STRICTLY STATUTES

A Newsletter from ADP India

OCTOBER 2013

EDITORS NOTE
Hello Readers, September 2013 saw that the courts across the country come up with some significant and interesting rulings. The Bombay High Court has made the employer liable to pay the ESI contribution to employees, irrespective of their engagement whether on contract basis or otherwise. India has the largest workforce employed in un-organized sector, mostly as daily wage workers and not covered by PF and ESI. This important ruling by Bombay High Court will ensure that contract workers, whether they are daily wage workers, coolies, loaders or un-loaders are now protected. Small steps such as these are in the right direction and will play a large role in mobilising the workforce movement towards organised sector. In the PF space, EPFO, has published a circular quoting a recent judgment, which states that canteen allowance will be included in the PF wage calculation and has instructed its field staff to refer to this ruling for adjudicating similar issues and for defending similar cases at EPFAT and high courts This issue covers these developments and judgments in detail, along with other interesting information in the statutory compliance space. We hope you enjoy reading this issue and find it useful. Please do share your inputs / suggestions and help us to enrich the newsletter content. You may write to us at contactadp@adp.com Regards, Editor

TABLE OF CONTENTS
Pages

Compliance calendar for Sep 13 (Time line for Oct 13) ADP trains Entrepreneurs on Statutory Compliance EPFO Schemes excluded from implementation of direct benefit transfer Employer is liable to pay ESI contribution for contract workers Partners are not to be included for coverage under PF Act No accident compensation for normal death during employment

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STRICTLY STATUTES
Compliance Calendar for October 2013
Due Date Professional Tax Remittances 10th Oct 13 15th Oct 13 20th Oct 13 21st Oct 13
th Aug Oct 13 30th

A Newsletter from ADP India

Scope

Due Under

Mode

Andhra Pradesh & Madhya Pradesh Gujarat Karnataka West Bengal Maharashtra, Assam & Orissa

State-wise regulations Gujarat PT regulations Karnataka PT regulations WB PT regulations State-wise State Wise regulations regulations

By Challan By Challan By Challan By Challan By Challan

Labour Welfare Fund Remittances 20th Oct 13 PF 15th Oct 13 25th Oct 13 ESI 21st Oct 13 Main Code & Sub Codes - Remittance of Contribution ESIC Act 1948 By Challan Central - Remittance of Contribution Central - International worker with wages and nationality EPF & MP Act 1952 EPF & MP Act 1952 By Challan Statement in 7 I W Kerala Kerala State Labour Welfare Fund By Challan

Employment Exchange (Compulsory Notification of Vacancies) Act, 1959 15th Oct 13 Factories Act 31st Oct 13 During month During month Renewal of Factory License Safety Committee Meeting Canteen Committee Meeting As submission As meeting As meeting Form ER I Strength Returns ESIC Act 1948 By Challan

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STRICTLY STATUTES

A Newsletter from ADP India

Flash News
ADP partnered with the Micro, Small and Medium Enterprises Development Institute and trains Entrepreneurs on Statutory Compliance

ADP partnered with MSME DI, Chennai, a Government of India initiative and trained 100 plus entrepreneurs on Statutory Compliance, which is mandatory for every organisation. Over hundred entrepreneurs from across industries ranging from Manufacturing, IT, ITeS, Educational Institutes to Staffing Companies and Service Organisations attended this two day training program held recently at Chennai. Officials from ADP India trained the participants on various State and Central Labour Legislations that are mandatory for every organization to follow. Participants were exposed to the complex maze of various local, regional and central acts and rules that are related to employer and employee compliance, which every employer is expected to comply with. The participants benefitted from this two day session, where ADP officials shared their expertise in an interactive format and trained them on running a 100% compliant organisation.

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STRICTLY STATUTES
Circulars

A Newsletter from ADP India

Canteen allowance is now part of basic wages for PF deduction

Canteen allowance, paid by the employer to his employees is considered to be part of basic wages, and is required to be taken into account while computing the provident fund (PF) contribution, the Delhi High Court has stated in a recent ruling. The EPFO has published this order in its Web site, as a reference to its field staff, for adjudicating similar issues and for defending similar cases at EPFAT and high courts. The court delivered its recent judgement on a petition filed by Whirlpool Of India Ltd., on July 22 against an order of Regional Provident Fund Commissioner asking the company to pay PF contribution on canteen allowance provided to its workers. The court observed that the employer is splitting wages to reduce their PF and other tax liabilities, which is an anti-worker movement and against the social security scheme. The canteen allowance is part of basic wages itself and will be considered for PF computation. However, it is to be noted that the Food and Consistence Allowances, which is provided by the employer will continue to be treated separately and will not be included for PF calculation.

