Home Top Stories Contractual workers also entitled to PF benefits: SC | India News

Contractual workers also entitled to PF benefits: SC | India News


NEW DELHI: Holding that an employer cannot differentiate between contractual and permanent employees, the Supreme Court has ruled that casual workers are also entitled to social security benefits under the Employees’ Provident Funds and Miscellaneous Provisions Act.
“As per Section 2(f) of the EPF Act, the definition of an employee is an inclusive definition, and is widely worded to include any person engaged either directly or indirectly in connection with the work of an establishment, and is paid wages,” a bench of Justices U U Lalit and Indu Malhotra said.
The order, which is essentially clarificatory, is part of the SC’s directions to public sector unit Pawan Hans Limited to bring all contractual employees under its PF scheme and provide benefits from January 2017, when the workers’ union had approached court.
The apex court held Pawan Hans liable to pay a simple interest of 12% per annum on the amount payable by it towards PF contribution from January 2017 to December 2019.
Former labour secretary Shankar Agrawal said that labour laws do not discriminate between permanent and contractual employees and employers are mandated to give benefits under PF scheme, even when workers are engaged through other firms.
The labour reforms proposed by the government also include various benefits like health cover and PF for workers in the informal economy like “gig workers”, such as food delivery riders. The proposal is likely to be endorsed by Parliament’s standing committee on labour, which is examining the codes.
Of its 840 employees, the company engaged 570 on a regular basis, while 270 were contractual. The Centre had in 2001 issued a notification making the EPF Act applicable to aircraft or airline establishments employing 20 or more people but exempted government-owned airlines.
The bench, after examining the provisions of the act, said an organisation has to the pass twin conditions to be exempted under the law — the establishment must either belong to or be under the control of the government, and employees of such an establishment should be entitled to the benefit of contributory PF or old-age pension in accordance to any scheme or rule framed by the central or state governments.
The court said Pawan Hans failed to fulfil the second condition as it restricted the PF scheme to only regular employees. It said that since PF Trust regulations are in force and are applicable to all employees of the company, it would be preferable to direct that members of the union and other similarly situated contractual employees are granted the benefit of PF Trust regulations so that there is uniformity in service conditions of all the employees of the company.





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