Important order on non payment of EPF contribution and damages to the contracted employees

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Wednesday, August 3, 2016

Dear all,

Hon'ble High Court Madras, has passed an order in writ petition filed by Brakes India Ltd (Brakes Division), Sholinghur-631 102, rep. by its Vice-President (Pers. & HRD) Vs Employees' Provident Fund Organization, Vellor rep. by its Regional Provident Funds Organization which is reproduced here-in-under.

The petitioner challenged the order of EPF authority that, EPF authority is not entitled to recover either P.F. contribution or damages from the principal employer.

In case of the registered contractor, having independent code number, is to be treated as independent employer and the Registered Contractor will be solely liable for payment of PF contribution and any damages. However, the liability of Unregistered Contractors, would fail on the principal employer in view of clause 30 of the EPF Scheme, 1952 - Accordingly writ petition is allowed.

The soft copy of the order is enclosed herewith for your ready reference.

The important points of the above order are as follows:

1. EPF Authority not entitled to recover either PF contribution or damages from the principal employer in respect of employees engaged through contractors, registered with the PF Department, having independent Code number.

2. Contractors, registered with the PF Department, having independent Code number, are to be treated as ‘independent employer’.

3. However, in case of default on the part of Unregistered Contractors, for payment of EPF contributions or damages, the liability would fall on the principal employer, in view of clause 30 of the EPF Scheme, 1952.

This is for your kind information.

Thanking you,
With regards,

For Silvassa Industries & Manufacturers Association

Narendra Trivedi,
Secretary

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