Employment, Criminal and Labour | Comments (0)
Under a recent landmark judgment concerning contractual employees and their right to receive provident fund, the Supreme Court has ruled that provident fund must be necessarily extended to all employees, including the contractual employees.
The case in question was of “Pawan Hans Limited & Ors. Vs Aviation Karmachari Sanghatana (Supreme Court)†wherein it was held that the members of the Respondents were in continuous employment for long periods of time and were thus receiving their salaries and wages accordingly from the Company without the need for any contractors whatsoever. Their work comprised of perennial and continuous labour and thus their work is defined a permanent and not contractual. However, in view of Clause 2f of the Provident Fund Trust Regulations, each and every employee of the organization, whether permanent or contractual is entitled to all benefits and wages or salaries accrued to them whether directly or indirectly from the Company.
According to section 2(f) of the EPF Act, the definition of the word employee is an inclusive definition and covers each and every form of employee. It has been defined in a manner so as to include every such person who is engaged whether directly or indirectly in the workings of the organization and thus is paid salaries or wages according.
Hence, in view of the above, the Supreme Court found that the members of the Respondent Union and every other such employee hired on a contractual basis is entitled to all forms of payments and benefits which accrue to every regular employee. Meaning that they are also entitled to receive the provident fund benefits which is their right under the PF Trust Regulations and the EPF Act, hence. Thus, the Supreme Court ruled that because the PF Trust Regulations are in force and applicable upon every employee of the Company it is ideal to direct all such employees of the Respondent Union and every other similarly occupied employee the benefit of receiving provident fund under the rightful Act in order to bring uniformity amongst every employee and not make any demarcations on the basis of the category of employment with the Company
The Bench which ruled the above judgment comprised of Justices U.U. Lalit and Indu Malhotra who explained upon the definition that al such persons/employees who draw wages or salaries directly or indirectly from any company are entitled to provident fund benefits under the Employees Provident Fund (EPF) Act, without any discrimination whatsoever.
The case which necessitated the need for a clear judgment on employees’ rights under the EPF Act can be analysed further to determine how and why every employee is liable to receive the benefits accrued under the EPF Act. In this case, the company decided to file a petition against its employees’ union aka the Aviation Karmachari Sanghatana, since this union sought to grant uniform rights and conditions for services to all employees working under the company, including the contractual employees. They made an effort to cease any differences in wages or benefits provided between a person employeed on a long term basis by the Company and a person employed for a short period of time or a contractual basis by the same.
The entire workforce comprised of a total of 840 employees. However, out of these the company had engaged only 570 workers on a regular basis and the rest of the 270 workers were employed on a contractual basis as per the agreement. Therefore, the Company decided to grant the rights of provident funds under the PF Trust Regulations only to those employees who were employed on a regular and not contractual basis, creating a divide between the employees working under the organization. The Company’s action to only provide the regular employees with the provident fund benefits, even though the definition of the word “employee†did not discriminate between employees whatsoever and was deemed an inclusive definition, was not accepted by the rest of the contractual employees. The definition in itself stated that the word “employee†included every person employed directly or indirectly under the PF Trust Regulations. And, thus the Company was found to be in direct contempt of the law in itself.
It is due to this reason that the contractual employees stated above, sought to gain parity with the regular employees who are covered under the Pawan Hans Employees Provident Fund Trust Regulations completely.
Due to the direct interpretation of the word employees given under the Act, the Supreme Court adjudged that all the members of the union as well as every other similarly situated contractual employee is entitled to the benefit of accruing his or her rightful provident fund under the PF Trust and Regulations. Justice Malhotra, who wrote the judgment, was quoted stating that “We find that the members of the union, and all other similarly situated contractual employees, are entitled to the benefit of provident fund under the PF Trust Regulations or the EPF Act. Since the PF Trust Regulations are in force and are applicable to all employees of the company, it would be preferable to direct that the members of the union and other similarly situated contractual employees are granted the benefit of provident fund under the PF Trust Regulations so that there is uniformity in the service conditions of all the employees of the Company,â€
Therefore, considering the above ruling, it was held that the members of the Respondent Union and every other such employee hired on a contractual basis is entitled to all forms of payments and benefits without any form of discrimination on the basis of the type of employment contract under which the person is employee.
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