Offsite workers eligible for provident fund contribution

Off-site workres eligible for provident fund contribution

In a recent judgment in the Officer-in-charge, Sub Regional Provident Fund Office and Anr v Godawari Garments Limited, the Supreme Court held that a company is liable to pay provident fund contributions for its offsite employees. The judgment came in an appeal by the provident fund authorities against a Bombay High Court judgment, which had held that Godavari Garments was not liable to make provident fund contributions for its employees.

The respondent, the garment company, engaged women workers to stitch garments for the company at their homes. The workers were provided with raw materials, such as fabric, thread, buttons, and so on, with which they were required to stitch garments in accordance with specifications given by the company. However, the sewing machines were owned by the workers and not provided by the company.

The appellant issued a show-cause notice to the company asking it to make provident fund contributions for the workers. The balance sheet of the company for the year 1988-89, revealed large debits in respect of salary and wages for direct and indirect workers, but the company made a false statement that it had only 41 employees.

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