TaxTMI 
TaxTMI 
2019 (7) TMI 1855
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....01.1979. 2.2. The main objective of the Respondent Company, as per its Memorandum of Association, was to encourage, promote, develop, set-up or cause to be set-up a readymade garments industry in the Marathwada Region, with a view to provide gainful employment to people possessing skills in stitching, tailoring, and allied activities, especially to women from the economically weaker Sections of the Society. 2.3. The Respondent Company engaged women workers who were provided with cut fabric, thread, buttons, etc. to be made into garments at their own homes. The sewing machines used by the women workers were owned by them, and not provided by the Respondent Company. 2.4. On 12.03.1991, Appellant No. 1 - Officer In-Charge, Sub-Regional Provident Fund Office, issued a Show Cause Notice to the Respondent Company calling upon it to pay the Provident Fund contributions for the women workers. The Balance Sheet of the Respondent Company for the year 1988 - 89, revealed large debits towards salary and wages for direct and indirect workers, but the Respondent Company made a false statement that it had only 41 employees. 2.5. On 30.11.1992, Appellant No. 1 i....
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....iable to pay Provident Fund contribution in respect of those women workers. 5. Mr. Anoop Kandari, learned Counsel appearing on behalf of the Respondent Company, submitted that there was no employer-employee relationship between the Respondent Company and the women workers. The women workers were not employees Under Section 2(f) of the EPF Act. They were independent contractors. It was further submitted that the sewing machines used by the women workers were owned by them, and not provided by the Respondent Company. The women workers worked from their homes, and not at the production centers of the Respondent Company. Hence, the work performed by them, could be done by their relatives, or any other person on their behalf. Furthermore, the women workers were not bound to report to the production centers regularly, nor were they required to work at the production centers. The Respondent Company exercised no supervisory control over the women workers. 6. The short issue which arises for consideration is whether the women workers employed by the Respondent Company are covered by the definition of "employee" Under Section 2(f) of the EPF Act or not. Section 2(f) of the EPF Ac....
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....ite apart from all these circumstances, as the employer has the right to reject the end product if it does not conform to the instruction of the employer and direct the worker to restitch it, the element of control and supervision as formulated in the decisions of this Court is also present. 6.5. On the issue where payment is made by piece-rate to the workers, would they be covered by the definition of "employee", this Court in Shining Tailors v. Industrial Tribunal II, U.P., Lucknow and Ors., (1983) 4 SCC 464 held that: 5. We have gone through the record and especially the evidence recorded by the Tribunal. The Tribunal has committed a glaring error apparent on record that whenever payment is made by piece rate, there is no relationship of master and the servant and that such relationship can only be as between principal and principal and therefore, the Respondents were independent contractors. Frankly, we must say that the Tribunal has not clearly grasped the meaning of what is the piece rate, If every piece rated workmen is an independent contractor, lakhs and lakhs of workmen in various industries where payment is correlated to production would be carved out of the ....
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....nary objection therefore, raised on behalf of the Appellant-employer was untenable and ought to have been overruled and we hereby overrule it. 6.6. In M/s. P.M. Patel & Sons and Ors. v. Union of India and Ors., (1986) 1 SCC 32 the Appellants therein were engaged in the manufacture and sale of bidis. The Appellants engaged contractors, and the contractors engaged workers who rolled the bidis at their own homes after obtaining the raw materials either directly from the Appellants, or through the contractors. The Appellants contended that those workers were not covered by the definition of "employee" Under Section 2(f) of the EPF Act. This Court rejected the contentions raised by the Appellants therein, and held that: 8. ...Clause (f) of Section 2 of that Act defines an "employee" to mean "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." It will be noticed that the terms of the definition are wide. They include....
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....oyee" Under Section 2(f) of the EPF Act. 6.8. The EPF Act is a beneficial social welfare legislation which was enacted by the Legislature for the benefit of the workmen. Regional Provident Fund Commissioner v. The Hooghly Mills Company Ltd. and Ors., 2012 (1) SCALE 422. This Court in The Daily Partap v. The Regional Provident Fund Commissioner, Punjab, Haryana, Himachal Pradesh and Union Territory, Chandigarh, (1998) 8 SCC 90 held that: 9. It has to be kept in view that the Act in question, is a beneficial social welfare legislation meant for the protection of weaker Sections of society, namely, workmen who had to eke out their livelihood from the meagre wages they receive after toiling hard for the same. Hence, the provisions under the EPF Act have to be interpreted in a manner which is beneficial to the workmen. 6.9. In the present case, the women workers were certainly employed for wages in connection with the work of the Respondent Company. The definition of "employee" Under Section 2(f) is an inclusive definition, and includes workers who are engaged either directly or indirectly in connection with the work of the establishment, and are paid wages. In the ....