Dear Pankaj,
Thanks for bringing good question here on citehr this is tricky question because answer is not expressed in writing anywhere.
During my intitial career in late 1980's this was practice and was legal until year 2000. Provident Fund contribution of employer is not right of employee if he is terminated for wrongful reasons. There are many case laws in my time and I also followed this pracitces and being challenged in labour courts and We won cases on this ground that employee has no lien in employers contribution if he is terminated for disciplinary and wrong reasons.
I still believe, that this is law and becasue in last 10 years industrial disputes and letigations has reduced die to the stern economic growth of service, IT sector this quesion was never arised or being noticed.
But as expereinced professional I do express this was in line with several supereme court judgements and labour provisions.
I hope for accurate detail and reference to supereme court judgment or PF provision you have to consult labour Law practitioner specially experienced one he only can offer you perfect reference of case no and corrosponding law that upheld disqualification of employee from receiving employers contribution to PF.
Regards
Bhajiya
From Saudi Arabia
1Thanks for bringing good question here on citehr this is tricky question because answer is not expressed in writing anywhere.
During my intitial career in late 1980's this was practice and was legal until year 2000. Provident Fund contribution of employer is not right of employee if he is terminated for wrongful reasons. There are many case laws in my time and I also followed this pracitces and being challenged in labour courts and We won cases on this ground that employee has no lien in employers contribution if he is terminated for disciplinary and wrong reasons.
I still believe, that this is law and becasue in last 10 years industrial disputes and letigations has reduced die to the stern economic growth of service, IT sector this quesion was never arised or being noticed.
But as expereinced professional I do express this was in line with several supereme court judgements and labour provisions.
I hope for accurate detail and reference to supereme court judgment or PF provision you have to consult labour Law practitioner specially experienced one he only can offer you perfect reference of case no and corrosponding law that upheld disqualification of employee from receiving employers contribution to PF.
Regards
Bhajiya
From Saudi Arabia
Thank you so much Bhajiya,
I also float this query to some PF Consultant and lot many other HR friends but still all of them are silent and need time to clarify.
For All :- This is not a question to avoid but need to discuss
Regards
Pankaj Chandan
From India, New delhi
I also float this query to some PF Consultant and lot many other HR friends but still all of them are silent and need time to clarify.
For All :- This is not a question to avoid but need to discuss
Regards
Pankaj Chandan
From India, New delhi
I am hapy you have unearth good practical question which to my notice on this forum no one has ever asked.
I am glad to see atleast someone from us has good apptoach to analyse technicality of such issues and I know most of PF consultants are liasoning agents to PF office who are retired from PF Office as Inspectors or UDC etc are sometimes only interested in making bucks rather than having sound knowledge of PF laws.
Even most of labour practioners miss such detail information and refer books and case laws if once in their life time some client approach for case on such exclusive grounds.
But I am quite sure, Employers has right to deprive employee of his contribution because at present I am working in Australia I canot figure out case no and provision in PF act of India but I express this due to my previous expereince in India and deal with this problems very often when IR was on peak specially Dutta Samant kind of militency of trade unionism was exised in those days in mumbai. So we were equiped with all tools where we can put employee under pressure from being offensive so I used to make this as deterence to my defence if employee does anything wrong he will miss employers contribution and that worked very well.
Bhajiya
From Saudi Arabia
I am glad to see atleast someone from us has good apptoach to analyse technicality of such issues and I know most of PF consultants are liasoning agents to PF office who are retired from PF Office as Inspectors or UDC etc are sometimes only interested in making bucks rather than having sound knowledge of PF laws.
Even most of labour practioners miss such detail information and refer books and case laws if once in their life time some client approach for case on such exclusive grounds.
But I am quite sure, Employers has right to deprive employee of his contribution because at present I am working in Australia I canot figure out case no and provision in PF act of India but I express this due to my previous expereince in India and deal with this problems very often when IR was on peak specially Dutta Samant kind of militency of trade unionism was exised in those days in mumbai. So we were equiped with all tools where we can put employee under pressure from being offensive so I used to make this as deterence to my defence if employee does anything wrong he will miss employers contribution and that worked very well.
Bhajiya
From Saudi Arabia
Dear All,
Kindly give your inputs for the following concern prvailing in our unit,
Our unit is existing in ESI non coverage area and we have two associates in the On roll category. For them we are processing the salary through saftware module, which is designed as per the statutory requirement obivously.
