The Employers Federation of Southern India, A.P. Branch, has filed a writ petition before the Hon’ble High court of Andhra Pradesh along with three other companies challenging the circular dated: 23.5.2011 issued by the Employees Provident Fund Organisation, New Delhi, wherein the P.F. Department, have directed all the Regional Commissioners to determine the P.F. contributions on the minimum wages.
The Hon’ble Sri Justice Nooty Rama Mohana Rao after considering the material have granted stay of the said circular vide order dated 29.09.2011 in writ petition No 23478 of 2011. The said case was argued by Mr. C. Niranjan Rao and Mr. G. Vidya Sagar, Advocates, on behalf of the employers.
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From India, Hyderabad
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5The Hon’ble Sri Justice Nooty Rama Mohana Rao after considering the material have granted stay of the said circular vide order dated 29.09.2011 in writ petition No 23478 of 2011. The said case was argued by Mr. C. Niranjan Rao and Mr. G. Vidya Sagar, Advocates, on behalf of the employers.
For more details contact : 9848050875 ..
From India, Hyderabad
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Dear Friends, Please find the attachment as per requirement. Regards, Arihant __________________ Regards, ARIHANT
From India, Surat
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From India, Surat
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Dear All,
Please find the enclosed copy of the order passed by the High Court of AP relating to PF contributions on minimum wages.
Warm regards,
C. NIRANJAN RAO
Advocate
HIG-II, BLOCK NO.22, FLAT NO.8,
BAGH LINGAMPALLY, HYDERABAD.
PH: 040 66827291 (O) 9848050875 (M)
Email: niranjanraoassociates@gmail.com
From India, Hyderabad
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Please find the enclosed copy of the order passed by the High Court of AP relating to PF contributions on minimum wages.
Warm regards,
C. NIRANJAN RAO
Advocate
HIG-II, BLOCK NO.22, FLAT NO.8,
BAGH LINGAMPALLY, HYDERABAD.
PH: 040 66827291 (O) 9848050875 (M)
Email: niranjanraoassociates@gmail.com
From India, Hyderabad
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Dear Mr. Rao,
I understand the judgment of the Madras High Court allowing all allowances to be taken into account for PF has been stayed, while a similar judgment from the Madhya Pradesh High Court has been challenged and is scheduled for a hearing on the 14th of October.
Regards,
P. K. Jadia
From India, Surat
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I understand the judgment of the Madras High Court allowing all allowances to be taken into account for PF has been stayed, while a similar judgment from the Madhya Pradesh High Court has been challenged and is scheduled for a hearing on the 14th of October.
Regards,
P. K. Jadia
From India, Surat
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Dear Friends, Please find recent updates by Labour Law Reporter regarding Splitting of Minimum Wage. Regards, Arihant
From India, Surat
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From India, Surat
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If only the decision of the Apex Court (the Supreme Court in Air Freight Ltd. V. State of Karnataka and others) reported in 1999 (4) LLN 395, especially the following passage, had been taken note of before the issue of Circular No.: Coord/4(6)2003/Clarification/Vol-II/ Dated: 23-05-2011 of Mr. K.C. Pandey, Addl. Central P.F. Commissioner (Compliance), Employees Provident Fund Organization (Ministry of Labour & Employment, Govt. of India), Head Office, Bhavishya Nidhi Bhawan, 14, Bhikaiji Cama Place, New Delhi - 110 066, prohibiting the splitting of Minimum Wages for the purpose of PF contribution, the multiplicity of legal proceedings in different High Courts would not have arisen.
