Understanding Exemptions in Factory Inspections

Exemptions Sec.87 -91 AA

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Can the SSO visit an exempted factory or establishment for inspection?

Sec.87 Exemption of a factory or establishment or class of factories or establishments The appropriate government may, by notification in the Official Gazette and subject to such conditions as may be specified in the notification, exempt establishment or class establishments in any specified area from the operation of this Act exceeding one year and may from time to time by like notification renew any such exemption for periods not exceeding one year at a time. any factory factories or or of for a period not

This exemption can be in respect of a single unit or the entire class. It can be only in respect of certain area.

Sec. 87 Two new provisos were inserted in the year 2010. 1. Comparative benefits must be taken into consideration. 2. Time limit for application for renewal and for arriving at a decision specified. 7

2010 amendment. In section 87 of the principal Act, the following provisos shall be inserted at the end, namely:- Provided that such exemptions may be granted only if the employees in such factories or establishments are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act: Provided further that an application for renewal shall be made three months before the date of expiry of the exemption period and a decision on the same shall be taken by the appropriate Government within two months of receipt of such application. 8

What E I court can and cannot do in the matter of Exemptions.

Regional Director, Andhra Pradesh Vs. Zuari Cement Ltd & Others (2007) In this case, it has been held that the E.S.I. Court cannot sit as an appellate authority to decide the correctness or otherwise of the order passed by the appropriate government in the application filed for exemption. In the decision reported in 1988-I-LLJ 678 Supreme Court mentioned supra it has been observed that the E.S.I. Court has jurisidiction to decide whether the benefits availed by the employees prior to coverage under E.S.I. Scheme are more advantageous than the benefits provided under the E.S.I. Scheme .

Sec. 88 Exemption of persons or class of persons The appropriate government may, by notification in the Official Gazette and subject to such conditions as it may deem fit to impose, exempt any persons or class of persons employed in any factory or establishment, or class of factories or establishments to which this Act applies from the operation of the Act

Sec. 89 Corporation to make representation No exemption shall be granted or renewed under section 87 or section 88, unless a reasonable opportunity has been given to the Corporation to make any representation it may wish to make in regard to the proposal and such representation has been considered by the appropriate government.

Sec. 90 Exemption of factories or establishments belonging to government or any local authority The appropriate government may, after consultation with the Corporation, by notification in the Official Gazette and subject to such conditions as may be specified in the notification, exempt any factory or establishment belonging to [* * *] any local authority, from the operation of the Act], if the employees in any such factory or establishment are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act.

Sec. 1 (4) It shall apply, in the first instance, to all factories (including factories belonging to the government) other than seasonal factories: PROVIDED that nothing contained in this sub-section shall apply to a factory or establishment belonging to or under the control of the government whose employees are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act. Note: This proviso was added in the year 1989.

Why were the words government or deleted from Sec. 90 and the proviso to Sec. 1(4) added in the year 1989? Was the purpose achieved?

What was the effect of pre-1989 Sec. 90 and what is the effect of the post-1989 Sec. 90? Pre-1989. Survey of the government factory. Allotment of Code No. Representation by the employer for exemption. Grant of exemption by the appropriate government. Post -1989. Who will ensure that benefits superior or substantially similar are available to the employees of the government factory? And, when?

Sec. 91 Exemption from one or more provisions of the Act The appropriate government may, with the consent of the Corporation, by notification in the Official Gazette, exempt any employees or class of employees in any factory or establishment or class of factories or establishments from one or more of the provisions relating to the benefits provided under this Act.

Sec. 91 Note the word consent in Sec. 91 and the word consultation in Sec. 90.

Sec. 91 A Exemptions to be either prospective or retrospective Any notification granting exemption under section 87, section 88, section 90 or section 91 may be issued so as to take effect either prospectively or retrospectively on such date as may be specified therein. 19

Exemptions to be prospective Sec.91-A : Exemptions can now be granted only prospectively and not retrospectively as earlier.

Exemptions and Recovery of arrears

Arrears recovered by Recovery Officer. The order of exemption for the concerned period is issued the next day. The employer, a government unit, seeks refund. What would you do?

Sec. 91AA 91AA. Notwithstanding anything contained in this Act, in respect of establishments located in the States where medical benefit is provided by the Corporation, the Central Government shall be the appropriate Government. 26

Appropriate Government Sec. 2(1) Sec. 2(1) "appropriate government" means, in respect of establishments under the control of the Central Government or a railway administration or a major port or a mine or oilfield, the Central Government, and in all other cases, the State Government.

Which is the appropriate government to grant exemption in respect of a private factory in Tamil Nadu? Which one is the appropriate government to grant exemption in respect of a private factory in Delhi, the State Government of Delhi or the Central Government?