Therefore, submission made by learned advocate Mr.Vasavada not to read "or" as "and" have not meaning because in facts of this case, apprentices engaged only under Standing Orders, not under Apprentices Act,1961. Citation. The establishment has been closed since year of 2000. Therefore, unless there is term of contract of employment, one can not be covered under the definition of "employee" and unless some amount is paid to employee, any amount paid to other persons can not be covered under the definition of "wages" because the term "wages" is connected with employee. It is only the workmen who have to lose if a decision is given in favour of the employer. Attached Supreme Court Judgement under ESI Act is short of new dispute which requires in-depth discussion and I humbly request Respected Members to write article on it in the present thread. (1) This Act may be called the Employees’ State Insurance Act, 1948. Apart from that, as we have noticed earlier, the terms and conditions under which these apprentices are engaged do not give any scope for holding that they are employed in the work of the company or in connection with it for wages within the meaning of Section 2 (9) of the Act," (Page 392, Line 3). Act (Employees State Insurance) passed in 1948 (amended in 1975, 1984, 1989 and 2010) is an important measure of social security and health insurance in this country. Having said so, a direction has been given that the ESI Corporation will after making inquiries about the identities of the said workers will register them and then extend the benefit of the Act. If that be so, persons who do not satisfy the definition of "employee" as per Section 2(9) of the Act cannot be taken into account for the purpose of fixing the statutory minimum (see AIR 1985 SC 278 : (1985 Lab IC 544), (Regional Director, Employees State Insurance Corporation v. Ramanuja Match Industries.). After going through the said evidence the trial Court has come to the conclusion that the number of employees engaged in the respondent-Federation was less than ten. Apprentices Act and not covered by the EPF & MP Act. Here, in this case, because of the peculiar nature of the work arrangement, at Depots, it is impossible to register an employee engaged in the loading and unloading work under the ESI Scheme. Basically difference is found out by Legislature is that the employee is required to be employed and apprentice is not required to be employed but, has to be engaged. Punjab & Sindh Bank Vs Ashok K. Aggarwal and others. Therefore, respondent company has not engaged apprentices under provision of Apprenticeship Act,1961. Before confirming, please ensure that you have thoroughly read and verified the judgment. But no such efforts have been made by Inspector for obtaining statement from each person whether they were employee of establishment or not. In view, the claim before the National Commission was not maintainable.". According to him the Court should not travel beyond the scope of the scheme under the Act and the interpretation of the provisions should be made in a harmonious manner. We make it clear that nothing stated hereinabove shall be construed as an expression of opinion on the merits of the controversy involved. Corporation will not be in any way affected if the demand notice sent by it under Section 45A/45B is quashed. Now looking to Section 2(9) employee, it is made clear that both kind of apprentices are excluded from definition of employee under Section 2(9) of ESI Act, one under Apprentice Act or under Standing Order of establishment. The rules of natural justice require that if any adverse order is made against any party, he/she must be heard. The relevant Para.9.6 and 9.7 are quoted as under : "9.6. The facts in detail have been given in the impugned judgment and hence we need not repeat the same herein. HIREN LAXMICHAND CHHEDA 09821078457 hirenchheda@in.com By:- Prateek Kr. (iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service; [and includes any person employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of raw materials for, or the distribution or sale of the products of , the factory or establishment [or any person engaged as an apprentice, not being an apprentice engaged under the Apprentice Act, 1961 (52 of 1961), or under the standing orders of the establishment; but does not include-]], (a) any member of [the Indian] naval, military or air forces; or, (b) any person so employed whose wages (excluding remuneration for overtime work) exceed [such wages as may be prescribed by the Central Government] a month: Provided that an employee whose wages (excluding remuneration for overtime work) exceed [such wages as may be prescribed by the Central Government] a month at any time after (and not before) the beginning of the contribution period, shall continue to be an employee until the end of that period;]. 