Bikaner Cold Storage Company Ltd. was carrying on the business of running a cold storage facility in Rajasthan, where agricultural producers and traders stored their perishable goods, mainly fruits and vegetables, for pr

CS Professional · Labour Laws and Practice · PYQS · December 2025
Bikaner Cold Storage Company Ltd. was carrying on the business of running a cold storage facility in Rajasthan, where agricultural producers and traders stored their perishable goods, mainly fruits and vegetables, for preservation. The business essentially required a limited number of permanent employees such as supervisors, clerks, accountants, mechanics, and helpers to maintain day-to-day operations like regulating the temperature, maintaining machinery, and supervising the storage process. However, during peak season when agricultural produce arrived in bulk there was a temporary need to engage extra labour for loading, unloading, stacking, and arranging goods inside the cold storage. These workers were employed for a few days or weeks depending on the volume of goods, and once the seasonal rush ended, their services were no longer required. The company maintained that such seasonal or casual labourers were not on its permanent rolls and were not engaged in the regular course of business but only as a stop-gap arrangement to meet temporary demands. The Regional Provident Fund Commissioner issued a notice contending that the establishment fell within the scope of Section 1(3)(a) of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952, as the strength of employees exceeded twenty including these seasonal and casual workers. The Commissioner argued that since these persons worked under the control of the establishment and were paid wages, they should be counted as employees for the purpose of the Act. The company challenged this position and filed the case, asserting that the actual number of permanent and regular employees was below twenty and that inclusion of temporary or casual labourers would unfairly extend the application of the Act to establishments that otherwise did not meet the statutory threshold. The main issue before the Rajasthan High Court was whether temporary or seasonal workers, engaged for shorter durations and not forming a permanent part of the business, could be treated as "employees" under Section 1(3)(a) of the Employees' Provident Fund Act for the purpose of determining the statutory strength of twenty employees. The Rajasthan High Court held that the persons employed in the normal and regular course of business of the establishment should be treated as "employees" for the purpose of Section 1(3)(a). However, persons employed only for shorter durations, whose engagement was not a regular feature of the business of the cold storage, could not be included in determining the employee strength. Accordingly, casual or seasonal workers brought in temporarily during peak demand were excluded from the calculation. On this basis, the Court concluded that the Act could not be made applicable to the petitioner establishment, as the required threshold of twenty employees was not satisfied. How did the Rajasthan High Court distinguish between regular employees and casual/seasonal workers in determining the applicability of Section 1(3)(a) of the EPF Act?

Answer & Explanation:

On the question whether casual or temporary workmen should be included for the purpose of ascertaining the strength of workmen in terms of Section 1(3) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 ('EPF Act') it was held by the Rajasthan High Court in Bikaner Cold Storage Co. Ltd. v. Regional P.F. Commissioner, Rajasthan, 1979 Lab. I.C. 1017 , that persons employed in the normal course of the business of the establishment should be considered as the persons employed for the purposes of Section 1(3)(a) and persons employed for a short duration or on account of some urgent necessity or abnormal contingency, which was not a regular feature of the business of the establishment cannot be considered as employees for the purpose of determining the employment strength in relation to the applicability of Section 1(3)(a) of the EPF Act. The Rajasthan High Court carefully distinguished between regular employees and casual or seasonal workers by interpreting the phrase "persons employed in the establishment" under Section 1(3)(a) of the EPF Act. The Court held that only those engaged in the normal course of business such as clerks, mechanics, supervisors, and other staff continuously required for day-to-day operation qualified as employees for determining statutory strength. By contrast, workers engaged only during peak seasons for limited functions such as loading and unloading were excluded because their employment was temporary, uncertain, and not integral to the establishment's ongoing activities. The Court reasoned that including such seasonal workers would unfairly bring smaller establishments within the purview of the Act, contrary to the legislative intent that aimed to cover units with a stable workforce of twenty or more. Thus, the distinction lay in the permanence and regularity of employment, not in mere physical presence or payment of wages.

Topics: Employees' Provident Funds and Miscellaneous Provisions Act, 1952

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