Chapter 6(C) Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 – CS Professional Labour Laws and Practice Notes is designed strictly as per the latest syllabus and exam pattern.
Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 – CS Professional Labour Laws and Practice Study Material
Question 1.
Re-write the following sentences after filling-in the blank spaces with appropriate word(s)/figures (s):
(i) Minimum ____ years of contributory service is required for entitlement of pension under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. [CSEP-II](June 2009, 1 mark)
Answer:
Rewrite the following sentences after filling in the blank spaces with appropriate word (s)/ figure (s) –
(i) Minimum 10 years of contributory service is required for entitlement of pension under the Employee’s Providend Funds and Miscellaneous Provisions Act, 1952.
Question 2.
Choose the most appropriate answer from the given options in respect of the following.
The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 is applicable to commercial establishments employing –
(a) 10 or more employees
(b) 20 or more employees
(c) 50 or more employees
(d) 100 or more employees. [CSEP -II] (1 mark)
Answer:
(b) 20 or more employees
Question 3.
Re-write the following sentences after filling-in the blank spaces with appropriate word(s)/figure(s):
A minimum of ___ contributory service is required for entitlement to pension under the Employees’ Provident Funds and Miscellaneous Provisions Act,1952. [CSEP -II] (June 2009, 1 mark)
Answer:
A minimum of ten years contributory service is required for entitlement to pension under the Employees Provident Funds and Miscellaneous Provisions Act, 1952
Question 4.
Re-write the following sentences after filling-in the blank spaces with appropriate word(s)/figure(s):
(i) The membership of provident fund scheme is compulsory for employees drawing a pay not exceeding ? per month.
(iv) Superannuation in relation to an employee, who is a member of the pension scheme, means the attainment of the age of years. [CSEP -II] (June 2010, 1 mark each)
Answer:
(i) The membership of provident fund scheme is compulsory for employees drawing a pay not exceeding ₹ 6,500 per month.
(iv) Superannuation in relation to an employee, who is a member of the pension scheme, means the attainment of the age of 58 years.
Question 5.
Choose the most appropriate answer from the given options in respect of the following:
‘Basic wages’ under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 does not include —
(a) Emoluments earned by an employee while on leave
(b) Emoluments earned by an employee while on holiday with wages
(c) The cash value of any food concession
(d) Emoluments earned by an employee which are payable in cash. [CSEP-II] (Dec 2010, 1 mark)
Answer:
(c) The cash value of any food concession
Question 6.
Re-write the following sentences after filling-in the blank spaces with appropriate word(s)/figure(s):
Under the Employees Deposit-Linked Insurance Scheme, employers are required to pay contributions for the insurance fund at the rate of the total emoluments. [CSEP -II] (Dec 2011, 1 mark)
Answer:
1 %
Question 7.
Write the most appropriate answer from the given options in respect of the following:
The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 is applicable to all factories and certain establishments employing —
(a) 20 or more persons
(b) 50 or more persons
(c) 10 or more persons
(d) Without any limit. [CSEP -II] (Dec 2011, 1 mark)
Answer:
(a) 20 or more persons
Question 8.
Write the most appropriate answer from the given options in respect of the following:
Under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, what percentage of the basic wage, dearness allowance and retaining allowance of an employee is paid or contributed by the employer —
(a) 8%
(b) 10%
(c) 12%
(d) 13%. [CSEP -II] (June 2012, 1 mark)
Answer:
(c) 12%
Question 9.
Write the most appropriate answer from the given options in respect of the following:
The authority which has been constituted by the Central Government to preside over the cases regarding determination of monies due from employers under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 is—
(a) Employees Provident Fund Appellate Tribunal
(b) Employees Provident Fund Consultancy Tribunal
(c) Employees Provident Fund Help Desk
(d) Employees Provident Fund Information Centre. [CSEP-II] (Dec 2012, 1 mark)
Answer:
(a) Employees Provident Fund Appellate Tribunal
Question 10.
Re-write the following sentences after filling-in the blank spaces with appropriate word(s)/figure(s):
(ii) has been exempted from attachment in execution of any decree or order of a civil, revenue or criminal courts.
(iii) A minimum of years contributory service is required for entitlement of pension under the Employees’ Pension Scheme. [CSEP -II] (June 2013, 1 mark each)
Answer:
(ii) Provident fund or Gratuity
(iii) 10
Question 11.
