p.f.on leave wages

Dear Sirs,

Sub:  Supreme Court Judgement on payment of Provident Fund Contribution on Leave Encashment

Further to this office circular dated 5^th March 2008, we are glad to inform you that The Hon’ble Supreme Court, in its Judgement delivered on Wednesday, the 12^th March 2008, held that leave encashment did not form part of the wages. Therefore, there was no question of payment of Provident Fund contribution on leave encashment.

The Hon’ble Supreme Court has further held that such amounts paid earlier would be adjusted against future amounts of Provident Fund contribution payable in the case of concerned employees. 

Copy of the Judgement will be circulated in a day or two.

As you are aware, the original petition in the Supreme Court was filed by Manipal Academy of Higher Education (MAHE), Manipal and Millowners’ Association, Mumbai (MOA) had impleaded in the matter on behalf of the textile industry.

Yours faithfully,

( V.Y. Tamhane )

Hon. Secretary-General