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krishnarajpr (n/a)     01 December 2010

Basic wages as per PF act - new query

Dear All,

 

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

Baisc 2700

HRA 2400

Conveyance 800

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.

 

Regards,

Krishnaraj P R

9840355204



Learning

 3 Replies

bharathbohini84 (n/a)     03 December 2010

Basic wage + VDA  is the pf calculation components.

ANAND (n/a)     28 February 2011

As per PF act BASIC + DA to be considered

rahul (probation)     17 June 2011

SO FAR I HAVE UNDERSTAND IT IS THIS

" THAT IF BASIC SALARY + DA  IS LESS THAN THE MINIMUM WAGES EXCLUSIVE OF OTHER ALLOWNCES THE PF CONTRUBUTION CANNOT BE LESS THAN THE  MINIMUMWAGES PRISCRIBED .

RAHUL      


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