The Hindu Business Line : Contractors for State projects must implement PF laws: HC

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Contractors for State projects must implement PF laws: HC

Our Legal Correspondent

Chennai, Nov 19

Those who were submitting tenders for supply of goods and services to the State-owned undertakings should be responsible to implement the provident fund law in respect of employees engaged by them, Madurai Bench of Madras High Court has held. Apprehension of contractors that the stipulation was arbitrary could not be accepted.

Dismissing a batch of writ petitions challenging rules prescribed under the Employees Providend Fund & Miscellaneous Provisions Act, 1952 that tender schedules must be registered and must have a registration number accorded by the department in future, Mr Justice K. Chandru noted that interest of petitioners, who were made contractors, was only with a view to avoiding various obligations. In the name of liberalisation, State could not be a mute spectator to allow contractors to ignore welfare of labour.

The conditions imposed in the tender schedules notification impugned in petitions only enhanced mandate under Part III and Para IV of the Constitution. Contentions voiced by petitioners, who had been executing projects undertaken by TN Small Industries Development Corpn Ltd (SIDCO), that it should be ensured that workmen engaged by them were regular workers and also they were liable to be covered by the State Act, might be relevant when this court examined any demand by the PF Dept with reference to contribution by petitioners’ establishments, the Judge said.

The court was concerned with the 5th respondent (SIDCO), a State instrument authority, who had to take proper care by securing itself by such conditions which would not bring any future liability for claims made under the PF Act. Petitioners submitted that if contract was awarded to them, they were bound to enforce those statutory obligations. But putting it as a precondition, they had edged out of competition. Hence, they sought aid of this court to quash the condition imposed in tender schedules floated by 5th respondent.

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