PROVIDENT FUND UPDATE

PF Defaults may now invite arrests – EPFO Nagpur Employees’ Provident Fund Organisation’s (EPFO) office in Nagpur has adopted a stricter stance against defaulting employers by resorting to the last option of issuing arrest warrants against many of them. Last month, the office issued as many as 12 warrants that enable the police to arrest persons and produce them before EPFO’s recovery officer. The officer can award them upto six months’ simple imprisonment. The action at Nagpur office is considered one of the biggest so far. Though EPFO has powers to make arrests, such orders are usually not issued. More such actions are likely as now there is a special focus on recovery, said a source. The biggest drive so far remains the one taken in Orissa in 2002, when 21 arrest warrants were issued in six months with each defaulter getting a six month prison sentence, said the source. In Nagpur there have been no jail terms so far. This is because the recovery officer also has the powers to let off the person on payment of the dues or on an undertaking to pay. All 12 warrants are for employers in Vidarbha though the Nagpur office also covers Marathwada. The warrants continue to remain valid in many cases. The process of arresting is slower than in a criminal case as the police can execute warrant according to its own priority. In December EPFO arrested a director of M/s. Navdurga Bamboo Craft Private Ltd., Chamorshi Tehsil, in Gadchiroli District. The firm had defaulted in PF contribution to the tune of Rs.5.50 lakh from 2005 to 2011. He was later freed on depositing Rs.50,000 and furnishing a personal bond to deposit rest of the amount. Arrests come after all the methods of recovery are exhausted. These include attachment of bank accounts and sale of assets. Even the courts advise using this power sparingly, said another senior official in the EPFO. Since last two years, EPFO has shifted to inspector raj, doing away with the computer-based system of tracking defaults. The earlier system used to highlight names of establishments whose contributions came below the normal level. Then notices were served. However, this was not considered the right method for detection. Sources said it often led to false alarms as the contributions fell due to valid reasons like reduction in manpower or delay in crediting the amount by banks. The EPFO has now reverted to field inspection system under which officer gather intelligence about defaults. Most defaults relate to contractual employees or those outsourced, said sources. Times of India

Advertisements

About labour law reporter

monthly magazine on labour laws in India

Posted on January 24, 2012, in News and views and tagged . Bookmark the permalink. Leave a comment.

Share your thoughts

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: