The whole problem started only after the circular issued by EPFO. The PF office cannot have locus standi to issue such an order. The Act is enacted in the Parliament, and if any changes are required, they are to be issued by the government. And that is where the problem lies. Everyone has their interpretation. Even in court orders, there seem to be differences of opinion between judges (which is why we see different judgments in different courts).
Do not get confused. Wait until the end of this month. There is a hearing coming in the Madras High Court against the order issued earlier. The matter will be thrashed out. We will know - as an employer - what to do. Have patience.
Balaji
From India, Madras
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113Do not get confused. Wait until the end of this month. There is a hearing coming in the Madras High Court against the order issued earlier. The matter will be thrashed out. We will know - as an employer - what to do. Have patience.
Balaji
From India, Madras
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Dear Balaji,
Someone raised the question in Lawyers Club India also based on the extant judgment of the Punjab Haryana High Court. I replied to that question in the Experts column as well.
In fact, any judgment of a court becomes applicable only to that specific case in which the judgment is made, unless specific orders of the competent court are in place to apply to all similar cases, or formal amendments in the relevant law are made by the Parliament, or the head of the Nodal department (in this case, the EPFO in PF cases) issues specific orders to that effect.
Since neither the Parliament made any changes in the law, nor has the Commissioner issued any orders to make it applicable generally to all organizations, the effect of the judgment would remain restricted to the concerned organization in favor of which the orders have been issued. Furthermore, since the judgment is very recent, the EPFO, if it decides so, can also file an appeal in the Supreme Court against the said judgment.
In my view, it cannot be assumed to be effective generally for all organizations unless the concerned organizations are unable to obtain specific judgments individually in their favor based on the existing judgment.
Your comments would be valuable; if you have a differing opinion, please share.
From India, Delhi
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Someone raised the question in Lawyers Club India also based on the extant judgment of the Punjab Haryana High Court. I replied to that question in the Experts column as well.
In fact, any judgment of a court becomes applicable only to that specific case in which the judgment is made, unless specific orders of the competent court are in place to apply to all similar cases, or formal amendments in the relevant law are made by the Parliament, or the head of the Nodal department (in this case, the EPFO in PF cases) issues specific orders to that effect.
Since neither the Parliament made any changes in the law, nor has the Commissioner issued any orders to make it applicable generally to all organizations, the effect of the judgment would remain restricted to the concerned organization in favor of which the orders have been issued. Furthermore, since the judgment is very recent, the EPFO, if it decides so, can also file an appeal in the Supreme Court against the said judgment.
In my view, it cannot be assumed to be effective generally for all organizations unless the concerned organizations are unable to obtain specific judgments individually in their favor based on the existing judgment.
Your comments would be valuable; if you have a differing opinion, please share.
From India, Delhi
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It is unjust to split minimum wages for the sake of EPF contribution. It has never been practiced in the past to split minimum wages when it was Rs. 1500/- or Rs. 2000/-.
If the employer is paying allowances on minimum wages, then that can be acceptable.
Jimmii d
From India, Delhi
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If the employer is paying allowances on minimum wages, then that can be acceptable.
Jimmii d
From India, Delhi
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Mr. Dhingra,
If you have a closer look at the circular floated by EPFO (from where the issue has started), you would understand they invoked certain judgments passed in cases such as RPFC, Punjab Vs. Shibu Metal Works, Crown Aluminium Works Vs. Workers Union, Kamani Metal Works & Alloys, civil appeal in the case of Air Freight Limited Vs. in the State of Karnataka and Others.
It is a common phenomenon that whenever such disputes take place, there is a tendency to quote the judgment or decree issued in favor or against that particular concept.
When EPFO issued the circular, they quoted all the above cases justifying their requirement of the inclusion of all allowances in the basic wages and sought contributions on allowances.
When EPFO refers to such cases, it is also possible for employers to quote certain court judgments supporting their claims. Therefore, it is common for anyone to refer to cases.
What I am trying to say is that there are different views in different forums, and the question now is who is the deciding authority. When the Act is enacted in Parliament, whether EPFO has locus standi to issue such circulars and whether it has any merit is a pertinent question. If EPFO initiates an inquiry against employers and passes separate orders for each inquiry initiated against such employers, and every employer has to approach the High Court/Supreme Court and obtain orders against such decisions, where does it end? Therefore, in my opinion, there should have been a clear-cut rule passed by Parliament regarding this issue with more clarity. Unless this happens, the EPF Tribunal, High Courts, and Supreme Courts will be flooded with appeals and claims. How many of us (employers)/you are ready to spend your productive time in tribunals and courts?
