Contractor’s Employees and EPF

 

1.                Are the employees engaged/employed through the contractor coverable under the Employees Provident Fund and Miscellaneous Provisions Act?

 

By amendments to the scheme in 1958 and 1960, the persons employed by or through ,contractor or in connection with an establishment to which the Act applied were brought within the purview of the scheme and principal employer was made responsi­ble for compliance with the provisions, of the Act and the scheme in respect of such employees. However, the amendments to the scheme were struck down as unconstitutional by the Supreme Court. The Supreme Court held insofar as no provision had been made in the scheme for the recovery by the employer of the contribution to be made by him on behalf of contractor's employees, the amend­ments operated harshly and unfairly on the persons who employed contract labour, and it resulted in discrimination against those who were employed as direct labour. The defect pointed out by the Supreme Court has now been removed by the Amending Act 28 of 1963. Accordingly, contractor's employees have become eligible for the provident fund benefits w.e.f. 30th November, 1963.

 

Reference:

 

          Orissa Cement Ltd. vs. Union of India. AIR 1962 SC 1902; 1962-1 LLJ 400.