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This blog summarises a key judicial development on extending Provident Fund and ESI benefits to casual workers, along with relevant interpretive guidance on coverage for temporary and casual employees. The update is presented in the context of evolving compliance expectations and workforce governance.
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Many times employers face the dilemma whether a temporary employee should be considered for assessing eligibility under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (the Act).
As per the provisions of the Act, it applies to an establishment employing twenty or more workmen at any point of time during the previous year. A recurring question arises when establishments do not usually employ twenty or more workers, but temporarily employ extra staff on certain occasions.
Madras High Court, in its judgment in the case of M/s New Star English School, Nagapattinam, clarified that since the Act covers casual employees, temporary employees should be considered for assessing eligibility under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952.
The Supreme Court has held that Section 2(22) of the ESI Act covers casual employees employed for a few days on a work of perennial nature. Wages as defined in Section 2(22) and wage period as defined in Section 2(23) do not exclude wages payable to casual workers. Such employees cannot be deprived of the beneficial provisions of the Act. Where the work is a perennial activity, employees engaged for that work are covered and consequently are entitled to the benefits of the Act.
In the case of Odisha University of Agriculture and Technology, Bhubaneswar and another vs. OUAT Workers’ Union and others; W. A. No. 1689 of 2023, the Orissa High Court delivered a judgment on the applicability of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and the Employees State Insurance Act, 1948 to casual employees. The appeal challenged a Single Bench judgment that directed the management of a prominent agricultural university to extend EPF and ESI benefits to its casual employees.
The university argued that it was exempt from the provisions of the EPF Act under Section 16(1)(b), which exempts establishments belonging to or under the control of the Central or State Government where employees are entitled to benefits of a contributory provident fund or old age pension under a government-framed scheme or rule. It also suggested that disputes related to ESI benefits should be adjudicated by the Employees' Insurance Court rather than through a writ petition.
The respondents representing casual employees argued that the university did not meet the exemption criteria under Section 16(1)(b) since it did not provide provident fund or pension benefits to its casual employees.
The court dismissed the appeal, affirming the Single Judge’s decision. It also addressed the jurisdiction argument and concluded that the writ petition was appropriate, as the core issue was the non-implementation of EPF and ESI Acts for casual employees, constituting a violation of Article 14 of the Constitution of India, which guarantees equality before the law.
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