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Amar Nanda   23 February 2017

Faulty EPF policy leading to large payments

Dear Sirs,

 

I am working in a Software MNC head-quartered in Pune. 5 years back when I joined the company, HR had a policy that the incumbent may or may not opt for EPF. So, I did not to opt.

Recently, after and audit and some meetings with the EPFO Commissioner they realised that the HR policy was wrong. We received a mail from HR regarding that. We must have had an EPF account.

But now, HR is asking all the employees without EPF account to open one account. And contribute the entire EPF deduction amount (5 years in my case, or the tenure of employment) into the new EPF account along with the interest. This is coming to a very large amount. All employees that have not opted for EPF are facing that issue.

We all  have financial commitments and it will be difficult for us to bear such a big financial burden. 

The point here is: this happened because of faulty HR policies and employees are paying for it. The reason the IT industry do not have a labour union, management is taking all undue advantage of the employees. Is this legal? I want to know our legal options here. Can we go to court against the company? What are our prospects?

We will be grateful if you provide some inputs here. Otherwise, we are at nowhere.



Learning

 60 Replies

Kumar Doab (FIN)     23 February 2017

It is wrong that there are NO IT/ITeS employee’s unions.

There are and embraced by Trade Unions.

Kumar Doab (FIN)     23 February 2017

The employee that are not properly informed, are not united face situations.

You ae also expected to know you are covered or not!

It is not employer’s or HR personnel’s decision or policy to provide PF coverage or not.

If the establishment was covered by the ACT 5 years back ( and you) then it was employer’s obligation to enroll all covered employee’s and deposit employee’s+employer’s contribution.

Kumar Doab (FIN)     23 February 2017

Employee cannot open PF a/c.

It is employer that attests forms and submits to EPFO.

You (employee) is expected to know the benefits of PF a/c (EPF,EPS,EDLI etc etc ).

You (employee) should have rather  jumped to be PF member even if it was not mandatory for you.

Visit EPFO website and count the benefits.

Also visit ESIC and count the benefits: e.g; salary in case of unemployment, coverage even after retirement (for self and spouse) @ say Rs 120/annum. There is NO match of ESI.

  

 

Kumar Doab (FIN)     23 February 2017

Saying, asking, telling are all verbal modes of communication.

Is HR saying verbally or in writing?

Let employers (or its attorney in HR) write to all employee’s.

You have the right to mention that you do not have funds to deposit in lump sum.

It is lapse by employer and it has to find suitable way out for its establishment and employee’s.

 

All employee's should unite.

Remain gentle and amiable.

 

Ritesh Maity (Labour Law Advocate)     23 February 2017

Initially your employer tried to evade paying PF although the company was covered. It seems now PF authority has sent notices to recover the PF dues for last five years, hence the company is asking you to pay the share. It is the responsibility of the employer to get covered under PF. If the company became covered 5 years back, then they should have started PF then. They did not start 5 years back and it is not the fault of employee. Right now, employee is not required to pay any PF contribution for earlier years. Let the company settle the dispute between themselves and PF authority.

Amar Nanda   23 February 2017

Thanks for your replies: Ritesh, and Kumar. 

This is clearly HR's fault. It is a large MNC with nearly 10k people. Originally from Pune, and head-quarterd in Pune. Recently completed 25 years.

HR is writing it in email. Keeping receipents in BCC, so that we do not get to "see" each other. But, talking among ourselves, we know that hundreds are affected. It is difficult to unite people, fear of loosing job is a problem. They are somewhat afraid to raise voice unless they have solid legal ground. 

Ritesh, I totally agree that it is a policy error and the company should settle it themselves. But are not doing that, they imposing everything on the employees. 

That is why I want to know what are our options: can law help us? Or a trade union, as Kumar has mentioned?

Please help us.

 

 

Sudhir Kumar, Advocate (Advocate)     24 February 2017

"HR had a policy that the incumbent may or may not opt for EPF. So, I did not to opt."

 

Illegal. 

I comment so without reading further.

 

EPFO knows how to deal with such oversmart employers.

