319.Ajay Justin-Employees Provident Fund and Miscellaneous Provisions Act

8/8/2019 319.Ajay Justin-Employees Provident Fund and Miscellaneous Provisions Act

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The Employees Provident Fund and MiscellaneousProvisions Act

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Table of ContentsTable of Contents ................................................................................................... 2

Extent of the Statute ............................................................................................. 3

Definitions to be taken note of .............................................................................. 4

Central Board ......................................................................................................... 5

Executive Committee ......................................................................................... 5

State Board ............................................................................................................ 6

Officers of the Boards ......................................................................................... 6

Contributions to be made into the Provident Fund ................................................7Employees Pension Scheme .............................................................................. 7

Employees Deposit Linked Insurance Scheme ...................................................8

Determination of moneys due from the employers ............................................9

Review of Orders passed .................................................................................... 9

Appellate Tribunal................................................................................................ 10

Appeals and Orders of the Tribunals ................................................................. 10

Recovery of Moneys due ...................................................................................... 11

Recovery of moneys by employers ................................................................... 11

Recovery of moneys by contractors ................................................................. 12

Issuance of Recovery Certificate ...................................................................... 12

Forwarding of certificate owing to want of jurisdiction .....................................12

Effect of Insolvency ......................................................................................... 13

Inspectors and their powers ................................................................................. 14

Penalties under the Act ........................................................................................ 15

Repeating Offenders ......................................................................................... 16Cognizance and trial............................................................................................ 16

Recovery of Damages .......................................................................................... 17

Industries Exempted ............................................................................................ 17

Power to Exempt .................................................................................................. 18

Exemption from Pension Scheme ..................................................................... 19

Exemption from Pension Scheme ..................................................................... 19

Effect of Cancellation of Exemption .................................................................. 20

Transfer of Accounts ............................................................................................ 20

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Effect of Transfer of Establishment ...................................................................... 21

Actions done in good faith ................................................................................... 21

Concluding remark ............................................................................................... 21

Extent of the Statute

The Act is meant to apply to every establishment which is a factory

engaged in any industry specified in Schedule I of the Act, provided that

twenty or more persons are employed therein. The Act can also be made

applicable to any other establishment employing twenty or more persons

or to class of such establishments which the Central Government may sonotify in the Official Gazette. The Statute also provides that the

application of the Statute may be extended to an establishment

employing less than twenty persons, provided that the Central

Government shall give not less than two months notice of its intention so

to do, vide a Gazette notification. Initially, the minimum number of

employees required to bring the establishment under the purview of the

Act was fifty, but taking into account the welfare nature of the Statute, thenumber was subsequently brought down to twenty by an Amendment

made in the year 1960.1

Apart from these modalities, there is another way in which an industry can

be brought under the purview of the Act as the statute provides that

where it appears to the Central Provident Fund Commissioner, on an

application made to him or even without such application, that the

employer and the majority of employees in an industry have agreed that

the provisions of the Act should be made applicable to the establishment,

the provisions of the Act can be made applicable to such establishment

vide a Gazette notification. In such cases, the provisions of the statute

shall be deemed to have taken effect from the date on which the

employer and the employees had come to an agreement to implement

the Act or from any subsequent date stipulated by such agreement.

1 Sec.2 of Act 46 of 1960, w.e.f. 31.12.1960.



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It is interesting to note that once the Act is made applicable to an

establishment, it shall continue to be governed by the Statute irrespective

of the fact that the number of persons employed therein falls below the

magical figure of twenty at any subsequent time.

Definitions to be taken note of

Section 2(b) of the Act defines basic wages to mean all emoluments

which are earned by an employee while on duty or on leave with wages or

on holidays with wages, in accordance with the terms of the contract of

employment and which are paid or payable in cash to him. However, the

Section excludes the following categories of payments from the purview of

basic wages: (i) the cash value of any food concession; (ii) any dearness

allowance, house-rent allowance, overtime allowance, bonus, commission

or any other similar allowance payable to the employee in respect of his

employment or of work done in such employment; and (iii) any presents

made by the employer. Dearness allowance here is meant to be

understood as all cash payments by whatever name called, paid to an

employee on account of a rise in the cost of living.

