Tag Archives: ESI Act

The humane Sec. 2 (22) Vs. The wicked Cl. 2 (80).

It is Corona times. The date is 25.05.2020. Lord Yama Dharma Raja is hovering over the earth along with his assistant, Chitragupta, watching the events taking place in various nations under lock-down. For the past three months there were unusual increase in the number of entrants to his Court. While on the move, he gets attracted by the conversation of two men in a cocktail party at a hotel in New Delhi. He stopped moving further and has started observing their conversation. Chitragupta, who is standing nearby, is also keen to hear the duo, who were drunk and did not care to keep anything secret. Their conversation reveals that they are power-brokers in the capital of India who get things done from the politicians in power as desired by the business magnates who engage them. This night they are in an ebullient mood, feeling buoyant as if they are swimming in a pool of alcohol. Their conversation reveals that they are Mr. Wall and Mr. Suffer.

Mr. Suffer: Have some more drinks please! (Pours more into the glass of his companion).

Mr. Wall: Yes, Mr. Suffer! I agree, we should go on drinking and drinking. You can float in a pool of alcohol only as long as you swim. You will sink, if you stop swimming. Pour me more, I am so happy that we could influence the people in power to prepare the Code on Social Security the way our masters wanted.

Mr. Suffer: What a nice thing we have done! We have virtually wrecked the entire social security structure in India but project the image that we are expanding the structure. I am not able to control laughing. Nobody knows that a social security enactment of the nation could be so easily wrecked by tampering with the definition of the terms ‘employee’ and ‘wages’. Hah hah haa! We have poured hot water just at the root of the plant. And, it won’t be noticed by anyone. With this one single shot through Cl. 2 (26) and Cl. 2 (80) of the Bill No. 375 of 2019, the entire edifice of the social security structure evolved through the ESIC collapses in a flash. I caused it to be made that way. And the bureaucrats did what I wanted. Funny, the way the legislations are drafted by the bureaucrats who do not care for the poor.

Mr. Wall: Hey, I do not know anything about the concept of ‘wages’ you talk of. But I got what I wanted for PPP, divestment of medical colleges, etc., The manner in which we could cause various words and phrases inserted at various places in the Code is amazing, even for me. The interesting part of it is that nobody can understand the depth of those innocuous-looking phrases and foresee the impact of our mischief. We are very clever. So, we could cheat the others easily. But one thing. We could do all that only because the legislation is about the poor working class about whom nobody cares. We cannot do such thing in a legislation that would affect the rich.

Mr. Suffer: Yes, of course! Poor should be cared for by the government only. When the government is not inclined to be so, who will care for them. None. Moreover, the rich who care only for themselves are able to dictate terms to the government. We do not see rich benefactors like Robert Owen or George Cadbury in the Indian scene. They evolved the social security structure in the international arena. But the ultra rich in India want to wreck the already established structure. What is more? They are able to get the law they want by paying the political parties through Electoral Bonds. The party in power gets about 92% of such corporate donations. Naturally the nation goes the way the rich want it.

Mr. Wall: You are right! The Indian society becomes less civilised with every such labour law passed by the government recently to exploit the labour in the manner in which the rich wanted to exploit them. Anyway, our concern is that we should make money and it is the rich who pay us. Why should we then bother about the poor?

Mr. Suffer: Why should we? The politicians in power want to get the votes of the poor but they do not bother about the poor. Why we should feel concerned about them, then?

Mr. Wall: Yes, Mr. Suffer! You are right! We have convinced the politicians in power that they should choose between ‘Production in Industry’ and ‘Protection for the labour class’. Both cannot go together, we told them. They believed our theory.

Mr. Suffer: Funny, these politicians in power do not know that only strong labour welfare measures can increase production. They do not want to see what is happening in the civilised countries like Norway, Sweden, Finland, Japan, etc., They are more interested in getting money for their political parties from the Corporates. So all of them are at the beck and call of the Corporates and are ready to work as their agents instead of protecting the large mass which constitute the working class.

