In a landmark judgement which may affect both government and private managements in India outsourcing the work to escape the labour laws by claiming that the persons so engaged are not their workers, the Supreme Court has declared that women tailoring garments at home for a company are entitled for the employees' provident fund (EPF) dues.
The apex court judgment may force the Union and state governments to review the present EPF law to cover the entire workforce in India.
Today’s verdict that will send cheers to the workers holds that "provisions under the EPF Act have to be interpreted in a manner which is beneficial to the workmen".
Shockingly, the defaulting readymade garment company that was ordered by the court to deposit the women workers' PF dues dating back to 1979 within one month is no private company but one set up by the Maharashtra state government.
The ruling came on a PF notice issued in 1991 to a subsidiary company of the state government to deposit Rs 15.97 lakhs as the provident fund dues of the women workers for the period of November 1979 to February 1991.
The Court rejected the management's alibi that it had no direct or indirect supervisory control over the women workers since the work to be done by them can be done by anybody on their behalf.
The Bench of Justices Abhay Manohar Sapre and Ms Indu Malhotra ordered Godavari Garments Limited, set up as a subsidiary of Marathwada Development Corporation of the Maharashtra Government, to deposit the provident fund dues of the women workers within one month.
Allowing appeal of the Provident Fund Office (PFO), the apex court reversed the 2012 order of the Aurangabad Bench of the Bombay High Court quashing the notice for the PF dues.
The company had set up the readymade garment industry to provide gainful employment to women from the economically weaker sections of the society possessing skills in stitching and tailoring.
It provided to women cut fabric, thread, buttons etc. to make garments at their own homes on their own sewing machines.
The Supreme Court declared them as workers of the company since they were paid wages on per piece basis for the services rendered.
It held that "merely because the women workers were permitted to do the work off site would not take away their status as employees of the respondent company".
It said these women were certainly employed for wages in connection with the work of the company as the definition of "employee" includes workers who are engaged either directly or indirectly in connection with the work of the establishment and are paid wages.