Dear Sir, We are running a 3-star hotel having a total of 75 staff .but we are shown only 40 staff in ESI & PF. But all the staffs have the same salary and benefits. We have two employees, one is “X” and the other is “Y”. X comes under the purview of the ESI act. Y doesn’t have. My question is
1. If any accident or anything happens to Mr.Y, can he claim under Workmen's compensation act?
2. If in any establishment, ESI, and workmen's compensation act are implemented simultaneously? i.e 40 staffs come under ESI and rest comes under WC.
I have already said that we are running a 3 star hotel. Now we have got a letter from ESI stating that we must pay an amount of Rs.27898/- for the wages paid to the Head load workers. The head load workers have their own welfare board and they are remitted 27% of the their salary to the welfare fund board. This welfare fund is far cbetter than ESi Corporatoion. Is it correct to remit the above amount to ESI corporation. We are utilized the head load workers only for unloading the beverages from the lorry to our store. We have get aleeter from the head load workers union that they are not paying any amount to ESI, but they are paid their welfare fund.
Pls clarify the above matters at the earliest.
From India, Kollam
11. If any accident or anything happens to Mr.Y, can he claim under Workmen's compensation act?
2. If in any establishment, ESI, and workmen's compensation act are implemented simultaneously? i.e 40 staffs come under ESI and rest comes under WC.
I have already said that we are running a 3 star hotel. Now we have got a letter from ESI stating that we must pay an amount of Rs.27898/- for the wages paid to the Head load workers. The head load workers have their own welfare board and they are remitted 27% of the their salary to the welfare fund board. This welfare fund is far cbetter than ESi Corporatoion. Is it correct to remit the above amount to ESI corporation. We are utilized the head load workers only for unloading the beverages from the lorry to our store. We have get aleeter from the head load workers union that they are not paying any amount to ESI, but they are paid their welfare fund.
Pls clarify the above matters at the earliest.
From India, Kollam
Dear Mr.Beeyardas
You have stated that you have 75 staffs and out of this 40 staffs are in ESI and PF and all have the sam salary. It means that though all the 75 staff are to be covered by the ESI and PF you have not covered all of them. It has been decided by the Supreme Court in CASE NO.: Appeal (civil) 8623 of 2002 in which the PETITIONER is BHARAGATH ENGINEERING and the RESPONDENT is R. RANGANAYAKI AND ANR.(DATE OF JUDGMENT: 20/12/2002) that "It is to be noted that the crucial expression in Section 2(14) of the Act is 'are or were payable'. It is the obligation of the employer to pay the contribution from the date the Act applies to the factory or the establishment. In Harrisson Malayalam Pvt. Ltd., [1993] 4 S.C.C. 361, the stand of the employer that employees are not traceable or that there is dispute about their whereabouts does not do away with the employer's obligation to pay the contribution. In .5.7. Corporation v. Hotel Kalpaka International, [1993] 2 SCC 9, it was held that the employer cannot be heard to contend that since he had not deducted the employee's contribution on the wages of the employees or that the business had been closed, he could not be made liable. Said view was reiterated in Employees' State Insurance Corporation v. Harrisons Malayalam Limited, [1998] 9 SCC 74. That being the position, the date of payment of contribution is really not very material. In fact, Section 38 of the Act casts a statutory obligation on the employer to insure its employees. That being a statutory obligation, the date of commencement has to be from the date of employment of the concerned employee.-----------When considered in the background of statutory provisions, noted above, the payment of non-payment of contributions and action or non-action prior to or subsequent to the date of accident is really inconsequential. The deceased employee was clearly an 'insured person', as defined in the Act."
This judgment makes it clear that even if the worker is not registered with the ESI he is an insured worker and is entitled to be benefits of the Scheme. So the ESI can ask you to pay the contribution in respect of that worker.
Regarding the letter from the head load workers, they cannot over rule the provisions of the law.
With regards
From India, Madras
You have stated that you have 75 staffs and out of this 40 staffs are in ESI and PF and all have the sam salary. It means that though all the 75 staff are to be covered by the ESI and PF you have not covered all of them. It has been decided by the Supreme Court in CASE NO.: Appeal (civil) 8623 of 2002 in which the PETITIONER is BHARAGATH ENGINEERING and the RESPONDENT is R. RANGANAYAKI AND ANR.(DATE OF JUDGMENT: 20/12/2002) that "It is to be noted that the crucial expression in Section 2(14) of the Act is 'are or were payable'. It is the obligation of the employer to pay the contribution from the date the Act applies to the factory or the establishment. In Harrisson Malayalam Pvt. Ltd., [1993] 4 S.C.C. 361, the stand of the employer that employees are not traceable or that there is dispute about their whereabouts does not do away with the employer's obligation to pay the contribution. In .5.7. Corporation v. Hotel Kalpaka International, [1993] 2 SCC 9, it was held that the employer cannot be heard to contend that since he had not deducted the employee's contribution on the wages of the employees or that the business had been closed, he could not be made liable. Said view was reiterated in Employees' State Insurance Corporation v. Harrisons Malayalam Limited, [1998] 9 SCC 74. That being the position, the date of payment of contribution is really not very material. In fact, Section 38 of the Act casts a statutory obligation on the employer to insure its employees. That being a statutory obligation, the date of commencement has to be from the date of employment of the concerned employee.-----------When considered in the background of statutory provisions, noted above, the payment of non-payment of contributions and action or non-action prior to or subsequent to the date of accident is really inconsequential. The deceased employee was clearly an 'insured person', as defined in the Act."
