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Boss has 2 different companies, one is a factory, and the other is a transport service provider with less than 10 employees from the beginning. The transport business does 80% work for providing transport facilities to her own factory and 20% work for other clients.

After lockdown to reduce her rent burden, she shifted all her transport staff to her factory. They solely do work of transport and are in no way related to the factory work.

Can we employees of transport claim benefits which are given to factory workers like a bonus, ESI, PF, etc?

If she is making us do work of the factory, how can we prove that we are working for the factory since we were never appointed for the factory? (we are doing very small works though but are scared if in future she makes us do a lot of work of both factory and transport and makes this shift to the factory a permanent shift.)

From India, Bengaluru

In a business establishment or a factory employees are entitled for bonus and gratuuity depending on its eligibility criteria or terms of services.
From India, Vadodara

The different location of factory and transport business does not make it separate establishments in the eyes of law and the reverse also. For PF & ESI purposes, the test of functional integrality is applied. A very significant factor is that 80% work of the transport business relates to factory, so the main activity of transport business is integral part of factory. The position being so, all benefits and provisions like gratuity, bonus as applicable to factory have to be extended to the transport personnel too. These are applicable even otherwise too, if the total strength is ten or more
From India, Mumbai
Thank you for responding sir.

That is great news. We all can demand our boss now. But just for being 100% sure before demanding from our boss I will give all details here for more clarity, so that we get all those benefits.

Transport (PAN) = 5 employees; Factory (GSTIN) = 24 employees.

The factory & transport are separate businesses with separate names and separate PAN, but with same owner. Previously the transport business was situated 9 km away from the factory.

Does what you said mean, we get the benefits even if the location of our work is different as it was before. I am asking if she (our owner) finds another rented/own office and we shift there, then do we loose our benefits. Also, does that mean, all employees who resigned from the transport business before can complain and claim gratuity (only if applicable) and complain that pf, esi, bonus was never given?

Also, as a lady, what all benefits should be given to me as I work in the transport business?

Also, please clarify regarding this:

If we do work of the factory also, how can we prove that we are working for the factory since we have never been appointed for the factory and only have appointment letter of the transport business.

From India, Bengaluru

Location of business has got nothing to do with your entitlements.
Also as said, under various regulatory statutes an employee is entitled for epf esic, bonus and gratuity subject to fulfilment of certain terms and conditons of employment for and employee to become eligible.
Also principal employer must fulfill the obligations towards applicable statutes as per the terms and conditons.

From India, Vadodara
The main thing is that factory and transport both follow the law if seen individually, but when we see them in a combined form (as owned by a single owner), transport does not follow anything because it has less than 10 employees, but it should follow since its owner has a factory. Transport just gives us our normal salary and CL,SL,EL. Nothing else.
From India, Bengaluru
Nagarkar Vinayak L

Dear colleague,

While it is not very clear, it appears the business of the factory establishment and the transport are perhaps two distinct legal entities.

Two are not perhaps interconnected in many ways even prior or after relocation in the factory .

Though the owner is the same for both, if separate balance sheet is being prepared, it is questionable whether transport Employees are entitled for legal bonus, leaves and other benefits on par with the factory staff.

However the right approach for transport Employees is to persuade the owner through cordial talk to consider giving better service conditions than presently given rather than asking for on par benefits.

Raising demands by legal route , at this stage, would put the owner off and may trigger vindictive actions from her.

By playing around with her ego, see if you can persuade her into accepting your expectations.


Vinayak Nagarkar

HR and Employee Relations Consultant

From India, Mumbai
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