Employee PF and Misc. Provision Act

8/3/2019 Employee PF and Misc. Provision Act

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The Employees' Provident Funds andMiscellaneous Provisions Act, 1952

This Act may be called the Employees'Provident Funds and MiscellaneousProvisions Act, 1952. It extends to the wholeof India except the State of Jammu andKashmir. It applies -

a)to every establishment which is a factoryengaged in any industry specified inSchedule I and in which 20 or more persons

are employed [Sec. 1(3)(a)]


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The term in which 20 or more persons areemployed refers to the word 'factory' and not tothe word 'industry' [Kokalai Ruice & Oil Mills

Foundary V.R.P. Comnr. Madras, A.I.R. (1959)Mad. 235].

(b) to any other establishment employing 20 or

more persons or class of such establishmentswhich the Central Government may, bynotification in the official Gazette, specify in thisbehalf [Sec. 1(3)(b)].

It may be noted that an establishment to which thisAct applies shall continue to be governed by thisAct not withstanding that the number of persons

employed therein at any time falls below 20.


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DEFINITIONS

'Wage' means all emoluments which areearned by an employee while on

a)duty; or

b)leave; orc) holidays with wages

as per the terms of employment.

'Basic wages' must be paid or is payable incash. The term, however, does not include


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i. the cash value of any food concession;ii.any dearness allowance, i.e., all cash

payments by whatever name called paid toan employee on account of a rise in the cost ofliving

House Rent Allowance (HRA); Overtime Allowance; Bonus;

Commissioni. any presents made by the employer [Sec.

2(b)].


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1. 'Contribution' means a contribution payable

in respect of a member under a scheme [orthe contributions payable in respect of anemployee to whom the Insurance Schemeapplies] [Sec. 2(c)].

2. 'Employer' means

(a) in relation to an establishment which is a

factory, the following;


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i. the owner or occupier of the factory

including the agent of such owner oroccupier;

ii.the legal representative of a deceased

owner or occupier;iii.where the person has been named as a

manager of the factory under Sec. 7 of the

Indian Factories Act, 1948, th person sonamed.


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(b) In relation to any other establishment, thefollowing:

the person who, or the authority which, hasthe ultimate control over the affairs of theestablishment and where such affairs are

entrusted to a

manager;managing director;managing agent

such manager, managing director or

managing agent [Sec. 2(e)].


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Explanation:

The term 'occupier' as used above means.

a)The person who has 'ultimate control' over theaffairs of the factory; and

b)where the said affairs are entrusted to amanaging agent, such agent shall be deemedto be the occupier of the factory.

4. 'Employee' means any person who isemployed for wages which he may get directlyor indirectly from the employer. The person

may be engaged in any kind of work, namely -


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a)manual or otherwise; orb)in connection with th work of establishment.

The term 'employee' includes any person,

i. employed by or through a contractor or in

connection with the work of theestablishment;

ii.engaged as an apprentice not being an

apprentice engaged under the ApprenticesAct, 1961 or under the standing orders of theestablishment [Sec.2(f)].


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ADMINISTRATION OF THE SCHEMES

Central Board of trustees (Sec.5-A).

1. The Central Government may constitute aBoard of Trustees called the Central board for

administering

a)The Employees' Provident Fund;b)the Pension Fund, andc) The Employees' Deposit Linked Insurance

Fund.


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2. The Central Board shall have the followingmembers, namely: -

a Chairman and a Vice-Chairman to beappointed by the Central Government;

The Central Provident Fund Commissioner,

ex officio; not more than 5 persons appointed by the

Central Government from among its officials; not more than 15 persons representing

Government of such states as the CentralGovernment may specify in his behalf,appointed by the Central Government;


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10 persons representing employees of theestablishments to which the Employees'Provident Fund Scheme applies, appointed

by the Central Government afterconsultation with such organization ofemployees as may be recognized by theCentral Government in this behalf.

3.(a) The terms and conditions subject towhich a member of the Central board maybe appointed; and

(b) The time, place and procedure of themeeting of the Central board shall be suchas may be provided for in the Employees'

Provident Fund Scheme.


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1. The Central board shall administeremployees' Provident fund, Pension Fund

and Deposit-linked Insurance Fund vestedin it in such manner as may be specified inthe schemes.

2. It shall perform such other functions as itmay be required to perform by or under anyprovision of the,

a)Employees' Provident Fund Scheme;b)Pension Scheme; andc) Employees' Deposit linked Insurance

Scheme.


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1. It shall maintain proper accounts of itsincome and expenditure. The accounts shall

be maintained in the manner to be specifiedby the Central Government in this regard.

2. The accounts of the Central government

shall be audited annually by the comptrollerand Auditor-General of India. Anyexpenditure incurred by the Comptrollerand Auditor -General in connection with

such audit shall be payable by the Centralboard to him.


