Dear Experts,
One of the sick unit has took over by a new company. In the old company all the employees are relieved during in the time of sick with F & F. And simultaneously the Managing Director (Occupier) of the old firm has intimated in a letter to PF / ESI authorities that the firm is ‘SICK’ with evidences. After that no correspondence has made from both the ends.
After six and half years the new firm has started recruitment of employees and intimated to the PF / ESI authorities without changing the firm name for “Reviving the same code number”, accordingly the new firm has depositing the contributions with the continuation of PF & ESI last employees serial numbers on wards.
Now what are the impacts and obligations after that. Please guide me.
Regards,
PBS KUMAR
From India, Kakinada
590One of the sick unit has took over by a new company. In the old company all the employees are relieved during in the time of sick with F & F. And simultaneously the Managing Director (Occupier) of the old firm has intimated in a letter to PF / ESI authorities that the firm is ‘SICK’ with evidences. After that no correspondence has made from both the ends.
After six and half years the new firm has started recruitment of employees and intimated to the PF / ESI authorities without changing the firm name for “Reviving the same code number”, accordingly the new firm has depositing the contributions with the continuation of PF & ESI last employees serial numbers on wards.
Now what are the impacts and obligations after that. Please guide me.
Regards,
PBS KUMAR
From India, Kakinada
Dear PBS Kumar ji,
In my view, what the new management has done is perfectly correct. The previous management has not surrendered its' PF and ESI numbers to respective authority and just informed the authorities that the company went in to sick and no employee is engaged and therefore, no contribution. The previous management also did it correctly.
Now the new management continuing with the old entity has to continue with the PF and ESI numbers which were allotted to the company previously and were not surrendered. The new management is very correct in reviving the same code numbers.
Now the new management has following obligations:
In regards to PF:
Pay minimum charges of Rs. 7/- ( Rs. 5/- towards PF administration and Rs. 2/- towards EDLI administration) every month for non contributed period;
Convince the authority that the payment done by you is correct with supportings such as balance sheet / P&L statements;
Submit Form 5A.
In regards to ESI:
Convince the authority that the non contribution period is correct with supportings such as balance sheet / P&L statements;
Submit Form 01C through update employers details on ESI portal.
From India, Mumbai
In my view, what the new management has done is perfectly correct. The previous management has not surrendered its' PF and ESI numbers to respective authority and just informed the authorities that the company went in to sick and no employee is engaged and therefore, no contribution. The previous management also did it correctly.
Now the new management continuing with the old entity has to continue with the PF and ESI numbers which were allotted to the company previously and were not surrendered. The new management is very correct in reviving the same code numbers.
Now the new management has following obligations:
In regards to PF:
Pay minimum charges of Rs. 7/- ( Rs. 5/- towards PF administration and Rs. 2/- towards EDLI administration) every month for non contributed period;
Convince the authority that the payment done by you is correct with supportings such as balance sheet / P&L statements;
Submit Form 5A.
In regards to ESI:
Convince the authority that the non contribution period is correct with supportings such as balance sheet / P&L statements;
Submit Form 01C through update employers details on ESI portal.
From India, Mumbai
I appreciate the reply by Keshav. In addition to what Keshav has put in, I would also like to advise PBS that you should also verify the physical records and ensure that the inspection by the PF Enforcement officer and the ESI Social Security Officer have been carried out up to date and there is no negative comments about omitted wages etc. Also make sure that all payments till the date of closure are made and without delay. In case remittances have been made after due dates, there is chances of recovery of interest and damages by them in subsequent dates. We should avoid unnecessary liabilities of the previous employer coming to our shoulders.
I also doubt just a communication stating that the company has been declared sick would convince ESI/EPF authorities. Shouldn't it be declared as sick by the Board of Industrial and Financial Reconstruction? And declaration as sick is expected to be done after all possibilities of its revival come to an end and there cannot be a reopening.
Madhu.T.K
From India, Kannur
I also doubt just a communication stating that the company has been declared sick would convince ESI/EPF authorities. Shouldn't it be declared as sick by the Board of Industrial and Financial Reconstruction? And declaration as sick is expected to be done after all possibilities of its revival come to an end and there cannot be a reopening.
Madhu.T.K
From India, Kannur
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