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EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 PowerPoint PPT Presentation


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EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952. Presented by : . Foreword. The employees provident funds and miscellaneous act,1952: is a piece of social legislation a beneficent measure,

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EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952

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EMPLOYEES’ PROVIDENT FUNDS ANDMISCELLANEOUS PROVISIONS ACT, 1952

Presented by :


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Foreword

The employees provident funds and miscellaneous act,1952:

  • is a piece of social legislation

  • a beneficent measure,

  • enacted for the purpose of institution of provident fund for employees in factories and other establishments.

  • Provident fund is an effective old-age and survivorship benefit.


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HISTORICAL BACKGROUND

WITH THE INDUSTRIAL GROWTH

  • Some big employers introduced schemes of PF for welfare of workers.

  • But these were private and voluntary

  • Workers of small employers remained deprived

  • Therefore grouse of deprived workers gained momentum.

  • Contd...


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  • In 1946, Labour Investigation committee was formed to investigate the functioning of the above mentioned private and voluntary PF schemes.

  • On 15th November 1951, the govt of India promulgated the Employees’ Provident Funds Ordinance which was subsequently replaced by the Employees’ Provident Funds and Actpassed on 4th March 1952.


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Object of the act

The object of the act is

  • to provide substantial security

  • timely monetary assistance to

EMPLOYEES

AND THEIR FAMIILY MEMBERS


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This act extends to the whole of INDIA except the state of JAMMU AND KASHMIR


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Where does this Act apply?

This act applies to every establishment, which is

  • a factory, and

  • to any other establishment employing 20 or more persons which the Central govt may by notification in the Official Gazette, specify in this behalf

    Contd…


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But the Central Government is empowered to apply the provisions of this act to any establishment

  • Employing less than 20 persons

  • By giving a notification at least 2 months before it intends to do so.


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Establishment not covered through the act can be covered through the act

  • On an application made to the CPF commissioner

  • Stating that the employer and the majority of employees agree to the applicability of the act to the establishment


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Important definitions under this Act

Basic wages: It means all emoluments earned by an employee while on duty or on leave with wages in accordance with the terms of employment and which are paid or payable in cash to him, but does not include;

(i) the cash value of the food concession

(ii) allowances payable to him

(iii) any presents made by the employer


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Employee: It means any person who

  • is employed for wages

  • in connection with the work of an establishment

  • who gets wages directly or indirectly from the employer

  • includes any person employed by or through a contractor


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Employer : In relation to a factory establishment, as per section 2(e) of the act, the employer means

  • the owner or occupier,

  • including his agent ,

  • the legal representative of a deceased owner or occupier

  • manager of the factory

    For other establishments,

  • the person who has the ultimate control over the affairs of the establishment.


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TRUE or FALSE

Q. The retired employees from railways are excluded employees under EPF scheme

Ans. False

Q. Schools are not liable for payment of contributions of the employees such as drivers, conductors, engaged by transport contractor.

Ans. True

.


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TRUE or FALSE

Q. Partner of a firm having a status of beneficiary will not be an employee either to be covered or counted under the Act.

Ans. True


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Power to apply act to establishments with common PF

When immediately before this act becomes applicable to an establishment there is in existence a provident fund which is common to the employees employed in that establishment and employees in any other establishment, the central govt may, notification in the Official Gazette, direct that the provisions shall also apply to such other establishments


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What does this Act include?

This Act includes :

(i) Employees’ Provident Fund Scheme

(ii) Employees’ Pension scheme

(iii) Employees’ Deposit-linked Insurance

Scheme.


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EMPLOYEES’ PROVIDENT FUND SCHEMES

According to Section 5 of this Act the Central Govt may, by notification in the Official Gazette, frame a Scheme to be called the Employees’ Provident Fund Scheme for the establishment of provident funds under this Act


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EMPLOYEES’ PENSION SCHEME

Section 6.A provides that the Central Government may frame an Employees’ Pension Scheme for:

  • Superannuation pension, retiring pension or permanent total disablement pension to the employees covered under the act.