Section 2(g) defines Factory as any premises, including the precincts

thereof, in any part of which a manufacturing processes is being carried

on or is ordinarily so carried on, whether with the aid of power or without

the aid of power. An Occupier of a factory is defined as the person who

has ultimate control over the affairs of the factory, and, where the said

affairs are entrusted to a managing agent, such agent shall be deemed to

be the occupier of the factory.2

Central Board

Section 5.A provides that the Central Government may constitute a

Central Board for all such territories as to where the Act applies. Such a

Board is to be created by a notification in the Official Gazette. The Board

2 Section 2(k).



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shall constitute of (i) a Chairman and a Vice-Chairman, who are to be

appointed by the Central Government; (ii) The Central Provident Fund

Commissioner who shall be an ex-officio member of the Board; (iii) not

more than fifteen persons appointed by the Central Government from

amongst its officials; (iv) not more than fifteen persons representing the

Governments of the States, who are to be appointed by the respective

States; (v) ten persons representing employers of the establishments to

which the scheme applies, to be appointed by the Central Government

after consultations with the recognised organizations of such employers;

and (vi) ten persons representing employees in the establishments to

which the scheme applies, to be appointed by the Central Government

after consultations with the recognized organizations of such employees.

The Board is expected to administer the funds vested in it by means of

contributions, maintain proper accounts of its income and expenditure in

such form and in such manner as prescribed by the Central Government,

and also perform such other functions as it may be required to perform by

or under any provisions of the Employees Provident Fund Scheme and theInsurance Scheme under the Act.

Executive Committee

Section 5(AA) provides that the Central Government may, by means of a

Gazette Notification, constitute an Executive Committee to assist the

Central Board in the performance of its functions. Such Executive

Committee shall consist of (i) a Chairman appointed by the Central

Government from amongst the members of the Central Board; (ii) two

persons appointed by the Central Government from amongst its officials

nominated into the Central Board; (iii) persons appointed by the Central

Government from amongst the State nominees in the Central Board; (iv)

three persons representing the employers elected by the Central Board

from amongst the fifteen representatives of employers in the Central

Board; (v) three persons representing the employees elected by the



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Central Board from amongst the fifteen representative of the employees

in the Central Board; and (vi) The Central Provident Fund Commissioner as

the ex-officio member.

State Board

Section 5.B provides that the Central Government may, after consultation

with the Government of any State, by means of a Gazette Notification,

create a State Board for such State. Such a State Board shall exercise

such powers and perform such duties as the Central Government may

assign to it from time to time.

Both the Central Board and the State Board shall be a body corporate

under the name specified in the notification constituting it, having

perpetual succession and a common seal and shall sue and be sued by

the same name.3

Officers of the Boards

The Central Government is to appoint a Central Provident Fund

Commissioner who is to serve as the Chief Executive Officer of the Central

Board. Such Commissioner is to be under the general control and

superintendence of the Board. The Central Government may also appoint

a Financial Adviser and Chief Accounts Officer to assist the Central

Provident Fund Commissioner in the discharge of his duties.

Apart from these, the Central Board has been given the power to appoint

as many Additional Provident Fund Commissioners, Regional Provident

Fund Commissioners, Assistant Provident Fund Commissioners, and such

other officers and employees as it may consider necessary for the efficient

administration of the schemes under the Act.

3 Section 5.C



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Contributions to be made into the Provident Fund

Each employer shall, in respect of an employee employed by him either

directly or through a contractor, pay ten percent of the basic wages,dearness allowance and retaining allowance (only in cases where

retaining allowance is being paid) payable to such employee, to the

Provident Fund. Each employee shall contribute to the Provident Fund an

amount equalling the contribution made by the employer, but shall be

free to make a contribution over and above the sum made by the

employer, but in such a case, there shall be no obligation on the employer

to match such excessive contribution made by the employee. However,the Central Government shall be free, after making due inquiry, to issue a

Gazette Notification fixing the quantum of contribution of both employers

and employees at twelve percent in any establishment or class of

establishments.