Mr. Wall: Be happy about it! It suits us! Otherwise we will also have to do some real work that would be really beneficial to the society. We cannot live this kind of happy parasitical life otherwise. Our work helps the rich exploit the masses without limit. I am surprised how the bureaucrats have been helping us in playing so many tricks in preparing the Code on Social Security to provide no meaningful security to the working population.

Mr. Suffer: Yes, the bureaucrats did not even explain to the politicians in power the circumstances under which various terminlogies had been defined in the ESI Act the way they have been and their importance in the Indian context. We know that as Sir William Beveridge said, industry in a nation will flourish, only when there is “Willing participation of labour”. But in India, the politicians in power do not want to listen to reason. They want to live off the rich; the rich want to live off the poor. The only goal amont the rich is to become ultra rich, and feature themselves in the Forbes magazine.

Mr.Wall: That they can achieve only when the politicians in power help them to exploit the poor through ‘Forced labour”. (He pours some more liquor for himself and drinks).

Mr. Suffer: I am not able to come out of the dizzy feeling I had when all our efforts bore fruit in the form of the Bill on the Code on Social Security, 2019 (Bill. No.375 of 2019) which contained the definition of the term ‘employee’ in Clause under Clause 2 (26) and the term ‘Wages’ under Clause 2 (80) as we wanted it. Nobody is going to notice it. Hah hah haa. With these two definitions, the entire ESI structure gets demolished so silently. The private insurers will then have a field day. I am so happy. I feel as if I am in heaven.

Mr. Wall: I feel that I am in heaven too.

(Lord Yama Dharma Raja looks at Chitragupta with a smile. Chitragupta smiles in response. He knows the meaning of the smile of the Lord and understands what is in store for this duo when they appear in the Court of the Lord, later.)

Mr. Suffer: Yes, of course. We have done a brilliant work. It requires a lot of talent to do what we have done. Even if you keep the present ESI Act in tact and continue to provide 70% to 90% of wages as compensation, the questionable phrases that we have caused to be included in the definition of the term ‘Wages’ under Cl. 2 (80) of the Bill No. 375 of 2019 would ensure that there is no meaningful social security net for the working population in India. What a marvellous work we have done! I admire at our own capability of deceit. And the bureaucrats, simply, fell for us. Oh, how easy to cheat the masses in India, with the help of the bureaucrats who do not care about their social responsibility under the Constitution!

Mr. Wall: Yes, yes! First of all, nobody cares for the poor; secondly, nobody knows where we have done what to undermine the social security system. Wah ! It is so easy to scuttle labour welfare measures in India.

Mr. Suffer: I admire myself ad infinitum. What a wonderful way in which I have caused insertion of the term “any overtime wages” in Clause 2 (80) and removed the same from Clause 2 (26) of the Bill concerned! Nobody knows the consequences of it. Because the overtime wages had been specified in Sec. 2 (9) of the ESI Act to be excluded for the purpose of coverage, but included for calculation of contribution payable on the wages defined under Sec. 2 (22) thereof. Its consequence has been phenomenally favourbale for the welfare of the labour, for the past 68 years. These terms have had a chequered history to protect the working population. But, we have reversed the relevant phraseologies in the present Bill on the Code on Social Security, in such a clever manner that it would be difficult for the people to understand the extent of the crime committed in drafting the Bill.

Mr. Wall: What would be the impact of such inclusions and exclusions?

Mr. Suffer: You see, the defintion of the term ‘wages’ as given in Sec. 2 (y) of the already promulgated Code on Wages, 2019 has been copied and pasted in Clause 2 (80) of the Bill on the Code on Social Security. The Code on Wages, 2019 replaced the Minimum Wages Act, 1948. The ESI Act had also been brought into existence only in 1948. But the term ‘wages’ had been defined differently in Sec. 2 (22) of the ESI Act. But now the bureaucrats did not care to examine why there was discrepancy between these two enactments while defining wages. They did not care either to analyse or even to record their observations in the Statement of Objects and Reasons accompanying the Bill on the Code on Social Security.

