Case Note & Summary
The appellant, M/s Group 4 Securitas Guarding Limited (now G4S Security Secure Solutions India (P) Ltd), is a security services company covered under the Employees' State Insurance Act, 1948. The appellant employed security guards and paid wages during a strike period. The ESI Corporation determined a contribution of Rs.65,20,855.18, which the appellant challenged by filing an application under Section 75 of the Act before the ESI Court, Bengaluru. The ESI Court dismissed the application, leading to this appeal under Section 82(2) of the Act. The core legal issue was whether wages paid during a strike constitute 'remuneration' under Section 2(22) of the ESI Act, which defines remuneration to include all remuneration paid or payable in cash to an employee, but excludes payments for periods of authorized leave, lock-out, strike, or cessation of work not due to the employee's fault. The appellant argued that strike period wages are excluded, while the respondent contended they are covered. The High Court analyzed the definition and held that wages paid during a strike are not remuneration as the strike is a period of no work, and the exclusion in Section 2(22) applies. The court allowed the appeal, set aside the ESI Court's order, and declared that the appellant is not liable to pay the contribution demanded.
Headnote
A) Employees' State Insurance - Remuneration - Strike Period Wages - Section 2(22) of the Employees' State Insurance Act, 1948 - The issue was whether wages paid to employees during a strike period are 'remuneration' under the Act. The court held that such wages are not remuneration as they are paid for a period when no work is performed, and thus no contribution is payable. The ESI Court's dismissal of the application was set aside. (Paras 1-10)
Issue of Consideration
Whether the wages paid by the appellant to its employees during the period of strike constitute 'remuneration' under Section 2(22) of the Employees' State Insurance Act, 1948, thereby attracting liability to pay ESI contribution.
Final Decision
Appeal allowed. The order dated 02.08.2013 passed by the ESI Court, Bengaluru in ESI Application No.19/2002 is set aside. The appellant is declared not liable to pay the contribution of Rs.65,20,855.18.
Law Points
- Wages paid during strike period not remuneration under ESI Act
- Section 2(22) of ESI Act excludes payments for periods of no work
- ESI Court erred in dismissing application
- Employer not liable for contribution on strike period wages
