Friday, March 16, 2012

Employer can reduce PF contribution at a later stage also


When an employer is deducting and depositing EPF upon more than Rs 6500, he can reduce it to Rs 6500 later on and in that event section 12 of the EPF Act providing bar on reducing wages will not attract as was decided in MARATHWADA GRAMIN BANK KARAMCHARI SANGHATANA AND ANOTHER Vs MANAGEMENT OF MARATHWADA GRAMIN BANK AND OTHERS (SC 2011 LLR 1130)

For more details please follow the link.

http://www.mediafire.com/?v8ad6q02pwa8ja9

Madhu.T.K

22 comments:

  1. Dear sir, i m thankful to your valuable post.my query is different from the post. that is... can a trainee works in a night shift. and secondly if works in night shift, does he illegible to get night shift allowance. if any amendment or any legal support is available with you please attached/send to my email.
    regards
    surjya kumar
    email- skbp79@gmail.com

    ReplyDelete
    Replies
    1. A trainee is like an employee and is covered by all labour Acts. As such he is expected to be paid minimum wages as per notification, he should be covered by ESI and EPF and other welfare schemes. He should be paid bonus and if he has worked for five years he should be paid gratuity when he leaves the company. Moreover, he will be eligible to retrenchment compensation or lay off compensation. If woman she will be entitled to maternity benefits. That means a trainee is entitled to all benefits. If that is the case, a trainee should work in night shift also. If for working in night shift all employees are paid night shift allowance, naturally, that should be paid to trainee also. The thing will be different in the case of Apprentices engaged following Apprentice Act, 1960. Apprentices are engaged through Related Instruction Centres and they are not treated as workmen. Apprentices are not supposed to be engaged during night.

      Madhu.T.K

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  2. Dear Madhu sir, I am really thankful to you for your good response.I would like to inform about a scheme mentioned under which was being agreement between recognize trade union and management in last wage settlement.May I clear that type of agreement is mandatory/compulsory, where this is not mentioned in the agreement.Is there any rule or way to protest it by uninterested employees. Please guide.
    -------SCHEME is like--------
    RETIREMENT WELFARE FUND SCHEME:
    With effect from date of signing ofthe settlement, a Retirement Welfare Fund scheme will be introduced for the welfare of employees retiring
    from the Company. Under the scheme , an amount of Rs.10/- per each retiring non-executive in a month will be recovered from the salary of each continuing non-executive employee and the recovered amount from all the non-executives of the Company will be paid to the retiring non-
    executives with matching contribution from the Company.

    ReplyDelete
  3. If the existing settlement is a 12(3) settlement, a settlement arrived at a conciliation, the terms of the settlement will be binding on all the employees and as such a few employees can not protest on it.

    Madhu.T.K

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  4. This comment has been removed by the author.

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  5. DEAR SIR,
    KINDLY GUIDE ME , HOW CAN I FILL THE EQUAL REMUNERATION FORM "D" IN SHORT BECAUSE THERE IS 3 WOMAN IN OUR COMPANY THOSE ARE ON BIG POST.

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  6. Form D, Register of employment is self explanatory. The object of this register is to ensure that there is no discrimination in salary structure. If a woman is employed in the same capacity of man, the salary with different heads shall be the same. However, it is to be noted that there will be changes with respect to responsibility, effort or skill required or conditions of work and in such circumstances the salary will change and that will not be a deviation from the Act as was decided in Ashok Kumar Garg v. State of Rajasthan, (1994) 3 SCC 357. Also, with regard to higher posts, we need not give that importance because persons whether men or women holding managerial posts will not come under Equal Remuneration Act.

    Madhu.T.K

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  7. Dear sir,is there any limitation for deduction voluntary provident fund except EPF.

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  8. No, employee can contribute 100% of his salary to PF

    Madhu.T.K

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  9. Sir, I have two queries:
    1) Can the employer put a bar on the percentage amount of salary that the employee can put in PF over and above the 12% ?
    2) In case of offices employing less than 5 employees, is it necessary to display the abstracts of labour laws?

    I would be grateful if you could reply at the earliest.

    Best Regards,

    Malini

    ReplyDelete
    Replies
    1. If the employer is putting a limit to the contribution by the employees, how can it be termed as "Voluntary" contribution? Therefore, the employer cannot bar it. Let the employees contribute, it is not the headache of employer because even if the employee contributes, his contribution can be limited to 12%.
      If the establishment is employing only 5 persons, then it is not mandatory to display abstract of labour laws which are not applicable to that establishment (which employs less than 10 employees)

      Madhu.T.K

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  10. This comment has been removed by the author.

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  11. Thank you for your reply Sir.

    I have another query:
    If Principal employer provides some benefits directly to the contractual workforce instead of providing the same through the contractor (eg: say if the PE wants to provide Mediclaim policy to contractual employees directly)does it have any legal implications and does it amount to establishing direct employer-employee relationship?

    Appreciate your early response.

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  12. That will prove against the principal employer. Therefore, do not provide any benefit to contract employees directly.

    Madhu.T.K

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  13. hello madhu sir...........good morning.

    Thanks a lot for the information sharing with us through your blog.
    it was very helpful to many people like me.
    i would like to talk to you regarding my career.
    kindly let me know your mail id.
    sumana
    sumanapolisetti@gmail.com

    ReplyDelete
  14. My email id is madhukannoth@gmail.com

    ReplyDelete
  15. Dear Mr. Madhu T.K.
    As per my inference from the attached judgement of SC, even if the PF at a higher rate is paid by the employer and employee, the same can now be reduced to base it at Rs.6500/-
    Milind Shah
    milindpshah@gmail.com

    ReplyDelete
  16. Certainly. But since the reduction will amount to changes in service conditions and any change in service condition can be made only with the consent of employees. In the present scenarios wherein the employer shows the PF contributions as part of remuneration by way of CTC, it becomes very important to get it done with the concurrence of the employee who was earlier given a higher CTC

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  17. Dear Mr Madhu,
    I am also deducting and depositing EPF upon more than Rs.6500 for my employees, but I wish to stop doing that so that my employees get more cash in hand.
    My query is:
    1. What will happen to the amount that has been deposited so far?
    2. What is the procedure for reverting to deductions on base salary of Rs.6500(any application etc. to EPFO required?
    3. Is base salary of Rs.3000 to Rs.6500 legal? I own a school in Sikkim, so any minimum base wages for deductions I need to follow?

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  18. You can stop deducting and contributing on salary over 6500. For this a notice (normally notice under section 9A which tells about notice of change in service conditions) is to be given to all employees 21 days in advance. The amount already deposited will be available in the account without any problem.
    About minimum wages applicable to schools, you may have to refer the notification which is issued by the State Govt.

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  19. Dear Mr. Madhu, every month I use to pay PF contribution of 12% on basic pay and now I want to reduce the basic pay for example from 9000/- to 6000/- and pay 12% on it. Is that okay?

    ReplyDelete
  20. Great Blog!
    Thank you for sharing such a informative blog.We are Providing Best Services Like.
    Payroll Services
    Statutory Compliance
    HRMS Payroll Software

    ReplyDelete