In a recent Supreme Court judgement in case of M/s. Pawan Hans Limit and ors. v. Aviation Karmachari Sanghatana & Ors. Dt. 17.01.2020, the news was floated that benefits of the provident fund under the Employees’ Provident Funds and Miscellaneous Provisions Act, should be extended to contractual employees engaged by a company. Now many people were confused whether they are liable to pay PF when they employ anyone via a contractor and how are they going to deposit such PF. In this post we are going to discuss that, but first lets discuss the background of this case.
M/S Pawan Hand Limited, a government enterprise which provides helicopter support services to oil sector for its offshore explorations, and services in remote and rough terrain.
The Government of India holds 51% shareholding in Pawan Hans Limited and the remaining 49% is held by Oil and Natural Gas Company Ltd. (ONGC).
In the judgement it was contended that these Regulations shall apply to all the employees of the Corporation. Now the definition of employee is wide and it includes: “Employee” means any person who is employed for wages/salary in any kind of work, monthly or otherwise, in or in connection with the work of the Corporation and who gets his wages/salary directly or indirectly from the Corporation, and excludes any person employed by or through a contractor or in connection with the work of the Corporation but does not include any person employed as an apprentice or trainee.”
Also in para no. 4.2 of the order it was contended by one of the counsel that employee includes all kind of worker which are directly employed by the employer and is paid directly or indirectly by him.
Thus from the above discussion and judgement it is clear that only those employees who are employed directly by the employer even though on contractual or daily wage basis the employer would be liable to deposit their PF. However where the employees are employed through some contractor then the liability of PF would not be of the employer. This was a major concern of many textile mill owners and steel plant owners where majority of work is done by contractual workers engaged through contractors.
Pawan hans supreme court judgement
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