Dear Fellow members,
I am working in an engineering company which undertakes Municipal and Industrial turnkey projects. We used to sublet many jobs to various contractors (civil, mechanical, electrical, fabrication, menpower, landscapping, housekeeping etc.).
In order to create awareness in our engineering/project people, I have prepared a presentation. The data taken from various related Acts & their Amendments. Some data taken from the documents shared by experienced members in this Forum. To make it presentable and understandable to our engineering people, I have slightly changed/modified the language / format.
Moreover, in order to co-relate the compliance level and coverage of various Act in our company, I have separately prepared slides. So that people can connect those compliances/Acts in present scenario. However, in this Presentation I have removed those slides.
Please go through the presentation and Q&A. Pls suggest your views / ideas to make it more attractive.
From India, Delhi
225I am working in an engineering company which undertakes Municipal and Industrial turnkey projects. We used to sublet many jobs to various contractors (civil, mechanical, electrical, fabrication, menpower, landscapping, housekeeping etc.).
In order to create awareness in our engineering/project people, I have prepared a presentation. The data taken from various related Acts & their Amendments. Some data taken from the documents shared by experienced members in this Forum. To make it presentable and understandable to our engineering people, I have slightly changed/modified the language / format.
Moreover, in order to co-relate the compliance level and coverage of various Act in our company, I have separately prepared slides. So that people can connect those compliances/Acts in present scenario. However, in this Presentation I have removed those slides.
Please go through the presentation and Q&A. Pls suggest your views / ideas to make it more attractive.
From India, Delhi
After going through the presentation, I have the following suggestions.
1. There has been interpretations by various Courts that 4 years and 240 days would qualify for gratuity. But when we speak of Gratuity Act, you cannot say that 4 years and 240 days would qualify for gratuity.
2. maternity leave is still 12 weeks only and there has been no change in the Maternity Benefit Act. Similarly, there is no restriction that it is available only for two child births. The Act is yet to cover commissioning mother or leave for adopting. Again there has been no such provision under the present Act which makes it mandatory to have a creche in the establishment.
3. PF is contributed on Basic and Dearness allowance. But what is basic wages is very clearly defined in the Act as that wages which includes all emoluments other than HRA.
4. I doubt if the pension formula has been changed Please check.
Certainly, I appreciate Pan Sigh for such a wonderful presentation.
Regards,
Madhu.T.K
From India, Kannur
1. There has been interpretations by various Courts that 4 years and 240 days would qualify for gratuity. But when we speak of Gratuity Act, you cannot say that 4 years and 240 days would qualify for gratuity.
2. maternity leave is still 12 weeks only and there has been no change in the Maternity Benefit Act. Similarly, there is no restriction that it is available only for two child births. The Act is yet to cover commissioning mother or leave for adopting. Again there has been no such provision under the present Act which makes it mandatory to have a creche in the establishment.
3. PF is contributed on Basic and Dearness allowance. But what is basic wages is very clearly defined in the Act as that wages which includes all emoluments other than HRA.
4. I doubt if the pension formula has been changed Please check.
Certainly, I appreciate Pan Sigh for such a wonderful presentation.
Regards,
Madhu.T.K
From India, Kannur
Dear Madhu sir,
Thnx a lot for your valued suggestions on the matter. However, pls note my clarification on the suggestions:-
1 OK I was unaware of the court interpretations regarding 4 years and 240 days. I will change the same to 5 years only.
2 The formal Notification has also issued regarding Maternity Benefit (Amendment) Act, 2016. All my points are covered in the Notification.
3 The Basic (specially for PF) has been a matter of discussion since long back. So I m not going deep into it. However, I will consider that our company pay as Basic (being higher than minimum wages) and we pay to our sub-contracting personnel (as specified in minimum wages of respective state).
4 In connection to the pension formula. There are difference formulas in cases service prior to 16th Nov 1995. But for employees who covered after pension scheme this formula is correct. However, under THE EMPLOYEES' PENSION SCHEME, 1995 the “pensionable salary” is defined as “12 months preceding the date of exit”. But in many cite HR posts I have seen the formula as “60 months preceding the date of exit”. I am confused on that. But finally I have considered (12 months) which is mentioned in the Act.
From India, Delhi
Thnx a lot for your valued suggestions on the matter. However, pls note my clarification on the suggestions:-
1 OK I was unaware of the court interpretations regarding 4 years and 240 days. I will change the same to 5 years only.
2 The formal Notification has also issued regarding Maternity Benefit (Amendment) Act, 2016. All my points are covered in the Notification.