Now the concern is while processing payroll for the associates ESI contribution is deducting as per the Act since it is not applicable. At the same time we cann't change the configuation of centralised payroll saftware.
Since ESI is not applicable for our unit what may be the suggestion from your side in terms of that ESI deducted amount, shall we give such ESI deducted Amount to the pertaining Associates or what?
Your reply is highly valuable.
Thanks,
Vedha
From India, Madras
Kindly give your inputs for the following concern prvailing in our unit,
Our unit is existing in ESI non coverage area and we have two associates in the On roll category. For them we are processing the salary through saftware module, which is designed as per the statutory requirement obivously.
Now the concern is while processing payroll for the associates ESI contribution is deducting as per the Act since it is not applicable. At the same time we cann't change the configuation of centralised payroll saftware.
Since ESI is not applicable for our unit what may be the suggestion from your side in terms of that ESI deducted amount, shall we give such ESI deducted Amount to the pertaining Associates or what?
Your reply is highly valuable.
Thanks,
Vedha
From India, Madras
The Employer can withhold their contribution to the PF in case of Wilful misconduct/dismissal. The misconduct has to be proved in the domestic enquiry. PF is a statutory right. HOwever, in cases of dismissal, employer's withhold their share of the contribution. The employee receives funds only to the extent of his contribution.
From India, Bangalore
From India, Bangalore
People were shocked when I put that question in front of them.
Well, after having lot many discussions as well as my personal visit to PF department I came to know that “YES Company can forfeited employer’s share from the contribution after willful misconduct / dismissal of an employee”. But they haven’t clear me that how they treat employer forfeited PF part on account.
Special thanks to Malikjs, Balaji Kuppuswamy, Bhajiya and Jyoti for valuable comments.
Regards
Pankaj Chandan
From India, New delhi
Well, after having lot many discussions as well as my personal visit to PF department I came to know that “YES Company can forfeited employer’s share from the contribution after willful misconduct / dismissal of an employee”. But they haven’t clear me that how they treat employer forfeited PF part on account.
Special thanks to Malikjs, Balaji Kuppuswamy, Bhajiya and Jyoti for valuable comments.
Regards
Pankaj Chandan
From India, New delhi
Dear all
Particularly Mr. Chandan
I am searching on the issue and has been able to found something on it.
The Remarks mentioned in Form 10 dealing with Forfeiture clause (I am not commenting upon the forfeiture owing to dismissal due to wilful misconduct) , I would like to brought to your kind notice the following:
The said remarks in Form 10 were significant when the sub para (3) of Para 69 and sub-para (6) of para 69 of EPF Scheme were applicable, but the said sub-para (3) & (6) were omitted by G. S.R. 221, dated 15th March, 1990 (w.e.f. 1-1-1990)
OLD Sub-para (3) of Para 69 deals with :-
(3) Where a member withdraws any amount under sub-paragraph (2) the following provisions shall apply, namely:—
(i) 75% of the employer’s contribution and interest thereon shall be forfeited to the Fund if the period of the membership of the Fund is less than 3 years; or
(ii) 50% of the employer’s contribution and interest thereon shall be forfeited to the Fund if the period of membership is 3 years or more but less “than 5 years; or
(iii) 25% of the employer’s contribution and interest thereon shall be forfeited to the Fund if the period of membership is 5 years or more but less than 10 years; or
(iv)15% of the employer’s contribution and interest thereon shall be forfeited to the Fund if the period of membership is 10 years or more but less than 15 years.
OLD Sub-para (6) of Para 69 deals with :-
(6) Any sum forfeited to the Fund under this paragraph shall not be returned to the employer but shall be credited to the “Forfeiture Account” of the Fund.
Explanation.—(a) In computing the period of membership under subparagraph (3) for the first withdrawal under sub-paragraph (2) in respect of a member, his total service, exclusive of periods of breaks under the same employer or ‘[factory or other establishment] before 2[or after] the Scheme applied to the ‘[factory or other establishment], as well as the period of his membership whether of the Fund or of private provident funds of exempted ‘factories or other establishment] or provident funds exempted under paragraph 27, immediately preceding the current membership of the Fund shall be included, provided that the member did not withdraw his] provident fund moneys during such period.
(b) In computing the period of membership under sub-pargraph (3) for subsequent withdrawal under sub-paragraph (2), periods of membership whether of the Fund or of private provident funds of exempted 2[factories or other establishments or provident funds exempted under paragraph 27 immediately preceding the current membership of the Fund shall be included, provided that the member did not withdraw his provident fund money during such periods.]