This judgment makes it clear that even if the worker is not registered with the ESI he is an insured worker and is entitled to be benefits of the Scheme. So the ESI can ask you to pay the contribution in respect of that worker.
Regarding the letter from the head load workers, they cannot over rule the provisions of the law.
With regards
From India, Madras
I would like to add that in Employees State Insurance Corporation v. Malhotra and Co., Chandigarh, (1981 Lab I.C. 475) and Regional Director, E.S.I. Corporation v. P. R. Narahari Rao, (1986 Lab I.C. 1981) the Punjab and Haryana High Court and Kerala High court respectively have categorically stated that there exists a distinction between employees 'employed' and 'engaged' and the head load workers are engaged to do a particular work and they are free to take up any other work apart from what has been given to them by the establishment (the Hotel)
The Punjab and Haryana High Court has observed that "a clear distinction must be made between a casual worker and a person engaged for a specific item. The distinction is between employment and an engagement. If a person is engaged casually for a process unconnected with the operations of the establishment or some work which does not form integral part of such operations, he will not be an employee. There is no relationship of employer and employee. The employer has no control to take disciplinary action. He would only be engaged for the purpose”. As such the headload workers can not be considered as workers even casually employed by the establishment and therefore, contribution can not be claimed by the ESIC in respect of them. The Kerala High Court has also given a similar wordings as follows:
"The oft repeated distinction is that between an "employment" and "engagement". If a person is engaged casually for a process unconnected with the operations of the establishment, or some work which does not form the integral part of such operations, he may not be an employee since there would be no employer-employee relationship between them only in consequence of the casual engagement for purposes unconnected with the main operations of the establishment. On the other hand, if a person is employed, though casually and for a very short period of time, but in connection with the processes which are integral and connected with the incidental or preparatory to the operations of the establishment, then he may be an employee entitled to coverage under the Act. The Courts have made a still further distinction to the effect that in case of employment, however, short it be, the employer shall have the right of disciplinary control, right of supervision and oversight of the quality of and the manner in which the work is to be performed etc. Further ramifications have been evolved by the decisions to the effect that the employer shall have control over the employee in the sense that the latter shall be obliged to report for duty at specified working hours and seek and obtain permission for absence on any account, and that the employer shall have the power to grant or refuse leave etc."
I feel that if you point out the above cases you can avoid payment of ESI contribution in respect of head load workers. In respect of others who are ordinarily engaged for the operations connected with the business, you are bound to contribute.
Regards,
Madhu.T.K
From India, Kannur
The Punjab and Haryana High Court has observed that "a clear distinction must be made between a casual worker and a person engaged for a specific item. The distinction is between employment and an engagement. If a person is engaged casually for a process unconnected with the operations of the establishment or some work which does not form integral part of such operations, he will not be an employee. There is no relationship of employer and employee. The employer has no control to take disciplinary action. He would only be engaged for the purpose”. As such the headload workers can not be considered as workers even casually employed by the establishment and therefore, contribution can not be claimed by the ESIC in respect of them. The Kerala High Court has also given a similar wordings as follows:
"The oft repeated distinction is that between an "employment" and "engagement". If a person is engaged casually for a process unconnected with the operations of the establishment, or some work which does not form the integral part of such operations, he may not be an employee since there would be no employer-employee relationship between them only in consequence of the casual engagement for purposes unconnected with the main operations of the establishment. On the other hand, if a person is employed, though casually and for a very short period of time, but in connection with the processes which are integral and connected with the incidental or preparatory to the operations of the establishment, then he may be an employee entitled to coverage under the Act. The Courts have made a still further distinction to the effect that in case of employment, however, short it be, the employer shall have the right of disciplinary control, right of supervision and oversight of the quality of and the manner in which the work is to be performed etc. Further ramifications have been evolved by the decisions to the effect that the employer shall have control over the employee in the sense that the latter shall be obliged to report for duty at specified working hours and seek and obtain permission for absence on any account, and that the employer shall have the power to grant or refuse leave etc."
I feel that if you point out the above cases you can avoid payment of ESI contribution in respect of head load workers. In respect of others who are ordinarily engaged for the operations connected with the business, you are bound to contribute.
Regards,
Madhu.T.K
From India, Kannur
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