Struggling with PF Defaults? Understanding the 72 Instalment Grant for Defaulters

Please see the attached circular dated 11.4.2012.

Thanks
Regards

Defective Order and Its Implications

The defaulters, in fact, have been rewarded. They do not need to pay the interest on the outstanding amount, as is stated in the circular, as there is no condition for the payment of interest imposed. It is a defective order. The big companies that usurp the legitimate dues of the employees have been very cheaply let off the hook. It means the law is only for the "have-nots". The "Haves" are allowed to have more. This is increasing the rich-poor divide in India. There is no provision to put the defaulters behind bars. Instead, they are just rewarded by such foolish circulars.

Mera Bharat Mahan

I hope you read the circular properly. It's intended to facilitate recovery only for industries that have been declared sick (and therefore you can't recover in normal mode) and only for those who have not defaulted on paying employees' share.

Thank you for the valuable information. Could you please address my inquiries?

1. Eligibility for Provisions Due to Losses

My company is not officially declared as a sick company, but we have been experiencing losses for the past few months and had to close the plant for about 2 months. Are we eligible to avail of any provisions due to this situation?

2. Directive on Provident Fund Deductions

Our Managing Director has instructed us to halt the Provident Fund (PF) deductions and restructure the salary breakup. Can we utilize this directive to enforce the discontinuation of PF deductions on employees voluntarily, citing the reason of increased take-home salary? Please provide me with guidance on this matter.

I appreciate your assistance.

Company Financial Challenges and PF Contributions

Our company is barely 2 years old and is experiencing monetary problems, with significant production losses leading to delayed payments. In the past two months, our plant has been completely closed.

Our Managing Director has instructed us to stop the PF contributions from the company. Can we leverage this situation in favor of the company and halt PF deductions, thereby providing employees with a higher take-home salary and no further PF deductions?