Dear seniors, Pl let us know impact of new judgement given by honourable supreme court in respect of pf contribution whether it is to be computed on basic or basic and other allowances....
From India, Mumbai
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8From India, Mumbai
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Refer to the Supreme Court judgement dated 28-02-19 in Civil Appeal 3967-3968 of 2013. The Court has determined that 'the allowances in question being paid to its employees were either variable or were linked to any incentive for production resulting in greater output by an employee and that the allowances in question were not paid across the board to all employees in a particular category or were being paid especially to those who avail the opportunity. In order for the amount to go beyond the basic wages, it has to be shown that the workman concerned had become eligible to receive this extra amount beyond the normal work which he was otherwise required to put in.'
It was also observed by the Authority as follows: 'a factual conclusion that the allowances in question were essentially a part of the basic wage camouflaged as part of an allowance so as to avoid deduction and contribution accordingly to the provident fund account of the employees.'
Therefore, the Honorable Supreme Court has dismissed the Appeals. The judgment is attached herewith for ready reference. This judgment has a wide impact on the definition of wages under the EPF Act. It may affect the definition of wages in all labor legislations where Basic and DA constitute Wages, e.g., ESI, Gratuity, etc.
V.K.SHAH
Retired Deputy Commissioner of Labour, Gujarat.
Advocate, Labour Laws Advisor, and Trainer.
9825866102
Email: dcl.vkshah@gmail.com
Website: [VKSHAHAssociates, Labour Laws Advisor, Consultant, Advocate & Trainer](http://www.vkshahassociates.com/)
From India, Ahmadabad
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It was also observed by the Authority as follows: 'a factual conclusion that the allowances in question were essentially a part of the basic wage camouflaged as part of an allowance so as to avoid deduction and contribution accordingly to the provident fund account of the employees.'
Therefore, the Honorable Supreme Court has dismissed the Appeals. The judgment is attached herewith for ready reference. This judgment has a wide impact on the definition of wages under the EPF Act. It may affect the definition of wages in all labor legislations where Basic and DA constitute Wages, e.g., ESI, Gratuity, etc.
V.K.SHAH
Retired Deputy Commissioner of Labour, Gujarat.
Advocate, Labour Laws Advisor, and Trainer.
9825866102
Email: dcl.vkshah@gmail.com
Website: [VKSHAHAssociates, Labour Laws Advisor, Consultant, Advocate & Trainer](http://www.vkshahassociates.com/)
From India, Ahmadabad
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Definition - PF Basic Wages - Supreme Court - Brief.pdf