Decided on January 17,2020

Aviation Karmachari Sanghatana Respondents


INDU MALHOTRA,J. - (1.)Leave granted.
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 should be excluded from the purview of the Act."

[emphasis supplied]

2.7 The Central Government, in exercise of the powers under S.1(3)(b) of the EPF Act, issued a Notification dated 22.03.2001, making the provisions of the EPF Act applicable to aircraft or airlines establishments employing 20 or more persons, excluding aircraft or airlines establishments owned or controlled by the Central or State Government. The Gazette Notification No. SO 746 dated 22.03.2001 ("Notification") is extracted for ready reference:

" S.O. 746 ­ In exercise of the powers conferred by clause (b) of sub section (3) of Section 1 of the Employees Provident Fund and Miscellaneous Provisions Act 1952 (19 of 1952), the Central Government hereby specifies the following establishment employing 20 or more persons as the class of establishments to which the said Act shall apply with effect from 1st April 2001 namely:

(i) An establishment engaged in rendering courier services;

(ii) An establishment of aircraft or airlines other than the aircraft airlines owned or controlled by the Central or State Government.

(iii) An establishment engaged in rendering cleaning and sweeping services."

[emphasis supplied]

The said Notification was brought into force w.e.f 01.04.2001.

2.8 Correspondingly, amendments were made to the EPF Scheme framed under Section 5 of the EPF Act. Clause 3 (b)(ci) was inserted vide Notification No. S35016/1/1997 SS II dated 22.07.2002, by which the EPF Scheme was made applicable to aircraft or airlines establishments other than the aircraft or airlines establishments owned or controlled by the Central or State Government.

2.9 The members of the RespondentUnion made several representations on 18.09.2012, 29.09.2012, 13.03.2013, 19.11.2014 to extend the benefit of the PF Trust Regulations since they were directly engaged by the Company on contractual basis, some of whom were working for almost 20 years.

The Company failed to respond to the representations.

2.10 Being aggrieved by the inaction of the Company, the RespondentTrade Union, filed CWP No.325 of 2017 on 20.12.2016 against the Company praying for the following reliefs:

"(a) A declaration that the members of the Respondent Trade Union and other similarly situated employees, employed on contract basis by the AppellantCompany are entitled to the benefit of Provident Fund as per the EPF Act and the EPF Scheme, and that the AppellantCompany be directed to forthwith enrol all such eligible contract employees under the EPF Scheme and deposit their contribution with the Respondent No. 3 Regional Provident Fund Commissioner, Employees' Provident Fund Organisation, from the date they are eligible till remittance, and thereafter, till they are in the employment of the AppellantCompany.

(b) Alternatively, the AppellantCompany forthwith be directed to suitably amend the PF Trust Regulations to permit the enrolment of contract workers as members of the PF Trust instituted by the AppellantCompany and to make all eligible contract employees members of the PF Trust from their respective dates of entitlement and continue to contribute amounts to the PF Trust in respect of contract employees."

2.11 During the pendency of the Writ Petition, the Regional Provident Fund Commissioner, Bandra issued a letter dated 24.05.2017 to the Company wherein it was stated that even though the EPF Act would not apply to establishments owned/controlled by the Central Government as per S.16(1)(b) and (c), however social security benefits such as provident fund must be provided to all "employees/workers who are engaged on contractual/casual/daily wages basis" since there is no distinction between a person employed on permanent, temporary, contractual, or casual basis under S.2 (f) of the EPF Act.

2.12 The High Court vide the impugned Judgment and Order dated 12.09.2018 allowed the Writ Petition in terms of prayer (a), with the direction that the benefits under the EPF Act be extended to the members of the Respondent Trade Union, and other similarly situated employees. It was held that a liberal view must be taken in extending social security benefits to the contractual employees. The High Court directed the Company to enrol all eligible contractual employees under the EPF Scheme, and deposit their contribution with Respondent No.3 ­ Regional Provident Fund Commissioner from the date they became eligible till remittance, and thereafter till they are in employment of the Company. This was to be carried out latest by 31.12.2018.

(3.)Aggrieved by the impugned Judgment, the Appellant Company filed the present Civil Appeal. This Court vide Order dated 14.01.2019 issued notice and granted stay of the impugned Judgment subject to the Company depositing a sum of Rs.5,00,00,000/ (Rupees Five Crores) within 3 months in this Court. Pursuant thereto, the Company deposited the said amount on 09.04.2019, which has been invested in a Fixed Deposit.

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