 

Sudhir Kumar, Advocate (Advocate)     24 February 2017

"audit and some meetings with the EPFO Commissioner they realised that the HR policy was wrong"

You are mistaken or being misled. 
 
what you feel as "audit" is basically a raiod/inspection by PF Inspector who has caught your employer doing invasion by not depositing PF of many employees like you.
 
No employer goes to EPFO office in such cirucmstances  for a coffeee table meeting.  The employer must have been summoned (like evader) to appear in assesement proceedings, probably on a notice u/s 7A on a pink paper.It is not choice of your owner/HR Manger to be there he can be called by arrest warrant if he so desires.
 
after this Peshi he has understood that that 2+2=4. 

Sudhir Kumar, Advocate (Advocate)     24 February 2017

"HR is asking all the employees without EPF account to open one account. And contribute the entire EPF deduction amount (5 years in my case, or the tenure of employment) into the new EPF account along with the interest."

 

In all probability your employer is now given assesement order and has to deposit employee share as well as employer share also from their own pocket, whether you pay arrears of employee share or not.

 

Liability is on company and not on you.

 

Interest will also be charged on this amount and fine will be in addition. Further if the deposit is not there EPFO is empowered to attach the assetts of the company (not employees) including future receipts, bank deposits etc without going to court.  The HR manager and /or propritor can even be sent to Jail by them without any court order.

It is you mercy (and mercy alone) if you agree to deposit employee share for the past.

Sudhir Kumar, Advocate (Advocate)     24 February 2017

You are not clear if the emplkoyer shar eis also being recovered from you.

 

You may better submit complaint to the RPFC about episode.  First use RTI and get copy of the notice, proceedings, assessement order against them, from the RPFC.

 

meet APFC concerned/PRO/ RPFC in person.

Ritesh Maity (Labour Law Advocate)     24 February 2017

Originally posted by : Amar Nanda

Thanks for your replies: Ritesh, and Kumar. 

This is clearly HR's fault. It is a large MNC with nearly 10k people. Originally from Pune, and head-quarterd in Pune. Recently completed 25 years.

HR is writing it in email. Keeping receipents in BCC, so that we do not get to "see" each other. But, talking among ourselves, we know that hundreds are affected. It is difficult to unite people, fear of loosing job is a problem. They are somewhat afraid to raise voice unless they have solid legal ground. 

You can simply reply to the email that you do not have the financial condition to pay any money.

Ritesh, I totally agree that it is a policy error and the company should settle it themselves. But are not doing that, they imposing everything on the employees. 

At the stage you can only disagree to make the payment for earlier years. If you wish you may initimate the PF authority too. 

That is why I want to know what are our options: can law help us? Or a trade union, as Kumar has mentioned?

Law is there. The dispute is between the company and EPFO. The company is illegally asking you to pay. Just don't pay. Since it is a matter of many employees, you guys can jointly consult a lawyer for suggestions/ drafting of reply to the email etc.


Please help us.

 

 

 

As already pointed out, the EPFO must have started proceeding against the company. Hence, the company is trying their best to recover the amount from their employees. At this stage you cannot do much apart from denying to meet the demands of the company. 

Kumar Doab (FIN)     24 February 2017

You have posted that:

“That is why I want to know what are our options: can law help us? Or a trade union, as Kumar has mentioned?

It is believed that you are referring to Shri Kumar Doab and not Shri Sudhir Kumar.

However Mr. Sudhir Kumar has  not posted on Unions.

 

I had not posted that Trade Unions can help you, or shall agree to help you or shall embrace you.

You had posted that:

“The reason the IT industry do not have a labour union, management is taking all undue advantage of the employees.”

and it was replied that:

“It is wrong that there are NO IT/ITeS employee’s unions. There are and embraced by Trade Unions.

You may note that there are IT/ITeS employee’s unions, and embraced by Trade Unions.

Kumar Doab (FIN)     24 February 2017

In Maharashtra even Shiv Sena has floated a wing for IT employees.

Employee’s is a huge vote bank.

United employees are properly informed and supported.

IT/ITeS employees have united and unions have done a good job.

Such matters are best taken thru union plate forms.

It is entirely your sweet wish to approach unions or not!

Kumar Doab (FIN)     24 February 2017

What is written by HR personnel, even if it is as posted by you: in BCC?


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