3 The Basic (specially for PF) has been a matter of discussion since long back. So I m not going deep into it. However, I will consider that our company pay as Basic (being higher than minimum wages) and we pay to our sub-contracting personnel (as specified in minimum wages of respective state).
4 In connection to the pension formula. There are difference formulas in cases service prior to 16th Nov 1995. But for employees who covered after pension scheme this formula is correct. However, under THE EMPLOYEES' PENSION SCHEME, 1995 the “pensionable salary” is defined as “12 months preceding the date of exit”. But in many cite HR posts I have seen the formula as “60 months preceding the date of exit”. I am confused on that. But finally I have considered (12 months) which is mentioned in the Act.
From India, Delhi
It is true that notification to amend the Maternity Benefit Act has been issued but no further action has taken place. Therefore, the old system of 12 weeks leave remain the benefit available. Similarly, other proposals like adoption, surrogacy, commissioning mother, creche etc are still in paper.
The issue of PF qualifying salary has been a matter of discussion even by various courts. But one thing is very clear. If you see the Act you will find that basic wages is all sum and when we talk about contribution we find that it is payable on basic salary (means all amounts paid as per terms of employment except HRA) and dearness allowance. That means it is not payable just on a salary that the employer fixes as Basic salary for HIS convenience.
With regard to pension calculation, since the pension qualifying salary has become 15000, a change has been made, because, it is not flat since 16th Nov 1995 but for the period from which the new ceiling of 15000 has been fixed it is flat but for the period prior to that till 15th Nov 1995, it is pro rate, and for the past service, again some fixed amount based on the salary. That means, the benefit of increased salary for pension purpose will not be available to those who are having very short period of service to retire although for an new comer with age of say 20 or 22, the benefit is good. I am not sure but you may check that.
One more thing is that the pension qualifying salary is not subject to a maximum of Rs 15000 but it can be the same salary on which PF is contributed by the employer. It should be noted that there is no required that you cannot contribute PF on a salary higher than 15000 but you can do it. That means if your salary is say 50000, the employer can contribute 12% of 50000 as PF. Normally, the practice is that in such cases also, the Pension Fund contribution would be limited to 8.33% of 15000. This was regulated by the EPFO through an administrative ruling. But the Supreme Court has taken it out and ruled that if the employees wish to get higher contribution the employer can contribute 8.33% on the total PF qualifying salary towards pension fund. Only thing is that in such cases, the employer's contribution towards PF will be very less. But at the same time, the employee will get higher amount as pension since the pension qualifying salary is higher.
Abbas may be able to put some light on this issue. Please Abbass
Madhu.T.K
From India, Kannur
The issue of PF qualifying salary has been a matter of discussion even by various courts. But one thing is very clear. If you see the Act you will find that basic wages is all sum and when we talk about contribution we find that it is payable on basic salary (means all amounts paid as per terms of employment except HRA) and dearness allowance. That means it is not payable just on a salary that the employer fixes as Basic salary for HIS convenience.
With regard to pension calculation, since the pension qualifying salary has become 15000, a change has been made, because, it is not flat since 16th Nov 1995 but for the period from which the new ceiling of 15000 has been fixed it is flat but for the period prior to that till 15th Nov 1995, it is pro rate, and for the past service, again some fixed amount based on the salary. That means, the benefit of increased salary for pension purpose will not be available to those who are having very short period of service to retire although for an new comer with age of say 20 or 22, the benefit is good. I am not sure but you may check that.
One more thing is that the pension qualifying salary is not subject to a maximum of Rs 15000 but it can be the same salary on which PF is contributed by the employer. It should be noted that there is no required that you cannot contribute PF on a salary higher than 15000 but you can do it. That means if your salary is say 50000, the employer can contribute 12% of 50000 as PF. Normally, the practice is that in such cases also, the Pension Fund contribution would be limited to 8.33% of 15000. This was regulated by the EPFO through an administrative ruling. But the Supreme Court has taken it out and ruled that if the employees wish to get higher contribution the employer can contribute 8.33% on the total PF qualifying salary towards pension fund. Only thing is that in such cases, the employer's contribution towards PF will be very less. But at the same time, the employee will get higher amount as pension since the pension qualifying salary is higher.
Abbas may be able to put some light on this issue. Please Abbass
Madhu.T.K
From India, Kannur
Dear sir,
Thnx once again for lighting the Pension contribution criteria (voluntary higher contribution agst “Supreme Court has taken it out and ruled”). Can we have any law case study on the same? Is it in force (means the employer can implement it or it is still matter of final discussion).
However, for Pension calculation I have dropped msg to Mr. Abbass as well. I even trying to connect with Dr. PBS Kumar who shared a Pension document in which Pensionable salary is taken as 60 months.
