Former Employee's False PF Claim: How Should We Handle Missing Records from 2002-2008?

One of our employees who left the job and took his full and final settlement on 8/05/18, with the statement "NOW NOTHING IS LEFT" written on the receipt, filed a complaint in 2020 with EPFO about the period from 2002 to 2008. He falsely claimed that he was in service during this period and that the employer did not deposit PF, etc., whereas he was not in service. The PF department requested records from that period, but the records from that time are not available. How should we handle this situation?

Preservation of Records Under the EPF Act

As far as I know, no time limit has been prescribed under the EPF Act, 1952 or its rules for the preservation of records by the employer. At the same time, the employer cannot be reasonably expected to preserve all payroll records forever, either in physical or electronic form.

However, it is an indisputable fact that some employers hire individuals without maintaining any records for many years and simply indicate the date of entry into service as the date from which such employees were enrolled in the EPF. It would be advisable for you, Jitendar, to investigate this matter. If the employee can provide any documentation, such as a gate pass or ID card issued to them between 2002 and 2008, it could potentially lead to complications. Additionally, there is no indication of the date of entry into the post as per your current records. A lack of a full-quit receipt cannot invalidate any financial claim relating to previous years if supported by documentary evidence.

Handling EPFO Inspection and Compliance Issues

Has your establishment been inspected by the PF department in the past? If they have conducted an inspection, please provide a copy of the inspection report indicating that you have complied with the requirements up to that inspection. EPFO cannot continue to scrutinize your compliance after the inspection has concluded.

You can respond to EPFO by informing them of the lack of records and suggesting that they obtain proof of employment from the former employee making the claim. You can craft your response accordingly.

I have a different view here. In my opinion, you cannot take a stand that once an establishment has been inspected by a PF inspector, no complaint from any member or individual can be entertained. The EPFO must proceed with conducting a postmortem of compliance even after the inspection based on a complaint that contains prima facie evidence.

Since there is no limitation prescribed in the PF Act of 1952, that doesn't mean compliance can be raised at any time. It has to be within a reasonable time. Raising the issue of compliance between 2002 to 2008, now in 2020, is definitely stale and affected by laches due to the inordinate delay. I agree with you on the point that the employee has to submit prima facie proof of what he is contending and the reasons for the delay. EPFO has to apply its mind rather than simply acting as a post office.