Appliability of PF & ESIC to Transporters - manpower supply

Godse Sopan Karbhari Started The Discussion:

:lol: We have entered into agreement with many transport agencies who are required to carry our finished goods and deilver them to our distributors located in various part of India. Them modus operandi is, the vehicle is called in the premises when the goods are ready for delivery. The driver with one suport enters the premises and takes the delivery and moves on. One vehicle hardly remains for Three hours in the premises. The question is what is our liability as a employer towards compliance of their PF and ESIC. (vehicles are not fully owned for us and we are not aware as to what happens to the vehicle after it makes our delivery) In an recent inspeciton of PF, the authorities have directed us to produce records of PF deducted for the transporters.

malikjs -  Member Since: Oct 2008
i donot think PF inspector is right.transporter is not sloely working for you and he is not your permanent contractor,he is just providing you services as and when requires for which you are paying him charges .
he is providng you services and for that you are even paying service tax.
i donot think you are responsible for payment of ESI and PF for the above said transporter.
j s malik

jitendersyadav -  Member Since: Sep 2008

1. You are not liable for the PF & ESIC compliances of Truck Driver & Cleaner.Because there is no labour consumed.

2. You are not hiring the transportation on regular/monthly basis, that's why also your are not liable for....


adv1307 -  Member Since: Feb 2009
pf & esic matter generally followed up by every organization
but your modus operandy is totally different therefore you
need not warry about it, because, you have not made any contract with
service provider, the contract made with you or between both of deliver the goods and
services and not manpower supply , isn't it, there is only particular service for particular days or hours.

irudayamarockiam -  Member Since: Feb 2009
DEar Mr.Sopan
1 As regards PF, Employee under Sec. 2(f) means (i) any person who is employed for wages or (ii) any person who gets his wages directly or in indirectly from the employer.
In the instant case, the onus would be on the EPF Dept. to establish that the Employer has indirectly paid wages to the driver and helper.

2 As regards ESI, the definition of Employee under Sec. 2 (9) is quite exhaustive. Under Sec.2 (9) (ii), a person who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factor or establishment or which is preliminary to the work carried on in or incidental to the purchase of the factory or establishment are also covered.
The coverage under ESI is much more sweeping and comprehensive since any worker who is employed either employed directly by the Principal employer or through Immediate employer would be covered under ESI since in case of accident even on the first day, they are eligible for Accident Benefit.

It is therefore advisable to ensure the coverage of such persons under ESI. While stating so, it would be practically impossible to maintain a Register, deduct contribution and follow all formalities. The best course would be to ensure that such Transport or any other outside Vendors are independently complying with ESI.

Again, it all depends as to how you account these expenses.One needs to be smart.

Advocate and HR Consultant


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