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By filing the appeal, the appellant has questioned the validity of the order, passed by the EPF Authority under section 7A of the Act stating that the appellant does not fall under any of the heads in the ‘schedule I’ appended to the Act as the establishment/industry of the appellant has not yet been notified in the scheduled head u/s 1(3)(a) or 1(3)(b) of the Act.
The Appellate Tribunal observed that the EPF Authority has covered the establishment of the appellant relying on the case M/s. Shri Mahila Griha Udyog Lijjat Papad decided by the Supreme Court but in fact that case was not contested by the proprietor, Mrs. Pushpa Berry, of M/s. Shri Mahila Griha Udyog Lajjat Papad and in that case the Counsel of Mrs. Pushpa Berry/appellant had comfortably agreed to make compliance under the provisions of the Act and the Supreme Court passed order relying upon the consent of the petitioner/establishment. Hence, the ratio of that case has no binding effect upon any other case. The appellant establishment cannot be brought under the purview of the Act in the absence of any scheduled head for coverage of such establishment. Impugned order suffers from infirmity and quashed. Appeal is allowed.
M/s. Shri Mahila Griha Udyog Lijjat Papad, Bhopal vs. Asstt. P.F. Commissioner, SRO, EPFO, Bhopal
ATA No.617(8)/2011 decided on 2.3.2012
The grievance of the appellant in the appeal is that the order dated 25.06.2010 passed by the EPF Authority under section 7A of the Act that the employer is liable to pay contributions under the Act on the wages as fixed under the Minimum Wages Act and not the actual wages paid to the workmen is illegal.
The Appellate Tribunal observed that the contribution under the Act is to be paid upon the ‘basic wages’ as defined under the Act and not upon the wages fixed under the Minimum Wages Act as also held by the Punjab & Haryana High Court in the case of APFC Gurgaon vs. M/s. G4S Security Services (I) Ltd., 2011 LLR 316. Hence, the impugned order of the EPF Authority is set aside and appeal allowed.
M/s. Black Panther Security Force vs APFC, Nagpur
ATA No.458(9)/2010 decided on 31.1.2012
The following is a reproduced version of the order issued in respect of declaration of Rate of Interest for EPF for the year 2011-12
No.Invest.I/3(2)/133/11-12/ROI/51350 Date : 14.3.2012
All Regional Provident Fund Commissioners
Regional Offices/Sub-Regional Offices
Subject : Declaration of Rate of Interest for the Employees Provident Fund Members Account for the Year 2011-12 – regarding.
It is to inform that Ministry of Labour and Employment, Govt. of India, vide its letter no. R-11018/1/2010.SS-II dated 14.3.2012 has conveyed the approval of the Central Government under para 60(1) of Employees’ Provident Fund Scheme, 1952 to credit interest @ 8.25% for the year 2011-12 to the account of each member of the Scheme.
You are, accordingly, requested to issue necessary instructions to all concerned for crediting the interest to the members’ accounts.
Financial Advisor and Chief Accounts Officer
In the appeal against the order of the EPF Authority under section 7A of the Act the appellant have stated that directing the appellant to deposit the dues is illegal as the EPF Authority has assessed the dues considering the allowances as ‘basic wages’.
The EPF Appellate Tribunal observed that the provident fund contribution is to be calculated on the basic wages and not upon the wages fixed under the Minimum Wages Act as already settled by the Punjab & Haryana High Court in the case of APFC Gurgaon vs. M/s. G4S Security Services (I) Ltd., 2011 LLR 316. Fixation of wage structure is within the domain of the employer. Wages can be split into allowances. Hence, order of the EPF Authority cannot sustain and appeal is allowed.
COVERING APPRENTICES UNDER THE EPF ACT – LIABLE TO BE SET ASIDE
The grievance of the appellant in the appeal before the Employees’ Provident Fund Appellate Tribunal is that the order dated 26.05.2009 passed by the EPF Authority treating the Apprentices as regular employees is illegal.