I hope I have been able to bring something more for discussion.
Regards
Puneet Gupta, Adv.
(Industrial & Labour Law Advisor)
Ludhiana.
098720-46812
From India, Ludhiana
Particularly Mr. Chandan
I am searching on the issue and has been able to found something on it.
The Remarks mentioned in Form 10 dealing with Forfeiture clause (I am not commenting upon the forfeiture owing to dismissal due to wilful misconduct) , I would like to brought to your kind notice the following:
The said remarks in Form 10 were significant when the sub para (3) of Para 69 and sub-para (6) of para 69 of EPF Scheme were applicable, but the said sub-para (3) & (6) were omitted by G. S.R. 221, dated 15th March, 1990 (w.e.f. 1-1-1990)
OLD Sub-para (3) of Para 69 deals with :-
(3) Where a member withdraws any amount under sub-paragraph (2) the following provisions shall apply, namely:—
(i) 75% of the employer’s contribution and interest thereon shall be forfeited to the Fund if the period of the membership of the Fund is less than 3 years; or
(ii) 50% of the employer’s contribution and interest thereon shall be forfeited to the Fund if the period of membership is 3 years or more but less “than 5 years; or
(iii) 25% of the employer’s contribution and interest thereon shall be forfeited to the Fund if the period of membership is 5 years or more but less than 10 years; or
(iv)15% of the employer’s contribution and interest thereon shall be forfeited to the Fund if the period of membership is 10 years or more but less than 15 years.
OLD Sub-para (6) of Para 69 deals with :-
(6) Any sum forfeited to the Fund under this paragraph shall not be returned to the employer but shall be credited to the “Forfeiture Account” of the Fund.
Explanation.—(a) In computing the period of membership under subparagraph (3) for the first withdrawal under sub-paragraph (2) in respect of a member, his total service, exclusive of periods of breaks under the same employer or ‘[factory or other establishment] before 2[or after] the Scheme applied to the ‘[factory or other establishment], as well as the period of his membership whether of the Fund or of private provident funds of exempted ‘factories or other establishment] or provident funds exempted under paragraph 27, immediately preceding the current membership of the Fund shall be included, provided that the member did not withdraw his] provident fund moneys during such period.
(b) In computing the period of membership under sub-pargraph (3) for subsequent withdrawal under sub-paragraph (2), periods of membership whether of the Fund or of private provident funds of exempted 2[factories or other establishments or provident funds exempted under paragraph 27 immediately preceding the current membership of the Fund shall be included, provided that the member did not withdraw his provident fund money during such periods.]
I hope I have been able to bring something more for discussion.
Regards
Puneet Gupta, Adv.
(Industrial & Labour Law Advisor)
Ludhiana.
098720-46812
From India, Ludhiana
Dear all
Particularly Mr. Chandan
I am searching on the issue and has been able to found something on it.
The Remarks mentioned in Form 10 dealing with Forfeiture clause (I am not commenting upon the forfeiture owing to dismissal due to wilful misconduct) , I would like to brought to your kind notice the following:
The said remarks in Form 10 were significant when the sub para (3) of Para 69 and sub-para (6) of para 69 of EPF Scheme were applicable, but the said sub-para (3) & (6) were omitted by G. S.R. 221, dated 15th March, 1990 (w.e.f. 1-1-1990)
OLD Sub-para (3) of Para 69 deals with :-
(3) Where a member withdraws any amount under sub-paragraph (2) the following provisions shall apply, namely:—
(i) 75% of the employer’s contribution and interest thereon shall be forfeited to the Fund if the period of the membership of the Fund is less than 3 years; or
(ii) 50% of the employer’s contribution and interest thereon shall be forfeited to the Fund if the period of membership is 3 years or more but less “than 5 years; or
(iii) 25% of the employer’s contribution and interest thereon shall be forfeited to the Fund if the period of membership is 5 years or more but less than 10 years; or
(iv)15% of the employer’s contribution and interest thereon shall be forfeited to the Fund if the period of membership is 10 years or more but less than 15 years.
OLD Sub-para (6) of Para 69 deals with :-
(6) Any sum forfeited to the Fund under this paragraph shall not be returned to the employer but shall be credited to the “Forfeiture Account” of the Fund.