Write the most appropriate answer from the given options in respect of the following:
Under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 what percentage of the basic wage, dearness allowance and retaining allowance of an employee is paid as ‘contribution’ by the employer-
(a) 8%
(b) 10%
(c) 12%
(d) 13%. [CSEP -II] (June 2013, 1 mark)
Answer:
(b) 10%
Question 12.
Re-write the following sentences after filling-in the blank spaces with appropriate word(s)/figure(s):
(i) Superannuation in relation to an employee who is a member of pension scheme, means attainment of the age of years.
(iv) The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 is applicable to factories employing or more persons. [CSEP -II] (Dec 2013, 1 mark each)
Answer:
(i) 58 years
(iv) 20
Question 13.
Write notes on the following:
‘Excluded employee’ under the Employees’ Provident Fund Scheme, 1952. [CSEP -II] (June 2010, 5 marks)
Answer:
Section 2 (f) of the Employees Provident Fund Scheme, 1952 defines ‘excluded employee’ as
- Apprentice
- An employee whose pay (Basic Wages + Dearness Allowance i.e. D.A. + cash value of fixed commission) exceed ₹ 5,000 per month.
- An employee who has withdrawn the amount accumulated in the funds as per the provisions of sub – paragraph 69 clause (a) or (c).
Question 14.
Write notes on the following:
Employees’ Pension Scheme under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. [CSEP-II](June 2012, 5 marks)
Answer:
Employee’s Pension Scheme under the Employee’s Provident Funds & Miscellaneous Provisions Act, 1952 is as under:-
- Employee’s Pension Scheme, 1995 came into effect from 16.11.1995.
- It has been conceived as a benefit defined Social Insurance Scheme formulated following actuarial principles for ensuring long term financial sustenance.
- New Scheme repealed & replaced the erstwhile Family Pension Scheme 1971.
- It is compulsory for all the persons who were the members of the Family Pension Scheme, 1971.
- Minimum 10 years contributory service is required for entitlement to pension.
- Thus, pension will be payable on fulfilling
- Minimum 10 years eligible service or
- Attaining age of 58 years.
Question 15.
Write notes on the following:
‘Excluded employee’ under the Employees’ Provident Fund Scheme, 1952. [CSEP -II] (Dec 2013, 5 marks)
Answer:
The term “excluded employee” has been defined in para 2(f) of the Employees Provident Fund Scheme, 1952 as follows:
‘Excluded employee’ means:
(i) an employee who, having been a member of the Fund, withdraw the full amount of his accumulations in the Fund under clause (a) or (c) of sub-paragraph 69;
(ii) an employee whose pay at the time be is otherwise entitled to become a member of the Fund, exceeds five thousand rupees per month. Explanation: “Pay” includes basic wages with dearness allowances retaining allowance (if any) and cash value of food concession admissible thereon.
(iii) An apprentice
Explanation: An apprentice means a person who, according to the certified standing orders applicable to the factory or establishment is an apprentice, or who is declared to be an apprentice by the authority specified in this behalf by the appropriate Government.
Question 16.
Attempt of the following stating relevant legal provisions and case law, if any:
Jay-Kay Ltd. employed casual workmen for a short duration of two months to execute a contingency plan of its operations. Are the casual workmen entitled for provident fund contribution from the employer?
[CSEP -II] (June 2007, 3 marks)
Answer:
In a case of Bikaner Cold Storage Co. Ltd. V Regional P.F. Commissioner, Rajasthan, it was held that the persons employed for a short duration, on account of some urgent necessity or abnormal contingency, should not be considered as an employee as it is not a regular feature of the business of the establishment. Hence casual workers are not entitled for P.F. .contribution from the employers.
Question 17.
Attempt the following stating relevant legal provisions and case law, if any:
An establishment discontinued deduction towards contribution to provident fund from its employees’ salary and stopped remitting contribution of its share of provident fund when the number of its employees on rolls fell to fifteen. Do the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 cease to be applicable to the establishment under such circumstances? [CSEP -II] (Dec 2008, 4 marks)
Answer:
No, the provisions of the Employer’s Provident Fund Miscellaneous Provisions Act 1952 will not cease to be applicable to the establishment merely on the ground that the number of employees has rolled down to fifteen. Though the applicability of the Act takes place on 20 employees yet if the number fall below, even then the Act remains applicable.
Question 18.
