Who is liable for the contribution in the EPF account whether Principal Employer or Contractor?
Utkarsh Garg
Practicing Advocate at Allahabad High Court || Ex- Research Associate || Writ Litigation || Family & Divorce Law || Property & RERA Laws || Industrial and Employment Laws || Other Civil Laws ll Contact- 9305119722
In the recent judgement of the Hon’ble Allahabad High Court, the following observations have been made by the Court.
a.??? Provision of the Act of 1952 equally applies to employees employed directly or through an agency or through a contractor.
b.??? Scheme of 1952 provides a procedure for payment of contribution also and at first instance principal employer has the responsibility to deposit which can be recovered from the contractor.
c.???? In this contractor is a registered establishment under the Act of 1952, then it is contractor’s obligation to for such payment/contribution. He cannot be allowed to take defense that the principal employer had defaulted in such payment.
d. Employer-Employee relationship test: As for all the purposes of employment, terms and conditions of service, payment attendance, and disciplinary matters, the personnel provided by the contractor remained fully under the administration and financial control of the contractor only. It is the duty of the contractor to deposit the amount of amount of tax as applicable to him. The Principal Employer has limited power to remove the guards in case of indiscipline will not create employer- employee relationship.
?Therefore the guards provided by the contractor to the principal employer will not create an employer-employee relationship between the principal employer and guards rather they shall be employees of the contractor and the contractor shall remain responsible for depositing the contribution under the Act of 1952.
Case- Central Pollution Board v. Union of India and Others 2023(4) ADJ 255
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