Is PF Deduction Necessary for Workers Hired for Just 2-5 Days a Month? Seeking Guidance from Seniors

Seniors, please let me know if it is compulsory to deduct PF in the case of workers engaged for short term, i.e., 2-5 days in a month. Also, it is confirmed from the work order/PO that the work duration is 2-5 days. If so, please post the clause in the Act.

Dear Saroj, whether you engage a person for just one day or hire labor through naka, you are required to deduct EPF from the wages you pay them and remit it to the PF account, along with your share.

EPF Enrollment Requirement

Effective from 01.11.1990, the waiting period to enroll any employee as a member of PF was reduced from 60 days to 1 day. I am providing the existing Para 26 (1) (a) of the scheme below for your reference:

"Every employee employed in or in connection with the work of a factory or other establishment to which this scheme applies, other than an excluded employee, shall be entitled and required to become a member of the Fund from the day this paragraph comes into force in such factory or other establishment."

This paragraph came into force on 01.11.1990.

Exclusion from PF

You may exclude an employee from PF if they are not an EPF member previously and if you are offering them wages exceeding Rs. 577 per day (i.e., 577 x 26 = 15000). You are required to maintain Form 11 New.

Regards,

Coverage of Temporary Workers for PF

Please find attached notes on the coverage of temporary workers for PF. According to the Supreme Court's ruling in RPFC v T S Hariharan, temporary workers engaged to perform work that is not the regular work of the establishment are not considered employees under the EPF Act. Therefore, they do not need to be covered under the EPF Act. In another judgment, the Bombay High Court has also stated that workers employed for a short period should be classified as casual and not covered under Sec 2 (f) of the EPF Act.

Regards,
N. Nataraajhan
Sakthi Management Services
[Phone Number Removed For Privacy Reasons]
[Email Removed For Privacy Reasons]

Thank you.

Dear N Nataraajhan ji,

Thanks for your contribution. My views on the judgment quotes by you are as follows:

Regarding RPFC v T S Hariharan (SC): It is a very old judgment from 1971. There was an amendment in the law in 1990.

Regarding BAI v UOI (Mumbai HC Nagpur Bench): You need to read the full text of the judgment. Workers employed for a short period on some abnormal contingency or emergency work beyond the control of management are treated as casual.

Thank you so much once again. Because of your discussion, I had an opportunity to read the Hariharan judgment once again and abreast myself. I read it earlier also and shared my views in one of the threads in this forum.

Supreme Court Ruling in the Hariharan Case

According to the Supreme Court in the Hariharan case, the employment of a few persons on account of some emergency or for a very short period necessitated by some abnormal contingency, which is not a regular feature of the establishment or does not reflect its business prosperity or financial capacity and stability, would not attract the provisions of the act.

The ratio of this decision in the Hariharan case still applies despite the amendment to Para 26 of the P.F. Scheme in 1990.

Hope I am not making any conceptual mistake. According to me, I once again repeat, PF is applicable even if you employ any person for just one day.

Exceptions

1. Excluded employees within the meaning of the Act; and
2. A person employed in some emergency or for a very short period necessitated by some abnormal contingency, which is not a regular feature of the establishment.

I am attaching the said judgment of Hariharan for your reference. Hope you will agree with me now.

Regards

Dear Mr. Korgaonkar,

PFA notes on Judgements as per which the Supreme Court has upheld the MP HC's decision on appeal in 1995 - after the amendment of para 26 of the EPF Act 1952. Therefore, the SC judgment in TS Hariharan's case is still valid. But the employment, as you rightly said, has to satisfy the conditions mentioned in the judgment.

Regards,
N. Nataraajhan
Sakthi Management Services
HP: +91 94835 17402
E-mail: natraj@sakthimanagement.com

Dear Harikrishnan Sir,

I have been employed as an executive by one of the PSUs - SPMCIL since 30.07.2018 on a fixed-term contract basis. I have been paid a consolidated amount of Rs. 50,000, but apart from the salary, I am not receiving any other benefits from the employer, such as PF, leaves, gratuity, etc.

Since none of the above-mentioned benefits were stated in the offer of employment, am I eligible to claim them? Please advise.

Thank you.