EPF applicable to casual workers labourers-EPFO Circular

EPF applicable to casual workers labourers

EPFO has issued a web circulation dated 19-10-2016 to all Regional PF Commissioners and Regional/Sub Regional offices on the matter of applicability of the provisions of the amended para 26(2) of EPF & MP Act, 1952 in respect of temporary , casual and site workers.

The said letter refere to the judgment of the Madras High Court delivered in the case of Builders Association of India, Madurai. In the said case the petitioner sought stopping of EPF Authorities enforcing the provisions of the amended para 26(2) of EPF & MP Act, 1952 in respect of temporary casual and site workers.

The letter points out that the Hon’ble High Court of Madras had dismissed the said petition with the following observation.

“Since the Hon’ble Supreme Court has already dealt with amended paragraph 26(2) of the Employees’ Provident Fund Scheme 1952, the same cannot be challenged in the present Writ Petition and further as per Section 2(f) of the EPF & MP Ad.1952, the same is applicable even to casual workers. ‘:

Builders Association of India, Madurai Case:

In the said case, the petitioner was a Builders Association of India and its contention was that casual workers/labourers were not covered within the purview of Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.  

However, as per EPF Authorities the amendment section 26(2) covered “employees engaged by any other establishment” and therefore they had issued the notice under challenge.

The High Court opined that even a cursory look of the amended section made it clear that employees employed by other establishments would also cover within the purview of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. Also a mere reading of the definition of ’employee” in Section 2(f) would clearly go to show that if any person is employed for wages, he would come within the purview of employee and the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 is also applicable to him.

Further, the High Court observed that in J.P.Tobacco Products, etc., etc. v. Union of India & Others reported in 1996 1 LLJ 822, a similar question had been dealt with by the Hon’ble Supreme Court and ultimately observed as follows:

“We have heard learned counsel for the parties. The “validity of paragraph 26(2) of the Scheme was challenged before the High Court on the following grounds:

(i)The amendment to paragraph 26(2) of the Scheme is invalid for non-compliance of S.7(2) of the Act.
(ii)The compulsory contribution amounts to denial of minimum wages.
(iii)The amendment is impracticable and and unworkable.
(iv)The amendment is ultra vires the Act and Article 14 and Art.19(1)(g) of the Constitution.

By a detailed and well reasoned judgment, the High Court has rejected all the four contentions noted above. We see no ground to interfere with the impugned judgment of the High Court. We agree with the reasoning and the consequences reached by the High Court therein. The special leave petitions are dismissed”

Again on section 26(2) the Madras High Court had observed as under:

“Since the Hon’ble Supreme Court has already dealt with amended paragraph 26(2) of the Employees’ Provident Fund Scheme, 1952, the same cannot be challenged in the present Writ Petition and further as per Section 2(f) of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, the same is applicable even to casual workers.”

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