3 schemes

EPF scheme

Employee Pension scheme

Together in this scheme the individual will get old age and survivorship benefits

Long term security and protection to him and after death to his family

Advances during sickness

Employee having salary of 15000 p.m. (basic, DA, retaining allowances, cash
value of food allowances)

Except J&K

Applicability 1(3) subject to section 16

Applies on factory engaged in industry specified in SCH I & 20 or more people

Notified in gazette by CG for establishment having 20 or more or class of such

establishment

Notice not less than 2 months for establishment having less than 20

If the Er and the ee agreed to be applicable then by notification central provident

fund commissioner by having a agreement

Once applicable forever applicable irrespective of number of employee

Case –

Good Shepherd public school for affirm 20 employees

M/s Nasiruddin Beedi Merchant Limited V. CPF Commissioner –

Employed through contractors cannot be objected any one for PF

Annamma lype Vs regional Provident Fund Commissioner -

Strength below 20

MC – Municipal Corporation and municipal council notified by CG or SG

 Factory in any Industry specified in Schedule I and 20 or more employed

 Class of establishment notified by CG in official gazette

Definitions

Appropriate government 2(a)

In relation to an establishment belonging to, or under the control of, the CG or in
relation to an establishment connected with-

A railway company

A major port;

A mine or an oil field; or

A controlled industry; or

In relation to an establishment having departments or branches in more

than one State, the appropriate Government is the ‘Central Government’;
for any other establishment ‘State Government’.

Authorized officer

Central PF commissioner (CPF commissioner)

Additional CPF commissioner

Deputy PF commissioner

Regional PF commissioner

Contribution

Payable in respect of member under scheme or to whom the insurance scheme

applicable
Confinement

Labour resulting in the issue of a living child or labour after 26 weeks of

pregnancy resulting on the issue of child, whether alive or dead.

Basic Wages

All emoluments earned on duty or holiday while employment paid or payable in

cash

Not includes –

The cash value of any consideration

DA, HRA, OT allowances, bonus, commission, any other similar allowances

Presents made by the employer

Basic wages

Cash element for the basic wage is very necessary

Emolument for certain employee but not for all does not form part of wages

Bonus are deducted

Employer (2e)
Employee (2f)

Apprentice not include which is under Apprentices Act, 1961

Factory (sec 2g)

Any premises including precincts thereof,

In any part of which a manufacturing process is being carried on

Or

Is ordinarily so carried on

With or without aid of power

Occupier (2k)

A person

Having ultimate ctrl over the affairs of the factory

If entrusted to managing agent then he is deemed as an occupier

Person responsible for managing such affairs

Sec 7 having power to amend or vary (prospective or retrospective)

Schemes

Scheme is created by the CG providing the savings benefit to every employee to

whom the act is applicable.

Scheme

3 types

Employees’ Provident Fund Schemes (5)

Employees’ Pension Scheme (6A)

Employees’ Deposit Linked Insurance Scheme (6C)

EPF Scheme

Effect from 2 September 1952

Administered by central board constituted under Sec 5A

Any provision applicable retro or prospectively

Central Board
State Board (Section 5B)

The CG constitute Board of Trustees for the State in consultation with the SG

To Exercise such powers and perform such duties as the CG may assign to it

Contributions (Sec 6)

By Employer – 10% of Basic Wage, DA, retaining allowances(if any)

Payable to each employee employed directly or trough a contractor

Employees contribution should be equal to employer, if they desire it can be higher

For employer it is in general 8.33 to 10% and for establishment notified by govt. is
10% to 12% (Raises as on 22 Sep 97)

Calculated at the nearest rupee, fifty paise or more counted as higher rupee less
than fifty paise is ignored

Eg. 1.5 = 2, 1.49 = 1

DA = cash value of food concession allowed

Retaining allowances = for retaining his service, when the establishment is not
working
Mandatory for all employer, no exception to specified employer can avoid his
liability

Wage Limit

Maximum of 15000 (1.9.14)

To pay contribution on higher wages – Joint (ee + er) request required

Er has to pay admin charges on the higher wages

Ceiling Not applicable for International worker

Applicability of the scheme (PF)

All factories and to which act applies

Not applicable to the tea factories in assam

Withdrawal from the fund (not reqired to be repaid)

Construction or Purchase of a dwelling house/flat (include site purchase)