Mr. Wall: Why did the two Acts had two different definitions for the term ‘wages’?

Mr. Suffer: The very purposes of the Minimum Wages Act, 1948 and the Employees’ State Insurance Act, 1948 were totally different. The former was intended to ensure that the working population got, at least, a certain minimum amount as wages and to prevent the employer from including many variable components of remuneration paid by him to the workers and showing them also as part of the said minimum wages. The latter was to ensure that the employer brought within the purview of social security provided by the State more employees by excluding many variable components so that the cash benefit that he would receive in the event of sickness or other contingencies would be attractive and substantial with reference to the total emoluments that he receives from his employer in whatever form, so that he would be able to maintain a reasonable standard of living during the periods of such unforeseen contingencies. For example, an employee who earns a sum of Rs. 20000 pm as wages now, would get about Rs. 14000 pm as Sickness Benefit, Rs. 16000 as Extended Sickness Benefit and Rs. 18000 as Total Disablement Benefit. This is the position as on date.

Mr. Wall: I understand now. It seems that the Minimum Wages Act, 1948 was for excluding many variable components of remuneration paid by the employer to identify the ‘wages’ while the ESI Act, 1948 was for adding many variable components of remuneration to the ‘wages’ paid otherwise. The definition in Sec. 2 (h) of the Minimum Wages Act, 1948 ensured not only a specific minimum as wages payable to the working population but also prevented the employer, through the ‘Exclusion Clause’ in the said Sec. 2 (h), from citing those extra allowances or payments as part of the said minimum wages.

Mr. Suffer: Yes. The goal of the Minimum Wages Act was to put at least a minimum money in the pocket of the worker while the goal of the ESI Act was to provide maximum possible cash benefit by the Government to enable the worker to meet the contingencies. There cannot, therefore, be one and the same definition of the term ‘wages’ for both enactments.

Mr. Wall: True. Both these enactments came into force immediately on the wake of independence and they came along with the another important labour welfare legislation, the Factories Act, 1948. The desire of the leaders of modern India, then, was not to allow exploitation of labour even after the independence of the nation. That was the precise reason for enacting all these legislations, on priority basis on attaining independence. It had been made clear in the Statements of Object and Reasons of all these three enactments, in the year 1948, that they were intended for the welfare of the working population.

Mr. Suffer: The definition of the term ‘wages’ in Sec. 2 (22) of the Employees’ State Insurance Act, 1948 read with the definition of the term ‘employee’ in Sec. 2 (9) of the said Act, (which specifically excluded over time allowance to decide the coverage of the insured person) ensured that the employee was not denied coverage because of variable components of remuneration but was given substantial amount as cash benefit (by taking into account many variable components of remuneration also as wages) and was thus enabled to maintain a reasonable standard of life even when he was affected by certain contingencies like Sickness, Disablement due to Employment Injury, etc.,

Mr. Wall: Yes, I got it. If the employee who draws total wages of Rs. 20000 is shown by the employer to have received only Rs. 7000 as wages and the remaining Rs. 13000 as extra allowances which have not been classified as Wages, as per Cl. 2 (80) of the Bill on the Code on Social Security, he would get only Rs. 4900 pm as Sickness Benefit, Rs. 5600 as Extended Sickness Benefit and Rs. 6300 as Total Disablement Benefit. As one who maintained his standard of life at Rs. 20000 pm, it would become very hard to him to maintain a reasonable standard at Rs. 4900 pm in the event of even ordinary sickness. It is essential in the context to know that the tendency of the employers to cheat and evade both his employees and the ESI Corporation has been real as borne out by the judgments of the courts of law in thousands of cases. A law-maker cannot just presume to the contrary and put the lives of the working masses at the mercy of the employers, going back once again to the pre-1948 era.