Here, the term dearness allowance is meant to include even the cash

value of any food concession allowed to the employee. Retaining

allowance is the allowance paid to the employee of a factory or any other

establishment during the time when such factory or establishment is not

working, for the purpose of retaining his services.

Employees Pension Scheme

Section 6.A provides that the Central Government may frame an

Employees Pension Scheme for the following purposes:

(a)superannuation pension, retiring pension or permanent total

disablement pension to the employees of any establishment or class

of establishments to which this Act applies; and

(b)Widow or widower's pension, children pension or orphan pension

payable to the beneficiaries of such employees.

There shall be established a Pension Fund as soon as possible after

framing the pension scheme, into which the Employer shall contribute, inAjay Justin Odathekal Roll No:319 Semester VII |Labour Law Project


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respect of every employee, an amount not exceeding eight and one third

percent of the contribution already made by him into the provident fund in

respect of such employee.

When such a Pension Fund is established, the Family Pension Scheme

which was earlier existent ceases to operate and all the assets and

liabilities of the old scheme vests upon the new scheme, in so far as all

the beneficiaries under the ceased scheme shall be entitled to draw the

benefits under the new scheme, not less than the benefits they were

entitled to under the old scheme.

Employees Deposit Linked Insurance Scheme

The Central Government is empowered under the Act to formulate an

Employees Deposit-linked Insurance scheme for the purpose of providing

life insurance benefits to the employees of any establishment or class of

establishments to which the Act applies. As and when such an insurance

scheme is formed, a Deposit-Linked Insurance fund is to be formed.

Contributions shall be made to the fund in such a way that the employer

shall pay, in relation to each employee employed by him, not more than

one percent of the aggregate of the basic wages, dearness allowance and

retaining allowances (only in cases where such retaining allowance is

payable) payable to such employee. Apart from these, the employer shall

pay into the Insurance Fund such sums not exceeding one-fourth of the

contribution which he is normally required to make under the scheme, for

the purpose of meeting all the expenses in connection with the

administration of the Insurance Scheme. However such expenses shall not

include the money required to extend any benefits provided by or under

the scheme.

Determination of moneys due from the employers

Section 7.A provides that the Central Provident Fund Commissioner, any

Additional Central Provident Fund Commissioner, any Deputy Provident



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Fund Commissioner, any Regional Provident Fund Commissioner or any

Assistant Provident Fund Commissioner may, (a) in a case where a dispute

arises regarding the applicability of this Act to an establishment, decide

such dispute; and (b) determine the amount due from any employer under

any provision of this Act, the Scheme or the Pension Scheme or the

Insurance Scheme, as the case may be, and for the aforesaid purposes

conduct such inquiry as he may deem necessary. Where such an order is

passed against an employer ex parte, he shall be entitled to apply to the

officer for setting aside such order at any time within three months from

the date of communication of such order, provided that he satisfies the

Officer that the show cause notice was not duly served on him or that he

was prevented from appearing for the inquiry owing to some valid reason.

The Officer shall, if he is satisfied that there is sufficient reasons for so

doing, make an order setting aside his earlier order and appoint a date for

proceeding with the inquiry. However, if the Officer has sufficient reasons

to believe that the employer had otherwise come to know of the date of

hearing and had sufficient time to appear before the officer, he shall not

set aside the order on the ground that the notice was not duly served on

the employer.

Review of Orders passed

Any person who is aggrieved by an order passed under the Section above

mentioned, but from which no appeal has been preferred under the Act,

and who, from the discovery of new and important matter of evidence,

which, after the exercise of due diligence was not within his knowledge or

could not be produced by him at the time when the order was made,

owing to some mistake or error apparent on the face of the record of for

any other sufficient reason, desires to have the order made reviewed,

may apply for a review of that order to the officer who made the order.

If the Officer is of the opinion that the application should be granted, he

may so do but not without granting sufficient opportunity to all interested



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parties to be heard. Such power of review can be exercised suo moto by

the officer who made the order if he feels that there are sufficient reasons

for so doing.

