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Section 2(9) of ESI Act

The term 'Employee' is defined under Section 2(9) as follows: Any person employed for wages in or in connection with work of a factory or establishment to which the Act applies.

In order to qualify to be an employee, under ESI Act, a person should belong to any of the categories:
  • Those who are directly employed for wages by the Principal Employer within the premises or outside in connection with work of the factory or establishment.
  • Those employed for wages by or through an immediate employer in the premises of the factory or establishment in connection with the work thereof.
  • Those employed for wages by or through an immediate employer in connection with the factory or establishment outside the premises of such factory or establishment under the supervision and control of the Principal Employer or his agent.
  • Employees whose services are temporarily lent or let on hire to the Principal Employer by an immediate employer under a contract of service (employees of Security Contractors, Labour Contractors, House keeping contractors etc., come under this category).
  • Employees employed directly by the Principal Employer in any part, department, branch situated in the same station or else where, in connection with administration of the factory or establishment for purchase of raw materials, sale or distribution of the products of the factory etc.
  • Exclusions are

    • An apprentice engaged under the Apprentice Act, 1961
    • Any members of Navy, Army or Air Force and 
    • Any person whose wages (excluding overtime wages) exceed Rs 15,000/- per month.
Broadly, all categories of employees, Regular, Casual, Badli, Temporary Contract etc., comes under the covered category. Employees engaged on loading, unloading, movement of raw-material, Gardening, Guest House Maintenance, watch and ward, House Keeping, cleaning, civil construction, repairs of building etc., erection, repairs and maintenance of machinery, plant, equipment furniture, fixtures etc., either engaged directly by the principal employer or through a contractor stand covered.

If the contractors' employees are engaged on any work of the factory or establishments out-side its premises, the factor of supervision of the Principal Employer or his agent is considered necessary for the purpose of such employees coverage.
Even the paid Directors of a company are "employees" if they are in receipt of salary not exceeding Rs. 15,000/- per month. However, a proprietor and working partners receiving salary are excluded from the coverage.
Part time employees employed on contract of service are also employees.

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