The Supreme Court's division bench of Justices Dinesh Maheshwari and Sudhanshu Dhulia issued notice on Friday in a petition filed by Tata Projects challenging the Employees' State Insurance Corporation's decision to extend the benefits of the Employees' State Insurance Act, 1949, to employees employed by building and construction agencies at the "construction site."

The petition challenges certain instructions issued by ESIC on July 31, 2015, which sought to extend the benefit of the ESI scheme to workers or employees employed by building or construction agencies on construction sites. Certain employers challenged the ESI Instructions in some high courts, claiming that they only resulted in duplication of benefits and subjected the employer to double obligations.

The petition also seeks to call into question the ESIC's "unilateral and arbitrary actions" in issuing notices and demanding contributions under the ESI Act from the petitioner.

Furthermore, the petitioner elaborating the facts claims that it purposefully did not contribute under the ESI Act due to the Supreme Court's stay order. Tata Projects was served with approximately 25 notices in the form of C-18 Ad-Hoc Notices issued by various regional offices of the ESIC across the country as a result of non-contribution.

"The Statement of Objects & Reasons categorically states that the ESI Act is to provide Health Insurance for industrial workers. The scheme envisaged is one of compulsory State Insurance providing for certain benefits in the event of sickness, maternity and employment injury to workmen employed in or in connection with the work in factories other than seasonal factories."

"The ESIC without application of mind has proceeded with issuing Instructions dated 31.07.2015 which per se is detrimental to the interest of those engaged at the construction site. The individuals engaged at the 'construction site' are mandatorily required to be extended the benefit of the EC Act and the BOCW Act. Moreover, with the application of the ESI Act, the individuals cannot avail the benefits of the EC Act and the BOCW Act, which are rather more beneficial for those engaged at the construction site in view of Section 53 and Section 61 of the ESI Act."

The next court date is scheduled for November 21.

Case Title: Tata Projects Ltd. versus Union of India and Anr

Citation: W.P.(C) No. 936/2022 Pil-W