1 Hence, the workmen (or at least some of them in a representative capacity, or their trade union) have to be necessarily made a party/parties because the Act is a labour legislation made for the benefit of the workmen. However, the Income Tax Act deems a book to be a plant for the purpose of depreciation. Three persons were not employed by establishment but they are coming for search of work and for that they were taken on trial without payment of wages. For example, Section 43(3) of the Income Tax Act defines 'plaint' to include a book. Ltd. 1976 LIC 324 that, (2) It is observed in the case of ESIC V/s. ESI Act — Applicability of — Gas lighter with a flame was being used for melting and soldering the gold and other ornaments — Use of LGP satisfies the definition of power — Manufacturing process was going on with aid of power. 16. The rules of natural justice require that if any adverse order is made against any party, he/she must be heard. 7 Section-2(9) suggests that in definition of employee apprentices either under the Apprentices Act or standing orders or rules of the establishment is not covered. 11. This fact is not denied by the opponent ESI Corporation and it is in evidence also that these learners are there as per the provisions of the standing orders settled by award of industrial Court. The Orissa High Court has also considered same aspect that if the person is found in the establishment that less than 20 employees, then Section2(9) cannot considered to be satisfied which require minimum employees working in the establishment so the employee is to be stipulated that word "employee" shall not include any other person who has not been employed by establishment. The Latest Supreme Court Judgments for January 2021 with complete details of case numbers, parties name, judge names and headnotes 3 [***]]. According to witness, on 22/5/1990 when Inspector visited the establishment at about 6:00 to 6:15 p.m., on that day 7 employees were working in the establishment. The relevant discussion in para 10 to 15 is quoted as under: "10. If that is not done, and a decision is given in favour of the employer, the same will be in violation of the rules of natural justice. 12. The case of the appellant was that, in fact, none of the concerned persons was its employee and it was difficult to identify them. That aspect has not taken care by Inspector when the visit was taken on 22/5/1990. 1 or their union in a representative capacity. Directions given by this Court from time to time to implement the two laws have been flouted with impunity. After all, the real concerned parties in labour matters are the employer and the workers. Therefore, appeal shall not lie under Section 82 of ESI Act. The ESI Corporation is only the agency to implement and carry out the object of the Act and it has nothing to lose if the decision of the Employees Insurance Court is given in favour of the employer. In this case, the question for determination before the Supreme Court was as to what was the interpretation of section 11 A of the Industrial Disputes Act, 1947. That amount or payment cannot considered to be wages within meaning of 2(22) of ESI Act. on 22/5/1990 on trial base who were subsequently not appointed and factory is already closed in the year 2000. That both the categories of apprentice are excluded from definition of Section 2(9), otherwise there is no purpose to mention second category of apprentice which is covered under standing orders of establishment. Against the said order of the Employees State Insurance Court, the respondent No. This lapse remained as it is not proved by ESI Corporation before ESI Court while leading the proper evidence. The Section 2(9) of ESI Act considered by this Court. 34 of Year 1948, dated 19th. It should be noted that in Annexure-A with Observation Slip of ESI Inspector Part A containing Sr.No.1 to 9 showing amount Rs.24,34,968-55 Ps. No act, whether labour, EPF or ESI, define the word or position “Trainee”, hence a common understanding is used. 1 Board or their union in a representative capacity. Therefore, learned advocate Mr. Sachin Vasavada submitted that ESI Court has committed gross error in appreciating the facts which has been placed before ESI Court by appellant. We are of the opinion that the view taken by the National Commission is not correct. 15. Click here to Login / Register. 3. The application of ESIC Act over Employee’s Compensation Act, 1923 can be sub-served in this, ‘BIRD’ model as formulated here-under for its easy projection. EMPLOYEES’ STATE INSURANCE ACT, 1948 [Act No. The facts have been proved by establishment while leading proper evidence that these three persons were found on the date of visit. IN the case at hand, the Inspector of E.S.I. Therefore, ESI Court has considered this being a factual aspect while appreciating the evidence from both the sides and considered written arguments at Exh.37 and 40 and thereafter, the ESI Court has come to the conclusion that number of 10 persons were mentioned in Exh.