Bombay Division Bench in 1990 in the case of Raisaheb Tekchand, Mohate Mills Vs. R.D. ESIC.
Hamalies/Coolies Employed at a Particular Time
Where hamalies and coolies are employed at a specific place and time, outside the premises of the factory/establishment to perform a specific job on the spot, in such cases no contribution is payable on the amount paid to such coolies/hamalies. However, the contribution is payable on the amount paid to the coolies and hamalies for services rendered within the employer's premises. The Bombay High Court in the case of Parley Bottling Co. Ltd. Vs. ESIC, Bombay 1989, and the Supreme Court in the case of ESIC Vs. Premier Clay Products have held this view.
Pertinent Questions to Address
Here you need to address these pertinent questions:
1) Whose employees are those personnel who were utilized for the purpose?
2) Where were their services utilized, i.e., within the 'premises' or outside?
3) Under whose supervision did they perform the services?
If they were supervised by you within your premises, then there is no escape, even if they are not on your own pay/muster rolls. Alternatively, you should ensure that these personnel are covered by your contractor. If not, there is a chance they are added among your manpower, and ESI contributions may be demanded.
Much also depends on how often they have been engaged, whether repeatedly, directly, or indirectly. It would be reasonable to have a labor contract on a piece-rate basis with them. It's advisable to consult your advocate considering your circumstances.
Regarding EPF, we need to study the applicability of the Act to your firm.
Regards.
From India, Bangalore
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Based on your views on ESI applicable to loading and unloading charges, I would like to request a copy of the judgments from various courts as mentioned in the previous discussion. Alternatively, could you please provide the full citation, including the year and court name, so that I can obtain it from the court library?
Regards,
Azim
From India, Mumbai
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Regards,
Azim
From India, Mumbai
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