EPF Enrolment: When Employer Have Two Different Dates Of Establishment

Dear Sir,

I am working in a Pvt. Ltd. company as the first HR in this company and joined in Mar 2012.

This company has been functioning since 11.04.2004, but there was no EPF and ESI enrollment. Now my issue is some of the employees have been working with this company since the year 2004. However, Company A no longer exists anywhere at present.

My company, i.e., Company B, was registered on 19.08.2006 and renamed on 05.04.2011, with EPF and ESI enrollment dates as 01.01.2007.

Company A employees have been transferred to Company B successfully. However, no joining formalities have been completed in Company B.

I have to complete this task from the beginning until the present date as I am the first HR.

I would like to ask you, what would be the date of joining for the employees from Company A:

Option 1: Would the EPF enrollment date be the date of joining?

Option 2: Would the date of Company B registration be the date of joining for old employees who have been working since the year 2004?

Please assist me with this.

Your kind response will be highly appreciated.

Thanks/Keerti

Dear Kirti,

EPF starts from the date of joining. We managed the PF accounts transfer during a merger. We transferred all the accounts to the new combined entity. They were issued a detailed Appointment Letter announcing their employment with the new combined entity. It further declared every benefit, designation, and structure offered by the parent company as null and void.

However, in your case, the first entity was never registered. I request our experts to respond to this.

Dear Keerti ji,

I am confused with your query. 

You said, you are working with a Pvt. Ltd. Company which is incorporated in 2004 and further you say this company is no longer in existence. 

You also said your company 'B' started in August 2006 which is registered under EPF in Jan 2007 i.e. after 6 months.

What I feel, you are working with company 'B' and not with 'A' which is not in existence. 

Ownership Status of company 'B' is not mentioned by you but I presume, it is also a Pvt. Ltd. company.

My questions to you:

1. Why you think of company 'A' now, which is not in existence? 

2. Is the entity of both the companies same?

3. Why you feel the employees of company 'A' are transferred to company 'B'?

According to me, your company 'B' is a separate entity and the same must have registered with PF on having 20 plus employees first time. 

Date of joining PF in respect of employees at the time of registration is the date of registration. 

Your record must have correctly mentioned about the date of joining in your Form 9 & Form 5. Also you must have uploaded the missing data in annexure-II according to the record of Form 9 & Form 5. 

Finally, one more question, why you said you have to complete this task from beginning?

I am totally aligned with the views of Mr. Keshav Korgaonkar. Since Company A is non-existent, there is no point in doing anything in the matter and the Date of Registration for PF could be considered as the date of joining for PF in the new entity.

Regards

Just to add one point to the views expressed above - if Company A was coverable under the EPF Act when the company was in existence but not covered, then those employees will be entitled to the benefits from the date of joining Company A. In that case, the management has to pay the arrears of contributions along with interest and damages, which may work out to a substantial amount depending on the size!

Dear All,

Thank you for your kind responses. I would like to clarify my query further. I have joined Company B, which was incorporated on 19.08.2006, and registered for EPF and ESI enrollment on 01.01.2007, which is about 4-5 months later.

All the previous employees from Company A have joined Company B and were registered for EPF and ESI on 01.01.2007.

In this scenario, what should I do with the date of joining for the previous employees?

1. Can we consider the date of joining from the incorporation date of the company, or should the EPF registration date be considered the date of joining?

2. Can I indicate that I resigned from Company A before joining Company B?

Some employees have a joining letter from Company A. They assume their date of joining from that previous date since Company A no longer exists. Please advise on how to resolve this issue and provide insights on any potential legal implications.

Thank you,
Keerti

Hello Keerti,

When I joined my current company, we were facing a similar situation. At the time of merging A into B, we issued the appointment letter with the effect of PF/ESIC enrollment date only, not with the actual establishment date of company B. Even though he/she was working within the same group, the individual was actually employed and registered in company B dated 01.01.2007, so that should be considered as his Date of Joining (DOJ).

If you require confirmation, you can seek guidance from a consultant.

Thank you for the guidance, sir.

As I already mentioned in my query, some employees have a joining letter from company A, which shows a date of joining before the incorporation date of company B. How should I address this? Can I reflect their resignation in company A and reappointment in company B as of the EPF effective date? Are there any legal implications?

Kindly advise.

Thanks,
Keerti

Hi Keerti,

In that case, you should show their resignation in Company A and reappoint them in Company B as of the effective date for EPF purposes.

Regarding legal implications, I don't have much idea, but I think you can consult the local EPF office or any EPF officer for guidance.

Thank you for such a valuable suggestion. I think it will be the best idea. However, at the time of gratuity, every previous employee will be considered for their previous Date of Joining. How do I tackle them in that matter? 11.02.2004 to 01.01.2007 is not a short period as far as gratuity is concerned.

Thanks,
Keerti