Attempt the following stating relevant legal provisions and decided case law, if any:
Raju has been employed by Fancy Bazar as a part-time sweeper to clean the floors twice during the day. The provident fund inspector visited the establishment and raised objections for non-inclusion of his name in the muster roll and not paying provident fund contributions. Is the view held by the inspector valid ? [CSEP -II] (Dec 2009, 4 marks)
Answer:
The contention of the inspector is legally tenable.
As per Section 2(f) of the Employees Provident Funds and Miscellaneous Act, 1952 the term ‘employee’ includes a part time employee. Thus Raju who has been employed by Fancy Bazar as part time sweeper shall be covered within the ambit of employee by virtue of Section 2(f) of the Act.
Question 19.
Attempt the following stating relevant legal provisions and decided case law, if any:
Galaxy Hotels Ltd., located in Aurangabad (Maharashtra), is covered under the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. Recently, it started a new restaurant in Belgaum (Karnataka) where 15 employees were employed. The provident fund authorities demanded contribution in respect of 15 employees in the new establishment contending that it is a part of Galaxy Hotels ‘Ltd. Is the demand of provident fund authorities justified ? [CSEP -II] (Dec 2010, 4 marks)
Answer:
No, the demand of the provident fund authorities is not justified.
It is of utmost necessity to ensure that whether there is any inter connection- some sort of common control and financial interlinkage between the branches/ department so as to establish that it the part of parent organisation.
Question 20.
Attempt the following stating relevant legal provisions and deckled case law, if any:
Hotel Amravati is managed by a firm employing more than 100 employees and covered under the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.
Some of its partners started a new restaurant in the premises registering the restaurant as a new unit as per the applicable State enactment. The restaurant employed 15 employees and the management of restaurant took a stand that the restaurant is a different establishment and is not covered under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. Will it succeed ? [CSEP -II] (June 2011, 4 marks)
Answer:
Not the management will not succeed and the provisions of the Provident Fund Act becomes applicable to it where an establishment to which this Act applies divides itself and operate as an independent unit. In this case, the Act is applicable to it even if the number of employees are less than 20.
Question 21.
Attempt the following stating relevant legal provisions and decided case law.
Raghu, on retirement, has withdrawn the entire amount of his accumulation in the provident fund. Later on, he was re-appointed for a fixed tenure. The provident fund inspector claimed contribution in respect of the salary paid to Raghu. Is the demand made by the inspector tenable in law? [CSEP -II] (Dec 2011, 4 marks)
Answer:
- The facts of the case is similar to ‘Bombay Printers Ltd. & Others v/s Union of India & Others’
- In this case, Raghu has withdrawn the entire amount of his accumulation in the provident fund and later re-appointed.
- As per the provisions of the Act, claim made by the provident fund inspector is not tenable in law as once the employee has withdrawn the full amount of accumulation of the provident fund on his requirement then there is no requirement of any contribution in respect of the salary paid.
Question 22.
Attempt the following stating relevant legal provisions and decided case law, if any:
Vaibhav Rice Mills is employing 15 persons in its factory for its regular operation. During inspection, the Provident Fund Inspector found that whenever the goods arrived and also whenever the goods were sent out of the factory premises, a few causal labourers were engaged for loading and unloading purposes. The Provident Fund Inspector demanded the employer to comply with the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 on the ground that the total number of employees (including casual labourers) exceeded 20. Is the Provident Fund Inspector justified? [CSEP -II] (June 2012, 4 marks)
Answer:
It was held in ‘RPF’ Commissioner A.P. v/s T.S. Hariharan, SC, that the casual workers are not covered under employees for the purpose of determining the employment strength for complying the provisions of the Employee’s Provident Funds & Miscellaneous Provisions Act, 1952.
Thus, Provident Fund Inspector is not justified.
Question 23.
Attempt of the following stating relevant legal provisions and decided case law. If any:
Sangeeta acquired a suitable plot of land from an authorised agency in Jaipur for the construction of a dwelling house. Can Amit, husband of Sangeeta, withdraw money from his provident fund being administered under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 for the construction of the house?
[CSEP -II] (June 2013, 4 marks)
Answer:
Withdrawl from the Provident Fund can be taken subject to conditions laid down in the Employees Provident Fund for:
- purchasing a dwelling house or flat, or
- for construction of a dwelling house including acquisition of a suitable site for the purpose, or
- for completing/continuing the construction of a dwelling house, already commenced by the member or the spouse, and
- an additional advance for additions/alteration or substantial improvement necessary to the dwelling house.
