Non-executive directors, even if they are not directly involved in the day-to-day operations of the establishment, can still be held liable for contravention of the provisions of the EPF Act. In India, the EPF Act imposes responsibilities on all directors, including non-executive directors, to ensure compliance with the Act's requirements.
[B] Legal Perspective:
1. The EPF Act holds all directors accountable for any violations, regardless of their executive or non-executive status.
2. Non-executive directors can be prosecuted if they are found to be involved in any decisions or actions that lead to non-compliance with the EPF Act.
[B] Practical Steps:
1. Ensure that all directors, including non-executive directors, are aware of their obligations under the EPF Act.
2. Regularly review the company's EPF compliance to avoid any potential issues.
3. Educate non-executive directors on the importance of adhering to the EPF regulations to mitigate legal risks.
4. Seek legal advice to understand the specific liabilities of non-executive directors under the EPF Act.
By following these steps and ensuring proper compliance with the EPF Act, non-executive directors can reduce the risk of prosecution for contravention of the Act.