Mr. Suffer: Very funny, indeed. The bureaucrats do have neither the understanding of the concept of social security nor any understating of the consequences. That was why the draftsman had simply inserted in Cl. 2 (80) of the Bill on the Code on Social Security the entire definition of the term Wages as given in Sec. 2 (y) of the Code on Wages, 2019, as it is.

Mr. Wall: It is not only that. They do not even know why the merger of the ESIC and the EPFO could not take place for the past 40 years, in spite of various studies undertaken by them. That merger could not materialise only because the term ‘Wages’ for the purpose of compliance and contribution, could not be given a common definition to answer the purpose of both the ESI Act, 1948 and the EPF Act, 1952.

Mr. Suffer: Exactly. If only the present Bill on the Code on
Social Security, 2019 with its Cl. 2 (80) as it is becomes law, it will be a death-knell for the entire concept of social security in India. Our nation will go down even lower in the list of civilised nations, because Social Security provided by the government has been recognised world-wide as the symbol of civilisation. This Code will make the cash benefits payable to the beneficiaries (insured persons or their dependant family members) totally unattractive with reference to the real wages earned by the insured person.

Mr. Wall: Yes, you are right. That benefit will not be useful to the workers in any real sense, unless contribution is made payable by the employer on all items of wages paid by them, as per the existing definition under Sec. 2 (22) of the present ESI Act. There would be no real Social Security to the working population. There would be no real “State Insurance” although Chaper IV of the Code on the Social Security, 2019, proclaims to the public that there would be an “Employees’ State Insurance Corporation”.

Mr. Suffer: Hey, that is not our botheration. Let us celebrate our victory in our mission to destabilise the social security system of the nation. We are not Mahatma Gandhi. I wonder whether he would have fought for independence if only he had known that people like us would be roaming around in the independent India manipulating the bureaucrats to our will, which is in fact the will of our pay-masters, the ultra and greedy rich.

Mr. Wall:  I understand. I find that there is no way for the nation to extricate itself from the web woven by you to destroy the social security system. Am I correct?

Mr. Suffer: True. As things stand,  the enemies of the working population, the ultra-rich who have already cornered more than 75% of the national resources  are commanding the politicians in power and demanding the laws they want in the manner in which they want them. It is as per their desires, I have woven a spider-net to trap and destroy the organisation which provides proper security-net to the working population. Yet, the social security system can be retrieved from the hands of these ultra rich, if the  Parliamentary Standing Committee on Labour directs the bureaucrats to have a relook at the Cl. 2 (80) of the Bill on the Code on Social Security, 2019 (Bill No. 375 of 2019) and to delete the following from the definition therein for the term ‘wages’:

    1. The phrase ‘any conveyance allowance or” appearing in the Exclusion Clause (d) of the definition has to be deleted;
    2. The phrase ‘house rent allowance” appearing in the Exclusion Clause (f) of the definition has to be deleted;
    3. The phrase ‘any overtime allowance” appearing in the Exclusion Clause (h) of the definition has to be deleted;
    4. The phrase ‘any commission payable to the employee” appearing in the Exclusion Clause (i) of the definition has to be deleted;
    5. The first proviso should be totally deleted as it does not have relevance in a social security enactment. In other words, this proviso starting with the phrase “provided that for calculating” and ending with the phrase “added in wages under this clause” requires to be deleted in toto.

Mr. Wall: (After remaining silent for some time) Hey, Mr. Suffer! C’mon, let us go home. You have drunk too much. Your eyes are red.

Mr. Suffer: Yeah, yours are red too. (He tries to make a move reclining himself on the shoulders of Mr. Wall)

Mr. Wall: No. Yours are redder. Redder, much more.

