Employees’ Provident Fund and Miscellaneous Provisions Act, 1952:
ss. 7-A, 2(f) – Employee – Definition of – Company engaged in producing garments, employed women workers – Workers provided raw materials-fabric, thread, buttons, to stitch the garments at their homes as per the specifications given by the company and the workers provided them to the company – Workers, if covered by definition of employee u/s. 2(f) – Held: Definition of “employee” u/s. 2(f) includes any person engaged either directly or indirectly in connection with the work of an establishment, and are paid wages – Women workers were directly engaged for wages in connection with the work of the company – They were paid wages directly by the company on a per-piece basis for every garment stitched – Merely because the women workers were permitted to do the work off site, would not take away their status as employees of the company – Further, the Company had the absolute right to reject the finished product, in case of any defects – Thus, the women workers are covered by the definition of “employee” u/s. 2(f) – Order passed by the High Court that workers are not the employees of the company, set aside – Company to deposit the amount towards Provident Fund dues of the workers within the stipulated period.
Interpretation of the EPF Act – Held: Employees’ Provident Fund and Miscellaneous Provisions Act is a beneficial social welfare legislation, enacted by the Legislature for the benefit of the workmen – Thus, the provisions have to be interpreted in a manner, beneficial to the workmen.
Allowing the appeal, the Court
HELD: 1.1 The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 is a beneficial social welfare legislation which was enacted by the Legislature for the benefit of the workmen. Hence, the provisions under the EPF Act have to be interpreted in a manner which is beneficial to the workmen. [Para 6.8] [1112-C-D]
Regional Provident Fund Commissioner v. The Hooghly Mills Company Ltd. and Ors.2012 (1) SCALE
422:[2012] 1 SCR 363; The Daily Partap v. The Regional Provident Fund Commissioner, Punjab, Haryana, Himachal Pradesh and Union Territory, Chandigarh (1998) 8 SCC 90 : [1998] 2 Suppl. SCR
482 - referred to.
1.2 The definition of “employee” under Section 2(f) of the EPF Act 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 are paid wages. [Para 6.1, 6.9] [1107-D-E; 1112-E-F]
1.3 In the instant case, the women workers employed by the respondent company were provided all the raw materials, such as the fabric, thread, buttons, etc. from the respondentemployer. With this material, the women workers were required to stitch the garments as per the specifications given by the respondent company. The women workers could stitch the garments at their homes, and provide them to the respondent company. The respondent company had the absolute right to reject the finished product i.e. the garments, in case of any defects. The mere fact that the women workers stitched the garments at home, would make no difference. It is the admitted position that the women workers were paid wages directly by the respondent company on a per-piece basis for every garment stitched. Thus, the women workers employed by the Respondent Company are covered by the definition of “employee” under Section 2(f) of the EPF Act. [Para 6.2, 6.3, 6.7] [1107-E-H; 1108-A; 1112-B]
M/s P.M. Patel & Sons and Ors. v. Union of India and Ors. (1986) 1 SCC 32 : [1985] 3 Suppl. SCR 55 ; Silver Jubilee Tailoring House and Ors. v. Chief Inspector of Shops and Establishments and Ors. (1974) 3 SCC
498 : [1974] 1 SCR 747; Shining Tailors v. Industrial Tribunal II, U.P., Lucknow and Ors. (1983) 4 SCC 464 - referred to.
1.4 The women workers were certainly employed for wages in connection with the work of the Respondent Company. The women workers were directly engaged by the Management in connection with the work of the respondent company, which was set up as a ready-made garments industry. The women workers were paid wages on per-piece basis for the services rendered. Merely because the women workers were permitted to do the work off site, would not take away their status as employees of the respondent company. [Para 6.9] [1112-F]
1.5 The judgment passed by the High Court is set aside. The order passed by the appellant No. 1 is restored. The respondent company is directed to deposit the amount assessed by appellant No. 1 towards Provident Fund dues of the women workers within the stipulated period. [Para 8] [1113-G]
C.E.S.C. Limited and Ors. v. Subhash Chandra Bose and Ors. (1992) 1 SCC 441 : [1991] 2 Suppl. SCR 267 - held inapplicable.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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