Applicablity Of Labour Fund - Doc Download

Hi FolksGoing throught post, it is clear that there is no need to pay labour fund contribution if the salary limit crosses Rs 3000Whether it is Gross salary or Basic&DAEven if you take Basic and DA and the minimum wages of any state for a month is almost morethan this amount of RS 3000. then every employee will be above the fixed amount of Rs 3000. Then what is the use of this Labour fund process. Can anybody describe what are the benefits an employee can derive from this fund. Did Any employee had recd any benefits from this fund from your companykindly update.

Different sates have different Labour Welfare Funds constituted for different kinds of employees. For example, in Kerala, there are a number of Labour Welfare Funds constituted separately for beedi workers, handloom workers, construction workers, workers in factories, employees in shops and establishments etc. In many of these, there is no salary ceiling like that you stated. The contribution (except the Labour Welfare Fund for employees of Shops and Commercial Establishments) is very low and payable in half yearly basis. It may be controversial if we go in detail about the benefits the workers get out of these Funds and if we take into account the Board Members' fees and allowances, their TA, DA etc, the same may exceed the amount realised from workmen and employers. But in theory, the scheme is suppose to help the workmen.

Under the Labour Welfare Fund of Shops and Establishments workers, contribution is Rs 20 per employee with an equal share of employer and there is no salary limit prescribed. There are a lot of welfare schemes announced including pension after 10 years of contribution at the age of 60 years, marriage loans etc. Therefore, we can not rule out the schemes as such.

Regards,

Madhu.T.K

I believe if you have registered with ESIC and PF you can seek an exemption from the LWF. Is this information correct?

In some Welfare Fund Acts specific provision excluding those covered by Provident Fund and pension Schemes is available but no exception can be availed on the ground of ESI coverage.For example, in Kerala, there is a welfare fund for motor workers but the same is excluded for those employees who are covered by EPF.
Regards,
Madhu.T.K

Thanks a lot for the information. I work with an IT Company which is covered by EPF. Can I seek exemption from LWF and if yes how to proceed with that? Who should I approach for the exemption? Thanks in advance.

I understand that your are working for an IT firm in Trivandrum. IT firms here are covered by Kerala Shops and Commercial Establishments Employees Welfare Fund. Unfortunately, there is no such provision in this Act which says that in respect of employees covered by PF, no contribution is required. I have said specifically that Kerala Motor Workers Welfare Fund Act has that provision. When this Shops Employees Welfare Fund was introduced many firms had had obtained injunction from the courts, but now every one has started contributing because the Act being a social welfare one the court cannot nullify it. The State government, at the same time has found this as a very good means of revenue!!
Regards,
Madhu.T.K

Thanks for the valuable input and observation :-D
It is evident that no such fund is useful to those intended sector, but someone else find it useful for their purposes.

I do agree with you. Moreover, the Shops Employees Welfare Fund of Kerala is applicable to Managers and even the VP level employees. That implies that they are also workmen!!
There is no doubt that this is a good revenue for the government and they are sure that nobody is going to claim pension from the Fund. For other benefits also, there are lot of conditions. Say for maternity benefit, the woman employee should not be covered by ESI, should have contributed at least for one year and the benefit is available for two deliveries. Similarly the maternity pay for 12 weeks is calculated on the minimum wages fixed by the govt. Normally those coming in that wages will be covered by ESI and then the benefit will not be available to them and for those who are not covered by ESI the benefit is an additional sum they get.
Please find the attachment of benefits available under the Kerala Shops and Commercial Establishments Workers Welfare Fund.
Regards,
Madhu.T.K

I would like to say one more thing that in respect of an establishment to which a Central Act is applicable, the state Act with the same objective will not be applicable. The Kerala High Court has ruled in Kalyani V K Vs Executive Officer, Kerala Shops and Commercial Establishments Workers Welfare Fund Board, that in respect of an establishment to which PF is applicable, welfare fund can not be demanded.