The principal employer is responsible for ensuring provident fund contributions for contract workers, as they are considered employees under the Act.

ORDER :

(M. DHANDAPANI, J.)

The petitioner has filed this writ petition seeking issuance of Writ of Certiorari calling for the records of the first respondent in ATA No.423 (13) of 2006 and quash its order dated 31.03.2010.

2.The brief facts of the case is that the All India Trade Union Congress [in short 'AITUC'] made a representation/ complaint to the second respondent alleging that the Tamil Nadu Electricity Board, Vellore Electricity Circle is engaging many labourers through contractors and those labourers are not given any social security benefits such as provident fund or pension fund and the petitioner establishment disputed their liability to extend the contributory provident fund or pension fund for the contract labourers on the ground that such workers are not directly engaged by the establishment and hence they are not employees.

3.Therefore, an inquiry under Section 7A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 [hereinafter referred to as 'Act'] was initiated by the second respondent and thereafter an order dated 28.02.2005 was passed by the second respondent wherein it was held that the Act applies to TNEB, Vellore Electricity Circle insofar as the contract – employees engaged by them are concerned and the petitioner was directed to pay a sum of Rs.60,51,482.10 towards the provident fund, pension fund, deposit linked insurance fund schemes and administrative charges, in respect of the contract workers engaged by them.

4.Aggrieved by the same, the petitioner preferred review application before the second respondent, however, the second respondent vide order dated 27.09.2005 confirmed the original order. Hence, the petitioner preferred appeal before the first respondent vide impugned order dismissed the said appeal. Hence, this writ petition.

5.The learned counsel appearing for the petitioner submitted that the members of the third respondent are not employees with the petitioner establishment and they are employees with the respective contractors and there is no employee and employer relationship between the petitioner establishment and the members of the third respondent. The learned counsel further submitted that as per Section 16 of the Act, the Act does not apply to the establishment belonging to or under the control of the Central Government or State Government and further submitted that the petitioner establishment provided all the relevant benefits to its employees and since the members of the third respondent are not employees of the petitioner establishment, the Act does not apply, however, the original authority as well as the appellate authority miserably failed to consider Section 16 of the Act and directed the petitioner establishment to make contribution to the members of the third respondent, which is not sustainable one.

6.Per contra, the learned counsel appearing for the respondents 1 and 2 and the learned Senior Counsel appearing for the third respondent submitted that Section 16 and Section 2(f) of the Act has to be read together. As per Section 2(f) of the Act, “employee” means 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 gets his wages directly or indirectly from the employer, and includes any person, employed by or through a contractor in or in connection with the work of the establishment; engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 (52 of 1961) or under the standing orders of the establishment. In the present case, though the members of the third respondent are employed through the respective contractors, the petitioner establishment being the principal employee, have to ensure that the contractor makes the contribution, if not, the principal employee namely the petitioner establishment has to make the contribution. Hence the petitioner giving interpretation to Section 16 of the Act is not permissible and Section 16 and Section 2