Appellate Tribunal

The Central Government is, under the provisions of the Statute,

empowered to constitute one or more Appellate Tribunals, which are to be

christened as Employees Provident Fund Appellate Tribunal. Each such

Tribunal is to exercise such powers and discharge such functions as

conferred upon them by the Statute and shall have jurisdiction over the

establishments of such areas for which it has been created, unless

otherwise specified.4 Each such Tribunal shall be single member Tribunals

and the presiding officer of such Tribunal shall be a person who is, or has

been, or is qualified to be a Judge of a High Court or a District Judge. Such

officer shall hold the office for a period of five years or until he attains the

age of sixty-two years, whichever is earlier.

Appeals and Orders of the Tribunals

Any person who is aggrieved by an order fixing the moneys due from the

employer5, or an order either allowing or denying the review

contemplated under the Statute6, or an order determining the escaped

amounts7, can prefer an appeal to the Appellate Tribunal, and the Tribunal

may, after giving sufficient opportunities to all those concerned, pass such

orders as it thinks fit, either confirming or altering the order appealed

against. It may also send the case back to the authority which passed the

order appealed against, with such directions for disposing of the case, as

it may think fit, or even direct a fresh adjudication upon the issue.

The Tribunal shall be entitled, at any time within five years of its passing

the order, amend any order passed by it, and shall make such

4 Section 7.D5 Section 7.A.6

Section 7.B.7 Section 7.C.



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amendment in the order if the mistake is brought to its notice by the

parties to the appeal, provided, such an alteration is made for the purpose

of correcting an error apparent from the record. However, when such an

order has the effect of enhancing the amount due from, or otherwise

increasing the liability of the employer, it shall not be made effective

unless and until such employer is given notice thereof and is giving

reasonable opportunity of being heard. It is interesting to note that the

Legislature has sought to give a finality to the orders rendered by the

Appellate tribunal in so far as Section 7.L(4) provides that any order made

by a Tribunal finally disposing of an appeal shall not be questioned in any

Court of Law.

Recovery of Moneys due

If any money is due from the employer to any schemes under this Act, it

could be recovered by the Central Provident Fund Commissioner or such

other officer as may be authorised by the Provident Fund Commissioner,

in the same manner as an arrear of land revenue, but only after making a

Gazette Notification to that effect.

Recovery of moneys by employers

In the case of an employee employed through a contractor, the employer

would be entitled to recover from the contractor all the moneys he has

paid towards the schemes under this Act in respect of each such

employed through the contractor. He may recover the money either by

deductions from any payment payable to the contractor under any

contract or as a debt payable by the contractor.

Recovery of moneys by contractors

A contractor, from whom money has been recovered by the employer in

respect of an employee employed through him, may recover from such

employee the employees contribution under any scheme. Such a

recovery can be made either through deductions from basic wages,Ajay Justin Odathekal Roll No:319 Semester VII |Labour Law Project


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dearness allowances and retaining allowances (whenever payable)

payable to such employee. However, no contactor would be entitled to

recover from the employee the employers contributions stipulated under

the Act.

Issuance of Recovery Certificate

Where any amount is in arrear from the establishment or the employer

under any of the schemes under the Act, the authorised officer may issue

to the Recovery Officer, a certificate bearing his signature, specifying the

amount in arrears. The Recovery Officer, as and when he receives the

certificate above mentioned, shall proceed to recover the amount

specified therein from the establishment, or as the case may be, from the

employer. For this purpose, he may adopt any of the stipulated modes of

recovery which include attachment and sale of the movable or immovable

property of the establishment/employer, arrest of the employer and his

detention in civil prison, appointment of a receiver for the management of

the movable or immovable properties of the establishment/employer, etc.

Forwarding of certificate owing to want of jurisdiction

The authorised officer may forward the certificate above mentioned to the

Recovery Officer within whose jurisdiction the employer either carries on

his business or profession or where the principal place of his

establishment is situated or he permanently resides or any movable or

immovable property of the establishment is located.

Where an establishment or the employer against whom the recovery

proceedings has been initiated has property within the jurisdiction off

more than one Recovery Officer and the Recovery Officer to whom the

certificate has been sent is either unable to recover the entire amount or

is of the opinion that he alone would not be able to secure the recovery of

the arrears, he may either send the certificate to the other Recovery

Officer within whose jurisdiction the other part of the property is located



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requesting him to recover the whole of the arrears or may send a copy of

the certificate to such Recovery Officer, if only a part of the recovery is to

be made by him the other part being recoverable by the Recovery Officer

to whom the certificate was originally addressed. When a Recovery Officer

receives such a forwarded certificate, he shall proceed to make the

recovery as if the certificate had originally been sent to him by the

authorised officer.

