Starting a New Unit in UP: Are We Automatically Covered Under PF/ESI Act?

My company "Sachin Chemical Ltd" has 5 units in different states of India. All are covered under the PF and ESIC Acts. Each unit has its own separate registration under both acts. Now, our management is going to start a new unit under the same name in the state of UP. My query is whether this unit is automatically covered under the PF/ESI Act?

Notables:

1. This new unit does not have 20 or more employees.
2. The area in which the unit is established is covered under ESIC.
3. Production has not yet started.

Kindly give your valuable guidance, please.

Regards,
S. Hussain

It is automatically covered. The PF Act states that if the same company is established in different areas, you can pay the PF under a single code by just giving intimation to the PF authorities. If the PF authorities are not satisfied, they will provide a sub-code for the particular area. The same applies to ESI as well.

Regards,
S.Hussain

Since production has not yet started, it need not be covered until then. Once production starts, you need to cover it under P.F. and ESI.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai

You are just opening a branch of your company and not a different company itself, so company policies and procedures will be the same. Otherwise, the particular state legislations are opposed to it. Hence, PF or ESI codes will be the same, but the special provisions, if any, need to be observed. Then you shall, according to them, get a sub-code, as cleared by Sarma KPK above.

It does not matter whether production has started or not. Once the main unit is covered (i.e., the Mother unit is covered), its branch should also be covered automatically. Even if it operates under a different name, it will be considered as part and parcel of the main unit. Therefore, both ESI and EPF must be eligible and covered.

Regards,
V. Subbarao
[Phone Number Removed For Privacy Reasons]

Our Head & registered office was previously located in Tamil Nadu, but now both are in Bangalore. We have initiated PF and ESI processes in Tamil Nadu; currently, ESI only has sub-codes designated by District and State.

Shifting PF from Tamil Nadu to Bangalore

We are now considering shifting PF from Tamil Nadu to Bangalore. If this is not feasible, could you please advise on the appropriate procedure to follow?

Kindly advise.

Regards.

Applicability of the P.F. Act to New Establishments

The language of Sec.1, which states that the P.F. Act is applicable to an establishment "engaged" in industry, and the definition of "Employee" under Sec 2(f), which defines an employee as a person "employed for wages in any kind of work of the establishment or in any kind of work connected with that of the establishment," presupposes that premises to be called an establishment shall have a business or production activity to be carried on. It is not the object of the P.F. Act to cover a bare premises where no work nor production has started and no employees have been recruited, as much as it does not cover an establishment which is closed or where the business activity or production activity comes to an end.

The object of the P.F. Act is to cover persons employed in the work of the establishment. It is altogether a different issue if you have employed persons to do some work preliminary or incidental to the production. But the details furnished by you do not indicate anything to this effect.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai.

If any company wishes to certify its standing order, is it required to give notice to workers for a change in working conditions?

Mangesh Wakodkar
Aurangabad

Respected Seniors, I have a query regarding a company that has branches in different states. It would be great if I could seek your guidance on what PF rules would be applied to that company and its branches, and if I could know where in the PF Act I can locate them.

Regards,
Parul Sharma