Are Outsourced Security Guards in Societies Eligible for PF and ESI Contributions?

Labor Laws and Cooperative Societies

The labor laws are not applicable in cooperative societies. Therefore, the security guards employed directly by an apartment/society's AOA are not eligible for PF and ESI.

Outsourced Security Guards and Eligibility for PF and ESI

My question is, in case the security guards are placed in the security of society through some agency/outsourced, then what is the case? Are the employees eligible for PF and ESI? If the answer is yes, then from whom will the agency collect the contribution?

Dear Shekhar,

Who told you that labor laws are not applicable to cooperative societies? Societies registered under the Cooperative Societies Act are just exempted from certain provisions of some labor laws like the Shops and Establishments Act only because of the inclusion of similar provisions in their registered bylaws.

Secondly, the AOAs you mentioned are not cooperative societies but associations of house owners only. If some of the apartments in the housing complex are let out for rent, the association loses its basic character of a house owners' association. Particularly, when the services of the security guards and/or housekeeping staff are hired through contract agencies by such an AOA, automatically, the provisions of the laws relating to minimum wages, EPF, ESI, etc., are applicable subject to the presence of the parameters of coverage and applicability.

Moreover, the manpower agencies which provide the people to serve in those housing complexes are industrial establishments. As such, they would be covered automatically by the ESI Act and EPF Act provisions according to the total number of employees employed by them for deputing to their clients. Therefore, they are also obligated to pay at statutory minimum rates of wages for the security and other personnel supplied to their clients irrespective of the fact whether the clients are covered by any labor law or not. As such, they cannot quote their charges without considering the statutory minimum wages factor and their primary obligations under the ESI and EPF Acts.