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EMPLOYEES’ PROVIDENT FUND ORGANISATION

Bhavishya Nidhi Bhawan, 14-Bhikaji Cama Place, New Delhi-110 066

No.Invest.I/3(2)/133/11-12/ROI/51350                                                                                                    Date : 14.3.2012

All Regional Provident Fund Commissioners
Officers-in-Charge
Regional Offices/Sub-Regional Offices

Subject : Declaration of Rate of Interest for the Employees Provident Fund Members Account for the Year 2011-12 - regarding.

Sir,

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.

Yours faithfully,
(RAJESH BANSAL)
Financial Advisor and Chief Accounts Officer

Copy to :
1. PS to Central Provident Fund Commissioner
2. All CBT Members
3. Director, NATRSS
4. All Zonal Dy Directors (Vig.)/All Zonal Audit Officers
5. Addl. Central Provident Fund Commissioner (IS)
6. RPFC (Exemption), HQrs-for information and necessary action
7. Officers-in-charge. ZTI, Kolkata, Ujjain, Faridabad & Chennai
8. All Officers & Section in Headquarters
9. All Zonal Addl. CPFCs
10. Central Organisations of Employers’ CCI, CII, ASSOCHAM, FICCI & PHD
11. Central Organisations of Employees-All Central Trade Unions
12. Director (SS-II) Ministry of Labour & Employment
13. Director (Budget), Ministry of Finance, D/o Economic Affairs, Budget Division, New Delhi
14.RPFC-II (In-charge), National Data Centre, for uploading the orders in the EPFO website.

(MANORANJAN KUMAR)
REGIONAL P.F. COMMISSIONER-II (INVEST)

From EPF Appellate Tribunal

MINIMUM WAGES CAN BE SPLIT INTO ALLOWANCES

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.

M/s. SSM Fine Yarns vs. RPFC, Madurai
ATA No.734(13) 2010 decided on 7.2.2012

EMPLOYER - NOT PROVIDENT FUND AUTHORITY CAN FIX WAGES FOR CONTRIBUTIONS

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

ROLLING OF PAPAD NOT COVERABLE UNDER THE PROVIDENT FUND ACT

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

CLUBBING 4 ESTABLISHMENTS FOR COVERAGE - WHEN NOT PROPER

By filing the appeal, the appellant has questioned the validity of the order, passed by the EPF Authority under section 2A of the Act stating that clubbing of 4 establishments in the absence of elements of inter-dependability, functional and financial integrality between the establishment is not justified.

The Appellate Tribunal observed that Employees’ Provident Funds & Miscellaneous Provisions Act applies upon an establishment employing 20 or more than 20 employees even for one day. However, an ‘establishment’ does not mean that it should be one only since 2 or more establishments can be clubbed together provided there is inter-dependability upon each other, common supervisory control, jeographical proximity, functional and financial integrality. In this case, there were 4 establishments known as M/s. Pavizham Jewellers, M/s. Pavizham Jewellers India Pvt. Ltd., M/s. Pavizham Galaxy India Pvt. Ltd. and M/s. Pavizham Jewel City. Enquiry Officer concluded that Managing Directors of all the 4 units are family members, engaged in same business having financial integrality and clubbed them for determination of PF dues. There is no common financial, managerial, functional and supervisory control. Each unit is independent having independent set of employees. Merely extending financial facilities to any other establishments or one person being Managing Director of more than one units itself may not be sufficient to establish that one is the branch of another. There are no findings of the Enquiry Officer that four establishments are inter-dependant on each other or there exists functional integrality between these units or there is a possibility that if one establishment is closed, others would not survive. Hence, order of the EPF authority and that of the EPF Appellate Tribunal suffers from serious infirmities and liable to be quashed. The appeal is allowed.

M/s. Pavizham Jewellers vs. Assistant Provident Fund Commissioner, Coimbatore
ATA No.624(13)/2011 decided on 8.2.2012

APPRENTICES UNDER STANDING ORDERS - NOT TO BE COVERED BY PROVIDENT FUND ACT

M/s. Sri Shanmugavel Mills (P) Ltd. filed an appeal before the Employees’ Provident Fund Appellate Tribunal putting forth its grievance that the EPF Authority has determined the PF dues treating the apprentices engaged well within the scope of the Certified Standing Orders as regular workers which is illegal.

The EPF Appellate Tribunal observed that the Investigating Officer has not recorded any evidence to establish the employment of the apprentices to be as of regular workers. As per Certified Standing Orders, the apprentices are to be engaged for a specified period of three years and on completion, they are to be issued certificates. Apprentices were paid stipend. No evidence is there to establish that apprentices were engaged in actual operations of the appellant. The apprentices so engaged have no right to regular appointment. They are trainees engaged for a limited period. Hence, impugned order is not sustainable and set aside.

M/s. Sri Shanmugavel Mills (P) Ltd. vs. RPFC, Madurai
ATA No.708(13) 2011 decided on 3.2.2012

DAMAGES FOR LATE DEPOSIT WHEN LEVIED IMPROPERLY - TO BE DECIDED AGAIN

The appellant filed an appeal before the Employees’ Provident Fund Appellate Tribunal against the order dated 9.7.2008, passed by the EPF Authority, putting forth its grievance that while levying damages, the EPF Authority has not considered the reasons given by the appellant for late deposit and imposition of damages to the uppermost limit is illegal.

The Tribunal observed that as per section 14B and Regulation 32A of the Act, the adjudicating authority is not bound to act mechanically in applying the uppermost limit of the damages. Impugned order indicates that the Enquiry Officer has not followed the law in its correct perspective. There is no finding that the appellant has willfully or deliberately withheld the PF contribution. Hence, the impugned order is set aside and the matter is remanded back to the EPF Authority to initiate fresh proceedings and decide the matter to meet the ends of justice.

M/s. V. T. Dyers & Screen Printers vs. RPFC, Chennai
ATA No.648(13)/2008 decided on 14.2.2012


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