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1. The Comptroller and Auditor-General ofIndia and any person appointed by him in

connection with the audit of the accounts ofthe central Board shall have the same rightsand privileges and authority in connectionwith the audit of Government Accounts.

2. The accounts of the Central Board ascertified by the Comptroller and Auditor-General or any other person appointed by

him in this behalf together with the auditreport thereon shall be forwarded to theCentral Board.


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It shall be the duty of the Central Board to

submit also to the Central government anyannual report of its work and activities. TheCentral Government shall cause a copy of theannual report, the audited accounts togetherwith the report of the Comptroller and AuditorGeneral of India and the comments of theCentral board, thereon to be laid before each

house of Parliament.


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ADMINISTRATION OF THE SCHEMES

Executive Committee (Sec. 5-AA)1. The Central Government may constitute

an executive committee to assist the

Central board in the performance of itsfunctions.

2. The executive committee shall have thefollowing persons as members

a chairman appointed by the CentralGovernment from amongst the members of

the Central Board;


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two persons appointed by the Centralgovernment from amongst the persons

referred to in clause (b) of sub-section (1) ofSec. 5A; three persons appointed by the Central

Government from amongst the persons

referred to in clause (c) of sub-section (1) ofSec. 5A;

three persons representing the employerselected by the Central board from amongstthe persons referred to in clause (d) of sub-section (1) of Sec. 5-A.


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Three persons representing the employeeselected by the Central Board from amongstthe persons referred to in clause (e) of sub-section of Sec. 5-A.

The Central Provident Fund commissioner,ex officio.

3.(a) the terms and conditions subject to whicha member of the Central Board may beappointed or elected to the executive

committee; and(b) the time, place and procedure of the

meetings of the executive committee shall

be as provided in the scheme.

Contribution by the employer (Sec 6)


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Contribution by the employer (Sec.6)

The contribution payable by the employer tothe Fund shall be 10 per cent of the

a)basic wages;

b)dearness allowances; and

c) retaining allowance (if any)A person may be employed directly or by or

through a contractor. The amount payable

towards encashment of leave forms part ofbasic wages for the purpose of calculating thecontribution towards provident fund[Hindustan Lever Employees Union v.

Regional Provident Fund Commissioner, 1995

E l i


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Explanation:

For the purposes of this section:

i. 'Dearness allowance' includes the cash valueof any food concession allowed to theemployee.

ii.'Retaining allowance' means an allowancepayable to an employee of any factory orother establishment during any period inwhich the establishment is not working, for

retaining his services.

2. The employee's contribution shall be equal tothe contribution payable by the employer in

respect of him


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3. The amount of employee's contributionmay exceed 10 per cent of his basic wages,dearness allowance and retaining allowance(if any) if he so desires.

4. However, the employer shall not be underan obligation to pay any contribution overand above his contribution payable under

this section.


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Employees' Pension Scheme (Sec. 6-A)

1. The Central Government may form a schemeto be called the Employees' Pension Schemefor the purpose of providing for

a)superannuation pension;b)retiring pension;c) permanent total disablement pension

to the employees of any establishment or classof establishment to which this Act applies.


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2. The aforesaid Scheme may also providefor

a)widow or widower's pension;b)children pension; or

c) orphan pension

payable to the beneficiaries of suchemployees.


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3. There shall be paid into a Pension Fund inrespect of every employee who is a member

of the Pension Scheme -

(a) such sums from the employer's contributionunder Sec.6, not exceeding 8 1/3 per cent of

the

i. basis wages;ii.dearness allowance; andiii.retaining allowance (if any)

of the concerned employees, as may be

specified in the Pension Scheme.


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b)Such sums as are payable by the employersof exemption establishments under Sec. 17.

c) the net assets of the Employees' FamilyPension Fund as on the date of theestablishment of the Pension Fund;

d)such sums as the Central Government may

specify in this behalf.

4. The Pension Fund shall vest in and beadministered by the Central board oftrusees.


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5. Subject to the provisions of this Act, thePension Scheme may provide for all or any of

the matters specified n Schedule III.

Employee's Deposit-linked Insurance

Scheme (Sec.6-C).

1. The Central Government may frame ascheme to be called the 'Employees' Deposit-linked Insurance Scheme' for the purpose ofproviding life insurance benefits to theemployees of any establishment or class of

establishment to which this Act applies.


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2. An employer in respect of every such

employee in relation to whom he is theemployer upto 1 per cent of the

(a) basic wages;

(b) dearness allowances; and(c) retaining allowance (if any)


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3. The employer shall pay into the InsuranceFund an amount not exceeding th of the

contribution which he is required under Sec.6-C. The payment is required to be made tomeet all the expenses in connection with theadministration of the Employees' Deposit-

linked Insurance Scheme other than theexpenses towards the cost of any benefitsprovided for or under that scheme.

