The Act does not have any provision for clubbing of establishments. Despite this the Provident Fund authorities tend to club establishments.

 

If in their true relation the establishments constitute one integrated whole, the establishment is said to be one. This relation is judged having regard to unity of ownership, management, control, employment, functional integrality, finance and geographical proximity.

 

Two units will be treated as different and distinct unless an interconnection between the two units is established of mutual dependence of one over the other, so that one cannot function altogether or substantially without the other. The mere fact that one concern exclusively purchases the products of the other cannot mean there is functional integrity. Similarly, merely because there is is one common proprietor for two units will not justify to treat them as one establishment.

 

The factors, such as, situation of the office of the firms in one premise, user of a common telephone number and post-box number and employing the services of the same person to write the accounts, is not relevant for clubbing them.

 

Before passing an order clubbing two or more establishments as one concern, the Commissioner must afford a reasonable opportunity to the affected establishments.

 

Issue of show cause notices containing the conclusion without giving documents of evidence, on the basis of which the conclusion is arrived, would not amount to giving reasonable opportunity.