Effect of Insolvency

If an employer from whom some money is due under any scheme under

the Act is declared insolvent or a Company from similar sums is due is

wound up, the amount due in either case, in so far as they accrued before

the order of insolvency or winding up, as the case may be, is made, would

be deemed to be included among the debts which are to be paid in

priority to all other debts, in the distribution of the property of the

insolvent or the assets of the company being wound up, as the case may

be.

Similarly, when an amount is due from the employer, the amount so due

shall be deemed to be the first charge on the assets of the establishment

and shall be paid in priority to all other debts.

The Statute in unequivocal terms stipulate that no employer can reduce,

whether directly or indirectly, the wages or any other benefits to which

the employees are entitled to, either by reason of his liability for the

payment of any contribution to the Funds under the Act or due to any

charges under the Act or any scheme there under.8

8 Section 12.



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Inspectors and their powers

The Act provides that the appropriate government may, by notification in

the Official Gazette; appoint such persons as it thinks fit to be Inspectorsfor the purposes of the Act and schemes framed there under. When the

Government appoints such inspectors, it shall also define their jurisdiction.

Any Inspector so appointed may, for the purpose of inquiring into the

correctness of any information furnished in connection with this Act:

a) Require an employer or any contractor from whom any amount is

recoverable under section 8A to furnish such information as he may

consider necessary;b) At any reasonable time and with such assistance, if any, as he may

think fit, enter and search any establishment, or any premises

connected therewith and require any one found in charge thereof to

produce before him for examination any accounts, books, registers

and other documents relating to the employment of persons or the

payment of wages in the establishment;

c) Examine, with respect to any matter relevant to any of the purposesaforesaid, the employer or any contractor from whom any amount is

recoverable under sections 8A, his agent or servant or any other

person found in charge of the establishment, or any premises

connected there with or whom the Inspector has reasonable cause

to believe to be or to have been, an employee in the establishment;

d) makes copies of, or take extracts from, any book, register or other

document maintained in relation to the establishment and, wherehe has reason to believe that any offence under this Act has been

committed by an employer, seize with such assistance as he may

think fit, such book, register or other document or portions thereof

as he may consider relevant in respect of that offence;

e) Exercise such other powers as the Schemes under the Act may

provide.



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Penalties under the Act

Any person who, for the purpose of avoiding any payment of money due

from him under the Act or any Scheme there under, or for the purpose ofenabling any other person so liable to avoid such payment, knowingly

makes or causes to be made any false statement or false representation,

is liable to be punished with imprisonment for a term which may extend to

one year or with fine of five thousand rupee or with both.

Similarly, an employer who contravenes the provision of the Act in relation

to the payments to be made into the Pension Scheme or makes default in

payment of inspection charges stipulated under the Act shall be

punishable with imprisonment which may extend to three years. Such

punishment shall not be less than one year and a fine of ten thousand

rupees when the matter relates to default in payment of the employees

contributions which have already been deducted by the employer from

the employees wages. In all other cases, the punishment shall not be less

than imprisonment for a period of six months and a fine of five thousand

rupees. However, the Court has been given adequate powers to impose a

lesser sentence, provided there are sufficient reasons for so doing, which

has been noted in the judgement.

An employer who contravenes the provisions of the Act relating to the

payments to be made into the Employees Deposit Linked Insurance

Scheme shall be punishable with imprisonment for a term which may

extend to one year, but shall not be less than six months, and shall also

be liable for a fine which may extend to five thousand rupees. In this case

also, the Court may impose a lesser penalty, provided there are sufficient

reasons for so doing, which are to be noted in the judgement.

Subject to the provisions of the Act and any Scheme formed there under,

any person who contravenes, or makes default in complying with any of

the provisions thereof shall be punishable with imprisonment for a term



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which may extend to one year, or with fine which may extend to four

thousand rupees, or with both.

