Can we employees of transport claim benefits which are given to factory workers like bonus, esi, pf, etc?

Boss has 2 different companies: one is a factory, and the other is a transport service provider with less than 10 employees from the beginning. The transport business does 80% of the work providing transport facilities to her own factory and 20% of the work for other clients.

After the lockdown to reduce her rent burden, she shifted all her transport staff to her factory. They solely do the work of transport and are in no way related to the factory work.

Can we, as employees of the transport, claim benefits that are given to factory workers like a bonus, ESI, PF, etc.?

If she is making us do the work of the factory, how can we prove that we are working for the factory since we were never appointed for the factory? (We are doing very small works though, but are scared if in the future she makes us do a lot of work for both the factory and the transport, making this shift to the factory a permanent shift.)

In a business establishment or a factory, employees are entitled to bonuses and gratuity depending on their eligibility criteria or terms of service.

The different location of factory and transport business does not make them separate establishments in the eyes of the law, and vice versa. For PF & ESI purposes, the test of functional integrality is applied. A very significant factor is that 80% of the work of the transport business relates to the factory, so the main activity of the transport business is an integral part of the factory. In this scenario, all benefits and provisions such as gratuity and bonuses applicable to the factory must also be extended to the transport personnel. These regulations apply even if the total strength is ten or more.

Thank you for responding, sir.

That is great news. We all can demand our boss now. But just to be 100% sure before demanding from our boss, I will give all details here for more clarity, so that we get all those benefits.

Transport (PAN) = 5 employees; Factory (GSTIN) = 24 employees.

The factory & transport are separate businesses with separate names and separate PAN, but with the same owner. Previously, the transport business was situated 9 km away from the factory.

Does what you said mean we get the benefits even if the location of our work is different as it was before? I am asking if she (our owner) finds another rented/own office and we shift there, then do we lose our benefits? Also, does that mean all employees who resigned from the transport business before can complain and claim gratuity (only if applicable) and complain that PF, ESI, bonus were never given?

Also, as a lady, what all benefits should be given to me as I work in the transport business?

Also, please clarify regarding this:

If we do work for the factory also, how can we prove that we are working for the factory since we have never been appointed for the factory and only have an appointment letter for the transport business.

Location of the business has nothing to do with your entitlements.

As per various regulatory statutes, an employee is entitled to EPF, ESIC, bonus, and gratuity subject to the fulfillment of certain terms and conditions of employment for an employee to become eligible.

Additionally, the principal employer must fulfill the obligations towards applicable statutes as per the terms and conditions.

The main thing is that the factory and transport both follow the law if seen individually. However, when we see them in a combined form (as owned by a single owner), transport does not follow anything because it has fewer than 10 employees. But it should follow since its owner has a factory. Transport just gives us our normal salary and CL, SL, EL. Nothing else.

Dear colleague,

While it is not very clear, it appears the business of the factory establishment and the transport are perhaps two distinct legal entities. They are not interconnected in many ways, even prior to or after relocation in the factory. Though the owner is the same for both, if a separate balance sheet is being prepared, it is questionable whether transport employees are entitled to legal bonuses, leaves, and other benefits on par with the factory staff.

The right approach for transport employees is to persuade the owner through cordial talks to consider giving better service conditions than currently provided, rather than asking for benefits on par. Raising demands through legal routes at this stage would put the owner off and may trigger vindictive actions from her.

By playing around with her ego, see if you can persuade her to accept your expectations.

Regards,

Vinayak Nagarkar
HR and Employee Relations Consultant