Transcript EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS …

EMPLOYEES’ PROVIDENT
FUNDS AND
MISCELLANEOUS PROVISIONS
ACT, 1952
Presented by :
Foreword
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The employees provident funds and miscellaneous
act,1952:
is a piece of social legislation
a beneficent measure,
enacted for the purpose of institution of provident
fund for employees in factories and other
establishments.
Provident fund is an effective old-age and
survivorship benefit.
HISTORICAL BACKGROUND
WITH THE INDUSTRIAL GROWTH
• Some big employers introduced schemes of PF for
welfare of workers.
• But these were private and voluntary
• Workers of small employers remained deprived
• Therefore grouse of deprived workers gained
momentum.
•
Contd...
• In 1946, Labour Investigation committee was formed
to investigate the functioning of the above
mentioned private and voluntary PF schemes.
• On 15th November 1951, the govt of India
promulgated the Employees’ Provident Funds
Ordinance which was subsequently replaced by the
Employees’ Provident Funds and Act passed on 4th
March 1952.
•
Object of the act
The object of the act is
• to provide substantial security
• timely monetary assistance to
EMPLOYEES
AND THEIR
FAMIILY
MEMBERS
This act extends to the whole of
INDIA except the state of JAMMU
AND KASHMIR
Where does this Act apply?
This act applies to every establishment, which is
• a factory, and
• to any other establishment employing 20 or more
persons which the Central govt may by notification in
the Official Gazette, specify in this behalf
Contd…
But the Central Government is empowered to apply the
provisions of this act to any establishment
• Employing less than 20 persons
• By giving a notification at least 2 months before it
intends to do so.
Establishment not covered through the act can be
covered through the act
• On an application made to the CPF commissioner
• Stating that the employer and the majority of
employees agree to the applicability of the act to the
establishment
Important definitions under this Act
Basic wages : It means all emoluments earned by an
employee while on duty or on leave with wages in
accordance with the terms of employment and which
are paid or payable in cash to him, but does not
include;
(i) the cash value of the food concession
(ii) allowances payable to him
(iii) any presents made by the employer
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Employee : It means any person who
is employed for wages
in connection with the work of an establishment
who gets wages directly or indirectly from the
employer
includes any person employed by or through a
contractor
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Employer : In relation to a factory establishment, as
per section 2(e) of the act, the employer means
the owner or occupier,
including his agent ,
the legal representative of a deceased owner or occupier
manager of the factory
For other establishments,
the person who has the ultimate control over the
affairs of the establishment.
TRUE or FALSE
Q. The retired employees from railways are excluded
employees under EPF scheme
Ans. False
Q. Schools are not liable for payment of contributions
of the employees such as drivers, conductors,
engaged by transport contractor.
Ans. True
TRUE or FALSE
Q. Partner of a firm having a status of beneficiary
will not be an employee either to be covered
or counted under the Act.
Ans. True
Power to apply act to establishments
with common PF
When immediately before this act becomes
applicable to an establishment there is in
existence a provident fund which is common to
the employees employed in that establishment
and employees in any other establishment, the
central govt may, notification in the Official
Gazette, direct that the provisions shall also apply
to such other establishments
What does this Act include?
This Act includes :
(i) Employees’ Provident Fund Scheme
(ii) Employees’ Pension scheme
(iii) Employees’ Deposit-linked Insurance
Scheme.
EMPLOYEES’ PROVIDENT FUND
SCHEMES
According to Section 5 of this Act the Central Govt
may, by notification in the Official Gazette, frame a
Scheme to be called the Employees’ Provident Fund
Scheme for the establishment of provident funds
under this Act
EMPLOYEES’ PENSION SCHEME
Section 6.A provides that the Central Government may
frame an Employees’ Pension Scheme for:
• Superannuation pension, retiring pension or
permanent total disablement pension to the
employees covered under the act.
• Widow or widower's pension, children pension or
orphan pension payable to the beneficiaries of such
employees.
