Contractual labours are those, which are hired by a company that hires an outside party to execute the labour for a particular project. They may have all the equipment’s and resources in case of contractual workers as the workforce for the implementation of work. They are a group of large number of workers doing a one time job. Contractual employees are different from permanent employees but that doesn’t make them any less deserving for the pension or any other facilities provided for an employee as mentioned under the act of employees provident funds and miscellaneous provision section 2 (f).

Pension For Contractual Employees Law in India
Pension For Contractual Employees Law in India

The purpose of this act is to ensure that there should be no discrimination between any kind of employees, these actions are initiated by the employees provident fund organisation (EPFO) by initiating the process of writing to all public sector enterprises, corporate, State Government and other establishment.

Pension scheme members are allowed to differ the age of drawing pension and to continue the contribution under EPS up to the age of 60. According to the act of employees provident fund and miscellaneous provisions section 2 ( f) that States the meaning of employee that means any person who is employed for wages in any kind of manual work or any other task in or in connection with the work and who gets his wages they directly or indirectly from the employer.

Supreme Court of India has ruled that casual workers are also entitled to social security benefits as there should be no discrimination between contractual and permanent employees by their employer. At the other hand according to formal labour secretary Shankar Agrawal said that labour laws do not discriminate between permanent and contractual employees and employers are mandated to give benefits under PF scheme even when workers are engaged through other firms.

There are many other cases which shows the problem where the contractual workers are not given the proper benefits or as equal benefits as given to permanent employees.

Even otherwise also, services of Contractual Employee can be counted towards qualifying service for Grant of Pension, Post Regularization as per Himachal Pradesh High Court’s recent decision in Sheela Devi  versus. State of HP & Ors. In CWPOA  No. 195/2019 by J Tarlok Singh Chauhan & J Chander Bhushan Barowalia . Read judgment here

The Pawan Hans case will be an example for Private Sector where contractual employees are not able to get benefit of pension scheme floated by government and this step will ensure parity of contractual employees with regular employees.

The two exemptions for Pension Scheme would be:

  1. The organization should be under the control of government.
  2. The employees should be entitled to contributory PF or old-age pension in accordance to any scheme or rule framed by the centre or state government.

If organization fulfil this, then it can be exempted. Rest now it is settled contractual employees are entitled for pension in Private companies.

Rest for pension related issues in one can contact service lawyer advocate in Chandigarh Panchkula Mohali for CAT, AFT, High Court Chandigarh Matters.

This post is written by Natasha Joshi. For more info, dial 99888-17966.

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