We all know that India is a major outsourcing destination and a recent Delhi High Court ruling has stated that clubbing of outsourcing units was not permissible or the companies outsourcing work to them for the purpose of benefiting from EPF or Employees Provident Fund. The court stated that holding interdependence between them could not be regarded as a ground for clubbing under the EPF Act.
Justice S.N Dhingra stated:
Two independent establishments cannot be clubbed together to show a unity of functions only because they are interdependent on each other at a particular time.
The court stated that the condition under which two companies could only be clubbed together for gaining benefits under the act was when an establishment was bifurcated for depriving workmen of the benefits of the labor law.
