Everybody would have come across the recent update in the PF website in chennai about the definition of Basic wages.
As per the same, the department has posted a update which claims to include Conveyance part of the salary also in to Basic wages.
For example for the following salary split
Other allowance 100.
What we have been practising and following so far is that for the purpose of considering Basic wages, we will take 2700 alone. But as per the update given, the department is construing the judgement of Division Bench of the Honourable Andhra Pradhesh High Court in
Nazeena Traders (Private) Limited v The Regional
Provident Fund Commissioner, that the EPF & MP Act, 1952 (citation not mentioned in the website) that except HRA portion which is specifically excluded in the section, apart from 2700, another 800+Rs.100 is added to the basic, and contribution to be paid on this.
For the sake of discussion, i have given some of the lines taken from the said judgement.
EPF & MP Act, 1952 is a beneficial
legislation enacted as a measure of social justice and should be construed
liberally so as to confer benefit on the employees to the maximum extent and
finally as per the guidelines laid down by the Hon’ble Supreme Court in The
Regional Provident Fund Commissioner, Punjab v Shibu Metal Works 1964-65
(27) FJR 491, in construing the material provisions of the Act, if two views are
reasonable possible, the Courts should prefer the view which helps the
achievement and furtherance of the object, which is also clearly defined in
Balbir Kaur and another v Steel Authority of India Ltd. and other; T.K.
Meenakshi (Smt.) and another v Steel Authority of India ltd. and Others as “to
ensure better future of the employee concerned on his retirement and for the
benefit of the dependants in case of his earlier death”. Moreover, in the matter
of State Vs. Girdhari lal Bajaj, 1962 II LLJ 46 (Bom.DB), the Hon’ble Court
observed that when there is doubt about their meaning, it is to be understood in
the sense in which it best harmonizes with the subject of the enactment and the
object which the legislature has in view"
With due respect to the Honourable High Court, I understand that the view of the Hon'ble court may not be of the view to bring all except the specific compents in the legislation a beneficial legislation, traversing against the employer's prerogative in deciding about the compents of the salary.
I request the members to put across their view and suggestion on this.
Krishnaraj P R