  • Widow or widower's pension, children pension or orphan pension payable to the beneficiaries of such employees.


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Employees’ Deposit-linked Insurance Scheme

The Central Government under Section 6-C of the Act may formulate an Employees’ Deposit-linked Insurance scheme for providing:

  • Life insurance benefits to the employees of any establishment or class of establishments to which the Act applies.


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CENTRAL BOARD

Section 5.A provides that the Central Government may by notification in the Official Gazette constitute a Central Board for all such territories as to where the Act applies.


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The Board shall constitute of

  • A Chairman and a Vice-Chairman;

  • The Central Provident Fund Commissioner who shall be an ex-officio member of the Board;

  • Not more than fifteen persons appointed by the Central Government from amongst its officials; and

    contd...


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  • Not more than fifteen persons representing the Government of the States;

  • Ten persons representing employers of the establishments to which the scheme applies;

  • Ten persons representing employees in the establishments to which the scheme applies.

    NOTE: ALL APPOINTMENTS TO BE MADE BY THE CENTRAL GOVERNMENT.


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WHAT ARE THE DUTIES OF THE CENTRAL BOARD ?

The Board is expected to

  • administer the funds vested in it by means of contributions,

  • maintain proper accounts of its income and expenditure in such form and in such manner as prescribed by the Central Government, and

  • Contd...

    .


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  • also perform such other functions as it may be required to perform by or under any provisions of the Employees Provident Fund Scheme and the Insurance Scheme under the Act.


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EXECUTIVE COMMITTEE

Section 5(AA) provides that the Central Government may, by means of a Notification in the Official Gazette, constitute an Executive Committee to assist the Central Board in the performance of its functions.


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Such Executive Committee shall consist of:

  • A Chairman appointed by the Central

    Government from amongst the members of the Central Board;

  • Two persons appointed by the Central Government from amongst its officials nominated into the Central Board;

  • Persons appointed by the Central Government from amongst the State nominees in the Central Board; and

    Contd...


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  • Three persons representing the employers elected by the Central Board from amongst the fifteen representatives of employers in the Central Board;

  • Three persons representing the employees elected by the Central Board from amongst the fifteen representative of the employees in the Central Board; and

  • The Central Provident Fund Commissioner as the ex-officio member.


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STATE BOARD

Section 5.B provides that the Central Government may, after consultation with the Government of any State, by means of a Notification in the Official Gazette, create a State Board for such State. Such a State Board shall exercise such powers and perform such duties as the Central Government may assign to it from time to time.


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OFFICERS OF THE BOARD

The Central Govt shall appoint:

A Central Provident Fund Commissioner who is to serve as the Chief Executive Officer of the Central Board and shall be under the general control and superintendence of the Board.

Contd...


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The Central Govt may also appoint:

  • A Financial Adviser and Chief Accounts Officer to assist the Central Provident Fund Commissioner in the discharge of his duties; and

  • As many Additional Provident Fund Commissioners, Regional Provident Fund Commissioners, Assistant Provident Fund Commissioners, and such other officers and employees as it may consider necessary.


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CONTRIBUTIONS TO BE MADE INTO THE PROVIDENT FUND

Each employer shall, in respect of an employee employed by him either directly or through a contractor

  • pay ten percent of the basic wages, dearness allowance and retaining allowance (only in cases where retaining allowance is being paid) payable to such employee.

    Contd...


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Each employee shall contribute to the Provident Fund

  • an amount equalling the contribution made by the employer,

  • but shall be free to make a contribution over and above the sum made by the employer, but in such a case, there shall be no obligation on the employer to match such excessive contribution made by the employee

    Contd...


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However, the Central Government shall be free, after making due inquiry, to issue a Gazette Notification fixing the quantum of contribution of both employers and employees at twelve percent in any establishment or class of establishments.


