EMPLOYEES' PROVIDENT FUND ACT, 1952
EMPLOYEES'
PROVIDENT FUND ACT, 1952
Q.
1. Write a note on the Employee's Provident Fund Scheme framed under the
Employees Provident Fund Act, 1952
Ans.
Employee's Provident Fund Scheme.--Section 5-A empowers
the Central Government to frame the Employees' Provident Fund Scheme by
notification in the Official Gazette. Such constituted scheme may provide any
of the provisions of the scheme operative prospectively or retrospectively on
specified date. Contribution to the fund shall be made for all those workmen
who have worked atleast 240 days under the employer concerned. The Government
will notify and specify the application of the scheme for employees, or for any
class of employees, or factories or class of factories. After framing of the
scheme a fund shall be established in accordance with the provisions of the
scheme and the Act. The fund shall vest in and be administered by the Central
Board constituted under Section 5-A. Provision of this section is not
unconstitutional-Hindustan Electric Co. Ltd. v. R.P.F.C. Punjab, AIR 1954 Punj.
27.
Section 6 lays down that both employer and employees
shall contribute towards the Fund equally. At first instance, the employer will
contribute and deposit his share as well as these of employees share of contribution.
Contribution payable by the employer shall be 6-1/2% of the basic wages,
dearness allowance and retaining allowance (if any) for the time payable to
each of employees, whether employed by him directly or through a contractor. If
employee so desires he may contribute an amount not exceeding 8 1/3% of his
basic wages, D.A. and retaining allowance (if any). An employee may contribute
upto 10% but then in that case, the employer shall not be bound to pay more
than 8 1/3% to equal the employee's contribution. But the employer shall in no
way can deduct his own share of contribution from the wages of the employees,
if he does so, he shall be punished. If the contribution involves a fraction of
a rupee, this scheme may provide for the rounding off of such fraction to the
full, half or quarter rupee
For the administration of the Fund under this
scheme, there shall be a body corporate of Board of Trustees constituted by the
Central Government named as Central Board or State Boards for the states. The
amount deposited or provident fund of any member, cannot be assigned or
otherwise disposed of nor can such amount be attached by the order of any Court
for the payment of debts. Section 10 (2) lays down that if the money is
deposited of its member, or amount deposited in Provident Fund of any exempted
member, and is payable to his nominee under the scheme or the rules of the
provident fund as the case may be, then the amount shall be paid to his nominee
after deducting the authorized amount. Under the scheme or rules It will be
free from any liability or debt which was on the nominee or on himself before
the death of the exempted workman.
Central Government has decided to enhance the rate
of interest on deposited Provident Fund from 8.5% to 9.5% i.e., increase of one
percent.
Q. 2. Describe in brief the provisions
relating to payment into and administration of the funds established under the
Employees' Family Pension Scheme and Employees' Deposit Linked Insurance Scheme.
Ans.
Employees' Family Pension Scheme.-According to Section
6A, the Central Government may, frame a scheme to be called the Employee's
Family Pension Scheme for the purpose of providing family pension and life
insurance benefits to the employees of any establishment or class of
establishments to which this Act applies.
There shall be established, as soon as may be, after
the framing of the family pension scheme, a family pension fund into which
shall be paid from time to time in respect of every such employee
(a) such
portion, not exceeding one fourth, of the amount payable to Provident Fund as
contribution by the employer and employee as may be specified in the Family
Pension Scheme,
(b) such
sums, as are payable by the employer of an exempted establishment under Section
17 (6), and
(c) such sums being not less than the amount payable
in pursuance of clause (a) out of the employer's contribution as Central
Government may specify. The Family Pension Fund shall vest in and be
administered by the Central Board.
The Family Pension Scheme may provide that any of
its provisions shall take effect either prospectively or retrospectively on
such date as may be specified in this behalf in that scheme.
The Supreme Court held in Mafat Lal Group Staff
Association v. Reg Commr. P.F., (1994) 4 SCC 58, that the Act is not
unconstitutional, although it makes distinction between employees already
employed and those to be employed on or after the date of commencement of the
scheme. Any employee may stay out. Provision of the Act, was held valid. In the
Family Pension Scheme, the provision may be made in relation to all of any of
the matters mentioned in the Third Schedule of the Act.
Word
'Family'.-Family does not include mother where deceased
employee would be married. Hence entire pension would be payable to widow. [Nitu
v. Sheela Rani, AIR 2016 SC 4352].
