Epfo circular 30.11.12
Saurabh Kumar Singh
(Querist) 19 December 2012
This query is : Resolved
Dear Experts,
as per circular dated 30.11.12 the EPFO suggested issued Guidelines for Quasi-judicial proceedings under Section 7A of the Employees'Provident Funds & Miscellaneous Provisions Act 1952.
now they also suggested
SPLITTING OF WAGES - Basic wages by its own definition encompasses all the payments except the specified exclusions. All such allowances which are ordinarily, necessarily and uniformly paid to the employees are to be treated as part of the basic wages. The confusion in definition of wages (and hence the issue of splitting of wages) primarily arises from the expression "commission or any other similar allowance payable to the employee" in Section 2(b) (ii) of the Act as "commission" and "any other similar allowance" are read as two separate expressions and hence "any other allowance" is read as an omnibus exclusion, thereby encouraging the subterfuge of splitting of wages to exclude the PF liabilities. The expression "commission or any other similar allowance payable to the employee" is one continuous term meaning commission or any other "commission" like allowance by whatever nomenclature referred. Thus "basic wages" is subject to exclusions expressly referred to in the above definition and no other.
kindly suggest as a company we have to go with reconstruction to basic wages or not.
All suggest future compliance action to safeguard our interest before EPDO in light of new circular.
Jai Karan Nagwan
(Expert) 19 December 2012
There is nothing new in the circular of 30 Nov 2012, this is same as 23rd May 2011, which was kept in abbeyance under the order of Delhi High Court and now circular of 30 Nov 2012 also met with same fate, this is now kept on hold by Labour Ministry on 14th Dec 2012. so Need not to make any changes in the existing practice, is your practices are as per law and not in derogation of any related laws.
More of same matter on the same subject is subjudice before the Hon'ble Supreme court and untill that is not decided, not circular should have any value. Please appreciate these all circulars are against the spirit of Bridge and Roof Judgment by constitutional bench of highest judicial forum of India.
Raj Kumar Makkad
(Expert) 19 December 2012
The circular has not come into practical operation as on day so nothing is required to be changed.