"... it is one pay package. Neither the scheme nor any provisions of the Act provide that the rates of minimum wages are to be split up based on the cost of each of the necessities taken into consideration for fixing the same. Hence, in cases where the employer is paying a total sum higher than the minimum rates of wages fixed under the Act, including the cost of living index (variable dearness allowance), he is not required to pay variable dearness allowance separately. However, that higher wages should be calculated as defined in Section 2(h) of the Act. Section 2(h) specifically provides that the value of the following items is not required to be computed for finding out whether the employer pays minimum wages as prescribed under the Act:
(i) the value of any house, accommodation, supply of light, water, medical care, or any other amenity or any service excluded by general or special order of the appropriate Government;
(ii) any pension fund or provident fund or under any scheme of social insurance;
(iii) any traveling allowance or the value of any traveling concession;
(iv) any sum paid to any person employed to defray special expenses entailed on him by the nature of his employment; or
(v) any gratuities payable on discharge.
But while deciding the question of payment of minimum wages, the Competent Authority is not required to bifurcate each component of the costs of each item taken into consideration for fixing minimum wages, as a lump sum amount is determined for providing adequate remuneration to the workman so that he can sustain and maintain himself and his family and also preserve his efficiency as a worker. Dearness allowance is part and parcel of the cost of necessities. In cases where the minimum rates of wages are linked up with variable dearness allowance, it would not mean that it is a separate component that is required to be paid separately when the employer pays a total pay package that is more than the prescribed minimum rate of wages. In the result, it is held that:
(1) The appellant-company would be covered by the expression "shops" and/or "commercial establishment" as it is carrying out various systematic commercial activities with a profit motive and also sells services on a retail basis.
(2) The notification issued under the Act prescribing minimum wages applies to all kinds of shops and commercial establishments, "big or small," and that payment of more than the prescribed minimum rates of wages is not relevant for deciding its applicability. It cannot be stated that as they are paying more than the prescribed minimum wages, the Act or notification would not be applicable. For determining whether they are paying minimum rates of wages or not, the amount paid for the value of items that are excluded under Section 2(h) of the Act is not to be taken into consideration.
(3) Minimum rates of wages fixed under the Act are remuneration payable to the worker as one package of a fixed amount. In cases where the minimum wage is linked with the cost of living index, the amount paid on the basis of dearness allowance is not to be taken as an independent component of the minimum wages but as part and parcel of the process of computing the rates of minimum wages, which are to be determined after taking into consideration the cost of various necessities. In this view of the matter, the order passed by the High Court holding that the State Government has fixed two separate categories of minimum rates of wages to be paid to the employees, one basic and the other allowance, that is, dearness allowance, is erroneous and is set aside.
At any rate, the Circular No.: Coord/4(6)2003/Clarification/Vol-II/ Dated: 23-05-2011 of Mr. K.C. Pandey, Addl. Central P.F. Commissioner (Compliance), Employees Provident Fund Organization (Ministry of Labour & Employment, Govt. of India), Head Office, Bhavishya Nidhi Bhawan, 14, Bhikaiji Cama Place, New Delhi - 110 066, prohibiting the splitting of Minimum Wages for the purpose of PF contribution cannot override the decision of the Apex Court.
Under Article 141 of the Constitution of India, the law declared by the Supreme Court is binding on all Courts and Tribunals. If any decision of any Inferior Court or Tribunal is contrary to the Law laid down by the Apex Court in Air Freight Ltd. V. State of Karnataka and others reported in 1999 (4) LLN 395, it is not a binding precedent, and definitely the EPF Department cannot issue any Circular in violation of Law laid down by the Apex Court in Air Freight Ltd. V. State of Karnataka and others reported in 1999 (4) LLN 395.
Rajan Law Firm
Legal Compliances required for the Staffing Industry
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From India, Madras
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"... it is one pay package. Neither the scheme nor any provisions of the Act provide that the rates of minimum wages are to be split up based on the cost of each of the necessities taken into consideration for fixing the same. Hence, in cases where the employer is paying a total sum higher than the minimum rates of wages fixed under the Act, including the cost of living index (variable dearness allowance), he is not required to pay variable dearness allowance separately. However, that higher wages should be calculated as defined in Section 2(h) of the Act. Section 2(h) specifically provides that the value of the following items is not required to be computed for finding out whether the employer pays minimum wages as prescribed under the Act:
(i) the value of any house, accommodation, supply of light, water, medical care, or any other amenity or any service excluded by general or special order of the appropriate Government;
(ii) any pension fund or provident fund or under any scheme of social insurance;
(iii) any traveling allowance or the value of any traveling concession;
(iv) any sum paid to any person employed to defray special expenses entailed on him by the nature of his employment; or
(v) any gratuities payable on discharge.
