Navigating PF and ESI Registration for Small Automation Service Firms: What Steps Should You Take?

Service providers such as repairers in the field of automation/industrial electronics fall under the purview of the Factories Act. Should a firm like this, operating as a proprietorship for the past 2.5 years with 8-10 employees, obtain registration for PF and ESI? If such a firm manages Annual Maintenance Contracts (AMC) for some Public Sector Undertakings (PSU), the PSU may request PF/ESI registration numbers. What steps should be taken in this scenario?

Dear Kiran Arora,

As for the basic data included in your query, the Factory Act, PF & ESI Act, prima facie, are not applicable to this service provider. But they are actually providing services to such PSUs that are covered under the aforementioned acts. That is why the PSU is asking for its PF & ESI Registration.

Since services under AMC are not covered under EPF and ESI, therefore, the said PSU, in my view, should not have any problem as far as compliance is concerned under ESI & EPF Act. The service provider must be having a CONTRACT FOR SERVICE with the PSUs (NOT CONTRACT OF SERVICE); both terms have a meaningful difference as per the Apex Court pronouncements on the same subject. (Check it in your agreement with PSU)

The Factories Act cannot be applicable to 8 employees. I hope this clarifies your doubts; otherwise, you can write to me on my Email ID - [Login to view]

Thanks,
Arif Khan
Asst. Manager (HR)

Any advice you receive in this forum is beneficial, but please consider hiring a good labor law consultant as this is only a discussion forum.

I agree with Mr. Arif Khan. Anyone who comes to the factory for any work, especially E&M work on a regular basis, must be covered under a medical service. I have a doubt regarding the PF part.

Regards,
Yash Pal
Asst. Manager - Administration