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Members of Co-Operative Society Will Not Be Covered Under the EPF Act


Contents News/Article Date: 18th August 2023

Relating to which Act: The Employees Provident Funds & Miscellaneous Provisions Act, 1952;           

Penalty under the Act: Whoever, for the purpose of avoiding any payment to be made by himself under this Act [the Scheme, the [Pension] Scheme] or the Insurance Scheme] or of enabling any other person to avoid such payment knowingly makes or causes to be made any false statement or false representation shall be punishable with imprisonment for a term which may extend to one year, or with fine of five thousand rupees, or with both].

Applicable to which State: Whole of India

Type: In The High Court of Judicature at Madras Dated: 18.08.2023 Coram: The Honourable Mr. Justice G.K. Ilanthiraiyan W.P.Nos.27966 To 27972 Of 2011 & 14875 To 14899 Of 2012 And M.P.No. 1 Of 2012 (32 Nos.

Pertains to: W.P.No.27966 of 2011: – M/s.Gudiyatham Jeeva Handloom Weavers Co-operative Production and Sales Society Ltd., Gudiyatham, Rep. by its Special Officer, Gudiyatham. …Petitioner -Vs [1]1. Versus The Employees’ Provident Fund Appellate Tribunal, Scope Minar, Core-II, 4th Floor, Laxmi Nagar District Centre, Laxmi Nagar, New Delhi – 110 092.

Relevance of this news: Karma Global is in the business of HR Services, Payroll, Outsourcing and Regulatory Compliances right from its inception in 2004 and since then, has brought in a lot of efficiencies and technological upgradations with experts on its roll, to ease the hassles of Payroll Processing, Temp Staffing, On-boarding, Employee Life Cycle, Statutory, Regulatory and Payroll compliances by providing customized solutions to all its elite clients.

Now Karma Global is also fully into labour compliances for nearly 18 years and is helping both establishments and workers for fulfilment of obligations as per the laws of the land.  It has over 200 staff, both direct and indirect on its rolls and operates on pan India basis.  Recently, it has diversified into foreign shores as well, into countries like US, UK, UAE, Canada, Philippines, and Asia for handling payroll, outsourcing, recruitment and governance.

And in the current instance:


These Writ Petitions have been filed challenging the order passed by the first respondent dated 23.07.2010, thereby dismissing the appeal filed by the petitioners as against the order passed by the third respondent under Section 7(A) of the Employees Provident Fund and Miscellaneous Provisions Act, thereby directing the petitioner’s societies to comply with the provisions of the Employees Provident Fund and Miscellaneous Provisions Act (herein after referred to as “the EPF & MP Act”).

As stated supra there is no employer and employee relationship between the petitioner/society and its members. The members of the petitioner/society are not running the handloom with the aid of any power. Further there being less than 50 employees in the petitioner/society and the Act itself states that the provisions thereof are not applicable and Section 16(1)(a) of the EPF & MP Act is very clear in that regard. Therefore, the members of the Weavers’ Co-operative Production and Sales Society Ltd., are not employees of the society. There are absolutely no materials such as attendance register, wages register and wage bills in order to prove that the members of the society are the employees of the petitioner/society. Therefore, the orders passed by the first and second respondents are illegal and this Court has no hesitation to interfere with the impugned orders.

Subject: Members of Co-Operative Society Will Not Be Covered Under The EPF Act in The Absence of 50 Or More Persons and Employer-Employee Relationship M/S.Gudiyatham Jeeva Handloom V. Epfat & Ors. Madras High Court

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