The court questions the classification of Lijjat Papad as an 'establishment' under the ESI Act, emphasizing the need for detailed scrutiny.
In a significant ruling, the Gujarat High Court has remanded the case concerning Shree Mahila Gruh Udyog Lijjat Papad back to the Employees State Insurance (E.S.I) Court for fresh consideration. The case revolves around whether the women working for Lijjat Papad can be classified as 'employees' and whether the organization itself qualifies as an 'establishment' under the Employees State Insurance Act, 1948.
Justice J.C. Doshi, presiding over the matter, highlighted the necessity to reevaluate the classification of Lijjat Papad, which operates as a cooperative society and a public trust focused on women's empowerment. The court identified gaps in the initial judgment by the E.S.I Court at Rajkot, which excluded the women from being considered 'employees' due to the lack of consistent supervision and declared that Lijjat Papad does not constitute an 'establishment' under the ESI Act.
The court's decision to remand the case is based on multiple factors, including the substantial number of women involved and the operational nature of the organization. The women, who roll papads at home after receiving raw materials from the society, contribute to the production process without direct supervision, raising questions about their employment status under the act.
Advocates representing the E.S.I Corporation argued for the inclusion of these women as employees, citing profits generated from selling the papads in the market under the "Lijjat Papad" brand. Conversely, representatives for Lijjat Papad maintained that the organization's cooperative model and the autonomous nature of the women's work exempt them from such classifications.
The court has granted both parties the liberty to present new evidence and directed the E.S.I Court to resolve the matter within nine months. The outcome of this case could set a precedent for similar organizations operating under cooperative and trust models, impacting how employment and establishment definitions are interpreted under the ESI Act.
Bottom line:-
Whether Shree Mahila Gruh Udyog Lijjat Papad can be treated as an 'establishment' under Section 2(12) of the Employees State Insurance Act, 1948 and whether the women members rolling papads can be considered as 'employees' under Section 2(9) of the Act, requires re-analysis, considering the nature of work and the absence of consistent supervision.
Statutory provision(s): Sections 2(9), 2(12), and 82(2) of the Employees State Insurance Act, 1948
Regional Director v. Shree Mahila Gruh Udyog Lijjatpapad, (Gujarat) : Law Finder Doc id # 2942283
