Full & final settlement wiht pf amount

Kindly provide precise details of the matter.Adjustment without any notice to employee and forfeiture may be treated differently.

--PF and Gratuity are covered under Social Security Laws.

--PF is immune from any attachment.

Can the amount standing to the credit of any member in the Fund be assigned, charged or attached?: The amount standing to the credit of a member in the Fund cannot be assigned, charged or attached under any decree or order of any Court. Similarly, the amount standing to the credit of a member in the Fund at the time of his death is free from any debt or other liability incurred by the member before his death and cannot be attached under any decree or order of any Court. {Section 10}

1.  https://epfindia.com/exemption_er.htm

TO BE OBSERVED BY THE ESTABLISHMENT GRANTED EXEMPTION UNDER SEC.17(1) (a) OF THE EMPLOYEES' PROVIDENT FUND & MISC. PROVISIONS ACT 1952  

23·  If the Provident Fund rules of the establishment provide for forfeiture of the employees' contribution in case where an employee ceases to be a member of the fund on the lines of para 69 of the said scheme, the Board of Trustees shall maintain a separate account of the amounts so forfeited and may utilise the same for such purpose as may be determined with the prior approval of the Central Provident Fund Commissioner.

24·  Notwithstanding anything contained in the Provident Fund Rules of the establishment, if on the cessation of any individual from the membership of the fund consequent on retiring from service or on taking up the employment in some other establishment , it is found that the rate of contribution , rate of forfeiture etc. under the P.F Rules of the establishment are less favourable as compared to these under the statutory scheme the difference shall be borne by the employer.

29.The exemption is liable to be cancelled for violation of any of the above conditions.

2.   The speaking order with reasons stated in sec 4(6) to forfeit the gratuity to the extent of the damage is must following due process of natural justice.

Payment of Gratuity Act, 1972

Section: 4
Payment of gratuity.

(6) Notwithstanding anything contained in sub-section (1), -

(a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused.

(b) the gratuity payable to an employee may be wholly or partially forfeited]­ -

(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or

(ii) if the services of such employee have been terminated for any act which

constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.

Some Companies/Establishments manage their Gratuity Fund. You may look into the Gratuity rules of your establishment.

Gratuity Rules: Bank of Baroda

III.  The expression “Salary” or “Wages” or “Pay” shall mean.

iii)  Notwithstanding anything  contained in Rule 12(1) (A) or  12(1) (B)  here in
above

•  Thegratuity payable to an employee shall be wholly forfeited:
•  If the services  of  such employee have been terminated for his  riotous  or disorderly
conduct or any other act of violence on his part, or
•  If the services of such employee  have been terminated for any act which constitutes
an offence involving moral turpitude provided that  such offence is committed by him
in the course of his employment.

Thanks Kumar,.

one of my frnds was in indian company he worked there for 3 yrs then he went to Europe (from the same company) for 1 & half yrs meanwhile he got inducted by the company there in europe for whihc he was working and he sent his resignation from Europe to Indian company.

now he is unclear whether the indian company can forefeit or off set  full and final settlement with his PF?

thanks, Vikash

If PF is managed by trust, PF rules may be obtained. These may be available at employee portal, website of company. Copy can be obtained from colleagues, concerned HR personnel, Head-HR, appointing authority etc. Employee may also obtain standing orders, employee rule book, service rules of the company.

The company may have its discipline rules for such a case. If company has allowed the employee to join this company there should not be any issue and if it is viewed as breach of agreement then company may proceed accordingly.

If the company levels any charges, those have to be looked into.

Company should issue a notice before forfeiture and follow the principle of natural justice.

Services of a competent and exeprienced service lawyer should be availed and reply by self may be avoided.