But while deciding the question of payment of minimum wages, the Competent Authority is not required to bifurcate each component of the costs of each item taken into consideration for fixing minimum wages, as a lump sum amount is determined for providing adequate remuneration to the workman so that he can sustain and maintain himself and his family and also preserve his efficiency as a worker. Dearness allowance is part and parcel of the cost of necessities. In cases where the minimum rates of wages are linked up with variable dearness allowance, it would not mean that it is a separate component that is required to be paid separately when the employer pays a total pay package that is more than the prescribed minimum rate of wages. In the result, it is held that:
(1) The appellant-company would be covered by the expression "shops" and/or "commercial establishment" as it is carrying out various systematic commercial activities with a profit motive and also sells services on a retail basis.
(2) The notification issued under the Act prescribing minimum wages applies to all kinds of shops and commercial establishments, "big or small," and that payment of more than the prescribed minimum rates of wages is not relevant for deciding its applicability. It cannot be stated that as they are paying more than the prescribed minimum wages, the Act or notification would not be applicable. For determining whether they are paying minimum rates of wages or not, the amount paid for the value of items that are excluded under Section 2(h) of the Act is not to be taken into consideration.
(3) Minimum rates of wages fixed under the Act are remuneration payable to the worker as one package of a fixed amount. In cases where the minimum wage is linked with the cost of living index, the amount paid on the basis of dearness allowance is not to be taken as an independent component of the minimum wages but as part and parcel of the process of computing the rates of minimum wages, which are to be determined after taking into consideration the cost of various necessities. In this view of the matter, the order passed by the High Court holding that the State Government has fixed two separate categories of minimum rates of wages to be paid to the employees, one basic and the other allowance, that is, dearness allowance, is erroneous and is set aside.
At any rate, the Circular No.: Coord/4(6)2003/Clarification/Vol-II/ Dated: 23-05-2011 of Mr. K.C. Pandey, Addl. Central P.F. Commissioner (Compliance), Employees Provident Fund Organization (Ministry of Labour & Employment, Govt. of India), Head Office, Bhavishya Nidhi Bhawan, 14, Bhikaiji Cama Place, New Delhi - 110 066, prohibiting the splitting of Minimum Wages for the purpose of PF contribution cannot override the decision of the Apex Court.
Under Article 141 of the Constitution of India, the law declared by the Supreme Court is binding on all Courts and Tribunals. If any decision of any Inferior Court or Tribunal is contrary to the Law laid down by the Apex Court in Air Freight Ltd. V. State of Karnataka and others reported in 1999 (4) LLN 395, it is not a binding precedent, and definitely the EPF Department cannot issue any Circular in violation of Law laid down by the Apex Court in Air Freight Ltd. V. State of Karnataka and others reported in 1999 (4) LLN 395.
Rajan Law Firm
Legal Compliances required for the Staffing Industry
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From India, Madras
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Thank you for uploading the Judgment of Delhi HC dated 30/08/2011. It would be highly appreciated if the Judgments of Case Nos. WP 26124/2011, WP 23478/2011, WP 23880/2011, and WP 26294/2011, for which a hearing was held on 27-10-2011, could be made available.
Please provide the orders of the Hon'ble Court of 27/10/2011.
Regards,
AK Sharma
From India, Mumbai
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Please provide the orders of the Hon'ble Court of 27/10/2011.
Regards,
AK Sharma
From India, Mumbai
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