Employees’ Deposit-linked Insurance
Scheme
The Central Government under Section 6-C of the Act
may formulate an Employees’ Deposit-linked
Insurance scheme for providing:
• Life insurance benefits to the employees of any
establishment or class of establishments to which
the Act applies.
CENTRAL BOARD
Section 5.A provides that the Central Government
may by notification in the Official Gazette constitute
a Central Board for all such territories as to where
the Act applies.
The Board shall constitute of
• A Chairman and a Vice-Chairman;
• The Central Provident Fund Commissioner who
shall be an ex-officio member of the Board;
• Not more than fifteen persons appointed by the
Central Government from amongst its officials; and
• Not more than fifteen persons representing the
Government of the States;
• Ten persons representing employers of the
establishments to which the scheme applies;
• Ten persons representing employees in the
establishments to which the scheme applies.
NOTE: ALL APPOINTMENTS TO BE MADE BY THE
CENTRAL GOVERNMENT.
WHAT ARE THE DUTIES OF THE
CENTRAL BOARD ?
The Board is expected to
• administer the funds vested in it by means of
contributions,
• maintain proper accounts of its income and
expenditure in such form and in such manner as
prescribed by the Central Government, and
•
Contd...
• also perform such other functions as it may be
required to perform by or under any provisions of
the Employees Provident Fund Scheme and the
Insurance Scheme under the Act.
EXECUTIVE COMMITTEE
Section 5(AA) provides that the Central Government
may, by means of a Notification in the Official
Gazette, constitute an Executive Committee to assist
the Central Board in the performance of its
functions.
Such Executive Committee shall consist of:
• A Chairman appointed by the Central
Government from amongst the members of the
Central Board;
• Two persons appointed by the Central Government
from amongst its officials nominated into the Central
Board;
• Persons appointed by the Central Government from
amongst the State nominees in the Central Board;
and
Contd...
• Three persons representing the employers elected by
the Central Board from amongst the fifteen
representatives of employers in the Central Board;
• Three persons representing the employees elected
by the Central Board from amongst the fifteen
representative of the employees in the Central
Board; and
• The Central Provident Fund Commissioner as the exofficio member.
STATE BOARD
Section 5.B provides that the Central Government
may, after consultation with the Government of any
State, by means of a Notification in the Official
Gazette, create a State Board for such State. Such a
State Board shall exercise such powers and perform
such duties as the Central Government may assign to
it from time to time.
OFFICERS OF THE BOARD
The Central Govt shall appoint:
A Central Provident Fund Commissioner who is to serve
as the Chief Executive Officer of the Central Board and
shall be under the general control and superintendence
of the Board.
Contd...
The Central Govt may also appoint:
• A Financial Adviser and Chief Accounts Officer to assist
the Central Provident Fund Commissioner in the
discharge of his duties; and
• As many Additional Provident Fund Commissioners,
Regional Provident Fund Commissioners, Assistant
Provident Fund Commissioners, and such other
officers and employees as it may consider necessary.
CONTRIBUTIONS TO BE MADE INTO
THE PROVIDENT FUND
Each employer shall, in respect of an employee
employed by him either directly or through a
contractor
• pay ten percent of the basic wages, dearness
allowance and retaining allowance (only in cases
where retaining allowance is being paid) payable to
such employee.
Contd...
Each employee shall contribute to the Provident Fund
• an amount equalling the contribution made by the
employer,
• but shall be free to make a contribution over and
above the sum made by the employer, but in such a
case, there shall be no obligation on the employer to
match such excessive contribution made by the
employee
Contd...
However, the Central Government shall be free, after
making due inquiry, to issue a Gazette Notification
fixing the quantum of contribution of both employers
and employees at twelve percent in any
establishment or class of establishments.
DETERMINATION OF MONEY FROM
EMPLOYERS
Section 7.A provides that ANY Provident Fund
Commissioner may:
• In a case where a dispute arises regarding the
applicability of this Act to an establishment, decide
such dispute; and
• Determine the amount due from any employer under
any provision of this Act
Review of Orders passed under sub-section
1 of section 7(A)
Any person
• who is aggrieved by an order passed,
• but from which no appeal has been preferred under
the Act and
• who, from the discovery of new and important
matter of evidence, desires to have the order made
reviewed, may apply for a review of that order to
the officer who made the order.
