As Saswata has explained section 12 applies only when the intention is to escape from PF liability but in this case it relates to two employees and there is no intention of reducing the PF liability.
In a scenario wherein an employee has been awarded a punishment of reduction to a lower grade or reduction of two/ three increments for any misconduct, it will be the basic wages or the PF qualifying wages that will be reduced and in such cases, the PF Organisation cannot challenge saying that it is against section 12 of the EPF&MP Act. Of course, the employees aggrieved can raise an industrial dispute over the issue alleging that they were not given any opportunities to be heard nor any show cause notice/ charge sheet was given and enquiry conducted before awarding such a punishment. In an organisation which has its own certified Standing Orders and proper HR practices, this kind of situation will not be seen but these kind of bad practices are plenty in organisations where policies are not framed. In such organisation, the employees will not take any step against the management and will easily accept whatever paper is given to them. If so, give them an anti dated office order stating what has been decided by the management and the decision of holding the increments granted and take the acknowledgement of the employees.
Madhu.T.K
In a scenario wherein an employee has been awarded a punishment of reduction to a lower grade or reduction of two/ three increments for any misconduct, it will be the basic wages or the PF qualifying wages that will be reduced and in such cases, the PF Organisation cannot challenge saying that it is against section 12 of the EPF&MP Act. Of course, the employees aggrieved can raise an industrial dispute over the issue alleging that they were not given any opportunities to be heard nor any show cause notice/ charge sheet was given and enquiry conducted before awarding such a punishment. In an organisation which has its own certified Standing Orders and proper HR practices, this kind of situation will not be seen but these kind of bad practices are plenty in organisations where policies are not framed. In such organisation, the employees will not take any step against the management and will easily accept whatever paper is given to them. If so, give them an anti dated office order stating what has been decided by the management and the decision of holding the increments granted and take the acknowledgement of the employees.
Madhu.T.K