Understanding Indemnity for Long-term Employees Without PF in India: What Are Their Rights?

Indemnity Instead of PF

An employee has worked in an Indian company for 15 years. He has a heart problem and has been admitted to an ESI hospital. Is he and his family permitted indemnity as he has no PF? What does Indian law say about indemnity/compensation?

Regards

Is he covered under ESI? If yes, there is no need to worry as ESI will take care of it. If not, don't you have any mediclaim policy for non-covered employees?

What Indemnity Are You Talking About?

Prashant B Ingawale

When the company does not open PF for its employees, and after the employee completes, let's say, 15 years of service, as in this case, at the end of his employment, the company has to compensate him for the number of years of service he has put in since there is no PF for him to obtain. What does the Indian Labour Law state in such cases where there is no PF for the employee's benefit, as there is no pension for him to fall back on? ESI is very well understood for him to obtain free medical aid.

Regards

Please do not mix up PF with indemnity/compensation. Indemnity is paid by the company as a bonus for the service put in by an employee that does not have PF. What does Indian law say about this indemnity?

If the company does not provide Provident Fund (PF) to its employees, the employees are not eligible for any alternate benefits under any labor statute in India. If the employer is evading the Employees' Provident Fund (EPF), then the EPFO has to take necessary action. In that case, it is uncertain whether employees will receive their share from the amount realized from the employer.

Regards,
Varghese Mathew