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shanmugam palanichamy (HR)     31 July 2010

ESI Coverage

One of my client is having a hardware shop with a staff strength of 10  and the concern is a sole prop. concern. His son is also running a similar shop in a different name and style with a staff strength of 5 .Further his daughter is also running a similar shop in a different name and style with a staff strenght of 5. Thus there are three shops in same town but in different locations. First one is run by father, and second one is by son and the third one is by daughter. They are having separate Sales Tax Registration certificates.For PF & ESI purpose the jurisdictional inspectors are clubbing all three as one , and issued notice for coverage of PF & ESI. Please suggest me to defend the case in favour of the shop owner.



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 2 Replies

Abdul Hameed (CEO)     04 August 2010

Based on the facts given the three shops are genuiely independant and can not be treated as One single Shop.  I also presume that the employees are not interchangeable, there is seperate door no, electrical and water connection  and there is no stock transfer without consideration.   I also assume that the first unit having 10 is not manufacturing concerned but only a commercial shop.

It is not the inspector/enforcemennt officer who will issue a final order or code No/Business no, but the concerned Regional Office only.  If there is a formal letter from inspector/enforcement officer give the above information and also the ownership or tenancy document in individual name and copies of other documents mentioned above to show that they are independant.  If and when there is an order or shaw cause notice from Regional ask for personal hearing.  There is no way these three shops can be clubbed as one.  In case of ESI Act, there is no voluntarily coverage but in case of EPF there is voluntary coverate.

O. Abdul Hameed

Formerly Regional Director of ESIC, W.Bengal, Andhra Pradesh, Karnataka and Keral and Additional Commissioner ESI Corporation New Delhi - Presently CEO of Santhi H ospital

oaamid@yahoo.com


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