Explanation.—(a) In computing the period of membership under subparagraph (3) for the first withdrawal under sub-paragraph (2) in respect of a member, his total service, exclusive of periods of breaks under the same employer or ‘[factory or other establishment] before 2[or after] the Scheme applied to the ‘[factory or other establishment], as well as the period of his membership whether of the Fund or of private provident funds of exempted ‘factories or other establishment] or provident funds exempted under paragraph 27, immediately preceding the current membership of the Fund shall be included, provided that the member did not withdraw his] provident fund moneys during such period.
(b) In computing the period of membership under sub-pargraph (3) for subsequent withdrawal under sub-paragraph (2), periods of membership whether of the Fund or of private provident funds of exempted 2[factories or other establishments or provident funds exempted under paragraph 27 immediately preceding the current membership of the Fund shall be included, provided that the member did not withdraw his provident fund money during such periods.]
I hope I have been able to bring something more for discussion.
Regards
Puneet Gupta, Adv.
(Industrial & Labour Law Advisor)
Ludhiana.
098720-46812
From India, Ludhiana
Particularly Mr. Chandan
I am searching on the issue and has been able to found something on it.
The Remarks mentioned in Form 10 dealing with Forfeiture clause (I am not commenting upon the forfeiture owing to dismissal due to wilful misconduct) , I would like to brought to your kind notice the following:
The said remarks in Form 10 were significant when the sub para (3) of Para 69 and sub-para (6) of para 69 of EPF Scheme were applicable, but the said sub-para (3) & (6) were omitted by G. S.R. 221, dated 15th March, 1990 (w.e.f. 1-1-1990)
OLD Sub-para (3) of Para 69 deals with :-
(3) Where a member withdraws any amount under sub-paragraph (2) the following provisions shall apply, namely:—
(i) 75% of the employer’s contribution and interest thereon shall be forfeited to the Fund if the period of the membership of the Fund is less than 3 years; or
(ii) 50% of the employer’s contribution and interest thereon shall be forfeited to the Fund if the period of membership is 3 years or more but less “than 5 years; or
(iii) 25% of the employer’s contribution and interest thereon shall be forfeited to the Fund if the period of membership is 5 years or more but less than 10 years; or
(iv)15% of the employer’s contribution and interest thereon shall be forfeited to the Fund if the period of membership is 10 years or more but less than 15 years.
OLD Sub-para (6) of Para 69 deals with :-
(6) Any sum forfeited to the Fund under this paragraph shall not be returned to the employer but shall be credited to the “Forfeiture Account” of the Fund.
Explanation.—(a) In computing the period of membership under subparagraph (3) for the first withdrawal under sub-paragraph (2) in respect of a member, his total service, exclusive of periods of breaks under the same employer or ‘[factory or other establishment] before 2[or after] the Scheme applied to the ‘[factory or other establishment], as well as the period of his membership whether of the Fund or of private provident funds of exempted ‘factories or other establishment] or provident funds exempted under paragraph 27, immediately preceding the current membership of the Fund shall be included, provided that the member did not withdraw his] provident fund moneys during such period.
(b) In computing the period of membership under sub-pargraph (3) for subsequent withdrawal under sub-paragraph (2), periods of membership whether of the Fund or of private provident funds of exempted 2[factories or other establishments or provident funds exempted under paragraph 27 immediately preceding the current membership of the Fund shall be included, provided that the member did not withdraw his provident fund money during such periods.]
I hope I have been able to bring something more for discussion.
Regards
Puneet Gupta, Adv.
(Industrial & Labour Law Advisor)
Ludhiana.
098720-46812
From India, Ludhiana
dear pankaj
we must appreciate mr puneet for the valuable guidance given by him .
now the things are clear ,why it was written this sentence on form 10
and now a days this sentence is not there on form 10.i really tkanks for me puneet.
tks
j s malik
From India, Delhi
we must appreciate mr puneet for the valuable guidance given by him .
now the things are clear ,why it was written this sentence on form 10
and now a days this sentence is not there on form 10.i really tkanks for me puneet.
tks
j s malik
From India, Delhi
Million of thanks to Mr. Puneet for kind guidance. Now I have something in my hand to challenge PF officer who misguided me.
Thanks to Mr. Malik for continue follow-up of this post and for valuable suggestions.
I will appreciate if seniors put more to guide us.
Regards
Pankaj Chandan
From India, New delhi
Thanks to Mr. Malik for continue follow-up of this post and for valuable suggestions.
I will appreciate if seniors put more to guide us.
Regards
Pankaj Chandan
From India, New delhi
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