ESIC notice to Boat Club not enforceable, says Employees Insurance Court

The Employees Insurance Court (Principal Labour Court), Chennai, has ruled that the notice issued by the Employees State Insurance (ESI) Corporation in 2005 against the Madras Boat Club, seeking payment of contribution with interest of about ₹6.62 lakh, is not enforceable.

The Madras Boat Club had moved a petition against the notice, issued after inspection, and said there were only five employees working in its kitchen and therefore provisions of the Employees State Insurance Act were not applicable to it.

The Employees State Insurance Corporation argued that the number of employees was never below 20 and also it could not accept the Club encircling the kitchen portion alone as a production unit, as it has been exploring many activities and was engaging regular workers.

The court ruled that as per provisions of the ESI Act, the corporation could not enforce the payment merely on the basis of notice and there was no order passed. When there is no return or the claim is made only on the basis of an inspection by the ESI Corporation, the provision of Section 45A of the Act comes into operation and makes it mandatory on the side of the ESI Corporation to give an opportunity to the petitioner and pass an order, it noted.

Relentless exercise

The court noted that it would be a relentless exercise after a lapse of nearly 15 years to call upon the ESI Corporation to pass a fresh order.

However, it rejected a plea by the Madras Boat Club, seeking a declaration that it was not covered by the provision of the ESI Act.

There could be no total exemption, and the question of coverage depended on various factors like less number of workers and the exemption granted by the government, the court added.

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Printable version | Oct 29, 2020 8:14:33 AM |

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