TMI Blog“EMPLOYEE” UNDER EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952.X X X X Extracts X X X X X X X X Extracts X X X X ..... “EMPLOYEE” UNDER EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952. - By: - Mr. M. GOVINDARAJAN - Other Topics - Dated:- 16-5-2012 - - Sec. 2(f) of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 ( Act for short) defines the term employee as any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment and who get his wages directly or indirectly from the employer and includes any person,- i. employed by or through a contractor in or in connection with the work of the establishment; ii. engaged as an apprentice, not being an apprentice engaged under the Apprentice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act, 1961 or under the Standing Orders of the establishment. Many litigation arises in interpreting the term employee under this Act. Some issues in this regard may be discussed in this article. The terms of the definition employee are wide. They include not only persons employed directly by the employer but also persons employed through a contractor. Moreover, they include not only persons employed in the factory but also persons employed in connection with the work of the factory. For example a home worker in beedi industry, by virtue of the fact that he rolls beedies, is involved in activity connected with the work of the factory. Under the statutory definition even if a person is not wholly empl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyed, if he is principally employed in connection with the business he would be a person employed within the meaning of the term employee . In Springdales School and others V. Regional Provident Fund Commissioner and another 2006 (2) LLJ 321 the High Court held that an employee would be treated as working in or in connection with the work of the establishment if it can be ascertained that he is discharging his duties exclusively related to the work of the establishment. It was held in Satish Plastics V. Regional Provident Fund Commissioner 1981 (XXII) GLR 686 that the definition of employee as it contained in Section 2(f) of the Act is wide enough to take within its sweep a person permitted to work his residence as we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll and further that even if a person is not employed but was principally employed in connection with the business of the shop, would be a person employed within the meaning of the statutory language. In Shahdol V. Regional Provident Fund Commissioner and another 2005 (4) LIC 4091 the MP High Court held that the person coming in the truck to unload the bamboos in the factory premises falls under the definition employee for all practical purposes. In Padiyur Sarvodaya Sangh V. Union of India, New Delhi and another 1999 (2) LLN 224 the Madras High Court held that the artisans, weavers, workers of sarvodhaya sangh are covered under the definition of employee . The Jaipur Bench of the Rajasthan High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt held in Alwar Central Co-operative Bank Limited V. Regional Provident Fund Commissioner and others 2007 (113) FLR 310 that the managers of the primary agricultural co-operative society are employees of the particular bank and not employees of particular gram sewa sahakari samiti. The following categories are not covered under the terms of the definition employee : The Patna High Court in Union of India V. Patna Tyre House Private Limited - 2004 (3) LLN 397 held that the directors are not employees even if they get remuneration; The Act would be applicable to the regular employees and not to the employees for casual work as held in Lakshmi Restaurant, New Delhi V. Regional Provident F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und Commissioner, Delhi and another 1975 LIC 1186; By amendment introduced by Act 33 of 1988, the definition of employee included a person employed by or through a contractor or engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961. The definition of employee brings in contract labor within the scope of Sec. 1(3) of the Act; but casual labor engaged by or through a contractor falls outside the scope of Sec. 1(3); The contractor for the purpose of Section 2(f) is clearly a labor contractor and not an independent contractor who contracts to supply finished product to the establishment but for the purpose of manufacturing of such finished products engages his labor for his own purpose as held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Karachi Bakery V. Regional Provident Fund Commissioner 1990 (2) LLN 630; The Bombay High Court in Prakash D. Shah and others V. Union of India through the Ministry of Finance and another 2004 (I) LLJ 943 held that the partner of the firm cannot be construed as an employee. The reason for this decision is further explained in Om Roller Flour Mill V. Union of India 2002 (3) LLJ 228 in which it was held that partners cannot be included in employees category to satisfy the requirement of minimum number of employees, as one person cannot at same time be employer and employee; In Lohardaga Charitable Ursuline Society V. Union of India 2003 (2) LLJ 554 it was held that the contention that nuns and sisters of a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ligious order are also employees without any evidence on record is not justified; The Division Bench of Bombay High Court in Reverend Father Agnelo Gracies V. Regional Provident Fund Commissioner for Maharastra and Goa at Bombay 2005 (2) LLJ 132 held that the priests in seminary are not covered under the definition of employee ; In Regional Provident Fund Commissioner V. Hotel Highway Limited 1991 (79) FJR 190 it was held that the trainees undergoing training with the management and not paid wages will not fall within the definition of employee ; In Regional Provident Fund Commissioner V. M/s Central Arecanut Cocoa Marketing and Processing Co-op Limited, Mangalore 2006 (1) LLN 529 it was held that the tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inees who were paid stipend during the training period had no right to employment, nor were under obligations to accept any employment, even if offered by the employer. The two member bench of the Supreme Court held that apprentices engaged under the Standing Orders of the establishment cannot be said to be employees in terms of Sec. 2(f) of the Act. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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