EMPLOYEES’ PROVIDENT FUND
APPELLATE TRIBUNAL
• The Central Govt may constitute one or more
employees’ provident fund appellate tribunal which
shall have jurisdiction in respect of establishments
situated in such area as notified in notification
constituting the tribunal.
• A tribunal shall consist of only one person who will be
the presiding officer
Contd...
A person can not be the presiding officer of a
tribunal unless he is, or has been, or is
qualified to be,(i) a judge of a high court; or
(ii) a district judge
Staff of tribunal
The Central Govt shall determine
• Nature and categories of officers and other
employees
• Staff of tribunal shall discharge their functions under
the Presiding officer
How to recover due money from
employers?
If any money is due from the employer to any
schemes under this Act,
• It could be recovered by the Central Provident Fund
Commissioner or
• Such other officer as may be authorised by the
Provident Fund Commissioner,
• In the same manner as an arrear of land revenue, but
only after making a Gazette Notification to that
effect.
Appeals to Tribunal
Any person
• who is aggrieved by an order fixing the moneys due
from the employers,
• or an order either allowing or denying the review
contemplated,
• or an order determining the escaped amounts, can
prefer an appeal to the Appellate Tribunal
• the Tribunal may, after giving sufficient
opportunities to all those concerned, pass such
orders as it thinks fit, either confirming or altering
the order appealed against.
• It may also send the case back to the authority
which passed the order appealed against, with such
directions for disposing of the case, as it may think
fit, or even direct a fresh adjudication
True or False
Q. A person preferring an appeal to a tribunal under
this Act may either appear in person or take the
assistance of a legal practitioner to present his case
before the Tribunal.
Ans. True
Orders of Tribunal
• A Tribunal after giving the parties to present
their case may pass orders as it think fit or,
• Refer the case back to authority concerned
• A Tribunal may within five years from the date
of its order may amend its order with a view to
rectify its mistake.
Contd...
• A Tribunal shall send a copy of every order
passed to the parties to the appeal.
• Any order made by a Tribunal finally disposing
of an appeal shall not be questioned in any
court of law.
Interest payable by the employer
The employer shall be liable
• To pay simple interest at the rate of twelve per cent
per annum or as specified in the scheme
• On any amount due from him till the date of actual
payment
NOTE: The rate of interest specified in the scheme
shall not exceed the lending rate of interest charged
by any scheduled bank
Mode of recovery
Issue of certificate to the recovery
officer
Where any amount is in arrear the authorised officer
may issue
• A certificate specifying the amount and the recovery
officer and
• The recovery officer shall proceed to recover the
amount by :
Contd...
• Attachment and sale of the movable and
immovable property of the establishment or the
employer.
• Arrest of the employer and his detention in prison;
• Appointing a receiver for the management of the
property of the establishment or the employer as the
case may be.
Effect of Insolvency
If an employer from whom some money is due under
any scheme under the Act is declared insolvent or a
Company from similar sums is due is wound up:
• The amount due in either case would be deemed to
be included among the debts which are to be paid in
priority to all other debts
Can the employer reduce wages?
The Statute in unequivocal terms stipulate that no
employer can reduce, whether directly or indirectly,
the wages or any other benefits to which the
employees are entitled to, either by reason of his
liability for the payment of any contribution to the
Funds under the Act or due to any charges under the
Act or any scheme there under.
Inspectors and their powers
The act provides for the appointment of Inspectors as
deemed fit by the appropriate government by a
notification in the Official Gazette
Any Inspector for the purpose of enquiring:
• May ask an employer or contractor from whom any
amount is recoverable, to furnish information as he
may consider necessary.
• May enter and search concerned premises and also
ask to produce documents for examination at
reasonable time and with assistance as required.
Contd...