Similarly, whoever contravenes or makes default in complying with anyprovision of the Act or of any condition subject to which exemption was

granted under the provisions of the Act shall, if no other penalty is

elsewhere provided by or under this Act for such contravention or non-

compliance, be punishable with imprisonment which may extend to six

months, but shall not be less than one month, and shall also be liable to

fine which may extend to five thousand rupees.

When the offences above mentioned is committed by a Company, then

every person who was in charge of the Company at the time of

commission of the offence, or who was responsible to the Company for

the conduct of the business of the company, shall be proceeded against,

along with the company and shall be punished accordingly. However, if

the person so proceeded against is able to prove that the offence was

committed without him having known about it, or that he took reasonable

care to prevent the commission of the offence, then he shall not be

proceeded against.

Repeating Offenders

A person who has previously been convicted for the commission of any of

the offences above mentioned is found to have committed the same

offence again shall be subject for every such subsequent offence to

imprisonment for a term which may extend to five years, but shall not be

less than two years, and shall also be liable to a fine of twenty five

thousand rupees.

Cognizance and trial

The Act provides that no court shall take cognizance of any offence

punishable under the Act, except on a report in writing of the facts

constituting such offence made with the previous sanction of the CentralAjay Justin Odathekal Roll No:319 Semester VII |Labour Law Project


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Provident Fund Commissioner or such other officer as may be authorised

by the Central Government. Section 14.AC further provides that no court

inferior to that of a Presidency Magistrate or a Magistrate of the first class

shall try any offence under this Act or any scheme framed there under.

Recovery of Damages

Where an employer makes default in the payment of any contribution to

the Funds formed under the Act, or in the transfer of accumulations

required to be transferred by him; the Central Provident Fund

Commissioner or such other officer as may be authorised by the Central

Government in this behalf may recover from the employer by way of

penalty such damages, not exceeding the amount of arrears, as may be

specified in the Scheme. However, before levying and recovering such

damages, the employer shall be given a reasonable opportunity of being

heard. Further, the Central Board has been given the power to reduce or

waive the damages so levied, if the establishment from which the money

is to be recovered has been declared a sick industrial company and a

scheme for its rehabilitation has been sanctioned by the Board for

Industrial and Financial Reconstruction.

Industries Exempted

Section 16 provides that the Act shall not apply to the following categories

of establishments:

a. Establishment registered under the Co-operative Societies Act,

1912, or under any other law for the time being in force in any State

relating to co-operative societies, employing less than fifty persons

and working without the aid of power, or

b. Any other establishment belonging to or under the control of the

Central Government or a State Government and whose employees

are entitled to the benefit of Contributory provident fund or old age

pension in accordance with any scheme or rule framed by the



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Central Government or the State Government governing such

benefits, or

c. Any other establishment set up under any Central, Provincial or

State Act and whose employees are entitled to the benefits of

contributory provident fund or old age pension in accordance with

any scheme or rule framed under that Act governing such benefits.

Power to Exempt

Section 17 provides that the Government may, by a Gazette notification,

provide either prospective or retrospective exemption to:

1. any establishment to which this Act applies if, in the opinion of the

appropriate government, the rules of its provident fund with respect

to the rates of contribution are not less favourable than those

provided for under the Act and the employees are also in enjoyment

of other provident fund benefits which on the whole are not less

favourable to the employees than the benefits provided under the

Act or any Scheme in relation to the employees in any otherestablishment of similar character.

2. any establishment if the employees of such establishment are in

enjoyment of benefits in the nature of provident fund, pension or

gratuity and the appropriate government is of opinion that such

benefits, separately or jointly, are on the whole not less favourableto such employees than the benefits provided under the Act or any

Scheme in relation the employees in any other establishment of a

similar character.

However, the Government cannot grant such an exemption without the

concurrence of the Central Board. Similarly, when such an exemption has

been granted, the employer shall establish a Board of trustees for the

administration of the provident fund consisting of such number ofAjay Justin Odathekal Roll No:319 Semester VII |Labour Law Project


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members as may be specified in the scheme. Such a Board of Trustees

constituted shall: (i) maintain detailed accounts to show the contributions

credited, withdrawals made and interest accrued in respect of each

employee; (ii) submit such returns to the Regional Provident Fund

Commissioner or any other officer as the Central Government may direct

from time to time; (iii) invest the provident fund monies in accordance

with the directions issued by the Central Government from time to time;

(iv) transfer, where necessary, the provident fund account of any

employee; and (v) perform such other duties as may be specified in the

Scheme.

