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Fir on resigned employee

(Querist) 06 December 2013 This query is : Resolved 
Sir,

For the following situation:


Employee resigned. his functional head released him with appreciation mail.(HR still did not)
Same time company realize that resigned employee was indulge in malpractice with vendor in huge volume. FIR also filed to that effect. Case is in court.
However, employee is quoting the reliving mail sent by his functional head and demand his PF and Gratuity settlement.

Any expert advice please.

Thank you.
Devajyoti Barman (Expert) 06 December 2013
The company can not withhold his PF and Gratuity but I doubt they would give him Release letter.
gurudath (Querist) 06 December 2013
Dear Mr.Barman,

Thank you for your efforts.

wanted to know if my understanding is correct.
Technically, employer cannot retain the PF Fund unless the employment contract contains terms that would entitle them to withhold PF dues if the termination formalities are not completed.

Few questions are:
1. Can it be a ground that FIR is filed against the accused and case is pending, to withhold the PF of the accused.
2. If the Employment contract contains terms on withholding the PF dues.
3. Can releasing the PF, infer that the company is indirectly admitting that accused is innocent and not guilty.

Regards
Gurudath
Sudhir Kumar, Advocate Online (Expert) 06 December 2013
you said



"Technically, employer cannot retain the PF Fund unless the employment contract contains terms that would entitle them to withhold PF dues if the termination formalities are not completed."


I totally disagree.


No language of any contract can give employer a right to withhold PF. It is criminal offence under rules made under EPF&MP Act 1952


Sudhir Kumar, Advocate Online (Expert) 06 December 2013
1. Can it be a ground that FIR is filed against the accused and case is pending, to withhold the PF of the accused.

ANS : NOT AT ALL. It is criminal offence

Sudhir Kumar, Advocate Online (Expert) 06 December 2013
2. If the Employment contract contains terms on withholding the PF dues.

ANS : NOT AT ALL. It is criminal offence

No right of employee under any labour statute can be waived by agreement.

Sudhir Kumar, Advocate Online (Expert) 06 December 2013

3. Can releasing the PF, infer that the company is indirectly admitting that accused is innocent and not guilty.


ANS ; NOT AT ALL. It is only a statutory duty of the company.

V R SHROFF (Expert) 06 December 2013
PF cannot be withheld or attached.
Once u join another company, it will be trf to ur next employer's PF
Kumar Doab (Expert) 07 December 2013
It is not clear that the querist/author of the post is employee or from the side of employee or from the side of employer.


Such clauses in the contract and such contracts can be termed invalid, unlawful, void, illegal.....................
The PF authorities may find themselves compelled to act against such causes.


Trade Unions, Employees unions may not slip over this meritorious opportunity.


If the standing orders are applicable to the establishment and extended to the designation of the employee the service conditions stated in standing orders that have statutory force shall prevail upon service conditions stated in appointment letter.


The employer HIMSELF shall be held responsible for faithful observance of standing orders.


It is up to the employee to proceed further in a manner as deemed suitable and bring the crafter of such agreement and the clauses to its logical conclusion.



If the employee is properly informed and is being advised by a competent lawyer by now he would be aware of the possibilities.


http://www.lawyersclubindia.com/experts/Implication-of-an-advocate-in-false-private-case-439076.asp#.UqCyOtIW1MA


>> Does your company have its own approved Trusts to manage the PF and gratuity and does it have its own PF and Gratuity rules?

It shall help if you can post what is this establishment: Private, Govt., bank, PSU etc :

Is the PF is being managed by EPFO and Gratuity by LIC or some FI?


>> Submit forms for PF withdrawal/Transfer and FormI ( or any prescribed form under Gratuity Rules of the Company if it has its own approved trust to manage the gratuity) for Payment of Gratuity under proper acknowledgment.


You can claim that entire amount held in your Gratuity a/c be paid even if the amount as per Formulae of calculation Gratuity is less than amount held in your Gratuity a/c.

