Hon’ble Apex Court -Interim Order –Basic Wage _EPF Act

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Legal Update:
In this update we are referring to the Hon’ble Apex Court Interim Order relating to Basic Wage _EPF Act - special allowance, dearness allowance, conveyance allowance and other allowances.
By *Interim Order dated 13-7-2012 in the matter of SURYA ROSHNI LTD Vs EPF where the matter in issue before the Hon'ble Supreme Court was whether certain allowances like conveyance allowance, transportation allowance and special allowance when uniformly paid to all employees should be treated as part of Basic wages under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (‘EPF Act’) and whether provident fund (‘PF’) contributions should be remitted on such allowances, the Apex Court granted partial stay of the demanded amount and directed deposit of 60 % of the demanded amount subject to credits of amounts already deposited. Further the Hon'ble Apex Court stayed the order of the High Court on compliance of the condition.*
The question whether the decision of the MP High Court holding that Section 2(b) and 6 of the Employees’ Provident Funds & Miscellaneous Provisions Act define basic wages and HRA, overtime allowance, bonus, commission or any other similar allowance are not covered in the definition of basic wages but when special allowance, dearness allowance, conveyance allowance and other allowances are paid universally to all the employees, they would be treated as part and parcel of basic wages by grant of Stay * is now a Substantial Question of Law of General Importance before the Apex Court under Article 133 of the Constitution of India .

Till date the Department has not issued any Circular based on this Interim Order or any further orders of the Hon'ble Supreme Court which presumably leads to the inference that the Department probably wants this Substantial Question of Law of EPF Law Compliance Importance to be decided by the Hon’ble Apex Court.

Our inference is purely personal and subject to any clarification or circular by the EPF Authority.

(Refer to Interim Order & its terms as contained therein)
With Regards
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry

Courtesy & thanks to  V.Sounder Rajan, Advocate -Labour & HR & Consumer Law Consultant -Chennai, Legal Consultant for Indian Staffing & Recruiting Industry