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Hello Experts,

How to do related compliances if a partnership firm has failed to fullfill labour laws with respect to Gratuity,PF,ESI etc. and employees are working from last 22 years or more than how liablity of the firm will be calculated in such case?

From India, Pune
Partner - Risk Management
Management Consultancy


The liability has to be calculated for each employee welfare scheme like PF, ESI, Gratuity, Labour Welfare Fund, Maternity Benefit etc., in addition will be the penalty and interest as applicable for the past years. Non-compliance for 22 years means there could be prosecution as well.
From India, Mumbai

The provisions for coverage of the establishment under Payment of Gratuity Act 1972, Employees' Provident Fund and Miscellaneous Provisions Act 1952 and Employees' State Insurance Act 1948 are different.

Please let me know the number of employees in your establishment and the nature of industry ?

- S K Mittal

From India, Faridabad

Fortunately for you, most labour laws have a 3 year limitation period for prosecution or civil action (though courts have the right to condone the delay, they are not likely to condone delay of 22 years)

You need to start complying from the current period and then deal with the fallout when the authorities start asking questions. You need, however, to be ready for the penalty, interest and back-payments.

Gratuity, if the employee has not claimed, you don't need to worry. But if they have claimed, you need to arrange for the money and pay it. And you need to take a Gratuity policy without further delay. For PF, ESIC, you need to register immediately. You may chose to fill the form in a manner as to minimise the impact, but here on the forum we do not encourage falsification of records. Remember that you will have to answer query from the department.

EISC may require you to pay the ESIC dues for 3 years if they discover that it was due. PF, I can not commit as I don't know how they look at such violations.

One big problem for you is that you are a partnership firm, so the partners are individually liable to pay the amount even if the firm does not have money

From India, Mumbai
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