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DETERMINATION OF MONEY FROM EMPLOYERS

Section 7.A provides that ANY Provident Fund Commissioner may:

  • In a case where a dispute arises regarding the applicability of this Act to an establishment, decide such dispute; and

  • Determine the amount due from any employer under any provision of this Act


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Review of Orders passed under sub-section 1 of section 7(A)

Any person

  • who is aggrieved by an order passed,

  • but from which no appeal has been preferred under the Act and

  • who, from the discovery of new and important matter of evidence, desires to have the order made reviewed, may apply for a review of that order to the officer who made the order.


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EMPLOYEES’ PROVIDENT FUND APPELLATE TRIBUNAL

  • The Central Govt may constitute one or more employees’ provident fund appellate tribunal which shall have jurisdiction in respect of establishments situated in such area as notified in notification constituting the tribunal.

  • A tribunal shall consist of only one person who will be the presiding officer

    Contd...


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A person can not be the presiding officer of a tribunal unless he is, or has been, or is qualified to be,-

(i) a judge of a high court; or

(ii) a district judge


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Staff of tribunal

The Central Govt shall determine

  • Nature and categories of officers and other employees

  • Staff of tribunal shall discharge their functions under the Presiding officer


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How to recover due money from employers?

If any money is due from the employer to any schemes under this Act,

  • It could be recovered by the Central Provident Fund Commissioner or

  • Such other officer as may be authorised by the Provident Fund Commissioner,

  • In the same manner as an arrear of land revenue, but only after making a Gazette Notification to that effect.


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Appeals to Tribunal

Any person

  • who is aggrieved by an order fixing the moneys due from the employers,

  • or an order either allowing or denying the review contemplated,

  • or an order determining the escaped amounts, can prefer an appeal to the Appellate Tribunal


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  • the Tribunal may, after giving sufficient opportunities to all those concerned, pass such orders as it thinks fit, either confirming or altering the order appealed against.

  • It may also send the case back to the authority which passed the order appealed against, with such directions for disposing of the case, as it may think fit, or even direct a fresh adjudication


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True or False

Q. A person preferring an appeal to a tribunal under this Act may either appear in person or take the assistance of a legal practitioner to present his case before the Tribunal.

Ans. True


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Orders of Tribunal

  • A Tribunal after giving the parties to present their case may pass orders as it think fit or,

  • Refer the case back to authority concerned

  • A Tribunal may within five years from the date of its order may amend its order with a view to rectify its mistake.

    Contd...


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  • A Tribunal shall send a copy of every order passed to the parties to the appeal.

  • Any order made by a Tribunal finally disposing of an appeal shall not be questioned in any court of law.


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Interest payable by the employer

The employer shall be liable

  • To pay simple interest at the rate of twelve per cent per annum or as specified in the scheme

  • On any amount due from him till the date of actual paymentNOTE: The rate of interest specified in the scheme shall not exceed the lending rate of interest charged by any scheduled bank


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Mode of recovery


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Issue of certificate to the recovery officer

Where any amount is in arrear the authorised officer may issue

  • A certificate specifying the amount and the recovery officer and

  • The recovery officer shall proceed to recover the amount by :

    Contd...


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  • Attachment and sale of the movable and immovable property of the establishment or the employer.

  • Arrest of the employer and his detention in prison;

  • Appointing a receiver for the management of the property of the establishment or the employer as the case may be.


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Effect of Insolvency

If an employer from whom some money is due under any scheme under the Act is declared insolvent or a Company from similar sums is due is wound up:

  • The amount due in either case would be deemed to be included among the debts which are to be paid in priority to all other debts


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Can the employer reduce wages?

The Statute in unequivocal terms stipulate that no employer can reduce, whether directly or indirectly, the wages or any other benefits to which the employees are entitled to, either by reason of his liability for the payment of any contribution to the Funds under the Act or due to any charges under the Act or any scheme there under.


