Dear All, Our company has introduced Benevolent fund and for that management has decided to deduct contributions from the salary of staff.
Legality--As per my knowledge this can be done by either incorporating the same in company policies/standing order, we do not have standing order so we are thinking of bringing a change in company policies by introducing this fund.
As per my knowledge, No statutory law permits to do the deduction in the name of benevolent fund so an employee may approach labour office/court to refund deduction, please elucidate on this
thanks
From India, Chandigarh
5Legality--As per my knowledge this can be done by either incorporating the same in company policies/standing order, we do not have standing order so we are thinking of bringing a change in company policies by introducing this fund.
As per my knowledge, No statutory law permits to do the deduction in the name of benevolent fund so an employee may approach labour office/court to refund deduction, please elucidate on this
thanks
From India, Chandigarh
Dear Destinywins,
Thanks for raising this query.
During initial period of my professional career, I came across a benevolent fund in one of the reputed companies having factory in Mumbai and another factory in Nasik. That time I asked the question to many seniors about the legality of such benevolent fund and whether can we effect deduction from payment of wages towards such benevolent fund?
Till time I do not know the legality of such benevolent fund but, certainly I can say, in the list of authorised deductions in POW Act the contribution towards any such benevolent fund is not included.
Experts are requested to throw some light in this subject.
From India, Mumbai
Thanks for raising this query.
During initial period of my professional career, I came across a benevolent fund in one of the reputed companies having factory in Mumbai and another factory in Nasik. That time I asked the question to many seniors about the legality of such benevolent fund and whether can we effect deduction from payment of wages towards such benevolent fund?
Till time I do not know the legality of such benevolent fund but, certainly I can say, in the list of authorised deductions in POW Act the contribution towards any such benevolent fund is not included.
Experts are requested to throw some light in this subject.
From India, Mumbai
Kindly reply on this. i know seniors can answer this probably this post has skipped their attention i suppose
From India, Chandigarh
From India, Chandigarh
Dear Member
Any deduction from the salary which is not statutory in nature and not listed in the list of permissible deductions under Payment of Wages act can be deemed illegal.
All such deductions have to be made with written consent of each individual. Management can make a policy but can not force the employees to be part of it.
The best way is to Discuss the policy before you float it. Explain the benefits to all the employees. Explain the process of claim, the contribution management is going to make towards the fund and seek individuals approval. Having a written consent from the individuals would give you the required legal shield.
Regards
Preetam Deshpande
From India, Mumbai
Any deduction from the salary which is not statutory in nature and not listed in the list of permissible deductions under Payment of Wages act can be deemed illegal.
All such deductions have to be made with written consent of each individual. Management can make a policy but can not force the employees to be part of it.
The best way is to Discuss the policy before you float it. Explain the benefits to all the employees. Explain the process of claim, the contribution management is going to make towards the fund and seek individuals approval. Having a written consent from the individuals would give you the required legal shield.
Regards
Preetam Deshpande
From India, Mumbai
Dear Preetam ji,
Thank you for your participation which compelled me to study again the section 7 to clear my conception.
According to Section 7 (2)(kk), deductions made with the written authorisation of the employed person, for the payment of his contribution to any fund constituted by the employer or a trade union registered under the Trade Unions Act, 1926 for the welfare of the employed persons or the members of their families, or both, and approved by the State Government or any officer specified by it in this behalf, during the continuance of such approval, is an authorised deduction.
Dear Destinywins,
You need to take approval of the State Government for such benevolent fund. To my knowledge, such fund / scheme may fall under the Charity Commissioner.
From India, Mumbai
Thank you for your participation which compelled me to study again the section 7 to clear my conception.
According to Section 7 (2)(kk), deductions made with the written authorisation of the employed person, for the payment of his contribution to any fund constituted by the employer or a trade union registered under the Trade Unions Act, 1926 for the welfare of the employed persons or the members of their families, or both, and approved by the State Government or any officer specified by it in this behalf, during the continuance of such approval, is an authorised deduction.
Dear Destinywins,
You need to take approval of the State Government for such benevolent fund. To my knowledge, such fund / scheme may fall under the Charity Commissioner.
From India, Mumbai
I'm sure that senior citizens can answer this, but I presume this post has escaped their notice word hurdle.
From Vietnam, Hanoi
From Vietnam, Hanoi
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Statutory Compliance of a Industrial or Commercial Unit.xls
Statutory-compl iance.pdf