So far as Maternity Act Amendment is concerned I agree with you. I think this is only the bill which has been passed in Rajya Sabha as well. For implementation the concern authority/ies have to issue formal validation duly cc to all state Labour Law Enforcement authorities.
From India, Delhi
Thnx once again for lighting the Pension contribution criteria (voluntary higher contribution agst “Supreme Court has taken it out and ruled”). Can we have any law case study on the same? Is it in force (means the employer can implement it or it is still matter of final discussion).
However, for Pension calculation I have dropped msg to Mr. Abbass as well. I even trying to connect with Dr. PBS Kumar who shared a Pension document in which Pensionable salary is taken as 60 months.
So far as Maternity Act Amendment is concerned I agree with you. I think this is only the bill which has been passed in Rajya Sabha as well. For implementation the concern authority/ies have to issue formal validation duly cc to all state Labour Law Enforcement authorities.
From India, Delhi
Please find the attached verdict from the High Court of Kerala. The Supreme Court verdict in which the EPFO's appeal was dismissed is not available with me right now. Please bear with me.
Madhu.T.K
From India, Kannur
Madhu.T.K
From India, Kannur
Dear PAN SINGH DANGWALJI,
I am late to attend the post due to personal reasons. I shall suggest some corrections on EPS - 95, viz.
1. w.e.f 01.09.2014, pensionable salary is average of last drawn 60 months (not 12 months)
2. w.e.f 01.09.2014, ceiling on pensionable salary is bifurcated into two viz.
Rs. 6500 for the service up to 31.08.2014 and Rs. 15000 w.e.f 01.09.2014. In both cases salary is arrived taking average of last 60 months.
3. Vide letter No. 1/3(4)16/7915 dated 22.07..2016, all pensioners with a total service of 20 years (including Family Pension scheme 1971) will get an additional weightage in pensionable service.
Abbas.P.S
From India, Bangalore
I am late to attend the post due to personal reasons. I shall suggest some corrections on EPS - 95, viz.
1. w.e.f 01.09.2014, pensionable salary is average of last drawn 60 months (not 12 months)
2. w.e.f 01.09.2014, ceiling on pensionable salary is bifurcated into two viz.
Rs. 6500 for the service up to 31.08.2014 and Rs. 15000 w.e.f 01.09.2014. In both cases salary is arrived taking average of last 60 months.
3. Vide letter No. 1/3(4)16/7915 dated 22.07..2016, all pensioners with a total service of 20 years (including Family Pension scheme 1971) will get an additional weightage in pensionable service.
Abbas.P.S
From India, Bangalore
Dear PAN SINGH DANGWALJI,
Vide letter No. 1/3(4)16/7915 dated 22.07..2016, all pensioners with a total service of 20 years (including Family Pension scheme 1971) will get an additional weightage of 2 years in pensionable service.
(the term 2 years is missed in the previous post)
Abbas.P.S
From India, Bangalore
Vide letter No. 1/3(4)16/7915 dated 22.07..2016, all pensioners with a total service of 20 years (including Family Pension scheme 1971) will get an additional weightage of 2 years in pensionable service.
(the term 2 years is missed in the previous post)
Abbas.P.S
From India, Bangalore
Thnx a lot Mr. Abbas for your valued inputs.
The Pensionable Salary has revised to 60 months.
However the "additional weightage of 2 years in pensionable service" is already included in Page 39.
Thnx once again to all of you for valued suggestions.
From India, Delhi
The Pensionable Salary has revised to 60 months.
However the "additional weightage of 2 years in pensionable service" is already included in Page 39.
Thnx once again to all of you for valued suggestions.
From India, Delhi
Dear PAN SINGH DANGWALJI,
I have noticed the "additional weightage of 2 years in pensionable service" that already included in Page 39. But it is for pensionable service of 20 years or more as stipulated in the scheme. But as per the above notification even if the pensionable service is less than 20 years and the total service including the erstwhile Family Pension 1971 is 20 years or more, pensioner is eligible to get a bonus of 2 years. Kindly correct the wordings accordingly.
Abbas.P.S
From India, Bangalore
I have noticed the "additional weightage of 2 years in pensionable service" that already included in Page 39. But it is for pensionable service of 20 years or more as stipulated in the scheme. But as per the above notification even if the pensionable service is less than 20 years and the total service including the erstwhile Family Pension 1971 is 20 years or more, pensioner is eligible to get a bonus of 2 years. Kindly correct the wordings accordingly.
Abbas.P.S
From India, Bangalore
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