Merely by depositing statutory dues like ESI/PF of Contract Employee will not rise right for absorption with Principal Employer

Simply that a principal employer has deposited statutory dues viz. Provident Fund contribution on its own code number for the workers of contractor, it cannot entitle those contract labour for seeking their regularization.

In one of the case of Hon’ble High Court of India, it has been clarified that the principal employer has discharged its obligation in paying the provident fund contributions of the workers of contractor; then in that scenario it cannot be a ground for regularization of workers of the contractor since the principal employer can recover the amount, as paid, from the contractor. Under section 2(f) of the Employee’s Provident Funds Act, 1952, which defined the expression ‘employee’ as, any employee is included by or through a contractor in connection with the work of the establishment. Therefore, the liability to pay the provident fund would arise even in respect of an employee under a contractor. Under section 3A, the amount of contribution paid or payable by the employer may be recovered by the employer from the contractor either by deduction of any amount payable under the contract or a debt payable by the contractor. Therefore, it is clear that the liability to pay provident fund is mainly on the principal employer and thereafter it is open to the employer to recover from the contractor. Thus, the fact that the employees are covered by the provident fund scheme is not relevant for deciding the status of the petitioners.

There is one more case where it has been held that merely the principal employer is depositing Provident Fund / Employee’s State Insurance contributions, providing medical facilities and uniform/shoes  which were in terms of the Award of the Wage Board and also under the requirement of Factories Act besides the directions given under section 33C(2) of the Industrial Disputes Act, these will not be the factors construing that the relationship of employer and employee existed between the principal employer and the workers as engaged through the contractors.

Hope this small write up will give insight about pertained subject.

To get the supporting case laws for this do write us on juristicsolution@gmail.com

IMPORTANT: 

Information in this blog is being provided as-is without any warranty/guarantee of any kind.

This blog is intended to provide information only. If you are seeking advice on any matters relating to information on this blog, you should – where appropriate – contact us directly at juristicsolution@gmail.com with your specific query or seek advice from qualified professional people.

We encourage you to take steps to obtain the most up-to-date information and to confirm the accuracy and reliability of any information on this blog in general by directly communicating with us.