Workers of contractor not eligible for ESI benefits

The workers of a contractor engaged by an establishment do not get the benefits of the Employees State Insurance Corporation Act, the Supreme Court stated last week in the judgment, Managing Director, Hassan Co-operative Milk Producer’s Society Union Ltd vs ESI Assistant Regional Director.

The ESI authorities demanded contribution to the fund from the milk coop maintaining that the loaders of the contractor engaged to bring milk to the main plant were in effect engaged by the coop. The ESI tribunal and the Karnataka high court upheld the demand. But on appeal, the Supreme Court overruled them and stated that the coop had no direct control over the workers of the contractors and had no supervisory power over them. The wages were not paid by the coop. Therefore it was not bound to pay the contribution under the law.