Chapter: 7 Employees Provident Fund any Miscellaneous Provisions Act, 1952

Employees Provident Fund any Miscellaneous Provisions Act, 1952

This is an Act to provide for the institution of Provident Funds (Pension Fund) and Deposit Linked Insurance Fund for employees in factories and other establishments.
The provisions are applicable to every establishment engaging 20 or more persons, the Act shall continue to govern any establishment though the number of persons may fall from 20.
This Act is a beneficient measure enacted for the purpose of institution of Provident Fund for employees, the provisions has e been made for the better future for the industrial workers, on their retirement and for the benefit of their dependents in case of death while in employment.
The Act is a beneficient piece of social welfare legislation aimed at promoting and securing the well being of the employees and the Court will not adopt a narrow interpretation which will have the effect of defeating the every object and purpose of the Act -1986 LIC 103 (S.C.)
Since the Act does not make any distinction between savages and salary it applies not merely to wage earners but also to salaried serf ants - AIR 1964 S.C. 980. Basic wages under this Act means all emoluments which are earned by an employee while on duty or in accordance w ith the terms of the contract of employment and which are paid or payable in case to him but does not include - cash value of food concession, any dearness allowance, HRA, OT. Bonus commission or any similar allowance payable to the employee or any if presents given by employer.
This definition of employee is completely different from that of a worker under the I.D. Act or Factories Act. The definition of employee brings in contract labour within the scope - AIR 1965 AP 200.
However, casual labour engaged by or through a contractor falls outside the scope of the definition - Nezeena Traders Ltd. V/s RPFC 1966 I LLJ 334.
The Act shall apply to all establishments consisting of different departments or its branches whether they are in the same place or different places unless this establishment has applied for exemption under section of the Act.
The employer shall pay contribution to the fund 81/3 of the Basic Wages, (D.A. and R.A.) and the employees contribution shall be equal to the contribution of the employer.
R.A. i.e. Retaining Allowance means an allowance payable for the time being to an employee of any factory or establishment during any period in which the establishment is not working for retaining his services.
Under Section 6 - A of the Act, the Central Government by its notification has framed a scheme called the Employees Pension Scheme for the purpose of providing superannuation pension, retiring pension or permanent total disablement pension to the employees of the establishment or class of establishments and widow or widowers pension, children pension or orphan pension payable to the beneficiaries. Under the Pension Scheme, the sums of employers' contribution not exceeding 81/3% of basic wages, D.A. and R.A., sums payable by the employers of exempted establishments, net assets of Employees Family Pensions Fund, any other sums after due appropriation of Parliament.
On the establishment of Pension Fund, the Family Pension Scheme shall cease to operate and all the assets of the ceased scheme shall be transferred to the Pension Fund.
Furthermore, the Act provides for Employees Deposit Linked Insurance Scheme for the purpose of Providing Life Insurance benefits to the employers. soon as this scheme is framed, the employer shall from time to time pay in respect of every employee an amount not being more than 1% of the aggregate of the basic wages, D.A. and R.A.
The Central Provident Fund Commissioner, or Additional Central Provident Fund Commissioner or Deputy Provident Fund Commissioner, or Regional Provident Fund Commissioner may by its order in case of whether the Act is applicable to any establishment decide this dispute and determine the amount due from any employer under the provisions of the Act, Scheme, Pension Scheme or Insurance Scheme.
The Officer conducting this enquiry may have the powers or the powers vested in the Court under the Code of Civil Procedure 1908 in respect of trying the suit namely, enforcing the attendance of any person or examining him on oath, requiring the discovery and production of documents, receiving evidence on affidavits, issuing commission for the examination of witnesses. The Commissioner should not necessarily pass any orders unless a reasonable opportunity is given to the employer to represent his case. Where the employer, employee or any other person is required to attend the inquiry fails to attend the enquiry without valid reasons or fails to produce documents or file any report or return in order to determine the amount due from the employer and where the order has been passed against an employee exparte he can within a period of 3 months from the date of communication apply to the office to set aside the said order provided, he is satisfied that there was sufficient cause for non appearance of the employer and that the show cause notice was not duly served on time;
1)  Glamour V/s RPFC 1975 LIC 954
2)   The News Paper Publishing Pvt. Ltd. V/s RPFC 1972 LIC 1392
3)  Swamy V/s RPFC 1987 (I) LLN 94
4)   Royal Talkies V/s ESIC AIR 1978 S.C. 1478
An employer aggrieved by an Order made under Sub-section 1 of Sec. 7A but where no appeal has been preferred and there is a discovery of new and important matter or evidence and which was not within the knowledge or could not be produced at that time when order was made and there is an apparent error on the fact of the record, the order can be reviewed, by the officer on his own mention and may grant the review by giving previous notice to all the parties to appear and be heard to support the order. The Commissioner is liable to reopen a matter within a period of 5 years from the date of communication of the order to re-determine the amount due from the employer if he has reasons to believe that by any reason there has been failure or omission on the part of the employer to make any document or report available or to disclose fully and truly all material facts necessary for determination of the dispute. No order for redetermining shall be passed unless the employer is given reasonable opportunity to represent his case. An employer is liable to pay simple interest at the rate of 12% p.a. or any amount due under this Act.
Under Sec. 7B of the Act any person aggrieved by the order passed under sec. 7A by the Regional Provident Fund Commissioner in which no appeal has been made can on the discovery of new evidence or facts which were not within his knowledge at the time of passing the order and on account of which the mistake was made can make a order for review before the same Commissioner who had passed the order.
Provided that the officer who has passed that order find the said application in order and if he comes to the conclusion that there is no sufficient ground for review he may reject the said application.
Where the officer comes to the conclusion that the said order needs to be reviewed then the said application should be heard by giving the parties an opportunity of being heard. Further proof of the said new evidence of having been discovered should be produced before the commissioner. This order has no appeal.
Where an order determining the amount due from the employer under section 7A or 7B has been passed, and the officer who has passed the said order has reason to believe that by reason of the omission or failure on the part of the employer to make any document or report available or to disclose fully or truly all materials facts necessary for determining the correct amount for any period has escaped his notice or, has in consequence of information in his possession reason to believe that any amount to be determined under section 7A or 7B has escaped from his determination for any period, he may within a period of  years from the date of communication of the order may re-open the said case for the redetermination of the amount. The employer must be given an opportunity of being heard.
Under Sec. 7 (O) of the Act no appeal shall be entertained unless the employer has deposited an amount of 75% of the amount of claim determined by the officer under Sec. 7A of the Act.
If the employer fails to pay the amount determined by the officer then he is liable to pay 12% interest on the amount per annum till the actual payment is made.
Any amount due from the employer in relation to which any scheme applies in respect of contributions payable to the fund damages are recoverable under section 14 B.
Any amount due from the employer in relation to the exempted establishment in respect of damages recoverable under 14 B may be recovered as arrears.
The amount of contribution as well as the employees contribution in pursuance of any scheme and any charges for meeting the cost of administering the fund paid or payable by an employer in respect of an employee by or through a contractor either by deduction from any amount payable to the contractor under a contract or a contractor from whom the amounts mentioned may be recovered in respect of any employee employed by or through him may recover from such employee the employees contribution by deduction of basic wages, dearness allowance and retaining allowance payable to the employee. Notwithstanding any contract to the contrary, no contractor shall be entitled to deduct the employers contribution or the charges from the basic wages, dearness allowances or the retaining allowances.
Where any amount is in arrears the officer may issue and order to the Recovery officer under his signature and for the amount specified to recover t he said amount from the establishment.