Please refer to the letter sent to EPFO, Delhi by Mr. H.L. Kumar, who is also an advocate like you, and who runs a big organization "Labour Law Reporter." I read the letter, but I do not have a copy of it at this point in time. (I will post it later). Mr. Kumar sought certain clarifications regarding this issue, but I do not think he has received any reply from them until now.
The circular issued by EPFO and court judgments have been floating around only to confuse and further complicate things, providing no solution. In the whole process, employers are harassed, and nothing more.
Balaji
From India, Madras
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If you have a closer look at the circular floated by EPFO (from where the issue has started), you would understand they invoked certain judgments passed in cases such as RPFC, Punjab Vs. Shibu Metal Works, Crown Aluminium Works Vs. Workers Union, Kamani Metal Works & Alloys, civil appeal in the case of Air Freight Limited Vs. in the State of Karnataka and Others.
It is a common phenomenon that whenever such disputes take place, there is a tendency to quote the judgment or decree issued in favor or against that particular concept.
When EPFO issued the circular, they quoted all the above cases justifying their requirement of the inclusion of all allowances in the basic wages and sought contributions on allowances.
When EPFO refers to such cases, it is also possible for employers to quote certain court judgments supporting their claims. Therefore, it is common for anyone to refer to cases.
What I am trying to say is that there are different views in different forums, and the question now is who is the deciding authority. When the Act is enacted in Parliament, whether EPFO has locus standi to issue such circulars and whether it has any merit is a pertinent question. If EPFO initiates an inquiry against employers and passes separate orders for each inquiry initiated against such employers, and every employer has to approach the High Court/Supreme Court and obtain orders against such decisions, where does it end? Therefore, in my opinion, there should have been a clear-cut rule passed by Parliament regarding this issue with more clarity. Unless this happens, the EPF Tribunal, High Courts, and Supreme Courts will be flooded with appeals and claims. How many of us (employers)/you are ready to spend your productive time in tribunals and courts?
Please refer to the letter sent to EPFO, Delhi by Mr. H.L. Kumar, who is also an advocate like you, and who runs a big organization "Labour Law Reporter." I read the letter, but I do not have a copy of it at this point in time. (I will post it later). Mr. Kumar sought certain clarifications regarding this issue, but I do not think he has received any reply from them until now.
The circular issued by EPFO and court judgments have been floating around only to confuse and further complicate things, providing no solution. In the whole process, employers are harassed, and nothing more.
Balaji
From India, Madras
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Dear Balaji,
Please don't get confused, as only the EPFO has the authority to issue clarificatory circulars even on the basis of judgments. However, a particular judgment does not apply to any other organization other than the organization referred to in the case until the EPFO acknowledges the universality of the judgment and agrees to apply it to all organizations. Therefore, any organization, other than the concerned one, cannot presume the judgment's applicability unless specifically affected by a court order or the EPFO.
From India, Delhi
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Please don't get confused, as only the EPFO has the authority to issue clarificatory circulars even on the basis of judgments. However, a particular judgment does not apply to any other organization other than the organization referred to in the case until the EPFO acknowledges the universality of the judgment and agrees to apply it to all organizations. Therefore, any organization, other than the concerned one, cannot presume the judgment's applicability unless specifically affected by a court order or the EPFO.
From India, Delhi
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Dear PS Dingra,
It is wrong to say that the judgment of a particular High Court is restricted only to a particular geographic location. High Court rulings and Supreme Court judgments are used as precedents and in future cases of a similar nature. A High Court judgment can be overruled by the Supreme Court or a full bench of the same or another High Court.
It is purely the discretion of a High Court to accept the views of another court when a case of the same nature is presented. If different High Courts conclude different views on the same matter, then the disputed matter has to be decided by a full bench of any High Court. If the order of a full bench of a High Court has to be challenged, the same can be done by an appeal in the Supreme Court.
Please refer to the Constitution of India for clarity on the same.
Regards,
Octavious
From India, Mumbai
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It is wrong to say that the judgment of a particular High Court is restricted only to a particular geographic location. High Court rulings and Supreme Court judgments are used as precedents and in future cases of a similar nature. A High Court judgment can be overruled by the Supreme Court or a full bench of the same or another High Court.
It is purely the discretion of a High Court to accept the views of another court when a case of the same nature is presented. If different High Courts conclude different views on the same matter, then the disputed matter has to be decided by a full bench of any High Court. If the order of a full bench of a High Court has to be challenged, the same can be done by an appeal in the Supreme Court.
Please refer to the Constitution of India for clarity on the same.
Regards,
Octavious
From India, Mumbai
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Dear Octavious,
I have not used the words "particular geographic location" anywhere in any of my two posts. Probably, you have misinterpreted the word "universality" used by me, which was intended to convey that a judgment in any particular case applies only to that specific case, not to all other organizations unless ordered by the competent court, through an amendment to the relevant law, or by the organizations deciding to apply it uniformly to all.
In that respect, you have also agreed that the judgment can be used as a precedent in future cases solely at the discretion of the courts. This also conveys the same message I intended to convey. Hopefully, you have also read my previous reply, which conveys the same idea. In other words, no organization, other than the one on whose case the judgment was delivered, can automatically consider the judgment universally applicable to all organizations unless specifically ordered to do so.
From India, Delhi
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I have not used the words "particular geographic location" anywhere in any of my two posts. Probably, you have misinterpreted the word "universality" used by me, which was intended to convey that a judgment in any particular case applies only to that specific case, not to all other organizations unless ordered by the competent court, through an amendment to the relevant law, or by the organizations deciding to apply it uniformly to all.
In that respect, you have also agreed that the judgment can be used as a precedent in future cases solely at the discretion of the courts. This also conveys the same message I intended to convey. Hopefully, you have also read my previous reply, which conveys the same idea. In other words, no organization, other than the one on whose case the judgment was delivered, can automatically consider the judgment universally applicable to all organizations unless specifically ordered to do so.
From India, Delhi
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Dear Dingra,
You tend to commit a fallacy when you say that a judgment in any particular case applies only to that particular case and not to all other organizations unless ordered by the competent court, amended in the relevant law, or applied uniformly by the organizations. I say a fallacy is committed because of the following reasons:
1. A judgment can be used in another organization if the matter is of the same nature, the question raised or asked is the same, and no new question or query is raised.
2. Precedents do not amend any statute or established law but clarify ambiguity and opacity. The amendment of the law is with the legislature, not the judiciary.
3. A judgment must be followed by any organization party to or affected by it until overruled. Precedents that affect the public in general are applicable not only to the parties to the case but also to others who are or may be affected by the judgment.
Regards,
Octavious
From India, Mumbai
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You tend to commit a fallacy when you say that a judgment in any particular case applies only to that particular case and not to all other organizations unless ordered by the competent court, amended in the relevant law, or applied uniformly by the organizations. I say a fallacy is committed because of the following reasons:
1. A judgment can be used in another organization if the matter is of the same nature, the question raised or asked is the same, and no new question or query is raised.
2. Precedents do not amend any statute or established law but clarify ambiguity and opacity. The amendment of the law is with the legislature, not the judiciary.
3. A judgment must be followed by any organization party to or affected by it until overruled. Precedents that affect the public in general are applicable not only to the parties to the case but also to others who are or may be affected by the judgment.
Regards,
Octavious
From India, Mumbai
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Dear Mr. Dhingra,
Your view that "a judgment in any particular case applies only to that particular case only" cannot be termed as correct. I would like to bring to your notice that Article 141 of the Indian Constitution clearly states that "the law laid down by the Supreme Court of India is binding upon all courts in the country." Numerous cases all over the country are decided in accordance with the view taken by the Supreme Court. Article 141 of the Constitution has given the Supreme Court powers to act even as a legislative body as it has the authority to interpret a law passed by the parliament. The same is applicable for High Court judgments regarding its binding within the jurisdiction of that particular High Court.
Regards,
Kamal
From India, Pune
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Your view that "a judgment in any particular case applies only to that particular case only" cannot be termed as correct. I would like to bring to your notice that Article 141 of the Indian Constitution clearly states that "the law laid down by the Supreme Court of India is binding upon all courts in the country." Numerous cases all over the country are decided in accordance with the view taken by the Supreme Court. Article 141 of the Constitution has given the Supreme Court powers to act even as a legislative body as it has the authority to interpret a law passed by the parliament. The same is applicable for High Court judgments regarding its binding within the jurisdiction of that particular High Court.
Regards,
Kamal
From India, Pune
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Dear Octavious,
If you find fallacy in my statement, you are free to sue me in some competent court of law at Delhi. Alternatively, quote the relevant section of any law or court judgment in support of your own statement that a judgment can be made generally applicable to all other cases of other organizations without any specific order of the court of law or amendment to the relevant law, or by the issue of specific instructions by the concerned department. On the other hand, I feel that your statement may be misleading the managements of various other organizations.
From India, Delhi
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If you find fallacy in my statement, you are free to sue me in some competent court of law at Delhi. Alternatively, quote the relevant section of any law or court judgment in support of your own statement that a judgment can be made generally applicable to all other cases of other organizations without any specific order of the court of law or amendment to the relevant law, or by the issue of specific instructions by the concerned department. On the other hand, I feel that your statement may be misleading the managements of various other organizations.
From India, Delhi
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