Whether coverage of an establishment once made will continue forever?
Sub-section (5) of section 1 of the Act provides that an establishment to which the Act applies shall continue to be governed by the Act notwithstanding that the number of persons employed therein at any time falls below 20. Where two theatres were owned by the same person and authorities regarded them as one establishment as a question of fact and the Act was applied then even when the two theatres subsequently went under different owners and the number of employees in each theatre happened to be less than 20, Act would not cease to apply.1 The Kerala High Court has observed that once the Employees’ Provident Funds Act is made applicable upon an establishment having prescribed number of employees, i.e., either 20 or 50 as the case may be, it will continue to apply even when the employment strength of persons falls below the prescribed number.2
When once the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 is made applicable to an establishment, it would continue to be effective notwithstanding the fall of number of employees below 20 as per section 1(5) of the Act.3
1. Benares State Bank Ltd. v. Union of India, 2004 (104) FJR 892 (Del HC).
2. Kottahala Handloom Weavers Industrial Co-operative Society v. Enforcement Officer, 2008 LLR 744 (Ker HC).
3. Polythene Bag Factory v. Assistant P.F. Commissioner, 2015 LLR 130 (Del HC).