• Makes copies of, or take extracts from, any book,
register or other document maintained in relation to
the establishment and, where he has reason to
believe that any offence under this Act has been
committed by an employer, seize with such
assistance as he may think fit, such book, register or
other document or portions thereof as he may
consider relevant in respect of that offence;
• Exercise such other powers as the Schemes under
the Act may provide
Penalties under the Act
Any person who,
• for the purpose of avoiding any payment of money
due from him ,
• or for the purpose of enabling any other person so
liable to avoid such payment,
• is liable to be punished with imprisonment for a term
which may extend to one year or with fine of five
thousand rupee or with both
Contd...
Similarly, an employer who contravenes the provision
of the Act in relation to the payments to be made into
the Pension Scheme or makes default in payment of
inspection charges stipulated under the Act
• shall be punishable with imprisonment which may
extend to three years
Contd...
NOTE : Such punishment ,
• shall not be less than one year and a fine of ten
thousand rupees in case of default in payment of the
employees’ contribution which has been deducted
from his wage.
• And in all other cases, the punishment shall not be
less than imprisonment for a period of six months and
a fine of five thousand rupees.
However, the Court has been given adequate powers
to impose a lesser sentence, provided there are
sufficient reasons for so doing, which has been noted
in the judgement.
Contd...
An employer who contravenes the provisions of the
Act relating to the payments to be made into the
Employees’ Deposit Linked Insurance Scheme:
• shall be punishable with imprisonment for a term
which may extend to one year, but shall not be less
than six months,
• and shall also be liable for a fine which may extend to
five thousand rupees. (In this case also the court can
impose lesser sentence)
Contd...
Offences mentioned, when committed by a Company,
• Then every person in charge of the Company at the
time of the offence or who was responsible to the
Company for the conduct of the business of the
company shall be proceeded against, along with the
company and shall be punished accordingly.
• However, if the person so proceeded against is able
to prove that the offence was committed without
him having known about it, or that he took
reasonable care to prevent the commission of the
offence, then he shall not be proceeded against.
What happens in the case of repeating
offenders?
A person who has previously been convicted for any
of the offences above mentioned is found to have
committed the same offence again shall be
• subject for every such subsequent offence to
imprisonment for a term which may extend to five
years, but shall not be less than two years,
• and shall also be liable to a fine of twenty five
thousand rupee
Cognizance and trial
The Act provides that no court shall take cognizance
of any offence punishable under the Act,
• except on a report in writing of the facts constituting
such offence made with the previous sanction of the
Central Provident Fund Commissioner or such other
officer as may be authorised by the Central
Government.
• Section 14.AC further provides that no court inferior
to that of a Presidency Magistrate or a Magistrate of
the first class shall try any offence under this Act or
any scheme framed there under.
Industries Exempted
Section 16 provides that the Act shall not apply to the
following categories of establishments:
• Establishment registered under the Co-operative
Societies Act, 1912, or under any other law for the
time being in force in any State relating to co-operative
societies, employing less than fifty persons and
working without the aid of power, or
Contd...
• Any other establishment belonging to or under the
control of the Central Government or a State
Government and whose employees are entitled to
the benefit of Contributory provident fund or old age
pension in accordance with any scheme or rule
framed by the Central Government or the State
Government governing such benefits, or
• Any other establishment set up under any Central,
Provincial or State Act and whose employees are
entitled to the benefits of contributory provident
fund or old age pension in accordance with any
scheme or rule framed under that Act governing such
benefits
Power to exempt
The appropriate govt may with the concurrence of
the central board exempt certain establishments
from the Act provided
• the rates of contribution is less than specified in the
scheme, and
• The employees are enjoying benefits in the form of
provident fund, gratuity or pension, which separately
or jointly are on the whole not less favourable than
those specified in the scheme.
Transfer of Accounts
If an employees leaves his employment in an
establishment and joins any other establishment
then the amount of accumulations to the credit of
such employee in the Provident Fund shall be
transferred within such time as specified by the
Central Govt. to the credit of his account in the
Provident Fund of the establishment in which he is
re-employed, if the employee so desires and the
rules in relation to that PF permit that transfer.