Thus, Amit, husband of Sangeeta can withdraw money from provident fund being administered under Employees Provident Funds and Miscellaneous Provisions Act, 1952 for the Constitution of house.
Question 24.
Jagrati Co-operative Society (JCS) is engaged in the manufacturing and selling of Papad and Pickles and has employed 35 female workers belonging to the nearby villages. The JCS is registered with the Registrar of Co-operative Society under the Co-operative Societies Act, 1912 and is having its works/administrative office in Palghar, Maharashtra.
The JCS is providing salary to its female workers, but is not deducting any Provident Fund. One day, Sandhya, a female worker of the JCS, made a complaint to the PF Dept, of that area for not deducting the PF from her salary. So the JCS received a notice from the PF Dept. The JCS has approached you for the legal advise. What will be your answer? (June 2022, 6 marks)
Recent Case Laws
| Case Law | Decision |
| 1. P.F. Inspector V Hariharan |
It was held by the Supreme Court that casual workers are not covered under Section 1 (3) of Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 for the purposes of ascertaining the strength of workmen |
| 2. P. G. Textile Mills V Union of India |
It was held in this case that a mere change in the partnership deed does not mean that a new business has come into existence for the purpose of Section 16(1) of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 |
| 3. Railway employees Cooperative Banking Society V The Union of India |
It was held that the definition of “employee” includes a part time employee, who is engaged for any work in the establishment, a sweeper, a night watchman, a gardner, etc |
| 4. State V S. P. Chandhani |
It was held that the Provident Fund Scheme has made the payment of contribution mandatory and the Act provides for no exception under which an employer can avoid his mandatory liability |
| 5. Goverdhanlal V REPC |
It was held that in case the sons of the employees are being paid wages, then they will be covered under the definition of employees for the purpose of Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. |
Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 Notes
Objective & Scope of Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
- An act to provide for institution of provident funds, pension funds & deposit linked insurance fund.
- Applies to whole of India excluding Jammu & Kashmir.
- Administered by Govt of India through Employees’ Provident Fund Office.
- Objective of the act is protect the interest of workers & provide to them security in old age.
- Applies to employees receiving wages less than or equal to ₹ 15,000 per month.
Applicability of the Act
- Factory having 20 or more persons engaged in industry mentioned under Schedule I.
- Any other establishment to which Central Govt, notifies.
Excludes:
- Co-operative establishments with less than 50 persons and working without power.
- Establishment of/under control/under Act of CG/SG where employees are entitled to benefits of provident or pension schemes.
Employee for the purpose of the Act
- Person employed for wages.
Includes:
- Contract employee
- Apprentice excluding apprentice engaged under Apprenticeship Act.
- Part time employee.
Note:
- Act to apply even if later on number of person reduce to less than 20.
- Act to apply even if the unit divides itself and operates as an independent unit.
Provident Fund
- Every employee working in a factory or establishment shall be entitled and required to be a member from the date of joining onwards.
- Contribution is mandatory.
- 10% of the basic wage, dearness allowance and retaining allowance of an employee to be paid by employer as Employer’s Contribution.
- The Government has raised the rate of Provident Fund Contribution from the current 8.33% to 10% in general and in cases of establishments specially noticed by the Government, from 10% to 12%
- Employee needs to pay an amount equal to the employer’s contribution.
- Employee may even opt to pay higher, but this cast no obligation on employer.
Pension Scheme
- Pension to be provided in case of: Superannuation ; Retirement; Total Disablement; Death during service; death after superannuation. Minimum 10 years required for entitlement of pension under the Act.
- Superannuation refers to attainment of age of 58 years.
Employee Deposit Linked Insurance Scheme
- 1% of the basic wage, dearness allowance & retaining allowance & cash value of food concessions of an employee to be paid by employer as Employer’s Contribution.
- Employee needs not to make any contribution.
- The employers are required to pay contributions to the Insurance
- Fund at the rate of 1% of the total emoluments, i.e., basic wages, dearness allowance including, cash value of any food concession and retaining allowance, if any.
Noteworthy Points
- Casual / temporary/ workers called on urgency basis or for short durations are not to be regarded as employees for the purpose of EPF Act.
- Employees Provident Fund Appellate Tribunal presides over cases for determining monies due from employers.