PF & ESI Registration
venkatesh.blore
(Querist) 07 August 2008
This query is : Resolved
Company A employs 4 persons who are on the rolls of the company. Further, it hires 18 persons to work for it who are on the rolls of B company. Company B is registered with PF & ESI authorities and complying with the relevant laws.
In this situation, since the company A has only 4 persons on its rolls, it has not registered under PF & ESI. Is there a statutory requirement to register?
H. S. Thukral
(Expert) 07 August 2008
How the company A makes payment to those 18 persons ? Directly to Company B or individual employee?
venkatesh.blore
(Querist) 07 August 2008
The company A pays monthly charges to Company B and payments to 18 employees of Company B is made by Company B itself.
H. S. Thukral
(Expert) 07 August 2008
In order to get answer to your query we shall have to go through the definitions of 'employee' in both the Acts.
The ESI Act
Section 2
9) "employee" means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and-
(i) who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere; or
(ii) who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on 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; or
(iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service
(13) "immediate employer", in relation to employees employed by or through him, means a person who has undertaken the execution, on the premises of a factory or an establishment to which this Act applies or under the supervision of the principal employer or his agent, of the whole or any part of any work which is ordinarily part of the work of the factory or establishment of the principal employer or is preliminary to the work carried on in, or incidental to the purpose of, any such factory or establishment, and includes a person by whom the services of an employee who has entered into a contract of service with him are temporarily lent or let on hire to the principal employer and includes a contractor;
Employees Provident Fund and Misc. Provisions Act
(f) "employee" means any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment], and who gets his wages directly or indirectly from the employer, and includes any person
(i) employed by or through a contractor in or in connection with the work of the establishment;
It is clear from the definitions that the employees employed by A through B shall be considered employees of A for the purpose of ESI and EPF Acts. Therefore the Acts shall become applicable as the requisite number of employees are there. However since B immediate employer is already complying with the contribution, A the Principal employer shall not be liable. Therefore A has to get registered with the concerned deoartments.
venkatesh.blore
(Querist) 08 August 2008
Thanks a lot Mr. Harbhajan. Your expert opinion has helped me resolve the issue.