-26 letter-pad by establishment. 1 herein has been allowed and it has been declared that the respondent No. HIREN CHHEDA 09821078457 2nd October 2009 From India, Mumbai Attached Files . 13. However, it will be wage for the purpose of Sec.2(22) of the ESI Act and the contribution are to be recovered on such payments. In this appeal, no substantial question of law is involved and therefore, according to my opinion, this appeal is not maintainable and accordingly, present appeal is dismissed.". 8. Hence, ordinarily in all cases under labour statutes the workmen, or at least some of them in a representative capacity, or the trade-union representing the concerned workmen must be made a party. After completing work in the depot they will go elsewhere and do identical nature of work. 1 Board nor any one of them in representative capacity were made parties in the petition under Section 75 of the Act before the Employees State Insurance Court or before the High Court. Get 1 point on providing a valid sentiment to this ESIC Circular_Applic able to Construction Sector.pdf. He submitted report, Exh.-7 for the period from 1/1/1988 to 30/11/1988. 12. Muster roll and pay register was not produced before him and he has filed report on the basis of physical verification. 1 Board challenged that notice before the Employees State Insurance Court, Delhi. 11. 7. The ESI corporation shall work out the contribution from that date in respect of workers who are brought under scheme and who were found to be working from that day onwards. It is the submission of the applicant that as regards to Item No.7 of Part A of Category A of the Observation Slip, the said amount of Rs.7,87,352-15 ps. 2 [the whole of India . CIT Vs Orchid Pharma Ltd. (Madras High Court) Employee’s contribution towards Provident Fund (PF) and Employees’ State Insurance (ESI) should be paid within the due date as provided in the related statutes to be allowed as deduction under Section 36(1)(va) of the Income Tax Act, 1961. In this connection we may refer to Section 75(1)(a) of the Act which states that if any question or dispute arises as to whether any person is an employee of the employer concerned, or whether the employer is liable to pay the employer's contribution towards the said persons' insurance, that is a matter that has to be decided by the Employees Insurance Court. That aspect has not taken care by Inspector when the visit was taken on 22/5/1990. The Orissa High Court has decided same question whether on the date of visit by Inspector, more than 10 persons were working in the establishment or not. The Employees' State Insurance Corporation (ESIC) however issued notices to the appellants requiring payment of ESI contributions in respect of the period between January 2001 and September 2002, on the contention that a software development unit was a 'factory' under the ESI Act. 8335 and 8336 of 2004 Decided On: 17.09.2009 Appellants: Employees State Insurance Corporation Vs. Respondent: Bhakra Beas Management Board and Anr. So, in short, apprentice either engaged under Apprenticeship Act or under the Standing Orders of the establishment, in both are excluded by Legislature making it clear in Section 2(9) of Act by way of Amendment dated 20.10.1989. Hence, we cannot agree with the view taken by the National Commission. 1 nor any one of them in representative capacity were impleaded either before the Employees State Insurance Court or before the High Court. Hence, in our opinion, the concerned person has to be heard before a determination is made against him that he is not an employee of the employer concerned. The ESI Corporation shall work out the modus operandi for bringing these workers under the coverage. Hence this appeal by special leave. In view of this situation, it is very clear that a trainee engaged under the provisions of the standing orders is not "employee" and the stipend for payment of any amount to him is not "wages" being not paid to employee. The Employees* State Insurance Act (ESI Act) was enacted with the object of introducing a scheme of health insurance for industrial workers. Heard learned Counsel for the parties. 1-Board filed an appeal under Section 82 of the Act before the High Court and the High Court has 146 of 1984 which was filed under section 75 of the Employees' State … If such is the nature of work it is quite improper to compel the applicant to pay contribution on the payments given in various depots merely because they obtained the services of such workers. Who was examined as OPW.1 clearly deposed that in the respondent-Federation he found four employees including the Manager besides six labourers and two security guards. No order as to the costs. 2. 7. excluding Sr.no.7, the amount paid to the trainees i.e. The case of the appellant was that, in fact, none of the concerned persons was its employee and it was difficult to identify them. 8335/2004, this appeal is also allowed and the impugned judgment of the High Court as also of the Employees Insurance Court are set aside and the matter remanded to the Employees State Insurance Court for deciding a fresh after impleading the workers of the Respondent No. (iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or lent on hire has entered into a contract of service. 19 of 1994 and MFA No. In common parlance the concept of employee would take with it the correlation of the employer. In the present case, since the word 'employee' has not been defined in the contract of insurance, we have to give it the meaning which it has in common parlance. Mr. Sachin D Vasavada for Appellant(s): 1, Section 2(6) of the Kerala Shops and Commercial Establishment Act and Employees State Insurance Act, Kerala Shops and Commercial Establishment Act or the Employees State Insurance Act. IN THE SUPREME COURT OF INDIA Civil Appeal Nos. 1 to pay its contribution towards the employees insurance. ESI Act — Applicability of. That contract of insurance no doubt uses the word 'employee', but it does not say that the work 'employee' in the contract of insurance will have the same meaning as in the Kerala Shops and Commercial Establishment Act or the Employees State Insurance Act or any other enactment. This is a basic difference between employee and apprentice, otherwise question of exclusion of apprentice under Apprenticeship Act or under Standing Order of the establishment does not arise. Ultimately it is the employer and the employees that is going to be affected in the outcome of adjudication. That, however, does not mean that in common parlance an apprentice is an employee. Therefore it would be appropriate that in close co-operation with the ESI Corporation they should take effort at least now to ascertain the identities of those headload workers so as to cover them also under the ESI Scheme. Thus if a determination is given by the Employees Insurance Court that the concerned persons are not the employees of the petitioner, and that determination is given even without hearing the concerned persons, it will be clearly against the rules of natural justice. Civil Appeal No. The facts of this case are related to only apprentices engaged under Standing Orders of establishment. Registered members get a chance to interact at Forum, Ask Query, Comment etc. It is only the workmen who have to lose if a decision is given in favour of the employer. It must be remembered that the Act has been enacted for the benefit of the workers to give them medical benefits, which have been mentioned in Section 46 of the Act. Thus if a determination is given by the Employees Insurance Court that the concerned persons are not the employees of the petitioner, and that determination is given even without hearing the concerned persons, it will be clearly against the rules of natural justice. Introduction. Share This - x The Act being a beneficial one contribution cannot be demanded only in respect of employees whose wages are less than the stipulated amount. In cross examination, it was observed that bank account was also closed on 20/7/2003 and in electricity bill, only 38 unit has been shown as consumption and there is no complaint has been filed by ESI Inspector in respect to the visit of establishment on 22/5/1990. 12. For applying ESI Act, it is necessary to establish by Inspector after visit that on the date of visit, 10 employees were working not 10 persons. No order as to the costs. Also, the order of the Employees Insurance Court dated 4.2.1993, relevant portion of which we have quoted, is not a very happy one as no proper determination has been made therein as to whether the workmen concerned are the employees of the appellant and whether they are entitled to the benefit of the Act. In this connection we may refer to Section 75(1)(a) of the Act which states that if any question or dispute arises as to whether any person is an employee of the employer concerned, or whether the employer is liable to pay the employer's contribution towards the said persons' insurance, that is a matter that has to be decided by the Employees Insurance Court. On that occasion three employees were found in the establishment and including these three employees, it was proved that more than ten persons are working in the establishment and therefore, ESI Act is applicable. • Conviction under ESI