HC rejects GHMC plea against EPFO

THE COURT said when the amount was deducted from the employee, it shall be deposited, otherwise the PF commissioner had every right to take action against such establishments.

The Telangana High Court dismissed a plea of the Greater Hyderabad Municipal Corporation (GHMC), which challenged the penalty imposed upon it and attachment orders issued by the Employment Provident Fund Organisation (EPFO) for delaying in remitting PF amount belonging to outsourced staff, who are working for the corporation.

The court did not agree with the GHMC’s contention that it was not bound to pay PF to outsourced workers as there was no such relation of master and servant between them. Justice G. Radha Rani made it clear that the PF amount should be remitted by the 15th day of closure of the month during which the employee worked with the establishment. The court said when the amount was deducted from the employee, it shall be deposited, otherwise the PF commissioner had every right to take action against such establishments.

The GHMC challenged regional PF commissioner’s order which directed to pay interest amount of around `4.5 lakh, the interest amount levied for the delay time in remitting the PF of outsourced workers. As it was delayed, the PF office also issued orders of attachment in 2020. This was also challenged by the GHMC.

The contention of the civic body was that it had been availing the services of outsourced workers provided by Self Help Groups (SHG) and contractors in sweeping roads. The outsourced workers were not employees of the corporation. However, as a welfare measure, the corporation made arrangements for making EPF contributions in respect of outsourced workers. There was no master and servant relationship.

Further, it contended that the corporation was passing through a severe financial crisis with its revenue collections getting far below the expenditure incurred in maintaining the civic amenities. “The expenditure has gone up fourfold. Without considering the relevant factors, the EPFO office passed the orders,” the counsel for GHMC argued.

On the other hand, the counsel for PF commissioner (regional) argued once the establishment was covered under EPF Act, it was statutorily bound to comply with the provisions of the Act. When the establishment was remitting the contributions for its employees, it would lose its locus standi to deny workers as its employees. Financial constraints were no bar for levying damages on belated remittances especially when the default was associated with bad administrative practice, the counsel said.