Dear Mr. SHD.
Minimum wages prescibed by the GOVTs. normally have two
components only, ie, BASIC and DA ( In karnataka and others)
DA is revised every year but not the Basic. The revision of Basic
is done rarely if the whole wage structure is required to be revised
for compelling reasons.
HC Subbaramu
HR & Labour Laws.
Bangalore
From India, Kochi
1Minimum wages prescibed by the GOVTs. normally have two
components only, ie, BASIC and DA ( In karnataka and others)
DA is revised every year but not the Basic. The revision of Basic
is done rarely if the whole wage structure is required to be revised
for compelling reasons.
HC Subbaramu
HR & Labour Laws.
Bangalore
From India, Kochi
Dear all,
Pls. note that we along with some others lawyers had taken a serious views against this notification. The notification is not acc. to the EPF act/law. Pls. do not follow this circular. OUR reply is given below:
TO,
The Addl. Central P.F. Commissioner (Compliance)
Bhavishya Nidhi Bhawan
14, Bhikaji Cama Place
New Delhi - 110 066.
Splitting of Minimum Wages for Provident Fund contributions
Sir,
Our attention has been invited to your Circular No. Coord/4(6)2003/Clarification/Vol-II/7394 dated 23.5.2011 under the caption of “Splitting of minimum wages for the purpose of Provident Fund contribution not permissible”.
While we appreciate the efforts made in digging out the old cases even from 1961 onwards and concluding ‘wherever the matter regarding splitting of wages is challenged or pending in a court of law, the stand of department alongwith all rules and guidelines of Hon’ble Supreme Court should be effectively utilised to defend the case. It is also mentioned that nothing said above shall come in way of implementation/execution of any order of a court of law’ . However, we must say that the conclusion drawn in your circular is bereft of any merit, devoid of legality and a sheer ‘colourable exercise’ by turning Nelson's eye to the latest judicial pronouncement directly on the subject.
Much emphasis has been laid down on the judgment of Division Bench of Karnataka High Court in the matter of G4S Guardings Limited vs. RPFC and the judgment of Supreme Court in Airfreight Ltd. vs. State of Karnataka & Ors. In fact, the main issue of ‘wages’ got obfuscated in the judgment of Karnataka High Court. It did not settle the law with regard to splitting of minimum wages for Provident Fund contributions hence; no weightage can be accorded to it since it had been left open to the Authorities to decide. But it hardly needs to be underlined that they (Authorities) can never go beyond the parameters as laid down by the legislature defining ‘wages’ under clause (h) of the Minimum Wages Act, 1948 and sub-section (b) of section 2 of the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952. Needless to state, that at the time of enactment of section 2(b) defining ‘basic wages’ under the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952, the definition of wages was already there under the Minimum Wages Act, 1948.
So far as the case of Airfreight Limited (supra) is concerned, this has not been under the Employees’ Provident Funds & Miscellaneous Provisions Act but in different context.
Therefore, the recent judgment of Punjab and Haryana High Court, in the case of Assistant Provident Fund Commissioner, Gurgaon vs. G4S Security Services (India) Ltd. & Anr, 2011 LLR 316 (P&H HC), is the only direct judgment on the subject of splitting of wages for the purpose of provident fund contribution, which has unequivocally and unambiguously permitted for splitting the minimum wages for the purposes of the Provident Fund. Strangely, this landmark judgment has been overlooked in the Circular for the reasons beyond anybody’s comprehension, although one of the officers of Provident Fund Department was the Party - rather Petitioner to it - and he was duly represented by an Advocate. The impugned circular, thus, appears to be motivated to supersede the judgment which could be only modified by an amendment in the Act and not by (a) overstepping a contested judgment of Punjab & Haryana High Court (b) by usurping the domain of the legislature. It is also inexplicable as to why this Circular was not issued for over seven long years after the judgment of the Karnataka High Court but issued with tearing haste i.e. within two months of the reported judgment of Punjab & Haryana High Court. The interpretations as given in the Circular are against the principles of interpretation.
It is pertinent to state here that both the cases of Karnataka High Court and the judgment of Supreme Court in the Airfreight Limited as relied upon in the Circular have been discussed and distinguished by the Hon’ble Punjab and Haryana High Court in detail.
Hence, in the fitness of administrative wisdom and the obligations of an Autonomous Body to honour the sanctity of High Court judgment, the impugned Circular may kindly be withdrawn and the gist of Punjab & Haryana High Court be circulated. It is desirable that a corrigendum be issued immediately in the larger interest of public otherwise; this so-called clarification Circular will confuse, confound and complicate the matter resulting into the opening of the sluice gate of litigation and harassment.
Thanking you,
Manish Gupta
From India, Mumbai
Pls. note that we along with some others lawyers had taken a serious views against this notification. The notification is not acc. to the EPF act/law. Pls. do not follow this circular. OUR reply is given below:
TO,
The Addl. Central P.F. Commissioner (Compliance)
Bhavishya Nidhi Bhawan
14, Bhikaji Cama Place
New Delhi - 110 066.
Splitting of Minimum Wages for Provident Fund contributions
Sir,
Our attention has been invited to your Circular No. Coord/4(6)2003/Clarification/Vol-II/7394 dated 23.5.2011 under the caption of “Splitting of minimum wages for the purpose of Provident Fund contribution not permissible”.
