ASSIGNMENT

Employees Provident Fund &

Miscellaneous Provision Act, 1958

Submitted By:
Hitesh Kheskani
Ishan Panjwani
Kirti Agrawal
Maulik Vora

Submitted on:
23/11/2010
About Employees Provident Fund & Misc. Provision Act, 1958
The concept of social security is based on the ideals of human dignity and social justice. Every
worker wants to be certain not of his next meal but also of his subsistence for the rest of his life
and subsistent of his dependents as well. With this need of social security which is a stability and
protection in the modern life, the Employees Provident Fund & Miscellaneous Provisions Act
1952 has come into existence.

The Employees Provident Fund & Miscellaneous Provisions Act 1952 which has come into force
from 1st November, 1952 is a piece of social security enactment designed to provide for a scheme
to make provisions for the future of industrial workers and their dependents in case of their
retirement and in the event of their premature death. By gradual extension of the scope and
coverage of the Employees Provident Fund & Miscellaneous Provisions Act, the benefits are
being made applicable to a wide range of employees working in factories, mines, plantation,
construction industries, educational institutions and other classes of establishment in a short
period.

The Employees provident Fund Organization has made distinct contribution in the field of social
security and to the national economy. The scope of the Act and three schemes have been
progressively extended to cover different sectors of industrial workers.

Coverage
The Act was initially made applicable only to such of those establishments, which have
employed 50, and above and the same has been reduced to 20 and above employee’s
w.e.f.31.12.1960. A special provision has been made in respect of Cinema theatre enabling
coverage of those employed 5 and above.

If at least for one day in a year, the establishment employs more than 19 persons or 20 persons,
the provisions of the Act becomes applicable automatically to the establishment from that date.
Once the Act applies, subsequent reduction in employees below 20 does not make any
difference.
If employer is compelled to employ addition hands for an accidental purpose or for a very short
period then such employee cannot be considered. Similarly, if the establishment regularly
employs for its business the required number of the employees then they will be considered even
if the number falls short for some days in the year.

Act applies by its own force if the conditions in the Act are satisfied. However, the EPFO issues
the code number for the purpose of compliance.

The onus to prove the establishment does not employ 20 persons lies on the employer who has
challenged the applicability.

The infancy benefit which was 5 years in respect of the establishments employing less than 50
persons has been reduced to 3 years with effect from 31.12.1960 and now has been wiped out
with effect from 22.9.1997 in order to provide the social security to the maximum employees.

Eligibility
The period of eligibility for becoming a member of the fund has been progressively reduced
from 240 days to 120 days and to 60 days and with effect from 1.11.1990 an employee is eligible
from the day one.

Rate of contribution
The rate of contribution payable towards provident fund, which was originally set at 6.25%, is
now enhanced to 8.33% and 10% and thereafter to 12% with effect from 22.9.97. the employer
shall have to pay matching/ equal contribution together the employees share deducted from
wages/salary within 15 days of close of every month. He will pay administrative charges on PF
and EDLI schemes.

Pay limit
The pay limit for becoming a member of the fund which was set initially at Rs. 300/- has been
increased to Rs.3,500/- with effect from 1.11.1990 and to Rs.5,000/- and now Rs.6500/- with
effect from 1.6.2001.
The definition of an employee has undergone change to cover all categories of employees
including that of contract, piece rated, daily rated, homeworker and trainees.

All the amendments show the intention of the government to provide much needed support to the
workers, with a view to provide long term financial security to the families of the even of their
untimely death, the govt. of India has introduced the employees” Family Pension Scheme, 1971
and thereafter the scheme of 1971 has been replaced by the employees’ Pension scheme,1995
with effect from 16.11.1995 providing monthly pension to the industrial worker on attaining the
age of 58 years if he has rendered 10 years’ service and also contributed to the pension fund.
Besides, the provisions have also been made for payment of a) dis-counted pension in case of
attaining the age of 50 years. b) Disabled person in case of permanent disability, c) widow
pension, children pension, orphan pension etc.

With view to provide insurance cover to the members of the P.F. The Employees deposit linked
insurance scheme has been introduced in 1976,for which employees need not to pay any
premium. The insurance payment has been linked to the provident fund accumulation subject to
maximum payment to the tune of Rs 60,000.

With view to provide financial assistance partial withdrawals have been allowed to the members
in case of illness, closure of establishment and discharge of social responsibilities like marriage
of sister, brother, son daughter or higher education of children abnormal conditions such as
floods, earthquake, riots and construction of dwelling house and physically handicapped member
etc.

With a view to provide the effective service to the subscribers, the computer has been installed in
Regional Office and Sub Regional Office of the EPFO. In order to redress the grievances of the
subscribers, Public relation officer is functioning in Regional Office as well as Sub Regional
Offices.

We would take this privilege to explain you about the services provided by our legal consultancy
in:
All Labor Laws related solutions & services
 EPF Act (Employees Provident Fund & Miscellaneous Provisions Act 1952)
 Factories Act, 1948
 ESI Act, 1948 (Employees State Insurance Act, 1948)
 Industrial Disputes Act, 1947
 Payment of Bonus Act, 1965
 Payment of Wages Act, 1936
 Minimum Wages Act, 1948
 Payment of Gratuity Act, 1972
 Contract Labor (Regulation & Abolition) Central Rules, 1957
 Industrial Disputes (Central) Rules, 1957
 Minimum Wages (central) Rules, 1950
 Payment of Bonus Rules, 1975

We also provide services in maintaining the records such as

 Salary sheets of the Employees

 Registers Under Labor Laws
 Monthly and Annual returns under EPF Scheme
 Employees’ Pension Scheme
 Returns under E.S.I.

