The Employees Insurance Court (Principal Labour Court) has rejected a plea by the Electronics Corporation of Tamil Nadu Ltd. (ELCOT) to declare that it was not liable to pay contribution towards ESI.
In its petition, ELCOT said it was a State Government undertaking, and with effect from June 1, 2003, all employees of its communication division were given the government scale of pay, and it was not liable to pay contribution towards the Employees’ State Insurance Corporation.
Prior to implementing the government scale of pay, it had been paying the contribution in respect of those employees without any default. The new pay scale was substantially higher and also the employees were eligible for the government-sponsored health insurance scheme, it said.
In its response, the Employees’ State Insurance Corporation (ESIC) said the mere application of the government scale would not affect the application of Employees State Insurance Act to ELCOT.
The Insurance Court said granting government scale was a conditional benefit, and ELCOT should have obtained no objection from the employees before bringing them under the scale. ELCOT should have got an undertaking from the employees that they would not claim any facilities under the Factories Act. They did not take any action to get exemption from the government, it added.
The court said without hearing the employees concerned, the argument of ELCOT that the scheme provided to them by changing their pay scale and by way of providing insurance scheme was far better than the ESI scheme and more beneficial to them could not be accepted.
The court rejected a plea for a permanent injunction restraining ESIC from recovering any money from ELCOT as well as a plea to set aside the demand notice towards contribution.