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Inspectors and their powers

The act provides for the appointment of Inspectors as deemed fit by the appropriate government by a notification in the Official Gazette

Any Inspector for the purpose of enquiring:

  • May ask an employer or contractor from whom any amount is recoverable, to furnish information as he may consider necessary.

  • May enter and search concerned premises and also ask to produce documents for examination at reasonable time and with assistance as required.

    Contd...


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  • Makes copies of, or take extracts from, any book, register or other document maintained in relation to the establishment and, where he has reason to believe that any offence under this Act has been committed by an employer, seize with such assistance as he may think fit, such book, register or other document or portions thereof as he may consider relevant in respect of that offence;

  • Exercise such other powers as the Schemes under the Act may provide


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Penalties under the Act

Any person who,

  • for the purpose of avoiding any payment of money due from him ,

  • or for the purpose of enabling any other person so liable to avoid such payment,

  • is liable to be punished with imprisonment for a term which may extend to one year or with fine of five thousand rupee or with both

    Contd...


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Similarly, an employer who contravenes the provision of the Act in relation to the payments to be made into the Pension Scheme or makes default in payment of inspection charges stipulated under the Act

  • shall be punishable with imprisonment which may extend to three years

    Contd...


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NOTE : Such punishment ,

  • shall not be less than one year and a fine of ten thousand rupees in case of default in payment of the employees’ contribution which has been deducted from his wage.

  • And in all other cases, the punishment shall not be less than imprisonment for a period of six months and a fine of five thousand rupees.

    However, the Court has been given adequate powers to impose a lesser sentence, provided there are sufficient reasons for so doing, which has been noted in the judgement.

    Contd...


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An employer who contravenes the provisions of the Act relating to the payments to be made into the Employees’ Deposit Linked Insurance Scheme:

  • shall be punishable with imprisonment for a term which may extend to one year, but shall not be less than six months,

  • and shall also be liable for a fine which may extend to five thousand rupees. (In this case also the court can impose lesser sentence)

    Contd...


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Offences mentioned, when committed by a Company,

  • Then every person in charge of the Company at the time of the offence or who was responsible to the Company for the conduct of the business of the company shall be proceeded against, along with the company and shall be punished accordingly.

  • However, if the person so proceeded against is able to prove that the offence was committed without him having known about it, or that he took reasonable care to prevent the commission of the offence, then he shall not be proceeded against.


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What happens in the case of repeating offenders?

A person who has previously been convicted for any of the offences above mentioned is found to have committed the same offence again shall be

  • subject for every such subsequent offence to imprisonment for a term which may extend to five years, but shall not be less than two years,

  • and shall also be liable to a fine of twenty five thousand rupee


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Cognizance and trial

The Act provides that no court shall take cognizance of any offence punishable under the Act,

  • except on a report in writing of the facts constituting such offence made with the previous sanction of the Central Provident Fund Commissioner or such other officer as may be authorised by the Central Government.


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  • Section 14.AC further provides that no court inferior to that of a Presidency Magistrate or a Magistrate of the first class shall try any offence under this Act or any scheme framed there under.


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Industries Exempted

Section 16 provides that the Act shall not apply to the following categories of establishments:

  • Establishment registered under the Co-operative Societies Act, 1912, or under any other law for the time being in force in any State relating to co-operative societies, employing less than fifty persons and working without the aid of power, or

    Contd...


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  • Any other establishment belonging to or under the control of the Central Government or a State Government and whose employees are entitled to the benefit of Contributory provident fund or old age pension in accordance with any scheme or rule framed by the Central Government or the State Government governing such benefits, or

  • Any other establishment set up under any Central, Provincial or State Act and whose employees are entitled to the benefits of contributory provident fund or old age pension in accordance with any scheme or rule framed under that Act governing such benefits


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Power to exempt

The appropriate govt may with the concurrence of the central board exempt certain establishments from the Act provided

  • the rates of contribution is less than specified in the scheme, and

  • The employees are enjoying benefits in the form of provident fund, gratuity or pension, which separately or jointly are on the whole not less favourable than those specified in the scheme.