While we appreciate the efforts made in digging out the old cases even from 1961 onwards and concluding ‘wherever the matter regarding splitting of wages is challenged or pending in a court of law, the stand of department alongwith all rules and guidelines of Hon’ble Supreme Court should be effectively utilised to defend the case. It is also mentioned that nothing said above shall come in way of implementation/execution of any order of a court of law’ . However, we must say that the conclusion drawn in your circular is bereft of any merit, devoid of legality and a sheer ‘colourable exercise’ by turning Nelson's eye to the latest judicial pronouncement directly on the subject.
Much emphasis has been laid down on the judgment of Division Bench of Karnataka High Court in the matter of G4S Guardings Limited vs. RPFC and the judgment of Supreme Court in Airfreight Ltd. vs. State of Karnataka & Ors. In fact, the main issue of ‘wages’ got obfuscated in the judgment of Karnataka High Court. It did not settle the law with regard to splitting of minimum wages for Provident Fund contributions hence; no weightage can be accorded to it since it had been left open to the Authorities to decide. But it hardly needs to be underlined that they (Authorities) can never go beyond the parameters as laid down by the legislature defining ‘wages’ under clause (h) of the Minimum Wages Act, 1948 and sub-section (b) of section 2 of the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952. Needless to state, that at the time of enactment of section 2(b) defining ‘basic wages’ under the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952, the definition of wages was already there under the Minimum Wages Act, 1948.
So far as the case of Airfreight Limited (supra) is concerned, this has not been under the Employees’ Provident Funds & Miscellaneous Provisions Act but in different context.
Therefore, the recent judgment of Punjab and Haryana High Court, in the case of Assistant Provident Fund Commissioner, Gurgaon vs. G4S Security Services (India) Ltd. & Anr, 2011 LLR 316 (P&H HC), is the only direct judgment on the subject of splitting of wages for the purpose of provident fund contribution, which has unequivocally and unambiguously permitted for splitting the minimum wages for the purposes of the Provident Fund. Strangely, this landmark judgment has been overlooked in the Circular for the reasons beyond anybody’s comprehension, although one of the officers of Provident Fund Department was the Party - rather Petitioner to it - and he was duly represented by an Advocate. The impugned circular, thus, appears to be motivated to supersede the judgment which could be only modified by an amendment in the Act and not by (a) overstepping a contested judgment of Punjab & Haryana High Court (b) by usurping the domain of the legislature. It is also inexplicable as to why this Circular was not issued for over seven long years after the judgment of the Karnataka High Court but issued with tearing haste i.e. within two months of the reported judgment of Punjab & Haryana High Court. The interpretations as given in the Circular are against the principles of interpretation.
It is pertinent to state here that both the cases of Karnataka High Court and the judgment of Supreme Court in the Airfreight Limited as relied upon in the Circular have been discussed and distinguished by the Hon’ble Punjab and Haryana High Court in detail.
Hence, in the fitness of administrative wisdom and the obligations of an Autonomous Body to honour the sanctity of High Court judgment, the impugned Circular may kindly be withdrawn and the gist of Punjab & Haryana High Court be circulated. It is desirable that a corrigendum be issued immediately in the larger interest of public otherwise; this so-called clarification Circular will confuse, confound and complicate the matter resulting into the opening of the sluice gate of litigation and harassment.
Thanking you,
Manish Gupta
From India, Mumbai
Dear Manish,
Over and above the Punjab and Haryana judgement the Employees provident fund appeal tribunal, New Delhi, in ATA No.364(8)2009 in the case of M/s.Benchmark Infocom (P) Ltd v/s RPFC indore has quashed the order to the provident fund commissioner and vide its judgement dated 2.06.2011 stated that the Authority has the power to resolve the dispute regarding the payment of dues but it has no power to hold whether the minimum wages amount to basic wage or not or whether the payment was made as per the minimum wages act or not and the order of the authority is set aside.
Kindly refer the said judgement where it is amply clear that PF authority has no power to dictate on the terms of payment of PF on minimum wages or not. Its a landmark judgement quashing all the circulars of the PF authority.
Jaikishen Kumtekar
9967542262
From India, Mumbai
Over and above the Punjab and Haryana judgement the Employees provident fund appeal tribunal, New Delhi, in ATA No.364(8)2009 in the case of M/s.Benchmark Infocom (P) Ltd v/s RPFC indore has quashed the order to the provident fund commissioner and vide its judgement dated 2.06.2011 stated that the Authority has the power to resolve the dispute regarding the payment of dues but it has no power to hold whether the minimum wages amount to basic wage or not or whether the payment was made as per the minimum wages act or not and the order of the authority is set aside.
Kindly refer the said judgement where it is amply clear that PF authority has no power to dictate on the terms of payment of PF on minimum wages or not. Its a landmark judgement quashing all the circulars of the PF authority.
Jaikishen Kumtekar
9967542262
From India, Mumbai
Dear Mr. Manish Gupta,
IS The letter addressed to CPFC responded ? the cpfc issued circular dated 2/12/2011 keeping in abeyance the matter regarding splitting of wages by citing P&H div bench judgement challanged by SLP by epfo.
The authority is not adhereing to the circular dated 2/12/11. they say circular is not binding on them ad they proceed with the asessing dues.
From India, Mumbai
IS The letter addressed to CPFC responded ? the cpfc issued circular dated 2/12/2011 keeping in abeyance the matter regarding splitting of wages by citing P&H div bench judgement challanged by SLP by epfo.
The authority is not adhereing to the circular dated 2/12/11. they say circular is not binding on them ad they proceed with the asessing dues.
From India, Mumbai
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