The Appellate Tribunal has referred to section 2(f) of the Act and observed that apprentices engaged under the Apprentices Act or under the Standing Orders are excluded from the purview of definition of ‘employee’ under the Act and even the Investigating Officer of the department had not recorded any evidence to establish that the apprentices were working as regular workers. Hence, order of the EPF Authority is set aside and appeal allowed.
M/s. Ambika Cotton Mills Ltd. vs. RPFC, Madurai,
ATA Nos.514, 515 and 516(13)/2009 decided on 5.1.2012
COVERAGE OF CHINESE WORKERS WITHOUT ASCERTAINING THEIR SALARIES – TO BE QUASHED
By filing the appeal, the appellant has questioned the validity of the order dated 29.09.2009, passed by the EPF Authority under section 7A of the Act that the amount paid to the technicians working in India and drawing salary in China in Chinese currency would attract EPF contributions.
The EPF Appellate Tribunal observed that the EPF Authority has not ascertained the actual salary/wages of these workers which is an essential requirement before enrolling an international worker a member of the EPF Scheme. The employees drawing salary/wages exceeding Rs.6,500 per month are not liable to be covered under the EPF Scheme. Hence, order of the EPF Authority suffers from serious infirmities and liable to be quashed. The appeal is allowed.
M/s. Wardha Power Company Ltd. vs. APFC, Nagpur,
ATA No.692(9)/2009 decided on 2.2.2012
DEMANDING CONTRIBUTIONS ON AMOUNT ACCRUING OUT OF SETTLEMENT – NOT PROPER
The appellant filed an appeal before the Employees’ Provident Fund Appellate Tribunal, against the order dated 14.2.2007, passed by the EPF Authority, putting forth its grievance that the order, treating the sum paid to the employees as per settlement approved by the High Court, as basic wages for the purpose of EPF contributions, is illegal.
The EPF Appellate Tribunal observed that the compromise arrived at between the parties, has approval of the Hon’ble High Court of Bombay. The calculation does not indicate how much sums paid denote the wages liable for EPF contributions. Therefore, there is no scope to reassess the validity of the agreed terms of settlement. Impugned order suffers from serious infirmity and is quashed. Appeal is allowed.
M/s. Tuli Hotel vs. APFC, Nagpur,
ATA No.230(9)/2007 decided on 18.1.2012
COMPENSATION TO AN EMPLOYEE NOT FOR DUTY PERFORMED – NOT TO ATTRACT EPF CONTRIBUTIONS
The grievance of the appellant in the appeal is that the order dated 15.06.2011 passed by the EPF Authority under section 7A of the Act stating that the amount paid towards compensation to an ex-employee for not performing duty would attract EPF contributions is illegal.
The EPF Appellate Tribunal observed that compensation was paid for keeping the employee away from duty, there is no document to show that the employee was continued in service without interruption. The amount paid is not the payment of wages for duties performed. Therefore, the amount of damages or the compensation awarded under a court settlement would not constitute ‘basic wages’ as envisaged by the Act and would not attract EPF liability. Hence, order of the EPF Authority is set aside and appeal allowed.
M/s. Binny Engineering Ltd. vs APFC, Tambaram, Chennai,
ATA No.605(13)/2011 decided on 23.02.2012
Latest on EPF
Senior officials of Employees’ Provident Fund Organisation (EPFO) say the EPFO will begin the process on April 1 when the entire compliance operation will be on line. That will eliminate the need for any EPFO officer to personally inspect company records. In the new system, the EPFO will ask companies to voluntarily disclose all information required to comply with the Employees’ Provident Funds & Miscellaneous Provisions Act. Based on the information, the EPFO will devise parameters to discover defaulters. The parameters will change each year to avoid companies being compliant with only certain parameters. Last July, the Central Bureau of Investigation registered cases against nine senior officials of the EPFO for causing a loss to the exchequer amounting to Rs.169 crore. Most defaulting companies usually understated the number of employees to bring down EPFO liability. In view of the above, the visits from the EPFO office to your Company may be a thing of past.