Dear All, Good Evening! Seek clarifications on the following :
Applicability of PF and ESI for Canteen Contractor.
1. Our Company is having canteen run by a private party.
2. They are supplying Breakfast, Dinner, Supper, and Tea/ coffee based on coupons.
3. Company will pay the amount based on bills (Based on Coupons).
4. No raw materials are provided to them.
5. Only Steam is provided to them for cooking purposes. For they are paying 0.50 ps per meal.
6. They have also obtained a license under the contractor labor act. We have included the canteen contractor name in our RC.
Our Clarifications: Principal Employer is responsible for payment of PF and ESI for canteen employees.
Ganapathy V

From India
Labour Law & Hr Consultant
Hr Manager

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As the wages for cateen employees are directly disbursed by the contractor (company settle
the bills to canteen contractor, on monthly basis, based on submission of coupons- I suppose), then it shall be the responsibility of the canteen cxontractor to meet the statutory payments towards PF &ESI, in respect of his employees.

From India, Aizawl

Dear Ganapathy,
Whoever disburses wages to the workers of the canteen run at and for the establishment, whether the contractor who employs them or the Principal Employer who has entered into a contract falling under the provisions of the CLRA Act,1970, the PE has the vicarious liability u/s 21(4) of the Act for payment of wages.
Since the definition of the term "employee" under both the ESI Act,1948 and EPF Act,1952 includes contract labor also and in view of Sec.40 of the ESI Act, the PE has the responsibility to ensure compliance by the contractor in this regard.

From India, Salem

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