Application and Extent of ESI Act, 1948 - Employer's Liability To Pay ESI

 The most widely asked question is what organisations are covered under ESI. The following points cover the answer to this question.

Application and Extent of ESI Act, 1948:-

1.       It extends to the whole of India.

2.       It shall apply, in the first instance, to all factories including factories belonging to the Government other than seasonal factories. 

3.       Provided that nothing contained in this sub-section shall apply to a factory or establishment belonging to or under the control of the Government whose employees are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act.

4.       The appropriate Government may, in consultation with the Corporation and where the appropriate Government is a State Government, with the approval of the Central Government, after giving Six months’ notice of its intention of so doing by notification in the Official Gazette, extend the provisions of this Act or any of them, to any other establishment, or class of establishments, industrial, commercial, agricultural or otherwise.

5.       Provided that where the provisions of this Act have been brought into force in any part of a State, the said provisions shall stand extended to any such establishment or class of establishments within that part if the provisions have already been extended to similar establishment or class of establishments in another part of that State.

6.        A factory or an establishment to which this Act applies shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time falls below the limit specified by or under this Act or the manufacturing process therein ceases to be carried on with the aid of power.

EXEMPTION:

1.       The appropriate government may, by notification in the Official Gazette and subject to such conditions as may be specified in the notification.

2.       Exempt any factory or establishment or class of factories or establishments in any specified area from the operation of this Act for a period not exceeding one year and may from time to time by like notification renew any such exemption for periods not exceeding one year at a time or

3.       Exempt any person or class of persons, employed in any factory or establishment, or class of factories or establishments to which this Act applies from the operation of the Act.

4.       No exemption shall be granted or renewed under above section 87 or section 88, unless a reasonable opportunity has been given to the Corporation to make any representation it may wish to make in regard to the proposal and such representation has been considered by the appropriate government.

5.       Under Section 90, The appropriate government may, after consultation with the Corporation, by notification in the Official Gazette and subject to such conditions as may be specified in the notification, exempt any factory or establishment belonging to  any local authority, from the operation of the Act, if the employees in any such factory or establishment are otherwise in receipt of benefits substantially similar or superior to the

Benefits provided under this Act.

6.       Under Section 91, The appropriate government may, with the consent of the Corporation, by notification in the Official Gazette, exempt any employees or class of employees in any factory or establishment or class of factories or establishments from one or more of the provisions relating to the benefits provided under this Act.

7.       Also the act does not apply to the following:-

a.       Under Section 1(4), Seasonal Factories are not covered under ESIC. They are defined under 2 (19A) as

                                                               i.      a factory which is exclusively engaged in one or more of the following manufacturing processes, namely

                                                             ii.      cotton ginning, cotton or jute pressing, decortication of ground-nuts, the manufacture of coffee, indigo, lac, rubber, sugar (including gur) or tea or any manufacturing process which is incidental to or connected with any of the aforesaid processes and

                                                            iii.      includes a factory which is engaged for a period not exceeding seven months in a year (a) in any process of blending, packing or repacking of tea or coffee or (b) in such other manufacturing process as the Central Government may, by notification in the Official Gazette, specify.

b.        Under Section 2(9), the following are not covered here

                                                               i.      any member of the Indian naval, military or air forces ; or

                                                             ii.      any person so employed whose wages (excluding remuneration for overtime work) exceed such wages as may be prescribed by the Central Government.

c.       Under Section 2(12) the following are also not covered

                                                               i.      A mine subject to the operation of the Mines Act, 1952 (35 of 1952), or

                                                             ii.      A railway running shed

                                                            iii.      Whereon in a factory less than ten persons are employed or were employed on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on or is ordinarily so carried on.