Challenges
 Corruption by the Enforcement officers
 The subscription rate being high
 Semi-literate, part-time workers do not want this facility
 Gap on the policy front.
 The operational authority is not clearly defined
 EPFO is run as if it were a welfare organization that does not require professionalism,
expertise, and long-term sustainability.
 The interest rate being offered to subscribers is still very high and the investment of the
corpus of fund by the organization is not fetching such interest
 A Pension Scheme, introduced by the organization, could also face major fund problems,
since the return on investment does not match the offer of pension outgo.
HIGHLIGHTS OF EMPLOYEES PROVIDENT FUND ACT &
MISELLANEOUS PROVISION ACT 1952

 This act applies to whole of India expect Jammu & Kashmir, this act applies to
a) To every establishment which is factory engaged in any industry in which 20 or more
persons are employed.

b) To any other establishment employing 20 or more persons which central government

may specify by notification in official gazette.

 Employer has to maintain provident fund account in establishment.

 Employer has to submit return in this respect, deposit the contribution, provide
facilities for inspection, pay administration charges.
 Employer has to follow rules & regulations laid down by central government in relation
to employees provident fund scheme.
 Employer directly or indirectly cannot cut the wages of employees, for the reason of his
liability for payment as to the contribution in provident fund and insurance scheme.
 Employer who contravences or makes default in complying with the provisions of
Employee’s Provident fund & Miscellaneous Provision act will be punishable with
imprisonment which may extend to 3 years.
AMENDMENT IN EMPLOYEES PROVIDENT FUND & MISCELLANEOUS
PROVISION SCHEME 1996
MINISTRY OF LABOUR
New Delhi,the 2nd February,1996
G.S.R……………… In exercise of the powers conferred by section 5 read with sub-section (1) of
section 7 of the EMPLOYEES PROVIDENT FUND & MISCELLANEOUS PROVISION ACT,1952 (19 OF
1952), the central government hereby makes the following scheme further to amend the
employees provident scheme,1952,namely :

1.

(1) This Scheme may be called the employees provident funds (amendment) schemes, 1996;
(2) It shall come into force on the date of its publication in the official gazette.

2. In the ‘EMPLOYEES PROVIDENT FUNDS SCHEME, 1952:

(1) “68NN Withdrawal within one year before the retirement. The commissioner or
where so authorized by the commissioner, any officer subordinate to him, may, on an
application from a member in such form as may be prescribed, permit withdrawal upto 90% of
the amount standing at his credit, at any time after attainment of the age of 54 years by the
member or within year before his actual retirement or superannuation whichever is later”.

(F.NO.S-35012/5/95-S.S.II)
(JP.Shukla)
Under
Secretary

Amendment of section 2

In section 2 of the principal act

(a) clauses (gg) and (ggg) shall be omitted.
 (b) after clause (k), the following clauses shall be inserted, namely :
“(ka)” “Pension fund” means the Employees’ pension fund established
under sub-section (2) of section 6A;
(kb) “Pension Scheme” means the employees’ pension scheme
framed under sub-section (1) of section 6A”;

Amendment of section 6C

In section 6C of the principal act;

(a) Sub-section (3) shall be omitted;

(b) Clause (b) of sub-section (4) shall be omitted.

Amendment of section 17

In section 17 of principal act:

(a) For sub-section (IC), the following sub-section shall be substituted, namely:
“(IC) the appropriate government may, by notification in the official gazette, and subject
to the condition on the pattern of investment of pension fund and such other conditions
as may be specified therein, exempt any establishment or class of establishment from
the operation of the pension scheme if the employees of such establishment or class of
establishments are either members of any other pension scheme or propose to be
members of such pension scheme, where the pensionery benefits at par or more
favorable than the Pension scheme under this act”.

In sub-section (6), the words “as well as employees” “contribution” shall be omitted.
Case
Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 – Failure to deposit
employer’s and employees’ contribution of provident fund

ROBIN PAUL V. STATE OF WEST BENGAL [2010] 153 COMP CAS 419 (CAL) PARTHA
SAKHA DATTA J [DECIDED ON 11-3-2008]

Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 – offences and prosecution
– offence by company – director – liability – failure to deposit employer’s and employees’
contribution of provident fund – whether director can be prosecuted under the Indian Penal Code
– held, no

Brief facts : For failure to deposit the employer’s  and employees’ contributions of the provident
fund, first information reports were lodged under sections 406 and 409 of the Indian Penal Code,
1860, against the petitioners alleging offence of criminal breach of trust. On revision petitions,
the petitioners contended that a director of the establishment was not answerable to charge under
section 406 / 409 of the Indian Penal Code; that the word “employer” under section 405 of the
Indian Penal Code did not include the directors and that prosecution had been launched against
the directors instead of the company. Therefore, the petitioners, being directors were not
answerable to the charge.

Decision: Petition allowed

Reason: The word “employer” does not include a director within Explanations 1 and 2 to section
405 of the Indian Penal Code, 1860.The definition of the word “employer” under the Employees’
Provident Fund and Miscellaneous Provisions Act, 1952 is the same as in the Employees’ State
Insurance Act, 1948, but the definition cannot cover the director when such director is sought to
be prosecuted for an offence under section 405 of the Indian Penal Code. [The court quashed the
criminal proceedings against the petitioner- directors.]
Reference

Website
http://www.onecaselawperday.com/?p=291

http://www.baicbe.org/scan2.pdf

Books
“GUIDE TO EMPLOYEES PROVIDENT FUND LAW” by K.G. Maheshwari, Book Corporation.