Yes.  In one case, the Madras High Court has held that an employee rendering continuous service for a period of 240 days in a year, e.g., the fifth year will be deemed to have continued in service for one year as stipulated by section 2A of the Act. Accordingly, an employee who has put in his service for 10 months 18 days for the fifth year subsequent to first 4 years should be deemed to have completed continuous service of 5 years and is entitled to get gratuity. The High Court has also distinguished the earlier ruling of Andhra Pradesh High Court wherein it was held that an employee who has worked for 4 years and 11 months and 10 days having not completed five years of service will not be entitled to gratuity.  Although the applicability of the judgment of Madras High Court should be restricted in the State of Tamil Nadu but it is being applied by the govt. rolling and Appellate Authorities under the Act all over India.1  In another case, the Kerala High Court has held that by a deeming provision, the Act provides for the service in any 12 months of a five year period to be treated as continuous service, if the employee has more than 240 days of service.

1. Mettur Beardsell Ltd. (represented by its Personnel Manager vs. Regional Labour Commissioner (Central Authority under the Payment of Gratuity Act, 1972), Madras, 1998 LLR 1072 (Mad. HC).
2. Sreeja vs. Regional Joint Labour Commissioner, 2015 LLR 826 (Ker. HC).

There is no bar even when there have been no objection by the Inspecting Authority and also the objection have been clarified by the employers.  So far as the determination under section 7A of the Act is concerned these are quasi judicial proceedings and the principle of res judicata (a matter that has been adjudicated by a competent court and therefore may not be pursued further by the same parties.) as applicable in judicial proceedings will not apply.

For correctly comprehending the concept of susceptibility of P.F. contribution in basic wages we shall have to refer to the definition of “basic wages” under section 2(b) of the EPF Act 1952 which runs as follows:

“Section 2(b) of the EPF Act defines the term basic wage – Section 2(b)(i) “basic wage” means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of contract of employment and which are paid or payable in cash to him, but does not include the value of any good concession.

(ii) any dearness allowance (that is to say, all cash payments by whatever name called paid to an employee on account of a rise in cost of living), house rent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment,

(iii) any presents made by the employer.”

An exception in clause (ii) exclude the dearness allowance from the ambit of basic wages but under section 6 contribution has to be made on dearness allowance and retaining allowance.

The Act very specifically excludes HRA, Overtime allowance, bonus, commission or any other similar allowance and the presents made by the employer. Irrespective of the nomenclature, if the nature of such payments falls under any of the following categories, the same need not be reckoned for PF contributions:

• The payment as made to one who avails of the opportunity, the same is exempted. Classic example is ‘overtime allowance’. Overtime work is generally permitted. But this may not be adopted in all the concerns. Even in the same establishment, not everyone will become eligible for this payment. But this payment will be made only to those who work extra hours. So, this loses the concept of ‘universality’. This will not be considered as ‘basic wage’. Another example is ‘night shift allowance’. Only those who work in the night shift will be entitled and so it is not ‘basic wage’.
• The payment is variable. For example, production incentive or bonus This is an additional emolument. The scheme may be open to all. But all the employees would not necessarily earn it. The quantum would also vary based on one’s efficiency and diligence.
• Where the payment is made for the work beyond the standard norms will not attract contributions.
• Also the payment which universally, necessarily or ordinarily paid, such a payment need not be reckoned.

Commission or other allowances of similar nature are not found in all concerns and even, if it is there, not all the employees of the establishment earn it.

However, if only commission is to be given to the employees for promotion of sales then it will be treated as ‘basic wages’ as held by the Kerala High Court in The South Malabar Gramin Bank vs. The Regional Provident Fund Commissioner and Anr., 2019 LLR 457.

They will be entitled.  In this context reference is made to paragraph 72 read with sub-para (6) provides as under :

72(6) Any amount becoming due to a member as a result of (i) supplementary contribution from the employer in respect of leave wages, arrears of pay, instalment of arrear contribution received in respect of a member whose claim has been settled on account but which could not be remitted for want of latest address, or ( ii) accumulation in respect of any member who has either ceased to be employed or died, but no application for withdrawal under paragraph 69 or 70 or transfer, as the case may be has been preferred within a period of thirty six months from the date it becomes payable shall be transferred to an account to be called the inoperative account.

Provided that in the case of a claim for the payment of the said balance, the amount shall be paid by debiting the Inoperative Account.

There is no parameter as prescribed and as such the total wages can be justifiably segregated between basic and house rent allowance.

Not necessarily.  Any such earning which would vary from individual to individual according to their efficiency and diligence will stand excluded from the term basic wages as held by the Supreme Court in Muir Mills Co. Ltd. vs. Its Workman, AIR 1960 SC 985.

The provident fund authorities will certainly impose damages and interest for the delayed payments as defaulted. The employers will have to approach the higher courts and in this context reference is made to the case of D.A.V. College and another vs. Regional Provident Fund Commissioner and Ors., 1988 (56) FLR 513 wherein it has been held that “we direct that the petitioners shall comply with the Act and the scheme framed there under regularly with effect from February 1, 1988.  Whatever arrears they have to pay under the Act and the schemes in respect of the period between March 1, 1982 and February 1, 1988 shall be paid by each of the petitioners within such time as may be granted by the Regional Provident Fund Commissioner.  If the petitioners pay all the arrears payable from March 1, 1981 upto February 1, 1988 in accordance with the directions of the Regional Provident Fund Commissioner he shall not levy any damages for the delay in payment of the arrears.  Having regard to the special facts of these cases the subscribers (the employees) shall not be entitled to any interest on the arrears.