There are judgments that employer has to disburse all amounts held in Gratuity a/c to the employee or all amounts paid by the LIC or any other FI from whom the compulsory insurance for gratuity has been obtained.


>> The employer and concerned employee in HR should attest the PF forms and submit to concerned office for further action in 5 days and should supply the acknowledgment issued by PF office for employee to employee preferably by effective mode of communication e.g redg. post.


From your side you may demand that all communications be supplied to you by redg. post only and that self addressed postage prepaid envelope for sending redg. post to you is attached.

If thee employer has declined to attest the PF forms or if you have POD of the PF forms submitted by you then you may get a fresh set of PF forms attested by any of the designated attesting authorities e.g BM of the bank where you hold an a/c and submit it thru the RPFC in nearest PF office under proper acknowledgment claiming by a covering letter that employer is not attesting the PF forms. The RPFC can depute the PF Inspector and penalize the company as deemed fit.


You must record the evidence of declinature.................audio/visual/in writing.


>> The speaking order with reasons stated in Payment of Gratuity Act Sec 4(6) to forfeit the gratuity to the extent of the damage is must following due process of natural justice.

The matter in FIR or court case may just be the utterances and employee may have nothing to do with it.

IN recent judgments the apex court has decided:



2. Crisp and short question which arises for consideration in these cases is as to whether, in the absence of any provision in the Pension Rules, the State Government can withhold a part of pension and/or gratuity during the pendency of departmental/ criminal proceedings? The High Court has - answered this question, vide the impugned judgment, in the negative and hence directed the appellant to release the withheld dues to the respondent.

7. It is an accepted position that gratuity and pension are not the bounties. An employee earns these benefits by dint of his long, continuous, faithful and un-blemished service…………………………..

8. It is thus hard earned benefit which accrues to an employee and is in the nature of "property". This right to property cannot be taken away without the due process of law…………………………..

12. Right to receive pension was recognized as right to property by the Constitution Bench Judgment of this Court………………………..

15. It hardly needs to be emphasized that the executive instructions are not having statutory character and, therefore, cannot be termed as "law"…………………………………….

the appellant cannot withhold - even a part of pension or gratuity. As we noticed above, so far as statutory rules are concerned, there is no provision for withholding pension or gratuity in the given situation…………………..

16. We, accordingly, find that there is no merit in the instant appeals as the impugned order of the High Court is without blemish.



>> In another elaborate and illustracious judgment pertaining to case of dismissal of service the learned court has decided implying that:

There has to be clear provision of forfeiture in the provident fund rules for effecting the forfeiture. If there is no such clause the employer can not forfeit the PF.

You may not confuse PF rules with the clauses inserted and stated on PF in appointment letter.


>> In another elaborate and illustracious judgment pertaining to case of dismissal of service of an employee of a Nationalized Bank the learned National Commission has decided that:

“Unless and until the Bank proves that losses have been caused due to the misconduct or fraud of the employee, the Bank has no authority, not to release the equal contribution made in the provident fund account of the employee.”

>> There are the judgments delivered by Supreme Court of India and other courts taking light from it that implies retrial benefits can not be attached and even after the retrial benefits reach the hands of retiree these do not loose their character.


>> >> Code of Civil Procedure, 1908


60. Property liable to attachment and sale in execution of decree.- (1)

Provided that the following particulars shall not be liable to such attachment or sale, namely:—

(g) stipends and gratuities allowed to pensioners of the Government or of a local authority or of any other employer, or payable out of any service family pension fund notified in the Official Gazette by the Central Government or the State Government in this behalf, and political pension;



Therefore it seems that it in interest of the employer that it fulfills its statutory obligation to attest the PF forms and supply the acknowledgment issued by PF office and voluntarily submits to release of PF and Gratuity


It shall be appropriate to deal with matter within the scope and possibilities and not by weird imagination and fantasy.


gurudath (Querist) 09 December 2013
Respected Sirs,

Thank you for your advice.

Regards
Gurudath


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