Exemption from Pension Scheme

Similarly, the Appropriate Government may, by a Gazette Notification

exempt any establishment or class of establishments from the operation

of the Pension Scheme under the PF Act, 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 pension benefits are at par or more favourable than the

Pension Scheme under the Act. However, such a scheme may make

provision for exemption of any person or class of persons employed in any

establishment to which the Scheme applies from the operation of all or

any of the provisions of the Scheme, if such person or class of persons is

entitled to benefits which are on the whole not less favourable than the

benefits provided under this Act or the Schemes framed hereunder.

Exemption from Pension Scheme

The Central Provident Fund Commissioner may, if requested so to do by

the employer, by a Gazette notification exempt, whether prospectively or

retrospectively, any establishment from the operation of all or any of the

provisions of the Insurance Scheme, if he is satisfied that the employees

of such establishment are in enjoyment of benefits in the nature of life

insurance, whether linked to their deposits in provident fund or not, andAjay Justin Odathekal Roll No:319 Semester VII |Labour Law Project


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such benefits are more favourable to such employees than the benefits

admissible under the Insurance Scheme. However, such an Insurance

Scheme may provide for the exemption of any person or class of persons

employed in any establishment and covered by that Scheme from the

operation of all or any of the provisions thereof, if the benefits in the

nature of life insurance admissible to such person or class of persons are

more favourable than the benefits provided under the Insurance Scheme

of the Act.

Effect of Cancellation of Exemption

When any such exemption granted under the forgoing provisions is

revoked, the amount of accumulations to the credit of every employee to

whom such exemption applied, in the Provident Fund, or the Pension Fund

or the Insurance Fund, as the case may be, of the establishment in which

he is employed shall be transferred to the credit of his account in the

Provident Fund, or the Pension Fund or the Insurance Fund, as the case

may be, under the Act.

Transfer of Accounts

When an employee employed in an establishment to which the Act applies

leaves his employment and obtains re-employment in another

establishment to which the Act does not apply, the amount of

accumulations to the credit of such employee in the Fund, or as the case

may be, in the provident fund of the establishment left by him shall be

transferred to the credit of his account in the provident fund of the

establishment in which he is re-employed, provided that the employee so

desires and also the rules in relation to that provident fund permit such a

transfer.

Similarly, when an employee employed in an establishment to which this

Act does not apply leaves his employment and obtains re-employment in

another establishment to which this Act applies, the amount of

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establishment left by him may, if the employee so desires and the rules in

relation to such provident fund permit, be transferred to the credit of his

account in the Fund or as the case may be, in the provident fund of the

establishment in which he is re-employed.

Effect of Transfer of Establishment

Where an employer transfers his establishment either in whole or in part,

the employer and the person to whom the establishment is transferred

shall jointly and severally be liable to pay the contribution and other sums

due from the employer under any provision of the Act or any scheme

framed hereunder, as the case may be, in respect of the period up to thedate of such transfer, provided that the liability of the transferee shall be

limited to the value of the assets obtained by him by such transfer.

Actions done in good faith

Section 18 declares that no suit of civil or criminal nature would lie against

the Central Government, any State Government, the Presiding Officer of

the Tribunals constituted under the Act, any Inspectors or any otherperson for any act which is done in good faith or is intended to be done in

pursuance of the Act or any scheme framed there under.

Concluding remark

Though the Employees Provident Fund and Miscellaneous Provisions Act is

a much more comprehensive Statute incorporating much more details,

the above discussed could very well be identified as the crux of the

Statute as they reflect the heart and soul of the Act and brings out its

welfare nature.


319.Ajay Justin-Employees Provident Fund and Miscellaneous Provisions Act

Documents

Transcript of 319.Ajay Justin-Employees Provident Fund and Miscellaneous Provisions Act