A Division Bench of the Apex Court of India, vide judgment dated December 2, 2020, in the case of M/S. Panther Security Service Private Limited v. The Employees’ Provident Fund Organization and Anr. have held that when the conditions prescribed under the Employees’ Provident Fund and Miscellaneous Provisions(EPF) Act, 1952 are met with, then the Act may be extended for implementation against private security agencies involved in offering security workforce to its customers.
The appellant had filed the present appeal being aggrieved by the order passed by the High Court upholding the order of the Assistant PF Commissioner, mandating the appellant to abide by the provisions stipulated under the EPF Act,1952.
The appellant company had preferred the appeal on the grounds that they possessed no authority over the security staff provided by them and that the wages of the security personnel were handled by the customers themselves. Due to these reasons, the company should not be treated as the employer of the guards provided by them. The appellant company was registered under the Private Securities Agencies (Regulation) Act, 2005.
The Supreme Court on a perusal through the definition of a Private Security Agency as provided under the 2005 Act, concurred with the Appellant’s submission that they were involved in the arranging of specialized and trained security guards to their customers in return for payment. However, the Court refused to accept the contention that the appellant was solely an intermediary in the entire transaction.
As per the Court, the 2005 Act, very clearly and unambiguously lays down that the guards are employees of the agency and the agency is, in turn, their employer. The existence of a contract between the agency and the customer wherein the wages of the guards are received by the money paid by the customers to the Agency, does not alter this fact.
The Supreme Court denied the grounds raised in the appeal and consequently dismissed it holding that the provisions of the EPF Act may be enforced against private security agencies upon fulfillment of the prerequisites mentioned under the statute.