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LIABILITY OF CONTRIBUTION ON LABOUR CHARGES - CURRENT SCENARIO

(FOCUS : JOB WORK)

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ESIC had occasions to receive a number of representations from  different Associations of Employers, Export Bodies of Employers and individual Employers from various quarters expressing the difficulties faced by them in covering the employees engaged by them through immediate employers / contractors on jobs outsourced.

Recently, the Hon’ble High Courts of Madras, Madhya Pradesh and
Karnataka have given their judgements in the following cases
in which the
aspect of supervision has been discussed in the light of the judgement of the Hon’ble Supreme Court in the case of CESC and others Vs. Subhash
Chandra Bose & others (AIR 1992-SC Page 573 (1992) 1 SCC 441):-


1. Judgement dated 24.7.2007 in CMA (NPD) No.1765 of 1999 between ESI Corporation V/s. Bethall Engineering Company before Hon’ble High Court of Madras.

2.Judgement dated 15.3.2007 in MA No.606/2003 between National India Rubber Works Ltd. V/s. ESI Corporation before Hon’ble High Court of Madhya Pradesh

3. Hon’ble High Court of Karnataka vide Judgement dated 15.7.2006 in MFA No.1089/2001 between ESIC V/s. JMD Fashions.

Keeping in view the representations received from the employers, their associations as well as the judgements referred above, the matter has been re-examined by ESIC in its entirety.

Labour Charges - Main page 

 Situation A - Jobwork done inside the factory / establishment premises through Contractors / Immediate Employers having independent code nos

Situation B - Job work done inside the factory premises through Contractors / Immediate employers not having independent code nos Situation C - Jobwork done outside the factory / establishments which are having independent code nos

Situation D - Jobwork done outside the factory / establishment premises through factories / establishments, which are not having independent code nos., but the supervision being exercised by the Principal Employer

Situation E - Jobwork done outside the factory premises through units engaging less than 10/20 employees but working exclusively for the Principa1 Employer

Situation F - Jobwork done outside the factory/establishment premises through factory/establishment engaging less than 10 / 20 employees which are not Independently coverable, and where no supervision is exercised and who are undertaking the work for more than one employer

Situation G - Jobwork done outside the factory premises through Contractors / Immediate Employers who perform the work through Home workers or works In non-implemented areas

For the purpose of verification during inspection, the details in respect of above possible categories of immediate employers/employees are required to be furnished by Principal Employer to the Inspecting Officer in the prescribed proforma.

Insurance Inspectors will also identify the coverable employees of the Job Contractors / Immediate Employers for providing the benefits on registration by way of submission Declaration Forms (Form 1). These Declaration Forms as and when submitted will be forwarded by Insurance Inspectors to Branch Offices of ESIC for immediate issue of TIC.

ESIC advises affected employers (whether Principal or Immediate) to comply with inspection formalities including submission of information regarding jobwork done inside / outside factory premises in the attached proforma to the inspecting authorities, to avoid disputes. ESIC further advises employees in their own interest to produce documentary proof in support of their claims / contentions, while submitting the aforesaid proforma during inspection.

 

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