1. When Deputing / transferring staff to branch/unit, whether the canteen/other related will be treated as a single unit.
A reading from the one of the cases in Bombay High Court is reproduced as below.
“Whether an establishment consists of different branches or has establishments- whether situated in the same or in different places- all such departments or branches shall be treated as part of the same establishment but does not provide for different establishments. Whether clubbing of four firms separately registered under the Sales Tax, Shops & Establishments Act and separately assessed under the Income Tax Act justified”->No.
Sunder Transport Vs Regional Provident Fund Commissioner, (1993) (Bombay HC)
Also,
“There will be functional unity and integrality between two establishment eg: ( wakf) laboratory India and the institute , since some employees have been transferred from the wakf to the institute and their EPF contributions were deducted by the institute and deposited with the wakf, hence the institute will be coverable under the EPF & MP Act from the date of its setup”.
Even when the two establishments are governed by different Acts, eg: one by Muslim wakf Act and the other by societies registration Act, it will not make them separate entities when the activities are inter link including unity of managements, finance, functional besides supervision and control etc.
(Both Delhi High Court)
But,
There as observed as in one court judgment,
“ Clubbing of two shops with the factory for coverage under EPF and MP Act will not be justified when two shops at Mangalore and Bangalore had 6 employees and were maintaining independent and separate account books, balance sheets and trading accounts. Hence When there was neither any travel nor any functional dependency between the factory and the two shops.”(Karnataka HC)
So , There cannot , however be a straight jacket – formula , to determine if one establishment can be clubbed with the other section 2(A) of the Act( observations made by Kerala H.C)
1 The unity of the ownership, management and control unity of employment and conditions of service functional integrality and general unity for the purpose.
2 The connection between two activities is not by itself sufficient to justify an answer one way or the other, but the employers own conduct in mixing up or not mixing up the capital, staff and right may often provide a certain answer.
3 The real purpose of the tests is to find out the true relationship between the two parts, branches, units etc, if they constitute one integrated whole, the establishment is one. If it is to the contrary then each unit is separate one.
4 In one case, the unity of ownership, management and control may be important test, in another case, functional integrality or general unity may be the important test, and still in another case the important test may be the unity of employment.
5 Many enterprises may have functional integrality between factories which are separately owned , some may be integrated in one part with units or factories having the same ownership and in part with factories or plants which are independently around. In the midst of all these complexities it may be difficult to discuss the real thread of unity.
Conclusion
Thus,
If there is financial, managerial and functional integrality between the different units and one cannot exists without the other , they should be treated as a single unit , if staff sent on deputation, a part of the same est under EPF act and hence the provisions of the act.
2. Trainees- PF?
Trainee/ Apprentice
There are two ways an employer may engage trainees. The first is to recruit them as apprentices under the Apprentices Act 1961. Similarly an establishment can appoint trainees and impact training to such persons for a fixed tenure under the certified standing orders constituted under the Industrial Establishment Standing Orders Act 1946.
Here the remuneration given in Apprentices Act is termed as “STIPEND”, and it is required that every contract of apprentiship shall be sent by the employer within such period as prescribed by the apprentiship adviser for registration- under see (4) and see(13) of the Apprentices Act.
Thus under the apprentices act, once has to register with central apprentiship council and comply with their formalities.
Whereas under PF Act, Sec 2(f)
An “Employee” means any person who is employed for ways in any kind of work, manual or otherwise, or in connection with the work of
[an establishment], and who gets, his wages directly or indirectly from the employer.
And includes any person
- Employed by or thorough contractor or in connection with the work of the establishment.
- Employed as an apprentice not being an apprentice engaged under the Apprentices Act 1961, or under the Standing Orders of the establishment.
So from the above, it is clear that trainees appointed under the certified standing order are not covered in EPF.Similar with ESI.
A Supreme Court judgment to support this is hereinafter reproduced below
“The trainees in an establishment covered by the Industrial Employment Standing Orders act will be excluded from the Provident Funds Act”(SC)
RPFC Mangalore vs. Central Aercanut & Coca Marketing & Processing Co-op Ltd, Mangalore.
Also Apprentices/Trainees are included in the 1st entry in the schedule of the industrial employment standing orders act reference (Sec 2(g)), for different class of employment.
3.Wheather an employer can limit the contribution (Employee & Employer-Normal 12% each), for Basic+DA above Rs 6500?
The said question is addressed in chapter 4 (membership of the fund) in the EPF & MP Act 1952,
26(6)-> “An officer below the rank of Asst PF commissioner may on joint request in writing of any employee of a factory or other establishment to which this scheme applies and his employer enroll such employee as a member or allow him to contribute more than( 6500 rs) of his pay per month if he is already a member of the fund and thereupon such employee shall be entitled to the benefits and shall be subject to the conditions of the fund provided that the employer gives an undertaking in writing that he shall pay the administrative charges payable and shall comply with all the statutory provisions in respect of an employee”
->So administrative charges can vary if the contribution is beyond rs 6500 per month.
Again,
26 A->Retention of Membership, clause no(2) where the monthly pay of such amber exceeds (6500 rs),the contribution payable by him and in respect of him by the employer, shall be limited to the amounts payable on a monthly pay of (rs 6500) including DA,Retain Allow and cash value of food concession.
Thus analyzing the relevant sections, an employee will continue to be a member of the EPF,if he has already been enrolled as a member of the EPF ,even when his salary was increased beyond Rs 6500 per month, but the employer has the option to restrict his contribution to the fund on the amount payable on rs 6500/month.This the contribution beyond rs 6500 is at the discretion of the employer, but once he extends the benefit, he cannot withdraw it at a later stage.
Also, a person who is appointed on the salary exceeding rs 6500, and he had not been the member of the fund earlier, will not be liable for the benefit of EPF under the scheme and he will be termed as ‘Excluded Employee’
Again, the contribution above rs 6500,(if a member is given) will be 12% from both the employer and the employee.
From India, Kottayam
I am of the view that the employer who has been contributing beyond Rs. 6500/- can subsequently restrict himself to the limit of Rs. 6500/-. Please see Kerala High Court Judgment.i.e.
of 2001®,
The North Malabar Gramin Bank Officers Association &anr Vs. Reserve Bank of India & ors
(Source - Keralawyer --: Judgment 07KLC-2126 <link updated to site home> ( Search On Cite | Search On Google ) )
Secondly a person who is appointed on the salary exceeding rs 6500, and who had not been the member of the fund earlier can be enrolled as member of PF Fund provided there is joint request by him and the employer under paragraph 26(6) of the scheme.
Regards,
Samar
From India, Mumbai
of 2001®,
The North Malabar Gramin Bank Officers Association &anr Vs. Reserve Bank of India & ors
(Source - Keralawyer --: Judgment 07KLC-2126 <link updated to site home> ( Search On Cite | Search On Google ) )
Secondly a person who is appointed on the salary exceeding rs 6500, and who had not been the member of the fund earlier can be enrolled as member of PF Fund provided there is joint request by him and the employer under paragraph 26(6) of the scheme.
Regards,
Samar
From India, Mumbai
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EMPLOYEES' PROVIDENT FUND & MISC PROVISIONS ACT '1952.ppt
EMPLOYEES' PROVIDENT FUND & MISC PROVISIONS ACT '1952 [Compatibility Mode].pdf