(Lord Yama Dharma Raja looks at Chitragupta and nods at him to move on. Chitragupta notices that the eyes of the Lord are red.)


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Social Security Code, 2019: Please put it for stakeholders’ discussion first!



Mr. Bhartruhari Mahtab,

Hon’ble M.P &  Chairman,

Standing Committee of Parliament on Labour,

South Block,

New Delhi – 110011.


(Through Mr. Kulvinder Singh, Deputy Secretary, Parliament of India, House of the People,

email: comm.labour-lss@sansad.nic.in)


Sub: Social Security Code, 2019– does not provide acceptable standards of quality of life – Ordinance route – improper – representation – submitted.


Ref: News item in the NDTV on 13.04.2020.



1. I am compelled to submit this representation because of the news item that appeared In the NDTV under the caption “Amid COVID-19 Effects, Executive Orders To Fast-Track Labour Codes” on 13.04.2020 which says that The coronavirus and the subsequent lockdown has pushed the government to take the ordinance route to formulate three of the four labour codes it is planning. I submit that any such action in a hurry to rush through the Labour Code on Social Security is fraught with dangerous consequences to the entire Indian society, for all the time to come. The facts of the case are that the last draft Bill was put in public domain for discussion on 17.09.2019 in File No. Z-13025/13/2015-LRC, giving stakeholders time to respond up to 25.10.2019 with “suggestions”, “comments” and “inputs”. But the draft was withdrawn at the behest of the PMO within three weeks, as reported by the Economic Times on 04.10.2019. To the shock of everyone, all of a sudden, a formal Code on Social Security got introduced in the Parliament on 06.12.2019 as Bill No. 375 of 2019 and the Bill was referred to the Parliamentary Standing Committee on Labour on 23.12.2019. The Standing Committee is now seized of the issue. I submit that this cannot be the way of deciding the livelihood of a large section of humanity, the working population of India and the stakeholders in providing social security to them.

2. There had been so many things fishy in this matter of preparation of code on social security, right from the beginning. It is common knowledge that neither the Finance Ministry nor the Labour Ministry could find out, for the past five long years, who played the mischief in smuggling in the mischievous phrase against the ESIC and the EPFO using the word, “hostages” in the Budget Speech of Mr. Arun Jaitely on 28.02.2015, without any documentary evidence and authorised source. That exactly was the point of origin of great conspiracy by certain vested interests who were all out to demolish the well-established social security structure of the entire nation. They had had illicit access to the power centres, it became evident from the reply of the Ministry of Finance in O.M. No. 2/98670/2015-RTI dated 13.05.2015. (For more, https://flourishingesic.info/2015/06/10/hostages-accusation-against-esic-epfo-without-documents/ ).

3. The benefits provided by the Employees’ State Insurance Act, 1948 are the best which, every succeeding government should try to better. This Act assures that the dependants of an employee who met with a fatal employment injury would get about 80 to 90% of the wages drawn by the deceased employee as Dependants Benefit. 3/5 of it is for the spouse and the remaining 2/5 is for the children up to 25 years of age. If the child is infirm at the time of the death of the employee concerned, that child gets its share throughout its lifetime.

4. Similarly, the employee gets 80% to 90% of his wages as compensation in the event Temporary Disablement caused due to Employment Injury. One who suffers from ordinary sickness is entitled to get 60% to 70% of the wages as compensation for 91 days within two consecutive benefit periods constituting one year. In these cases, the cash benefits are in addition to the free medical aid, which is needed for the sickness or disease concerned, for which a large chain of dispensaries and hospitals have been established. The benefit called Extended Sickness Benefit that provides 80% of wages to the employees for about two years with free medical aid to them and their family members for three years is unmatched and can never be provided by any private player. The benefits payable to the insured persons in the event of their interim unemployment are immense and its importance assumes large dimension in the context the current nation-wide lockdown due to Covid virus. In order to ensure brevity, I am not dealing here with all the benefits provided under the ESI Scheme. But there is no assurance anywhere in the Social Security Code, 2019 that the benefits available as per the present statute would be continued. Leaving everything to subordinate legislation, the Code has left the entire workforce in the wilderness. When an existing law is proposed to be changed, people do have the right to know whether the benefits that would be available would be the same or more or less. That issue has not been answered to.