EPFO Schemes excluded from the list of schemes identified for the implementation of direct benefit transfer
With reference to the Ministry of Labour letter No. Z.25025/7/2012.SS.II, dated 27 May 2013, it should be understood that the schemes of EPFO have been excluded from the list of schemes of the ministry identified for the implementation of direct benefit transfer to the beneficiaries.

http://www.moia.gov.in/services .aspx?ID1=285&id=m4&idp=81& mainid=73

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STRICTLY STATUTES SIGNIFICANT RECENT JUDGMENTS EMPLOYER IS LIABLE TO PAY ESI CONTRIBUTION FOR CONTRACT WORKERS
In a case (Appeal under ESI No. 2/2007, D/-2-5-2013) between Regional Director, ESI Corporation, Goa vs. Farmacia Ananta, Goa, the Bombay High Court has ruled that when the employer is unable to give details of labour charges and cost of material, the ESI Authority could fairly determine contribution at the rate of 25% of total amount as notified vide memorandum dated 16.11.1981 by the ESI Corporation.

A Newsletter from ADP India

When the activity of loading and unloading is a regular activity in the regular course of business, under the supervision and control of the employer, the employees like coolies / hamalies employed through contractors or directly by the employer, to carry out the job, will be employees under section 2 (9) of the Employees State Insurance Act, 1948. The employer is liable to pay the ESI contribution, irrespective of their engagement on contract basis or otherwise, if they have to perform work of regular nature under the supervision and control of the employer.

PARTNERS ARE NOT TO BE INCLUDED IN A FIRM FOR COVERAGE UNDER PROVIDENT FUND ACT

In a recent judgment (C. Misc. W.P. No. 2922/2000,D/-19-10-2012), Allahabad High Court has pronounced that partners are not to be included in a firm for coverage under Employees Provident Funds & Miscellaneous Provisions Act, 1952 Section 1(3)(b). According to this ruling that was passed in the case of M/s. Sachan Nursing Home & Anr. Vs. Reg. P.F. Commissioner, Bhavishya Nidhi Bhavan, Varanasai & Anr., the partners of an establishment will not be included in a firm for coverage under the EPF & MP Act, since the partners have different status than the employees as held by the Supreme Court. The High Court quashed the decision of EPF Authorities and the ruling further states that the partners of a firm cannot be treated as employees as per Employees Provident Funds & Miscellaneous Provisions Act, 1952 Section 2 (f), to be covered under the EPF & MP Act and hence the coverage of Nursing Home stating that it was employees in addition to 3 doctors who were partners as such.

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STRICTLY STATUTES

A Newsletter from ADP India

NORMAL DEATH EVEN DURING THE COURSE OF EMPLOYMENT WILL NOT ATTRACT ACCIDENT COMPENSATION

The Gauhati High Court, in a case (M.F.A. (WC) No. 16/2002. D/-18-12-2012) between Santi Rani Debnath and Another vs. Anil Chandra Saha and Others, has ruled that the normal death even during the course of employment will not attract accident compensation. In its ruling the court has stated that normal death by bodily ailment even in course of employment cannot attract the liability of employer under the act. Only an unlooked mishap or an untoward event, which is not expected or designed is to be covered under accident as per judicial pronouncement. Death caused due to illness, not consequential or connected with discharge of duty, cannot be

termed as accidental death. If the claimant fails to establish that the injury suffered by him is due to accident arising out of and in the course of his employment, the employer is not liable to pay compensation under the Workmens / Employees Compensation Act - 1923. An injury under section 3(1) of the Employees Compensation Act is a wide term than bodily injury or actual physical hurt and it may include a disease also, when a disease is contracted as a result of passage of virus i.e. consequential result of the injury.

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STRICTLY STATUTES

A Newsletter from ADP India

ADP Global With more than $11 billion in revenues and more than 60 years of experience, ADP (NASDAQ: ADP) serves approximately 620,000 clients in more than 125 countries. As one of the world's largest providers of business outsourcing and human capital management solutions, ADP offers a wide range of human resource, payroll, talent management, tax and benefits administration solutions from a single source, and helps clients comply with regulatory and legislative changes, such as the Affordable Care Act (ACA). ADP's easy-to-use solutions for employers provide superior value to companies of all types and sizes. ADP is also a leading provider of integrated computing solutions to auto, truck, motorcycle, marine, recreational vehicle, and heavy equipment dealers throughout the world.

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