Category Archives: Inspections

August 30, 2012 · 4:54 pm

When the PMO went wrong …

The PMO which happened to have some discussion about the workload of the employers once, issued a direction on its own, with the aim of reducing the workload of employers regarding ESIC and EPFO. Accordingly, a new challan format was devised and the ESIC and EPFO were directed to use it. It was a combined challan to facilitate the employers to pay the contributions of ESIC and EPFO at one go.
It resulted in chaos and posed a lot of administrative and legal problems in these organisations, besides making it inconvenient to the bankers to process the challans and credit the funds to the concerned organisations.
The employers asked why they should pay ESI dues also seven days in advance. Because, they had, as per law, one week’s time more to pay the ESI dues every month.
Things got changed when the ESIC introduced online payment later. But, during the period when the combined challan was being used because of the order of the PMO, the employers, the employees, the ESIC, the EPFO and the Banks had to face a lot of problems. But, nobody did say anything against the novel idea mooted by the PMO. They were reluctant to tell the PMO that it had diagnosed the problem wrongly.
The Lehman-Brothers-factor was at work.
Read, for more:

Lessons from M/s Lehman Brothers


This website will also be a forum to help the administrators by acting as a medium for expressing genuine grievances of the public, in public interest.
Patricia E. Powers recalls how the 1989 book, ‘The global village: transformations in World life and Media in the 21st century’, predicted that the customer as producer would take the initiative away from the conglomerate and cites Youtube as an example. (Newsweek July 30, 2012).
It would be helpful if the ESIC, which contemplates some more amendments, calls for the opinion of the public also, through their website, before making those proposals into law. Such a course of action will make the amendments, really purposeful and error free.

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July 1, 2012 · 2:30 pm

Inspection of factories

An article published in the Business Standard in December, 2010 brought out how the employees of the factories in Vellore felt that their legitimate rights would be protected only when the factories were inspected by the inspectors periodically. Long working hours, penalty for visit to toilets more than twice during a day, etc., were highlighted in that article.

As far as the ESIC is concerned, numerous cases of concealed employment are not detected because of absence of availability of information, lacunae in the Inspection Policy and lack of adequate number of Social Security Officers with reference to the actual work-load in such cases.

The ESIC has permitted the employers to register themselves online and get Employer’s Code Numbers generated. As a result, various kinds – repeat various kinds – of further problems have cropped up.

Monetary liability for the ESIC is, at present, created in respect of every TIC generated online by an employer or by a person posing as an employer even when the organisation is not sure whether the case is genuine and whether contribution as per rules would be forthcoming or not.

The EPFO is also facing only some of these problems. For more on this issue, please visit

http://www.business-standard.com/india/news/epfo-to-begin-endinspector-raj/466476/

But, the laxity in inspection does not  result in incorrect financial outgo as the EPFO pays benefits only with reference to the contribution paid, while the ESIC pays benefits not only on the basis of contribution paid but also on the basis of contribution payable but not paid.

The ESIC has not put in place adequate monitoring mechanism. The availability of man-power in the cadre of Social Security Officers is very very less when compared to the magnitude of the work in hand.

The government wants to do away with inspections, of course, for certain legitimate reasons. Please visit the following link:

http://www.thehindubusinessline.in/2002/12/14/stories/2002121402500100.htmB

But, controlling corruption and doing away with inspection are not synonymous. The government should also find a way and convince the working population how the problems faced by them would be located and solved.

Periodical and proper inspection of all factories and establishments will, alone, ensure coverage and protection of the workforce.

The very concept of compliance under the ESI Act is based on mutual trust and that was why the word ‘may’ is used instead of ‘shall’ in Sec. 45 (2) of the ESI Act, 1948.

But, the concept of Public Administration is “You do not get what you expect; you get only what you inspect’.

In other words, “Do not expect what you do not inspect”.

It would be helpful to the insured population if the inspection system of the ESI Corporation is streamlined to be ‘employee-friendly’ so that all employees are covered in time and contributions made to be paid on all items of wages as defined  under Sec. 2 (22) of the ESI Act, 1948.

ESI Corporation can ensure willing participation of labour in the making of the nation.

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