PF Department Initiates Inquiry into EY Pune Operations Amid Labour Ministry Concerns

Reported by Tikam Shekhawat

Pune, 26th September 2024: In a new development in the ongoing Ernst & Young (EY) Pune case, the Provident Fund (PF) department has initiated a preliminary inquiry, as confirmed by sources within the Labour Ministry. The inquiry follows revelations that EY Pune, a member firm operating since 2007, lacked the essential registration under ‘The Maharashtra Shops and Establishments Act.’

According to sources, EY Pune’s PF registration is under the PF Mumbai office and Prima Facie no violation has occurred under the PF Act. However, a key question before the Labour Ministry is how the company managed to obtain PF registration, ESIC (Employees’ State Insurance Corporation) registration, and Professional Tax registration without the basic Shops and Establishments registration, which is required for any establishment conducting business in Maharashtra.

The crucial question for the Pune Labour Commissioner’s Department is how EY Pune managed to operate for 16 years without this essential registration. Were there any inspections conducted earlier? Was any Contract Labour Registration granted to them without the basic ‘Establishment Registration’ document?

Labour Department officials confirmed that EY India’s Pune office, which employed the late Anna Sebastian Perayil, a 26-year-old audit executive who allegedly died due to a high workload, had been operating without the mandatory registration. This raises further concerns about the company’s adherence to employment laws.

EY, which advises clients on legal and employment practices, now faces scrutiny for failing to comply with basic regulatory requirements. The case has already led to a Central Government investigation following a letter from Anna Sebastian’s mother, accusing the firm of contributing to her daughter’s death due to extreme work pressure.

The situation highlights serious lapses in EY’s adherence to employment laws in India as questions arise about the statutory audits conducted over the past 15 years, and what actions, if any, were taken by the firm to address such a legal gap.