Exemption is permissible from operation of provisions of the Act subject to the condition that the employees in a covered factory or establishment are other-wise in receipt of benefits substantially similar or superior to those provided under the ESI Act.
The appropriate Government may grant exemption to such factory or establishment for a period of one year at a time prospectively in consultation with ESI Corporation. An exempted application unit has to apply for renewal three months before the date of expiry of the prior exemption.