The Factories Act:
(m) “factory” means any premises including the precints thereof-
(i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being
carried on with the aid of power, or is ordinarily so carried on, or
(ii) whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being
carried on without the aid of power, or is ordinarily so carried on, but does not include a mine subject to the operation of 2[the Mines Act, 1952 (35 of 1952) or 3[a mobile unit belonging to the armed forces of the Union, a railway running shed or a hotel, restaurant or eating place;]
4[Explanation 5[I].-For computing the number of workers for the purposes of
this clause all the workers in 6[different groups and relays in a day shall be taken
taken into account;]
7[Explanation II.-For the purposes of this clause, the mere fact that an Electronic Data Processing Unit or a Computer Unit is installed in any premises or part thereof, shall not be construed to make it a factory if no manufacturing process is being carried on in such premises or part thereof.];
(n) “occupier” of a factory means the person who has ultimate
control over the affairs of the factory,
(i) in the case of a firm or other association of individuals, any one of the individual partners or members thereof shall be deemed to be the occupier;
(ii) in the case of a company, any one of the directors, shall be
deemed to be the occupier;
(iii) in the case of a factory owned or controlled by the Central Government, or any State Government, or any local authority, the person or persons appointed to manage the affairs of the factory by the Central Government, the State Government or the
local authority, as the case may be, shall be deemed to be the occupier]:
The EPF Act. provisions:
THE EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952
(Act No. 19 of 1952)
4 th March, 1952
An Act to provide for the institution of provident funds, pension fund and deposit-linked insurance fund for employees in factories and other establishments.
Be it enacted by Parliament as follows:-
1. Short title, extent and application.- (1) This Act may be called the Employees‟ Provident Funds and Miscellaneous Provisions Act, 1952.
(2) It extends to the whole of India except the State of Jammu and Kashmir.
(3) Subject to the provisions contained in section 16, it applies -
(a) to every establishment which is a factory engaged in any industry specified in Schedule I and in which twenty or more persons are
(b) to any other establishment employing twenty or more persons or class of such establishments which the Central Government may, by notification in the Official Gazette, specify, in this behalf:
Provided that the Central Government may, after giving not less than two months‟ notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any establishment employing such number of persons less than twenty as may be specified in the notification.
ESIC Act provision:
1. Short title, extent, commencement and application. — (1) This Act may be called the
Employees’ State Insurance Act, 1948.
(2) It extends to 2 [the whole of India 3 [***]].
(3) It shall come into force on such date or dates as the Central Government may, by
notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act and 1 [for different States or for different parts thereof].
(4) It shall apply, in the first instance, to all factories (including factories belonging to
the 2 [Government]) other than seasonal factories.
[Provided that nothing contained in this sub-section shall apply to a factory or
establishment belonging to or under the control of the Government whose employees are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act.].
[(12) “ factory ” means any premises including the precincts thereof whereon ten or more persons are employed or were employed on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on or is ordinarily so carried on, but does not include a mine subject to the operation of the Mines Act, 1952 (35 of 1952), or a railway running shed ;].....
If the Contractor has the registration the Principal Employer need not have separate regn. in respect of contract labour. However it's the responsibility of the Principal Employer to ensure all are covered under EPF & ESIC either by the Contractor or failing which the PE should cover them also.
To arrive at an appropriate answer to your query relating to the enrollment of the workmen of a contractor having less than 20 workmen deputed to a factory under the EPF and ESI shemes, it is imperative to analyze the definitions of the terms workman, worker and employee occurring respectively under the CLRA Act, 1970, the Factories Act,1948, the ESI Act,1948 and the EPF Act,1952.
To begin with, let us first take up the definition of the term "factory" as defined u/s 2(m) of the Factories Act,1948 in which the deciding factor is the minimum number of workers engaged in the manufacturing process carried on in a premises. Then the term " worker " as defined u/s 2(l) of the Factories Act. It includes every person employed in the factory so defined u/s 2(m) in connection with the manufacturing process. Such employment can be direct or indirect i.e., through an agency including a contractor. Therefore, the natural corollary which follows is that the no of contract labour also gets added to decisive factor of the minimum no of workers in such premises where any manufacturing activity is carried on.
By a conjunctive reading of the definition of workman u/s 2(i) with the deeming provision of section 2(1)(b) of the CLRA Act,1970 respectively, the persons supplied by the contractor become "contract labor " irrespective of their numbers.
In terms of the application clause u/s 1(4) of the ESI Act,1948 and 1(3)(a) of the EPF Act,1952, such a factory in which contractors supplying less than 20 contract labor automatically falls within the scope of the application of the Acts independently.
Therefore, in general, the inclusion of the contract labor engaged in such a factory under the schemes of ESI and EPF is mandatory. But your query is who would be the employer for the purpose of registration, whether the Principal Employer or the Contractor. Here, I would emphatically concur with the answer of our learned friend Loginmiraclelogistics.