Once upon a time, in the later Eighties, an Insurance Inspector sent his Inspection Report pertaining to a hotel in a small town, which fell within the implemented area. The hotel had been covered as an establishment, then. He reported that the Attendance Register and the Wages Register showed very clearly that there were only 22 employees in the hotel. But, the employer had been paying contribution for 25 employees and submitting Return of Contribution Cards too.
The matter was probed into by him further and it was found that the three persons for whom the employer of the hotel was paying contribution were employed in the neighbouring peanut shop, not run by the hotel-owner. The peanut-shop owner had, earlier, been working in a textile mill in Mumbai and had come back to his native town, after the mills were closed after the large scale strike by the labour leader Datta Samant. This peanut-shop owner knew the benefits of coverage under the ESI Act and, therefore, wanted to provide that security net to his employees. He requested the neighbour, the hotel owner, to include his employees also in the RCC stating that he would pay the contribution amount correctly.
While this report was considered to be a compliment to the ESI Corporation, the hotel-owner was advised to desist from such practice, as the employees of the peanut-shop were not the employees of the hotel and the peanut-shop was not an establishment coverable under the ESI Act.
Moreover, providing Disablement Benefits and Dependant Benefits to these three employees in the event of accidents in the non-coverable peanut shop would become difficult.
The ESIC is supposed to receive contribution compulsorily from and in respect of all the coverable employees, but, only from the coverable employees and not from the non-coverable but willing employees. ESIC did not see that there was more revenue because of such coverage. ESIC went beyond it and understood that there was more liability than what was legally permitted, when such non-coverable but willing employees are admitted into its fold. ESIC took care to enforce the law strictly and rightly.
What is the position now? And, what is the position after the introduction of the I.T. Roll-Out? Is it a free-for-all now in respect of coverage? These matters will be discussed when the issues involved in I.T. Roll-Out are taken up. For the present, the contents of the Revenue Manual alone are discussed. Flourishing ESIC acknowledges with deep appreciation the inputs given by many.
When the ESIC Headquarters Office released the Revenue Manual, two questions were asked:
1. Does this Revenue Manual supersede all the instructions on Revenue-related matters until the date of its publication?
2. Has this Revenue Manual taken into consideration all the instructions issued by the Hqrs. on revenue-matters until the date of its publication?
The answer was a plain and simple ‘No’.
The extent to which the Revenue Manual would be useful to the Revenue Branch Officers, Social Security Officers, and the staff members dealing with Revenue matters in the ESIC can be understood from the above-said reply itself.
This Manual is available online and is in public domain. It is a fact that the Revenue Manual, brought out after a lot of hard work, throws light on important issues with historical facts. But, a Manual of an organisation must be foolproof. When the Local Office Manuals were prepared and updated, different sections of the Manual were sent to various regions for examination and feedback to ensure that there was no error. But, such an exercise had not been done before printing the Revenue Manual, in spite of the fact that some problems were and are endemic while many are epidemic. Endemic issues are those which are confined only to a few Regions or Sub-Regions. This Manual does not tackle certain important endemic and epidemic issues plaguing the revenue administration. A consultation and brain-storming sessions with regions would have helped the Hqrs. to solve many problems.
Some of the issues are, therefore, brought up for discussion in this article. Some major issues are and will not be discussed here in this forum, as it would be misused by unscrupulous elements, which already play a negative role aided by the deficiencies in the Revenue Manual. :
Issue 1: Incorporating obsolete instructions:
|It has been mentioned in Page 212 of the Revenue Manual that order under Sec. 45-A of the ESI Act, 1948 could be issued on the basis of entries in the Despatch Register regarding the despatch of C-18 adhoc.Instructions like this had been issued in July 2002 but were later modified in May 2008.There had been so many judgments against the method suggested in Page 212. That a letter had been sent by Registered Post does not imply that it had, really, been delivered. One must ensure that the Notice sent in Form C-18 had actually been delivered before passing the order under Section 45-A.But, the instructions issued in May 2008 had not been taken into account before publishing the contents of Page 212.
Page 221 contains the word ‘or’ in line 3 in Para L.13.2.(1) and this confuses the issue more.
But, Page 223 contains the following details of the instructions issued in May, 2008:
“Keeping the above broadly in view, it has been desired that adequate care should be taken to ensure that the following action has been completed before issuing speaking order u/s 45-A:
What, then, is the need to incorporate the obsolete instructions in Page 212?
Issue 2: Essential details omitted:
The format for issue of order u/s 45-A does not contain, in its last paragraph in Page 230, the date of delegation of power by the Corporation and the details of gazette in which it was published in the year 1991. When a standardised format is introduced, this aspect could have been taken care of.
Issue No. 3: Allotment of Code Numbers to Contractors:
Page 57of the Revenue Manual contains unlawful instructions. While Para P.5.3 is correct, the contents of the next para P.5.4 are wrong. It is true that the authorities are able to do now whatever they desire. But, that does not imply that whatever they do is right.
P. 5.3. Submission of Employer’s Registration Form by the Contractors (Immediate Employers): A contractor or the immediate employer to whom the Act applies, but is letting out the services of all his employees to only one covered factory or establishment, no separate ESI code number is allotted to him. He is required to comply with the provisions of the Act, rules and regulations under the code number of the principal employer, with a sub-code number to identify him and his compliance.
P. 5.4. Allotment of a code number to a contractor or immediate employer : If a contractor or immediate employer to whom the Act applies, and letting out the services of his employees to an uncovered factory or establishment or to more than one covered factory or establishment, such contractor or immediate employer may be registered separately and a separate code number allotted to him. For this purpose, the following points may be kept in view.
A contractor is only an Immediate Employer and he cannot be given separate code number to enable him to cover the employees sent by him to do work of other employers, to do the work in the premises of other employers.
The directions in page 57 and subsequent pages on this issue have created a lot of havoc. The manner in which the software under the I.T. Roll Out has enabled the employers to create their own code numbers has added to the problems, to put it very politely.
Hope the matter will be set right by the authorities. The intricacies of this issue had been brought to the notice of the authorities long back. But, there is no system in place to hear the subordinates.
The management principle recommended by Mr. Gordon M.Bethune, former Chief Executive of the Continental Airlines is to hear the subordinates. For, they know more about the work, they know more about the weak-spots.
The importance of respecting the views of the subordinates has already been highlighted in the following thread:
In the context, the contents of the EPF Inspector Manual, available in the following link, is worth-comparing. http://www.epfindia.gov.in/EPFO_RulesRegulations/Inspector_Manual.pdf The ESIC too had similar Handbook for Insurance Inspectors. This Handbook has not been published now.
On the other hand, the Revenue Manual contains the duties of Social Security Officers too. But, as a rule, Manuals must confine themselves only to time-tested procedures. They should not give room to ambiguous interpretations.