PF Judgement

 

Dear All,

The P&H High Court, in a recent judgment dated 01.02.2011 has dismissed the petition filed by the PF department, wherein the department has challenged the order of PF appellant tribunal passed in favor of G4 Securities regarding having basic salary less than minimum wages.

The brief facts of the matter:

1.      As per the salary structure of G4 Securities, the basis salary of their many employees comes less than the minimum rate of wages, as prescribed by the Government of Haryana.

2.    The PF department, in enquiry under 7A has levied PF contribution to be paid on the minimum rate of wages.

3.    G4 had challenged the order of RPFC in the PF appellant tribunal and the appeal was accepted and the order of RPFC was quashed.

4.    The PF department has challenged the order of PF appellant tribunal in P&H High Court.

PF Department's Stand

The PF Department has contended that it is the minimum wage, the definition of which is provided under the Minimum Wages Act, which is to be taken into consideration for determining the contribution and that the Tribunal was wrong in interpreting the provisions of law and determining the liability of the respondents on the basis of the basic wage which was being given by the respondents to its employees for the purposes of determining the contribution to the fund. It is his case that the respondents have deliberately, by not including the allowances in the basic wage have sought to deflate the share of the employees contribution.

Management's Stand

It was argued by the management before the Hon'ble court that the definition of wages under the Minimum Wages Act is distinct from that of the basic wage under the Employees Provident Fund & Misc. Provisions Act and the provisions of one Act cannot be read into the other when the Legislative intent is clear since the Provident Fund Act was enacted subsequent to the enactment of the Minimum Wages Act and if the Legislature so intended , it would have certainly read the definition of wage as provided under the Minimum Wages Act into the provisions of the Employees Provident Fund Act but instead it chose to provide a separate definition as it was conscious of the needs of the Legislation.

The Hon'ble court, while dismissing the petitionof PF Department held that The objects and reasons of both the statutes are manifestly distinct even though they converge on the beneficial aspect of the welfare of an employee. The laws of interpretation of statute also provides that nothing more is to be read into the language of a statute and the words are to be  read and interpreted as they exist to acknowledge the legislative intent

The sum and substance is that the PF department can not claim PF contribution on Minimum Wages but only at the Basic Salary and other allowance are to be excluded for the purview of the definition.

However, such judgments are also subject to judicial review and we need to see if the PF department challenge this judgment is superior Court. I shall update you accordingly.

Please go through attached detailed judgment

--