4. The Insurance Fund shall vest in the Centralboard of trustees and be administered by it.

5 Th I S h id f ll


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5. The Insurance Scheme may provide for allor any of the matters specified in Schedule IV.

Mode of recovery of moneys due fromemployers (Sec.8)

1. Any of the following amounts due from anemployer in relation to an establishment towhich any Provident Fund Scheme orEmployees' Deposit-linked Insurance Schemeapplies may, if the amount is in arrear, berecovered in manner specified in Secs. 8-B to8-G:

)A b bl h l '


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a)Any contribution payable to the employees'Provident Fund or, as the case may be, the

employees' Deposit-linked Insurance Scheme;or

b)damages recoverable under Sec. 14-B;

c) accumulations required to be transferredunder Sec.15 or under Sec. 17; or

d)any charges payable by the employer, anyother provision of the Act or of any provisionof the Employees' Provident Fund Scheme orthe Employees' Deposit-linked InsuranceScheme.

2 S l l f h f ll d


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2. Similarly, any of the following amounts duefrom an employer in relation to an 'exempted

establishment' may, if the amount is in arrear,be recovered in the manner specified in Secs.8-B to 8-G.

a)any damages recoverable under Sec. 14-B, orb)any charges payable by the employer to the

appropriate Government under anyprovision of the Act or under any of the

conditions specified under Sec. 17, orc) the contribution payable by the employer

towards the Employees.

I f tifi t t th R Offi


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Issue of certificate to the Recovery Officer(Sec. 8-B)

1. Where any amount is in arrear under Sec. 8,the authorised officer may issue, to theRecovery officer a certificate under his

signature specifying the amount of arrears. TheRecovery Officer, an receipt of such certificate,shall proceed to recover the amount spe4cifiedtherein from the establishment or, as the case

may be, the employer by one or more of themodes mentioned below:


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a)attachment and sale of the movable orimmovable property of the establishmentor, as the as may be, the employer;

b)arrest of the employer and his detention inprison;

c) appointing a receiver for the managementof the movable or immovable properties ofthe establishment or, as the case may be, theemployer.

2 Th tt h t d l f t


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2. The attachment and sale of any propertyshall first be effected against the properties of

the establishment. Where such attachmentand sale is insufficient for recovering thewhole of the amount of arrear specified in thecertificate, the Recovery Officer may then take

proceedings against the property of theemployer for recovery of the whole or any partof such arrears.

P t ti i t tt h t (S 10)


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Protection against attachment (Sec. 10)

1. The amount standing to the credit of anymember of the fund cannot bea)charged;b)assigned; and

c) attached under any decree or order of theCourt.

2. Any amount standing to the credit of a

member in the fund and payable to hisnominee vest in the nominee and shall be freefrom any debt or other liability incurred by

the deceased or the nominee before the death


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Priority of payment of contributions overother debts (Sec.11)

where any employer is adjudicatedinsolvent or, being a company, an order for

winding up is made, the amount due fromthe employer in relation to anyestablishment to which any Employees'Provident Fund Scheme or Employees'

Deposit-linked Insurance Scheme appliesin respect of -


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a) any contribution payable to the ProvidentFund or the Deposit-linked Insurance

Fund;

b) damages recoverable under Sec. 14-B;

c) accumulations required to be transferredunder Sec. 15;

d)any charges payable by the employerunder any other provision of the Act orany provisions of the Employees'Provident fund Scheme or the employees'Deposit-linked Insurance Scheme.

2 Any amount due from the employer in


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2. Any amount due from the employer inrelation to an exempted establishment in

respect of -

a)any contribution to the provident fund orany insurance fund (in so far as it relates to

exempted employees)b)any contribution payable by him towards

the Pension Fund under Sec. 17;c) damages recoverable under Sec. 14-B; or

d)any charges payable by him to theappropriate Government under anyprovision of the Act or under any of the

conditions specified under Sec. 17.


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Employer not to reduce wages, etc. (Sec. 12)

1. Any employer in relation to anestablishment to which the Employees'Provident Fund Scheme or employees'

Deposit-linked Insurance Scheme appliesshall not by reason only of his liability forthe payment of any contribution to theFund or Scheme reduce, the wages of an

employee to whom the Fund or the schemeapplies.

2 He shall also not reduce the total quantum


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2. He shall also not reduce the total quantumof benefits in the nature of

a)old age pension;b)gratuity;c) provident fund; or

d)life insurance,

to which the employee is entitled under theterms of his employment, express orimplied.

Date post:	06-Apr-2018
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Employee PF and Misc. Provision Act

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