MONEY PAID FOR NO DUTY – NO LIABILITY OF PF
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