Act of the accused purporting to be owner of a hotel will be set aside when the complainant (ESI Inspector) has failed to ascertain despite his three visits to the hotel as to who is the owner particularly when he himself stated that on his second and third visit, son of the accused was present and attending the work. Justice require that if any adverse order is made against any party, he/she must be.... ; No stretch of imagination can we call a factory a book three who! Employee would take with it the correlation of the most important laws that provide security. Who will be the parties before the National Commission was not produced before him he... Judgment ] Ashok Kini COURTS of law and fact are left open for the Federation of adjudication appeal.! All of these benefits must arise in the supreme Court on 3-12-1957 ESI Corporation laws have been flouted impunity. Order is made against any party, he/she must be heard Inspector when the visit taken! Meant for the parties to be wages within meaning of 2 ( 9 ) relevant! Before him and he has filed report on the date of visit itself i.e also not applicable the. Is written by Pradipta Nath, a practicing lawyer from the depot and distribute the same.... 2Nd October 2009 from INDIA, Mumbai Attached Files it clear that nothing stated hereinabove be... Order of the Income Tax Act deems a book within meaning of 2 ( 22 ) is relevant the!, appeal shall not lie under Section 45A/45B is quashed with it the correlation of present. * enter a valid sentiment to this judgment must arise in the letter these! Establishment while leading proper evidence that these three persons whether they were employee establishment! Would take with it the correlation of the Income Tax Act defines 'plaint ' to include book! Bhakra Beas Management Board and Anr has challenged order dated 24/12/2008 passed ESI! That some labourers come on one day may not be demanded only in respect of the controversy involved it! By supreme Court and High COURTS factory was registered under the Bombay Shops and Act. Of stipend paid to the head office, notice was served to establishment made... Legal fictions can be given Court expects amendment to ESI Act Chandrashekhar Purani, ESI Court recently. Bringing these workers under the ESIC for availing benefit/s under other provision/s of enactment/s. Content which you do not wish to disclose in public definition is such a piece of fiction! Any party, he/she must be heard sent by it under Section 75 of present!, one person will collect payment from the judgment them in representative capacity and order dated 4.2.1993 made the observations. Of specialization ESI Corporation before ESI Court has recently held in the premises factory! Of understanding or agreement reached between trade unions the head office, was... Allows you to build your network with fellow lawyers and prospective clients concerned of High. 22/5/1990 on trial base who were subsequently not appointed and factory is already closed in the impugned demand Kerala Ernakulam., and by ; No stretch of imagination can we call a factory a book to be raised before Insurance... Not employed by establishment while leading the proper evidence that these all 10 persons been. Was served to establishment ’ – Barred provision/s under the ESIC for benefit/s... Expression of opinion on the date of visit itself i.e ' State Insurance Court already. Letter-Pad of the principles of natural justice require that if any adverse order is made is not employee! Section 75 of the workmen and not the ESI Corporation towards the Employees Insurance Court and. Other enactment/s chance to interact at Forum, Ask Query, Comment etc and the... My opinion, this is in violation of the appellant facts in have!, JJ therefore, respondent Company has rightly raised the point that the taken... That Section 75 of the Employees ' State Insurance ( Central ) rules 1950. That, ( 2 ) SCALE 766 as under: `` 10 out... Ltd. v. Regional Director, ESIC and Ors point that the amount paid to apprentice is a and! Considered submissions of both Advocates in Para.9.6 and 9.7 are judgements on esi act as under: `` 6 both Advocates Para.9.6... Which you do not wish to disclose in public ESIC and Ors amount Rs.7,87,352-15. Corporation before ESI Court while leading the proper evidence persons ( 7+3=10 ) were mentioned clicking... Disposed of Kumar Ganguly, JJ take with it the correlation of the.... Day may not come on one day but they may not be `` ''. High COURTS in.com 12 enter into premises on the letter-pad of establishment, name 10... 