Special
Grant by Central Government. The Central Government shall,
after due appropriation made by Parliament by law in this behalf, pay such
further sums as may be determined by it into the Family Pension Fund to meet
all the expenses in connection with the administration of the Family Pension
Scheme other than the expenses towards the cost of any benefit provided by or
under the said scheme.
Employees
Deposit Linked Insurance Scheme.-According to Section
6(c) the Central Government may frame a scheme to be called the Employee's
Deposit Linked Insurance Scheme for the purpose of providing the insurance
benefits to the employees of any establishment establishments to which this Act
applies. class of There shall be established, as soon as may be, after the
framing of the Insurance Scheme, Deposit Linked Insurance Fund into which shall
be paid by the employer from time to time in respect of every such employees in
relation to whom he is the employer. Such amount, not being more than one
percent of the aggregate of the basic wages, dearness allowance and allowance
any) for the time being payable in relation to such employee as the Central
Government may by notification in the Official Gazette specify.
It may be noted that for the purpose of this
sub-section on the expression, 'dearness allowance' and 'retaining allowance'
has the same meaning as in Section 6,
The Central Government shall after the appropriation
made by the Parliament by law, contribution relating to the Insurance Fund in
relation to each employee of any establishment to which the Act applies, an
amount representing one half of the contribution which an employer is required
by sub-section (2) to make.
The employee shall pay into the Insurance Fund such
further sum of money not exceeding one fourth of the contribution which he is
required to make under sub-section (2) as the Central Government may from time
to time, determine to meet all the expenses in connection with, the
administration of the Insurance Scheme other than the expenses towards the cost
of any benefits provided by or under that scheme. The Insurance Fund shall vest
in the Central Board and be administered by it in such manner as maybe
specified in the Insurance Scheme. The Insurance Scheme may provide for a rule
or any of the matter specified in Schedule IV. The Insurance Scheme may provide
that any of its provisions shall take effect either prospectively or
retrospectively on such date as maybe specified in this behalf in that scheme.
Section 7 empowers the Central Government to amend,
vary, either prospectively or retrospectively, the scheme, the family pension
scheme, or the Insurance Scheme as the case maybe, by making notification in
the Official Gazette. All notifications made in this respect shall be laid
before the Parliament, as soon as maybe, after they are issued.
Determination
of money due from employers.-Under Section 7A the Central
Provident Fund Commissioner, the deputy P.F. Commissioner or, Regional P.F.
Commissioner may by order determine the amount due from any employer under any
provision of this Act. Scheme or the Family Pension Scheme, or the Insurance
Scheme, as the case may be, and for this purpose may conduct such inquiry as he
may deem necessary. The officer conducting the inquiry shall for the purpose of
such inquiry, have the same powers as are vested in a Civil Court for trying a
suit in respect of the following matters
(a) enforcing the attendance of any person for
examining him on oath,
(b) requiring the discovery and production of
documents,
(c) receiving evidence on affidavit,
(d) issuing commission for the examination of
witnesses,
All such inquiry shall be deemed to be judicial
proceeding within the meaning of Sections 193 and 228 for the purpose of
Section 196 of the Indian Penal Code.
No order determining the amount due from any
employer shall be made unless the employer is given a reasonable opportunity of
representing his case. An order made under this section shall be final and
shall not be questioned in any Court of law( It was held in District Exhibitors
Association and others v. Union of India, AIR 1991 S.C. 1381 that the employer
cannot be saddled with liability to pay for the retrospective period, because
he cannot deduct the contribution from the future wages of the employees). It was held in Wire Netting Stores. R.P.F.
Commr and others, 38 FLR 277, that the Act does not impose any unreasonable
restrictions on the right of the employer, as the Commissioner has no
discretion to pick and choose any employer. Mode of recovery is also provided
by the Act, under Section 8.
References:-
https://www.casemine.com/act/in/5a979db74a93263ca60b72ed
https://labour.gov.in/sites/default/files/TheEmployeesAct1952_1.pdf
https://www.ilo.org/dyn/natlex/docs/ELECTRONIC/51949/75277/F-2073748793/IND51949.pdf
https://labour.gov.in/sites/default/files/375_2019_LS_Eng_0.pdf
https://labour.gov.in/sites/default/files/SS_Code_Gazette.pdf
https://indiacode.nic.in/bitstream/123456789/5437/1/employees_provident_fund_act.pdf
https://www.lawyersclubindia.com/section/-employees-family-pension-scheme--6625.asp
https://indiankanoon.org/doc/778220/
https://www.lawfinderlive.com/bts4/LABOUR.htm
https://authorzilla.com/oeYAK/labour-laws-department-of-higher-education.html
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