Whether ESI has to be deducted for casual workers

CASUAL-WORKER’S MEANING: A The phrase 'casual worker' is often used to describe workers who are not part of the permanent workforce, but who supply services on an irregular or flexible basis, often to meet a fluctuating demand for work.

QUERY: I want to know about the applicability of ESI Act to casual labourers working in a factory. They may be working for one week or two weeks or one month or two month in one but he isn’t come regular based in factory and then go to another factory and work there. What is the employer's liability?

SOLUTION; Whether employer has to deduct ESI from his wages and contribute his share and deposit to Government or he is not required to deduct. If he has to deposit then what is the period of benefit for the worker. By the time employer deposit the amount before 21st of subsequent month the workers might have completed and left. They may not come again for work in this factory.
 

In fact, that primarily needs to be taken note of here is that the definition of ‘employee’ in the ESI Act [Sec 2(9)(ii)] as well as the PF Act [Sec 2 (f)(i)] includes the ‘Contract Worker’.

The ESI Act and PF Act have very clearly stated that the deduction from the contract worker and the contribution from the Contractor (immediate employer) have to be paid by the Principal Employer and thereafter to be recovered from the Contractor. The relevant portion of the extract says so –

ANNOUNCEMENT; Sec 2 (9) of the ESI Act, 1948, defines an employee:-

In a case A.P.State Electy. Board V E.S.I.Corpn,1977 Lab IC 316 (AP); mentions that the word 'employee' as defined under Section 2(9) includes casual workers also.

2. All employees to be insured - Refer Sec 38 of the ESI Act ; In Bochringer Knoll V E.S.I. Corpn , 1977 Lab IC 1116 (Bom) - The definition of Section 2(9) must be given effect to for the purpose of Section 38

3. In a case : A.P.State Electy.Board V E.S.I.Corpn, 1977 Lab IC 316 (AP);Sec 39(4) and 42(3) ; establish that a casual worker is entitled to payment of contribution by the employer towards employer's contribution as well as employee's contribution , though he is employed even for a day or two or a few days in a week.

JUDGMENT; From the above three points and the cases cited, we have sure that you have understood that a casual worker should be ESI & EPF insured after three month from the date of joining and you can cite the cases in your discussions.