The test adopted to determine if any payment was to be excluded from basic wage is that the payment under the scheme must have a direct access and linkage to the payment of such special allowance as not being common to all.  The crucial test is one of universally e.g. where the wage is universally, necessarily and ordinarily paid to all across the board such emoluments are basic wages.

To

………………

………………

It has come to my notice that after you finish work here, on most nights and at some weekends, you work part time for …………….. (‘XY Company’).

What you do in your own time is, of course, a matter for you but I must urge you to consider your health and caution you against doing too much. Your work here must not be allowed to suffer, which must mean that you must get an adequate amount of rest.  Your attention is also invited to section 60 of the Factories Act, 1948 and provisions of Shops and Establishments Act wherein double employment is prohibited.

I must also warn you that in some cases we are in direct competition with ‘XY Company’ and you must ensure that you do not disclose to them anything that you may have learned of our business, nor do anything that might help them in competition with us.

For and on behalf of the management

Authorised Signatory.....

To

……………………….

……………………….

While going through your attendance record we find that you have been irregular in attending your work besides persistently coming late or leaving the work place earlier than the prescribed time for joining and leaving which results into dislocation of work besides inconvenience to the Management and your colleagues. You have been repeatedly warned/reprimanded orally but of no effect since you have neither improved your regularity in attendance nor punctuality.  On the contrary, it has further deteriorated.  During the last three months, you have absented yourself from duty without any application or intimation on the following occasions besides coming late or leaving earlier than the duty hours.

(Herein mention the dates when employee has remained absent or came late or left earlier than the duty hours).

Please note that irregularity in attendance and non-observance of punctuality cannot be tolerated at the cost of efficiency and discipline. Although the management has every justification in dispensing with your services but a lenient view is being taken and as such you are hereby warned to improve your regularity and punctuality failing which the Management will be compelled to take appropriate disciplinary action against you.

For & on behalf of the Management

Authorised Signatory....

To

……………………………

..………………….

This is with reference to the chargesheet dated ………………. wherein grave and serious charges were levied against you.  You were given 48 hours for submission of your explanation to the chargesheet but you have failed to make the compliance.  Although the management is within its rights to draw an irresistible presumption that in the absence of any explanation you have admitted the charges nevertheless the management has decided to hold an enquiry by appointing independent and impartial Enquiry Officer Mr. ………………………Advocate who will intimate you time, date and venue of the enquiry.   You are advised to participate in the enquiry in your own interest. 

Yours faithfully,

Authorised Signatory

CC to – Mr. ………………………Advocate.....

To

………………………

………………………

We have received your application dated………asking for grant of leave for……..days on account of your alleged sickness.  You have not supported your application either with medical certificate or ESI slip (mention only when an employee is covered under the ESI Act).

In view of the above, your application for leave cannot be considered for sanctioning of leave and as such you are advised to report for duty alongwith an explanation for your unauthorized and wilful absence from duties latest within three days from the receipt of this letter.  In the meantime, you are being marked absent.

Authorised Signatory..

An appeal was field by the appellant before the Central Goverment Industrial Tribunal -cum-Labour Court , Lucknow, challenging the order dated 17/11/2005, passed by the EPF Authority under Section 7 A of the Act.

Brief Facts:

Appellant contends that it never employed 20 or more persons for "wages". Teachers in school run by Gurudwara were paid 'honorarium' form 'Charity Fund'. No tution fee form the students was received. Proceedings under section 7A were duly attended by the appellant by all necessary records. EPF Authority has contended that 'teachers'  are 'employee' to be covered under the Act and appellant has not deposited the EPF contribution in time. Appellant himself has given list of 22 employees to be covered under.

( Teachers getting honorarium from charity fund are employee getting salary/wages, covered under the EPF & MP Act, 1952 and employee is liable to pay EPF contributions in respect of such teachers.)

Order No.………….dated…………….

In exercise of the powers conferred on the undersigned under Section 4(1) of the Sexual Harassment of Women at Workplace (PP&R) Act referred to above, the Internal Complaints Committee is constituted in ………………….. (name & address of the establishment) with the following persons as Presiding Officer, members and also a member from NGO respectively to look into and proceed on the complaints filed by the women members on staff of the establishment against sexual harassment or incidents that of similar in nature.

1. Ms………………… Presiding Officer
2. Ms……………………….…….Member
3. Ms………………………………Member

4.Mr./Ms……………from………… (herein state the name of the non-government organization) or Ms……..… Advocate (familiar with the issue of sexual harassment or a social workers with at least five years experience in the field of social work which leads to creation of societal conditions favourable towards empowerment of women and in particular in addressing workplace sexual harassment.)

The Presiding Officer and other two members of the Internal Complaints Committee shall hold the office from …………. to …………. for a period of three years. The Presiding Officer will convene the meeting of the committee as and when required and the proceedings thereon will be recorded as the minutes of the committee/proceedings.

CEO

Competent Authority of the establishment

Note : The Presiding Officer and every member of the Internal Complaints Committee shall hold office for such period, not exceeding three years, from the date of their nominations.

The Internal Complaints Committee shall in each calendar year prepare an annual report under section 21 of the said act read with Rule 14 which shall have details of number of cases filed, if any, and their disposal under this Act.