QUESTIONS FOR
YOU!!
Is the Act applicable to a factory which is closed
down but is employing a few employees to look
after the assets of the establishment?
Ans. Where a factory is closed down for good and
only four security men are retained for
keeping a watch over the assets and
properties of the establishment, the Act
would not continue to be applicable to the
factory.
Are "home workers" in the beedi industry
entitled to the benefit of the Act?
Ans. The workers employed at their homes in the
manufacture of beedis are also entitled to
the benefit of the Act and the Schemes
framed thereunder.
Is a trainee an "employee" under the Act?
Ans. The provisions of Section 2(f)(ii) of the Act and
Para 2(f)(iv) of the Scheme framed under the
Act are to be kept in mind while considering if
a trainee is an employee or not. These
provisions show that a trainee who is an
apprentice engaged under the Apprentices
Act, 1961 or who is an apprentice according to
the certified standing orders applicable to the
establishment is excluded from the definition
of an employee under the Act.
Is a partner of a firm an employee under the Act?
Ans. For the purpose of the Employees Provident
Funds Act a partner of a partnership firm
cannot be said to be an employee of the
firm having regard to the provisions of the
Indian Partnership Act. A person cannot be
both an employer and employee.
Does the Act apply to a poly clinic?
Ans. A poly clinic is covered by the entry in respect of
"establishments of hospital" as well as the entry
in respect of "establishment of Medical
Practitioners and Specialists" and therefore the
Act applies to a poly clinic. The object (of the two
entries) is to bring all medical establishments
employing 20 or more persons under the purview
of the Act.
What does it mean when section 10(2) of the Act
says that the amount standing to the credit of a
member in the Fund at the time of his death and
payable to his nominee shall vest in the
nominee?
Ans. Vesting of the amount in the nominee is for limited
purpose of receiving the amount from the employer
and handing over the same to the heirs entitled
thereto. The nominee is merely authorized to receive
the amount for the benefit of heirs of the deceased.
Can a nominee of a deceased employee claim
an absolute right in respect of the amount of
provident fund of the deceased employer?
Ans. The nominee cannot claim an absolute right to the
amount excluding the right of the heirs. An heir of
the deceased employee can always initiate legal
proceedings against the nominee for claiming his
share in accordance with the law of succession
If any establishment has departments or
branches, are these departments or branches,
to be treated as separate establishments or
parts of the same establishments?
Ans. Where an establishment consists of different
departments or has branches, whether situate in the
same place or in different places, all such
departments or branches shall be treated as parts of
the same establishment. {Section 2(A)}
What happens to a private provident fund of an
establishment when that establishment is
covered under the statutory Provident Fund
Scheme?
Ans. On the application of the statutory Provident Fund
Scheme to an establishment, the accumulations in
the private provident fund in that establishment
standing to the credit of the employees who become
members of the statutory Provident Fund must be
transferred to the statutory Provident Fund. The
accumulations will be credited to the accounts of the
employees entitled thereto in the statutory
Provident Fund. {Section 15}
Is the employer liable to pay the
contribution when he is not in a position
to pay wages to the employees?
Ans. The employer is liable to pay the employer's
contribution as well as the employee's contribution
irrespective of the fact that wages have been paid
to the employees or not
If an employee has a "family", can he
make nomination in favour of brother?
Ans. No nomination can be made under the E. F. P.
Scheme in favour of a person who is not a member
of the "family". The word "family" is defined in Para
2(g) of the Scheme and according to the definition
brother is not a member of the "family". The
nomination made in favour of brother is invalid
EMPLOYEES
PROVIDENT FUND
FORM
EMPLOYEES’
PENSION SCHEME
FORM
Concluding remark
Though the Employees Provident Fund and
Miscellaneous Provisions Act is a much more
comprehensive Statute incorporating much more
details, the discussed things could very well be
identified as the crux of the Statute as they reflect
the heart and soul of the Act and brings out its
welfare nature.