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SUPREME COURT OF INDIA
UDAY UMESH LALIT, INDU MALHOTRA
M/S. PAWAN HANS LIMITED & ORS. – APPELLANTS
Versus
AVIATION KARMACHARI SANGHATANA & ORS. – RESPONDENTS
Civil Appeal No. 353 of 2020 (Arising out of SLP (C) No. 381 of 2019)
Decided On : 17-01-2020
Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 – Sections 1(3) and 16 – Right of contractual employees to get provident fund benefits – Company had its own Scheme viz. Pawan Hans Employees Provident Fund Trust Regulations in force – Company restricted application of PF Trust Regulations to only ‘regular’ employees – PF Trust Regulations of Company were not framed by Central or State Government, nor were they applicable to all employees of Company, so as to satisfy second test – Since members of Respondent-Union and other similarly situated contractual workers were not getting benefits of contributory provident fund under PF Trust Regulations framed by Company or under any Scheme or any rule framed by Central Government or State Government, exemption under Section 16 of EPF Act would not be applicable to Appellant-Company – Company has failed to make out a case of exclusion from applicability of provisions of EPF Act – Members of Respondent-Union have been in continuous employment with Company for long periods of time – They have been receiving wages/salary directly from Company without involvement of any contractor since date of their engagement – Work being of a perennial and continuous nature, employment cannot be termed to be contractual’ in nature – Clause 2.5 of PF Trust Regulations would cover all contractual employees who have been engaged by Company, and draw their wages/salary directly or indirectly from Company – Members of Respondent-Union and all other similarly situated contractual employees, are entitled to benefit of provident fund under PF Trust Regulations or EPF Act – Since PF Trust Regulations are in force and are applicable to all employees of Company, it would be preferable to direct that members of Respondent-Union and other similarly situated contractual employees are granted benefit of provident fund under PF Trust Regulations so that there is uniformity in service conditions of all employees of Company – interests of justice would be best sub-served if benefit of Provident Fund is provided to members of Respondent-Union, and other similarly situated contractual employees, from January 2017 when Writ Petition was filed before High Court – Benefit shall not be extended to those employees who have superannuated, expired, resigned, or ceased to be in employment of Company on the date of this Judgment. (Paras 6.2, 6.4, 6.5, 7 and 8)
Facts of the case:
Issue which arises for consideration is whether contractual employees of the Appellant-Company are entitled to provident fund benefits under Pawan Hans Employees Provident Fund Trust Regulations or under Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (EPF Act) and Employees’ Provident Fund Scheme, 1952 (EPF Scheme) framed thereunder. issue which arises for consideration in the present Civil Appeal is whether the Appellant-Company is under a statutory obligation to provide the benefit of provident fund to its contractual employees under PF Trust Regulations or the EPF Act? If so, the date from which aforesaid benefit is to be extended to contractual employees.
Findings of Court:
Interests of justice would be best sub-served if benefit of Provident Fund is provided to members of Respondent-Union, and other similarly situated contractual employees, from January 2017 when Writ Petition was filed before High Court.
Result : Appeal disposed of with directions.
JUDGMENT
INDU MALHOTRA, J.
Leave granted.
1. The issue which arises for consideration is whether the contractual employees of the AppellantCompany are entitled to provident fund benefits under the Pawan Hans Employees Provident Fund Trust Regulations or under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (“EPF Act”) and the Employees’ Provident Fund Scheme, 1952 (“EPF Scheme”) framed thereunder.
2. The background facts in which the present Civil Appeal has been filed are as under :
2.1 The Company was incorporated on 15.10.1985 under the Companies Act, 1956, and is registered as a Government of India company with the Registrar of Companies, Delhi. The Government of India holds 51% shareholding in the AppellantCompany and the remaining 49% is held by Oil and Natural Gas Company Ltd. (ONGC).
The Company was incorporated with the primary objective of providing helicopter support services to the oil sector for its offshore exploration operations, services in remote and hilly areas, and charter services for promotion of tourism. It is classified as a nonscheduled operator under Rule 134 of the Aircraft Rules, 1937.
2.2 On 01.04.1986, the AppellantCompany framed and notified the Pawan Hans Employees Provident Fund Trust Regulations (hereinafter referred to as “the PF Trust
Regulations”) for giving provident fund benefits to all the employees of the AppellantCompany. Regulations 1.3 and 2.5 of the PF Trust Regulations are set out hereunder for ready reference:
“1.3 These Regulations shall apply to all the employees of the Corporation.
2.5. – “Employee” means any person; who is employed for wages/salary in any kind of work, monthly or otherwise, in or in connection with the work of the Corporation and who gets his wages/salary directly or indirectly from the Corporation, and excludes any person employed by or through a contractor or in connection with the work of the Corporation but does not include any person employed as an apprentice or trainee.”
[emphasis supplied]
2.3 On 26.03.1987, the AppellantCompany instituted the Pawan Hans Employees Provident Fund Trust (“PF Trust”) wherein the management started depositing its share towards the provident fund contribution with respect to employees on the regular cadre of the Company; correspondingly, the regular employees started depositing the matching contribution with the PF Trust.
2.4 Out of a total workforce of 840 employees, the Company had engaged 570 employees on regular basis, while 270 employees were engaged on ‘contractual’ basis.
The Company implemented the PF Trust Regulations only with respect to the regular employees, even though the term “employee” had been defined to include “any person” employed “directly or indirectly” under the PF Trust Regulations.
2.5 The Company having framed its own PF Trust Regulations, was claiming exemption from the applicability of the EPF Act and EPF Scheme under Section 16 of the EPF Act.
2.6 On 08.01.1989, the Ministry of Labour, Government of India, issued a communication to the Central Provident Fund Commissioner, New Delhi, pertaining to the grant of exemption to departmental undertakings under the control of the Central/State Government statutory bodies. The Central Provident Fund Commissioner was directed to instruct the Regional Provident Fund Commissioners to carefully review the cases of departmental undertakings and statutory bodies falling under the categories specified in Section 16(1)(b) and 16(1)(c) of the EPF Act, and take further action as indicated in the said letter.
Clause (iv) of the said letter dated 08.01.1989 is of relevance, and is extracted hereunder for ready reference:
“(iv) There may be establishments which employ large member of casual/contingent staff, who are not entitled to the benefit of provident fund or pension. The casual/contingent staff of such establishment will continue to be covered under the Act, but their regular employees who are entitled to the benefit of provident fund or pension
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