Madras High Court ruling on the applicability of PF contb on certain allowances

deepabadoni Started The Discussion:

Hi All,

I have this new ruling by Madras High Court on the applicability of Provident Fund contributions on certain allowances. Looking forward for views / impact on organisations on the same.

The Madras High Court in the case of Reynolds Pens India Pvt Ltd and other petitioners (‘Petitioners’) vs Regional Provident Fund Commissioner (‘RPFC’) has held that certain allowances such as Conveyance, Educational Allowances, Food concession, Medical, Special Holidays, Night Shift Incentive, City Compensatory Allowances etc. should be treated as part of Basic wages under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (‘EPF Act’). Accordingly, provident fund (‘PF’) contributions should be remitted on such allowances. "
The Employees’ Provident Fund Organisation (‘EPFO’) has in a recent internal communication1 forwarded the aforesaid judgment to its officers and directed them to utilise this judgement as per the merits of each case.


sethupathy -  Member Since: Jun 2007
Dear All,

Here is that landmark judgment by Madras High Court.

I have highlighted some portions for easy reading.

I request our members to go through this and post their valuable comments...

Excellent Hr Services,

Attached FilesProvided by community member sethupathy. Join us to learn and grow with your peers.
File Type: doc MADRAS HIGH COURT'S LANDMARK JUDGEMENT.doc (95.5 KB, 902 views)
vetrisc -  Member Since: Mar 2010
Thanks for the posting.

Please refer the CPFC's letter dated 23rd May 2011, asking the RPFC's to see PF contribution should be paid at least on minimum wages.Now this madras High court order has come. Two different guidances.Which is correct ?

To my knowledge there should be suitable amendment in the act itself. Because the Act has been enacted long back according to that period. Now things has changed a lot. New salary components are introduced as the nature of work demands.

PF authorities are just reacting to the judgements given by the court every now and then. Tomorrow another judgement will come, then they will refer that.

There should be a concrete guidance, which will enable both Employers as well as Employees about their commitment towards PF contribution.

korgaonkar k a -  Member Since: Mar 2009
Dear All,

Many Thanks to Shri. Sethupathy for his posting.

Please find attached a gist of ruling by Madhya Pradesh High Court on similar parameters in which conveyance allowance and special allowance are considered for determination of provident fund liability for the information and knowledge of all. The said gist of ruling is posted by me on 06.07.2011 in a Thread "Splitting of Minimum Wages for the purpose of PF contribution not permissible" by Shri. Madhu.T.K.

Thanks with regards.

Keshav Korgaonkar,Welcome To Shantadurga Enterprises
Cell: +91 99675 16383

Attached FilesProvided by community member korgaonkar k a. Join us to learn and grow with your peers.
File Type: doc EPF_MP HC RULING.doc (36.5 KB, 212 views)
prayankkhemka -  Member Since: Jul 2011
vetrisc, could you please tell me where i could find the letter from the CPFC to the RPFC that you mentioned. or could you tell me what the letter stated. thanks

vetrisc -  Member Since: Mar 2010
Dear all,

As we all know the endless argument go's on and on. I think we have to keep our cool till the EPF organisation wakes up. Because they them self do not know what the act implies and waiting for the Court orders to come one by one to tell us what are all the components covered for PF contribution.Please note that,

1) A review Petitions have been filed before the Madhya Pradesh High Court (Gwalior Bench) which would come up for hearing on 29th July, 2011.

2) A Writ Appeal has also been filed in the High Court of Madras which is likely to come up for hearing on or around 8th August, 2011.

Wait for the judgements to come from the above petition and appeal to come.

korgaonkar k a -  Member Since: Mar 2009
Dear Vetrisc, Thanks for sharing about review petitions and appeal. Regards. Keshav Korgaonkar Cell: +91 99675 16383

ragav_mahr -  Member Since: Jul 2011
Can anyone update on the Review Petition status at MP HC Gwalior bench please? Advance thanks, Ragav

emandiramesh -  Member Since: Jan 2011
THANKS FOR INFORMATION. Thanks&Regards E.Ramesh Sr.Personnel Officer Universal Converters(P)ltd Chittoor-517004 9704420983


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