…An Insight For the better part of the last decade, the question that was there amongst both Labour Law practitioners and the Central Government Industrial Tribunals all around this Country was based on the specific question of law as to whether ‘allowances’ bearing different nomenclature, paid by any establishment to its employees would necessarily fall within the definition of ‘basic wages’ as provided u/s 2 (b) (ii) r/w sec 6 of the Employees’ Provident Fund…Read More
Applicability of the Provident Fund Act
The Provident Fund Act is applicable to every Factory in India engaged in any industry specified in Schedule 1 in which 20 or more persons are employed and any other establishment which are notified by central government employing 20 or more persons employed. The criteria for applicability under the Provident Fund Act are number of persons employed in the Factory/establishment. This brings us to a question; In considering the number of employees, can partners /…Read More
What are the various statutory compliances under Provident Fund Act?
An employer under the Provident Fund Act, 1952 has to ensure compliance with the following requirements – Every employee must file Declaration and Nomination Form as given in Form 2 as prescribed under Para 33 & 61 (1) of the Employees’ Provident Funds Scheme, 1952 and Para 18 of the Employees’ Family Pension Scheme, 1971. An employer must prepare Contribution Cards in Form 3-A as prescribed under Para 35 & 42 of Employees’ Provident Funds…Read More
Can the assets of an establishment, already pledged to a bank against loans, be sold to clear Provident Fund dues?
In Maharashtra State Co-operative Bank Ltd. V/s The Assistant Provident Fund Commissioner, 2009 the Hon’ble Supreme Court, was faced with the question of whether the sugar bags pledged by two sugar mills in favour of the appellant-bank as security for repayment of the loan together with interest could be attached and sold for realization of the dues of provident funds etc. payable by the employer i.e., the management of the Sugar Mills under the Employees’…Read More
Components forming part of Wages for deciding contribution under Provident Fund Act, effect of splitting salary into components/allowances and its effect on Contribution under Provident Fund Act
I. Components forming part of wages under the Provident Fund Act Section 6 of the Provident Fund Act in India provides for “Contribution”. The Section reads as under; ‘The Contribution which shall be paid by the employer to the Fund shall be twelve per cent of the basic wages, dearness allowance and retaining allowance (if any) for the time being payable to each of the employees (whether employed by him directly or by or through…Read More