Loading, Maintenance And Pay Loader Workers Not Short Period Employments, Entitled To Provident Fund Under EPF Act: Andhra Pradesh HC

The Andhra Pradesh High Court has held that employees engaged by security agencies for the purposes of loading and unloading, office or factory maintenance and Pay Loader work are covered by the definition of 'employee' under Section 2(f) of the Employees Provident Funds & Miscellaneous Provisions Act, 1952 (“EPF Act”) and are entitled to the Provident Fund.

A Division Bench of the High Court comprising Chief Justice Dhiraj Singh Thakur and Justice Ravi Cheemalapati held that the employees mentioned above cannot be equated with those persons who are “employed for a short period on account of some passing necessity or some temporary emergency beyond the control of the company” and are, thus, entitled to the benefits of the EPF Act.

Background

The appellant was a factory engaged in the manufacture of cement with more than 100 employees and was within the application of the EPF Act. While it was later declared a sick industry, the company continued to pay contributions as demanded by Respondent No. 2, who later passed an order under Section 7A of the EPF Act (Determination of Moneys due from Employers). This was challenged by the appellant in W.P. No.18280 of 2003, where it was argued that the amount included contributions of those persons who were not working in the company and that the evidence produced by the petitioner was ignored. The High Court set aside the order under Section 7A and remitted the matter back to Respondent 2 for fresh consideration. Pursuant to this, Respondent 2 initiated an inquiry and subsequently passed an order on 11.06.2004 determining the amount at Rs. 8,09,558.15 ps from April, 1999 to March, 2003. This was challenged by another Writ Petition (W.P. No.10165 of 2004) which was disposed of with a direction to the appellant to avail an alternative remedy of preferring statutory appeal before the Employees Provident Funds Appellate Tribunal. The Tribunal also dismissed the appeal.

The Employees' Provident Fund Organization (“EPFO”) had argued that after receiving a complaint from the employees union that the petitioner had failed to enrol certain employees as members for the benefit of provident fund, an enquiry was conducted and the order dated 11.06.2004 was passed. It was argued that Section 2(f) of the EPF Act, which defines 'employee', provides no distinction between regular, contract, or casual employees and any person employed by the petitioner had to necessarily be enrolled as a member of provident fund. The Single Judge dismissed the writ petition. Aggrieved by this, the appellant filed the Writ Appeal.

The Court noted that in the inquiry conducted under Section 7A of the EPF Act, the commission had failed to find any conclusive proof to establish the genuineness of the initial complaint. The commission, however, established that certain employees like employees engaged by security agencies for loading and unloading, office maintenance/factory maintenance and Pay Loader work were paid salaries but were not included within the Provident Fund benefit. Dues payable to such employees was determined at Rs. 8,09,558.15 ps.

The petitioner had relied on the case of The Provident Fund Inspector, Guntur vs. T.S. Hariharan (AIR 1971 SC 1519), where the Supreme Court held that the word 'employment' connotes regular course of business and would not include employment of a few persons for a short period for a passing necessity or some temporary emergency. However, the Court observed that employees engaged by security agencies for loading, unloading, office maintenance, factory maintenance, and Pay Loader work were not short period employments and were included within the ambit of 'employee' under Section 2(f) of the EPF Act, and hence, were entitled to the benefits of the EPF Act.

The Court further observed that Annexure-A related to Provident Fund due payable to the employees engaged by security service agencies, amounting to ₹2,51,200.60. Except the name of the security service agencies, the names of the employees were not mentioned. Similarly, names were not mentioned in Annexure-B which related to loading and unloading charges, with an amount determined at ₹4,59,742 based on ledger entries. Relying on a previous ruling of the Employees Provident Fund Appellate Tribunal in M/s. Janchaitanya Housing Limited vs. Asst. Provident Fund Commissioner, Guntur, where it was held that without identifying workers, determining Provident Fund dues based on balance sheet entries was improper, the Court set aside the order dated 11.06.2004 insofar as it related to determination of the dues in respect of unidentified workers.

Allowing the writ petition in part, the remaining part of the order which related to the identified workers was confirmed. Further, the Court permitted the Employees Provident Fund Organization, Guntur, to identify the workers that had worked during the relevant period and pass 7B orders accordingly.

Case Details:

Case Number: WRIT APPEAL NO: 11/2025

Case Name: M/s. Sri Chakra Cements Ltd., v. The Employees Provident Funds and Others

Date: 21.03.2025

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