Repayments of loan in special cases

One year before retirement

Advances from the fund

Illness in certain case

Marriages or post matriculation education of children

(non refundable) –

Abnormal conditions like flood, earthquakes, riot

Affected by cut in the supply of electricity

Physically habdicapped

Pension scheme (6A)

CG framed for –

Superannuation pension

Retirement

Permanent total disablement pension

Widow or widower’s pension

Children or orphan pension (beneficiaries)

*all or any provision may applicable retro or prospetively

Contribution

Not from employee

From employer 8.33% of basic wages, DA, retaining allowances

Not payable after 58 (as it ceases at age of 58)

Pension Fund

Administered by CG

Matters related to –

The employees or class of employees to whom the scheme applies

The portion of Pension Fund in employers contribution and manner of crediting

Minimum qualyfying service and grant of benefit

Interest protection angainst default of payment of contribution Er

Accounts and pattern of investment

Form for furnishing ee and his family information

Forms, registers and records to be maintained for administration

Payment and submission of return on payment towards pension scheme for

exempted estd

Mode of Disbursement of pension

How expenses of pension fund is administered

Reuirement for implementing the pension scheme

Employees’ Deposit linked Insurance Scheme- Section 6C

From 1/9/1976

Applicable to all where act applies exept tea factories in assam

Contribution

Deposit Linked Insurance Fund Created

Er to pay not more than 1% of aggregate of basic wage, DA, retaining allowance

Er shall pay further amount not exceeding ¼ th of the contribution required by CG

to meet the expenses of administration other than expenses for cost of any benefits

If monthly pay exceeds 15000, then the contribution payable is restricted to 15000
p.m., DA, RT, cash value of food concession
Determination of moneys due from employers 7A

In case of dispute on applicability the authority may conduct necessary enquiry to

decide the dispute and determine the amount due from the employer on any
scheme.

Before passing order reasonable opportunity to represent the case is given

Power of authority as if court (CPC) for –

 Enforcing the attendance of any person or examining him on oath

 Requiring the discovery and production of documents
 Receiving evidence on affidavit
 Issuing commissions for the examination of witnesses

Where Er, Ee or any other require to attend enquiry not attended

The authority shall decide the case ex-parte and pass order based on the available
docs

Er within 3 month of order may apply to the authority to set aside the ex-parte
order showing the reason for not attending on date

If authority satisfied he may set aside the order and appoint a date for inquiry

In ‘S.K. Nasiruddin Beedi Merchant Limited V. Central Provident Fund

Commissioner

It was held that the applicability to any class of employees is not determined and
decided by any proceeding under Section 7A but under the provisions of the Act
itself.

When the Act became applicable to the employees in question, the liability arises.

What is done under Section 7A of the Act is only determination of quantification

of the same
Review of order under Section 7A

Section 7B
Aggrieved person on order u/s 7A can apply for a review to the officer if –

 New and important evidence is discovered which was not known to

employer earlier even after due diligence
 Some mistake
 Error visible on the face of the record
 Any other sufficient reason

Officer can review his own order if necessary

Determination of escaped amount (7C)

Officer can reopen the case within 5 year from the date of order (7A or 7B)

If he have reason that the Er failed to show the required document or true materials
fact for due amount from his side

The officer may re - determine the amount due

EPF Appellate Tribunal (Sec 7D)

Appointment of EPF Appellate Tribunal to hear the appeal against the Order under
Section 7A or 7B or 7C

Direct the parties appealed to confirm, modify, the order and case back to the
authority

Tribunal may rectify the mistake till 5 years from appeal order

No appeal from Er entertained until 75% of amount due is deposited

The tribunal may reduce the deposit due with reason in writing

Protection against attachment (Sec 10)

Being assigned or charged and shall not be liable to attachment in any decree of
debt. Neither official assignee nor any receiver has any claim

Employer not to reduce wages (12)

Can’t deduct wage due to only by the reason of applicability of any of the scheme

Transfer of Accounts (17 A)

Employee moved from act applicable establishment to not applicable, and then the
accumulated credit transferred to the provident fund of the establishment (not
applicable) if the employee desires

Penalties
14(3)

Default in comply provisions

Or

Any condition subject to exemption was granted

If no penaly elsewhere provided such non compliance

1 < 6 Months

5000

Offences by companies

14A (1)

Every person at the time of offence is in charge is responsible to the company and
the company shall be deemed to be liable and punished

But cant if the person proves that it was committed without his knowledge or
exercised all due diligence

14A (2)

Offence due to the negligence of the director or manager or secretary or other

officer, then such persons are liable