5. It is appropriate to recall the fact that Paul Krugman, the celebrated Nobel Prize Winner of 2011 has examined the issue in depth and warned the American legislators not to fall victim to the propagandists of privatisation of social security. It is also worth noting that a leader who wanted to privatise Social Security was looked at as an anti-people leader by the public. The presidential candidates of the USA in the year 2004 wanted to make use of that impression to villainise each other. Mr. John Kerry wanted to scare away the voters from voting again for President George. W. Bush saying that the latter was planning a surprise second term attempt to privatise social security and forecast a “disaster for America’s middle class”.  “I’ll tell you what. I will never privatise social security”, Mr. Kerry said. The spokesman of Mr. George W. Bush, the Republican Party Chairman, Ed Gillespie, called the charge “just flat inaccurate”. None of the parties wanted privatisation of social security there. These incidents would show the importance of keeping the social security scheme in public sector, to provide social security benefits as a sovereign duty, in accordance with Art. 22 of the Universal Declaration of Human Rights and Art. 39, 41 and 42 of the Constitution of India.

6. A Social Security Scheme provides a security-net assuring every employee that his economic condition and health condition would not be allowed to fall below that net. It is a safety net that gives peace of mind to the employee and ensures peace and harmony in the entire society, referred to at length in the Preamble of the Charter of the International Labour Organisation, established in 1919 AD.

7. The social security system established in India in the year 1948 was evolved out of the famous report of Sir William Beveridge which contributed already to the strength of the National Health Scheme in the UK. The ESI Scheme in India had been modelled on and drawn from the same ‘Beveridge Report’. Any independent analyst who examines the social security provisions of every nation for comparison and contrast would declare, unequivocally, that the ESI Act, 1948 of India is a symbol of civilisation. Every social security enactment is intended to take every society towards a civilised status. In the matter of social security, the Scandinavian countries provide examples to be emulated. Private players cannot provide real social security and they cannot have a have role in it. The Hindu, had editorially conceded on 01.01.2005, that “The package (of benefits provided by the ESIC) can rarely be matched by private employers on their own because of the heavy costs involved – not to mention the disinclination among employers, with honourable exceptions, to operate health care systems for their workforce”.

8. But instead of taking the nation forward the three draft Labour Codes on Social Security prepared in the years 2017, 2018 and 2019 put the nation on the path of retardation, and consequently those efforts ended up in failure. Because the intention of those interests who drafted those Codes was not for providing real social security but to deny social security and demolish even the existing structure, while maintaining a facade that they were taking action for the welfare of all the people. These three drafts had been withdrawn from public discussion because of the incomplete, incongruous and inadequate provisions therein. It was a fact that the PMO itself had disagreed with the draft circulated on 17.09.2019 in File No. Z-13025/13/2015-LRC and ordered to withdraw that last draft. All those three drafts had, literally, been running into hundreds of pages. It is, therefore, not proper to make use of the pandemonium created by the Covid pandemic and enforce such a voluminous Labour Code on Social Security through an Ordinance.

9. The ESI Act provides a goal post, a decent and reasonable standard, for social security in the Indian context. It provides an ideal security net and it has been successful all along. What is required now is to make use of Sec. 1 (5) of the Act that enables the ESI Scheme to be extended to the establishments in all the four sectors, ( industrial, commercial, agricultural and otherwise) and provide social security of the same standard to all the employees in all those sectors. It is not necessary to prepare the code as has been done thrice by the vested interests who wanted to really deny even the existing security cover. These draft codes reduced the existing benefits instead of providing more benefits to more workers.

