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HIMA KOHLI, RAJESH BINDAL
Assistant Provident Fund Commissioner – Appellant
Versus
G4s Security Services (India) Ltd. – Respondent
| Table of Content |
|---|
| 1. appellant's challenge to previous judgment. (Para 1 , 2) |
| 2. argument regarding minimum wages definition. (Para 3) |
| 3. court's reasoning on 'basic wage' definition. (Para 4 , 5) |
| 4. dismissal of the appeal. (Para 6) |
ORDER :
2. Before the learned Single Judge, the appellant had impugned the order dated 15th June, 2009, passed by the Appellate Tribunal under the provisions of the EMPLOYEES PROVIDENT FUND AND MISCELLANEOUS PROVISIONS ACT , 19523[Hereinafter referred as ‘EPF Act’], while determining the issue raised by the respondents regarding the liability of the Management under the provisions of Section 7A of the EPF Act. The stand of the appellant is that for the purposes of determining its contribution towards provident fund, the respondent no.1 was wrongly splitting the wage structure of the employees and treating the reduced wage as the basic wage to the detriment of the employees, thereby evading its liability to contribute the correct amount towards provident fund. The aforesaid stand taken by the appellant has been turned down by the Appellate Tribunal as also by the learned Single Judge and the Division Bench of the High Court.
4. In our opinion, once the EPF Ac
The Supreme Court defined 'basic wage' under the EPF Act, clarifying that only universally paid wages qualify, while variable allowances do not.
The classification of basic wages must genuinely reflect employee remuneration, and artificial wage splitting to avoid statutory contributions is impermissible under the Act.
Allowances must be universally and necessarily paid to qualify as 'basic wage' under the EPF Act; variable allowances do not meet this criterion.
The Supreme Court established that basic wage does not include leave encashment, impacting provident fund contributions and related damages.
The terrain allowance is not included in 'basic wages' as defined by the EPF Act due to its inconsistency among employees; thus, it is exempt from EPF contributions.
Payment made under Section 17-B of the I.D. Act does not constitute 'wages' for the purpose of provident fund contribution.
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