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“Casual workers are also Employee as defined under ESI Act” Supreme Court

Casual workers are also Employee as defined under ESI Act: Supreme Court

Supreme Court in its judgment dated 29 February, 2016 in Royal Western India Turf Club Ltd. Vs. E.S.I. Corporation, has held that casual workers are covered under definition of employee as defined in Section 2(9) of the Employees State Insurance Act, 1948.

The Apex Court Bench comprising of Justices V. Gopala Gowda and Arun Misra was hearing the appeal preferred by Royal Western India Turf Club Ltd. The main question in this appeal was referred to a three judge Bench which had held that the Turf Club would fall within the meaning of the word ‘shop’ as mentioned in the notification issued under the ESI Act. Thereafter it was placed before Division Bench.

‘Employee’ definition very wide. The Court observed that the definition of “employee” is very wide and a person who is employed for wages in the factory or establishment on any work of, or incidental or preliminary to or connected with the work is covered. The definition brings various types of employees within its ken. The Act is a welfare legislation and is required to be interpreted so as to ensure extension of benefits to the employees and not to deprive them of the same which are available under the Act, the Bench said.

‘Employee’ covers Casual employees. The Court said that it is apparent from section 39 that an employee who is employed for a part of the wage period is also covered for the purposes of contribution. The definition of the term “employee” in section 2(9) is also wide enough to cover casual employees who are employed for part of wage period. A bare reading of the aforesaid provisions makes it clear that it would cover the “casual employees” employed for a few days on a work of perennial nature and wages as defined in section 2(22) and wage period as defined in section 2(23) does not exclude the wages payable to casual workers. They cannot be deprived of the beneficial provisions of the Act, the Bench observed.

The Court also referred to Regional Director, Employees’ State Insurance Corporation, Madras v. South India Flour Mills (P) Ltd. [AIR 1986 SC 1686] in which it was held that casual employees come within the purview of the ESI Act.