Dear All,
Everybody would have come across the recent update on the PF website in Chennai about the definition of Basic Wages. As per the update, the department has posted an update which claims to include the Conveyance part of the salary into Basic Wages.
For example, for the following salary split:
- Basic: Rs. 2700
- HRA: Rs. 2400
- Conveyance: Rs. 800
- Other Allowance: Rs. 100
What we have been practicing and following so far is that for the purpose of considering Basic Wages, we will take Rs. 2700 alone. But as per the update given, the department is construing the judgment of the Division Bench of the Honourable Andhra Pradesh High Court in [LEFT][LEFT][FONT=Times New Roman]Nazeena Traders (Private) Limited v The Regional[\/FONT][\/LEFT][\/LEFT] [FONT=Times New Roman]Provident Fund Commissioner, that the EPF & MP Act, 1952 [\/FONT] (citation not mentioned on the website) that except for the HRA portion which is specifically excluded in the section, apart from Rs. 2700, another Rs. 800 + Rs. 100 is added to the basic, and contribution to be paid on this.
For the sake of discussion, I have given some of the lines taken from the said judgment.
"[LEFT][LEFT][FONT=Times New Roman]EPF & MP Act, 1952 is a beneficial[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]legislation enacted as a measure of social justice and should be construed[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]liberally so as to confer benefit on the employees to the maximum extent and[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]finally as per the guidelines laid down by the Hon'ble Supreme Court in The[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]Regional Provident Fund Commissioner, Punjab v Shibu Metal Works 1964-65[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman](27) FJR 491, in construing the material provisions of the Act, if two views are[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]reasonably possible, the Courts should prefer the view which helps the[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]achievement and furtherance of the object, which is also clearly defined in[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]Balbir Kaur and another v Steel Authority of India Ltd. and other; T.K.[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]Meenakshi (Smt.) and another v Steel Authority of India Ltd. and Others as "to[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]ensure better future of the employee concerned on his retirement and for the[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]benefit of the dependents in case of his earlier death". Moreover, in the matter[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]of State Vs. Girdhari Lal Bajaj, 1962 II LLJ 46 (Bom.DB), the Hon'ble Court[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]observed that when there is doubt about their meaning, it is to be understood in[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]the sense in which it best harmonizes with the subject of the enactment and the[\/FONT][\/LEFT][\/LEFT] [FONT=Times New Roman]object which the legislature has in view"[\/FONT]
With due respect to the Honourable High Court, I understand that the view of the Hon'ble court may not be to bring all except the specific components in the legislation a beneficial legislation, traversing against the employer's prerogative in deciding about the components of the salary.
I request the members to put across their views and suggestions on this.
Regards,
Krishnaraj P R
[Phone Number Removed For Privacy Reasons]
From India, Madras
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3Everybody would have come across the recent update on the PF website in Chennai about the definition of Basic Wages. As per the update, the department has posted an update which claims to include the Conveyance part of the salary into Basic Wages.
For example, for the following salary split:
- Basic: Rs. 2700
- HRA: Rs. 2400
- Conveyance: Rs. 800
- Other Allowance: Rs. 100
What we have been practicing and following so far is that for the purpose of considering Basic Wages, we will take Rs. 2700 alone. But as per the update given, the department is construing the judgment of the Division Bench of the Honourable Andhra Pradesh High Court in [LEFT][LEFT][FONT=Times New Roman]Nazeena Traders (Private) Limited v The Regional[\/FONT][\/LEFT][\/LEFT] [FONT=Times New Roman]Provident Fund Commissioner, that the EPF & MP Act, 1952 [\/FONT] (citation not mentioned on the website) that except for the HRA portion which is specifically excluded in the section, apart from Rs. 2700, another Rs. 800 + Rs. 100 is added to the basic, and contribution to be paid on this.
For the sake of discussion, I have given some of the lines taken from the said judgment.
"[LEFT][LEFT][FONT=Times New Roman]EPF & MP Act, 1952 is a beneficial[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]legislation enacted as a measure of social justice and should be construed[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]liberally so as to confer benefit on the employees to the maximum extent and[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]finally as per the guidelines laid down by the Hon'ble Supreme Court in The[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]Regional Provident Fund Commissioner, Punjab v Shibu Metal Works 1964-65[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman](27) FJR 491, in construing the material provisions of the Act, if two views are[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]reasonably possible, the Courts should prefer the view which helps the[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]achievement and furtherance of the object, which is also clearly defined in[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]Balbir Kaur and another v Steel Authority of India Ltd. and other; T.K.[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]Meenakshi (Smt.) and another v Steel Authority of India Ltd. and Others as "to[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]ensure better future of the employee concerned on his retirement and for the[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]benefit of the dependents in case of his earlier death". Moreover, in the matter[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]of State Vs. Girdhari Lal Bajaj, 1962 II LLJ 46 (Bom.DB), the Hon'ble Court[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]observed that when there is doubt about their meaning, it is to be understood in[\/FONT][\/LEFT] [LEFT][FONT=Times New Roman]the sense in which it best harmonizes with the subject of the enactment and the[\/FONT][\/LEFT][\/LEFT] [FONT=Times New Roman]object which the legislature has in view"[\/FONT]
With due respect to the Honourable High Court, I understand that the view of the Hon'ble court may not be to bring all except the specific components in the legislation a beneficial legislation, traversing against the employer's prerogative in deciding about the components of the salary.
I request the members to put across their views and suggestions on this.
Regards,
Krishnaraj P R
[Phone Number Removed For Privacy Reasons]
From India, Madras
Acknowledge(0)Amend(0)
Dispute on Basic Wages Definition
This matter is disputable. In the cases of Employees' State Insurance Corporation vs. Sundaram Clayton (moped division) and ESI vs. Cosmopolitan Club, Chennai, it was decided that conveyance allowance is not a part of basic wages. If this is the case for ESI, then the action now being initiated by PF authorities based on one case in Andhra Pradesh may not be justified.
Regards,
B. Alexander
[Phone Number Removed For Privacy Reasons]
From India, Madras
Acknowledge(0)Amend(0)
This matter is disputable. In the cases of Employees' State Insurance Corporation vs. Sundaram Clayton (moped division) and ESI vs. Cosmopolitan Club, Chennai, it was decided that conveyance allowance is not a part of basic wages. If this is the case for ESI, then the action now being initiated by PF authorities based on one case in Andhra Pradesh may not be justified.
Regards,
B. Alexander
[Phone Number Removed For Privacy Reasons]
From India, Madras
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Definition - PF Basic Wages - Supreme Court - Brief.pdf