10. I submit that the need of the hour is to run the organisation corruption-free and not to run down the organisation and its concept. But that is not being done. Even the CAG has not been helpful to monitor the functioning right. He failed to detect the huge fraud committed in the name of construction of medical colleges and prepared a slip-shod report bearing No. 40 of 2015. When challenged in the W.P. 33775 of 2016 and W.P. 35284 of 2016 in the Hon’ble High Court of Madras, the Comptroller and Auditor General of India could not file any counter-affidavit, for the past four long years, while the Cabinet Secretary himself had filed his counter-affidavit within a year. I submit that it is worth probing into the puzzling silence of the CAG who is, now, afraid of judicial review of his inactions and lapses on this serious issue. This CAG has, through his report No. 40 of 2015, cheated the President, the Parliament and the public in this matter and is, deliberately, trying to avoid accountability. I submit that it is there where the government should concentrate.

11. Mr. Ratan Tata has, in the context of the living conditions of the poor in Dharavi of Mumbai, said that we should think over about the “acceptable standards of quality of life”. He has added, “… we’re dealing with populations that need to be a part of new India. We are creating a community which we are ashamed of. We should be driven by the desire of creating a world culture” (Times of India 21.04.2020).


12. But the intention of the forces which caused the preparation of the three drafts on Labour Code on Social Security in2017, 2018 and 2019, was to radically reduce the acceptable standards of quality of life when the workers meet with various contingencies in life. These three drafts reduced even the existing time-tested benefits provided under the ESI Act. These drafts made the government to disown its constitutional responsibility and gave freehand to private players to play havoc with the lives of the working population. No explanation had ever been given by the brains behind those drafts to justify their attempt. Silence cannot be the answer to valid questions which the persons who drafted those drafts found uncomfortable. Now, the news item mentioned in the reference cited has caused genuine alarm and apprehension in the minds of the people about the fate of social security in the nation.

13. I submit that the very introduction of ‘the Code on Social Security, 2019’ in the Parliament as Bill No. 375 of 2019 on 06.12.2019 is premature, as the draft Bill placed in public domain on 17.09.2019 had been withdrawn at the instance of the PMO, as reported in the Economic Times on 04.10.2019. I, therefore, fervently pray that the mode of ordinance may not be resorted to for enforcing any Labour Code on Social Security, when the need of the hour, after the withdrawal of the third draft circulated on 17.09.2019, is to do the preliminary work of preparing a fresh draft Labour Code on Social Security and putting it in public domain for public discussion.

14. As there has been no real public discussion on the contents of the Bill placed before the Parliament on 06.12.2019, I request that the Parliamentary Standing Committee on Labour may be pleased to recommend withdrawal of the Bill No. 375 of 2019 from the Parliament for placing it in the public domain first inviting ‘suggestions”, “comments”, and “inputs”, from the stakeholders, as called for in the letter dated 17.09.2019 of the Ministry of Labour.

With profound regards,

Yours faithfully,












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Coverage of Man-Power Supply Agencies!

Man-power supply agencies are coverable under the ESI Act as Shops, but only their offices, as the premises in which those offices are functioning are utilised to render service for a price.

The persons supplied by them to do the work of the other factories or establishments cannot be treated as employees of these Man-power supply agencies, just because they got an ESI Employer’s Code Number.


A lot of evasion, manipulation and abuse of the benefits of ESI and denial of benefits takes place in the coverage and non-coverage of the employees deputed by these agencies, which use their employer code number to cover the non-coverable employees also.


The responsibility for their coverge lies only with the ultimate employer who utilizes their services. The Principal Employer for the employees deputed by these agencies to work in other factories or establishments are only those employers who utilize the services of these employees and not the man-power supply agencies which depute them.

Relevant details in this regard are provided in the Powerpoint Presentation available in the following link:

Manpower supply agencies

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