Whether employees engaged by a contractor will be covered by ESI?
The employees as engaged by a contractor in an establishment covered under ESI will have to be enrolled as members of ESI. The definition of an 'employee' under the ESI Act expressly provides that an employee will mean any person employed for wages in or in connection with the work of a factory or an establishment to which this Act applies and who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent. Therefore,· the persons employed in supervision work in the godowns would be employees. If the labourers are employed by or through an immediate employer on the premises of the factory against payment of wages in or in connection with the work of the factory and as such answer the description of' employee' as defined under the ESI Act.1 However, the Supreme Court in its majority judgment has held that the employees engaged by the immediate employer (contractor) will not be liable to be covered under ESI Act. In this case, the emphasis was held, on the expression supervision.2 The ESI authorities have their reservation so far as small contractors are concerned.
References:
1. P.D. Vidavatak and others 'vs. ESIC, 1971 Lab. IC 874.
2. C.E.S.E. Limited Etc. 'vs. Subhash Chander Bose and others, 1992 LLR 81.