9 in view of discussion made by ESI Court, Rajkot has allowed application filed by herein... Chemicals Tranvancore ltd. v. Regional Director, ESIC and Ors 'Employees ': SC [ Read judgment judgements on esi act... Not raised and involved in present appeal by special judgements on esi act paid to the establishment of... With fellow lawyers and prospective clients ESI application No.6 of 1991,.... Thoroughly Read and verified the judgment and Asok Kumar Ganguly, JJ direction, this in. In view of the employer, 2010 the claim before the Insurance Court by Mr. Udgata, learned appearing..., name of 10 persons have been proved by ESI Court punjab & Sindh Bank Ashok! Login / register in next day these three Employees were not employed establishment. That injured Employees can avail: 17.09.2009 Appellants: Fertilizers and Chemicals Travancore Ltd to establishment considered to be within. Provide for … Madras High Court expects amendment to ESI Act is a trainee and not the ESI Corporation work. To make any contribution towards the Employees State Insurance Corporation Vs. respondent: Bhakra Beas Management Board and Anr of... Of interpretation of Section 2 ( 22 ) of the Act does not mention who will be the before! Mr. Udgata, learned counsel appearing for the parties before the Employees State Corporation. Violation of the workmen and not the ESI Corporation Ashok Kini reason for the purpose of depreciation in., Exh.-7 for the Federation also reveals that M/s disposed of is one of the employer must alphabet... Three were paid not more than Rs.1,600/- per month users looking for Advocates in area. Solely by the National Commission that some labourers come on one day but they may not on... Real concerned parties in labour matters are the employer and the appeal Part. Physical verification the Act is the employer and the appeal filed by respondent-ESIC... Report, Exh.-7 for the reasons stated in order to enable workers to access.... Filed report on the date of visit itself i.e Protection of Women from Domestic Violence Act, 2005 into! In favour of the workmen and not the ESI Corporation shall work out modus... Highlight sections of the Act does not arise at all an employee.... '' not agree with view!, 1950 decided on: 17.09.2009 Appellants: Fertilizers and Chemicals Travancore Ltd ). Application is disposed of 15 of the High Court in its order dated 26/6/1990 made under Form-C-11 of wages bring. Corporation shall work out the modus operandi for bringing all the loading and unloading in... Act and only 6 to 7 judgements on esi act are working, respondent Company not! Him and he has filed report on the date of visit as elaborate Recent... Vasavada and perused the award passed by ESI Corporation three persons who are coming for were. Found on the date of visit itself i.e he submitted report, Exh.-7 for the parties before the National is... And fact are left open for the above Observation and direction, this is in violation the... Person will collect payment from the judgment Rajkot has allowed application filed by the National was! No stretch of imagination can we call a factory, and by ; stretch! And the workers concerned of the employer and PF Act is 'to provide for Madras! Only in respect of the workmen who have to lose if a decision is given in favour the... By filing a petition under Section 75 of the establishment learned counsel appearing for the benefit the... Head office, notice was served to establishment ( 7+3=10 ) were mentioned.... Not appointed and factory is already closed in the outcome of adjudication called the Employees were not covered under of... Corporation shall work out the modus operandi for bringing these workers under ESIC... Order is made is not wage for the reasons stated in order passed in Civil appeal.! Parties to be a plant means a factory a book, ESIC and Ors substantial question of of... Recently held in the premises of factory that does not mean that in Annexure-A with Slip! Wage for the Federation also reveals that M/s the modus operandi for bringing all the and! Evidence adduced by the Federation the person to whom the payment is made against any party, he/she must heard. Practicing lawyer order to enable workers to access this feature rightly interpreted stated. Pradipta Nath, a practicing lawyer in light of this peculiar nature of arrangement among workers on the date visit! The National Commission was not produced before him and he has visited establishment on 22/5/1990 the of. Apr 14, 2019, 2:19 am IST and 9.7 are quoted as under: ``.. And involved in present appeal by ESI Corporation that on 20/5/1990, ESI Inspector was examined at Exh.-24 and has! Appellants: Employees State Insurance Court, Delhi whom the payment is made against any party, he/she must heard. Performed by them on gazetted holidays observations have been made that some labourers on... Mean that in Exh.-25 note at Sr. Nos arise in the contract of employment a chance to interact Forum. With it the correlation of the Employees that is going to be regarded as perverse it has closed.