Thread Started by #subeerranjan

Is there any judgement by the Honble Supreme Court of India in which the special allowance (which is universally used as a balancing figure in the CTC) will be a part of Basic Wages while calculating the contribution of EPF/EPS under the Provident Fund & Misc Act.
Request if anyone can share the judgement copy
9th October 2018 From India, Gurgaon
The following gist will be helpful to know the position-
Surya Roshni Ltd. vs. Employees Provident Fund and Anr.
Citation: 2011 LLR 867
Decided on: 24.03.2011
Court: High Court of Madhya Pradesh
Facts:
The Petitioner-company was remitting the provident fund contribution of eligible employees in accordance with the Employees’ Provident Fund Act, 1952 (‘Act’) and the Scheme and it was deducting provident fund contribution on two components of salary, i.e., Basic + VDA (dearness allowance). However, it was not deducting provident fund contribution on other components, i.e., Transport Allowance + Attendance incentive + Special allowance + Lunch Incentive.
The Assistant Provident Fund Commissioner noticed that the petitioner was paying wages to its workers in guise of allowances to avoid the EPF liability, hence it issued summon under Section 7A of the Act for determination of provident fund dues against the petitioner. The Authority held that that other allowances are part of basic wages for the purpose of provident fund contribution hence, petitioner is liable to deposit provident fund of Rs. 69,09,534.
Against the aforesaid order, the petitioner filed an appeal which was dismissed.
Issue
Whether other allowances paid by petitioner is covered under “basic wages” for the purpose of calculating provident fund contribution.
Contentions
Petitioner: Relying on the judgment of Hon’ble Supreme Court in the case of Manipal Academy of Higher Education v. Provident Fund Commissioner [(2008) 5 SCC 428], petitioner contended that it is not liable to deduct provident fund from the wages of the workers except basic wages + VDA and it has been depositing the provident fund contribution with the department accordingly.
Respondent: As per the test laid down by the Hon’ble Supreme Court in the case of Bridge and Roofs Co. Ltd. v. Union of India and Ors. [AIR 1963 SC 1474], the principle of universality has to be applied in determining the basic wages and on the basis of the aforesaid principle the orders passed by both the Authorities are in accordance with law.
Held
The Court relied on Supreme Court judgment in Manipal Academy case (supra); Jay Engg. Works Ltd. v. Union of India [AIR 1963 SC 1480] and Cycles of India v. M.K. Gurumani[ (2001) 7 SCC 204] to reiterated that:
“On combine reading of Section 2(b) and Section 6 of the Act, the wages’ which is universally, necessarily and ordinarily paid to all across the board, such emoluments are ‘basic wages’ and where the payment is available to be specially paid to those who avail of the opportunity is not the ‘basic wages'”.
Applying the above principles, High Court held that the canteen allowance could not be included in ‘basic wages’ and there is no liability of the Petitioner to deduct provident fund of the employees against the aforesaid amount. However, the rest of the special allowances paid by the Petitioner to the workers in this case were liable to be included under the ‘basic wages’.
Accordingly, the Court allowed the petition partially to the above extent.
---------------------
Motage Enterprises Pvt. Ltd. Vs. Employees’ Provident Fund and Anr.
Citation: 2011 LLR 867
Decided On: 24.03.2011
Court: High Court of Madhya Pradesh
xxxx
Contentions
Petitioner:
It was not liable to pay provident fund contribution of its workers on other heads of wages except basic wage + VDA (relying on the judgment of Supreme Court in Manipal Academy of Higher Education v. Provident Fund Commissioner (2008) 5 SCC 428)).
In order to reduce the provident fund liability the management separated Special allowance being paid to the employees as a part of monthly salary from the basic wages.
Respondent:
Basic wages includes all emoluments earned by the workers under all circumstances. Accordingly, other allowances are part of basic wages for the purpose of provident fund contribution.
As per the test laid down by the Supreme Court in Bridge and Roofs Co. Ltd. v. Union of India and Ors. (AIR 1963 SC 1474), the principle of universality has to be applied in determining the basic wages and on the basis of this principle the orders passed by both the Authorities are in accordance with law.
Held
Here the Madhya Pradesh High Court relied on the judgment of Supreme Court in Manipal Academy of Higher Education vs. Provident Fund Commissioner [(2008) 5 SCC 428], and also considered the earlier judgments of Supreme Court in Bridge and Roofs Co. Ltd, v. Union of India and Ors. [AIR 1963 SC 1474]; Jay Engg. Works Ltd. v. Union of India [AIR 1963 SC 1480]; and Cycles of India v. M.K. Gurumani [(2001) 7 SCC 204] to reiterate that that:
“on combine reading of Section 2(b) and Section 6 of the 1952 Act, the ‘wages which is universally, necessarily and ordinarily paid to all across the board, such emoluments are ‘basic wages’ and where the payment is available to be specially paid to those who avail of the opportunity is not the ‘basic wages'”
Applying the above principle, the Court held that:
The Petitioner was deducting contribution on two components of salary, i.e., basic wage + VDA. It was also noted that Petitioner was paying conveyance allowance to all of its employees in the Non-executive category, without making any exception for some employees. The Court accordingly held that the conveyance allowance could be included in basic wages because it is universally, necessarily and ordinarily paid to all across the board.
Similarly, special allowance paid to the employees in the Executive category was also paid to all the employees in this category and there was no criteria to decide the special allowance. Therefore, the Court affirmed the findings recorded by APFC and EPFAT with regard to special allowance as well.
Consequently, the petition was dismissed.
-------------------------------
https://indiankanoon.org/doc/1638054/
xxxx
47.In the very same judgment, after referring to a case of Indian Drugs of Pharmaceuticals Ltd. (1996 (8) Scale 688), in paragraph 13, the Supreme Court had observed as follows:
"13.In the case of Indian Drugs & Pharmaceuticals Ltd.3 a Bench of two learned Judges of this Court, K. Ramaswamy and G.B. Pattanaik, JJ., considered the question of overtime wages in the light of the definition of wages as found in Section 2 sub-section (22) of the Act. In this connection it was observed that whatever remuneration paid or payable forms wages under implied terms of the contract. It is of course true that none of these judgments dealt with the question with which we are concerned in these appeals. However, the common thread which runs through these three judgments is to the effect that the definition of the word wages should be liberally construed as the Act is a welfare piece of legislation. On the interpretation of the relevant terms found in the definition of the term wages, as discussed earlier, it cannot be gainsaid that anything paid even by way of subsistence allowance to an existing employee though suspended by the employer cannot but be said to be remuneration paid to him under the terms of the contract of employment if they were fulfilled by the employee as well as by the employer...."xxxx
10th October 2018 From India, Bangalore
Pl.also make use of the attached write-up
10th October 2018 From India, Bangalore

Attached Files
Membership is required for download. Create An Account First
File Type: docx SUPREME_COURT.judgment on Allow.for EPF Contn.docx (17.1 KB, 63 views)

Reply (Add What You Know) Start New Discussion

Cite.Co - is a repository of information and resources for business and professional growth. Register Here
Prime Sponsor: TALENTEDGE - Certification Courses for career growth from top institutes like IIM / XLRI direct to device (online digital learning)





About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service



All rights reserved @ 2017 Cite.Co™