The definition of 'employee' under the Employees' State Insurance Act includes those employed through immediate employers, negating the need for direct employment by the principal employer for coverage eligibility.

1The appellant before us is the Regional Director of the Employees' State Insurance Corporation. The question raised in this appeal is one of importance as the decision that we render in this case may have considerable impact on, the question of coverage under the Employees' State Insurance Act, 1948. The respondent here is the partner of a firm styled "Sylvan Laminations." The said firm is engaged in making shuttle blocks. In the premises where the work is carried on by M/s. Sylvan Laminations there are persons employed in the work of plaining and wood processing and also in the work of lamination. Such work was necessary to produce the finished product. Though all these-activities were carried on in the same premises the work of sawing was being carried out by employees of PW 2 one Krishnan Kutty Nair and the work of plaining and wood processing was being carried out by the employees of one Zacharia. These gentlemen have been examined in the Employees' Insurance Court as PW 2 and PW 3 respectively. They say they are carrying out the work as contractors of M/s. Sylvan Laminations. The total number of workers engaged in these three activities is not less than 20 so much so that if coverage is to be determined taking all the three units into account, the Employees' State Insurance Act will apply. If, on the other hand, coverage is to be considered independently of each of the units none of the units would be liable to be covered under the Act as the number of employees in each of the units would be less than 20. An officer of the Employees State Insurance Corporation made an inspection of the premises as a result of which he prepared Ext. D1 inspection note. In that he found that though apparently working as three units, the wages are being paid by M/s. Sylvan Laminations and the product of M/s. Sylvan Laminations calls for work of sawing, plaining and wood processing before the finishing work of lamination is done. Consequently he took the stand that M/s. Sylvan Laminations was liable to be covered under the Employees' State Insurance Act in respect of all the employees working in the premises. That was challenged by the firm by an application under the Employees' State Insurance Act moved before the Employees' Insurance Court. That application has been allowed by the Court on two assumptions: (1) the number of employees employed by M/s. Sylvan Laminations is only even and though persons concerned in work incidental to the work of a factory also can be treated as employees of the factory, it must necessarily be shown that there is factory and that would be possible here only if it is shown that M/s. Sylvan Laminations had 20 or more employees; (2) it must necessarily be shown that M/s. Sylvan Laminations was supervising the work of the other units and that having not been shown there is no scope for coverage. It is the correctness of this approach by the Court that is in controversy in this appeal.

2 We may dispose of the 2nd of the two points first, for, the answer to that is simple. The contention of the Employees' State Insurance Corporation was evidently that the employees working under PWs. 2 and 3 were those working under their immediate employers and M/s. Sylvan Laminations was the principal employer of such employees. The definition of the term "employee" in S.2(9) of the Employees' State Insurance Act shows that in the case of employees employed through an immediate employer the requirement of supervision by the principal employer or his agent is not necessary in every case, for, it is either such supervision or working by the employee in the premises of the factory or establishment that is the test. In other words, in the case of any person employed through an immediate employer, he would be an employee if he is doing work which is ordinarily part of the work of the factory or establishment, or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment and further if su