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Transfer of Accounts

If an employees leaves his employment in an establishment and joins any other establishment then the amount of accumulations to the credit of such employee in the Provident Fund shall be transferred within such time as specified by the Central Govt. to the credit of his account in the Provident Fund of the establishment in which he is re-employed, if the employee so desires and the rules in relation to that PF permit that transfer.


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QUESTIONS FOR

YOU!!


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Is the Act applicable to a factory which is closed down but is employing a few employees to look after the assets of the establishment?

Where a factory is closed down for good and only four security men are retained for keeping a watch over the assets and properties of the establishment, the Act would not continue to be applicable to the factory.

Ans.


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Are "home workers" in the beedi industry entitled to the benefit of the Act?

The workers employed at their homes in the manufacture of beedis are also entitled to the benefit of the Act and the Schemes framed thereunder.

Ans.


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Is a trainee an "employee" under the Act?

Ans.

The provisions of Section 2(f)(ii) of the Act and Para 2(f)(iv) of the Scheme framed under the Act are to be kept in mind while considering if a trainee is an employee or not. These provisions show that a trainee who is an apprentice engaged under the Apprentices Act, 1961 or who is an apprentice according to the certified standing orders applicable to the establishment is excluded from the definition of an employee under the Act.


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Is a partner of a firm an employee under the Act?

For the purpose of the Employees Provident Funds Act a partner of a partnership firm cannot be said to be an employee of the firm having regard to the provisions of the Indian Partnership Act. A person cannot be both an employer and employee.

Ans.


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Does the Act apply to a poly clinic?

Ans.

A poly clinic is covered by the entry in respect of "establishments of hospital" as well as the entry in respect of "establishment of Medical Practitioners and Specialists" and therefore the Act applies to a poly clinic. The object (of the two entries) is to bring all medical establishments employing 20 or more persons under the purview of the Act.


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What does it mean when section 10(2) of the Act says that the amount standing to the credit of a member in the Fund at the time of his death and payable to his nominee shall vest in the nominee?

Vesting of the amount in the nominee is for limited purpose of receiving the amount from the employer and handing over the same to the heirs entitled thereto. The nominee is merely authorized to receive the amount for the benefit of heirs of the deceased.

Ans.


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Can a nominee of a deceased employee claim an absolute right in respect of the amount of provident fund of the deceased employer?

The nominee cannot claim an absolute right to the amount excluding the right of the heirs. An heir of the deceased employee can always initiate legal proceedings against the nominee for claiming his share in accordance with the law of succession

Ans.


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If any establishment has departments or branches, are these departments or branches, to be treated as separate establishments or parts of the same establishments?

Where an establishment consists of different departments or has branches, whether situate in the same place or in different places, all such departments or branches shall be treated as parts of the same establishment. {Section 2(A)}

Ans.


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What happens to a private provident fund of an establishment when that establishment is covered under the statutory Provident Fund Scheme?

On the application of the statutory Provident Fund Scheme to an establishment, the accumulations in the private provident fund in that establishment standing to the credit of the employees who become members of the statutory Provident Fund must be transferred to the statutory Provident Fund. The accumulations will be credited to the accounts of the employees entitled thereto in the statutory Provident Fund. {Section 15}

Ans.


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Is the employer liable to pay the contribution when he is not in a position to pay wages to the employees?

The employer is liable to pay the employer's contribution as  well as the employee's contribution irrespective of the fact that wages have been paid to the employees or not

Ans.


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If an employee has a "family", can he make nomination in favour of brother?

No nomination can be made under the E. F. P. Scheme in favour of a person who is not a member of the "family". The word "family" is defined in Para 2(g) of the Scheme and according to the definition brother is not a member of the "family". The nomination made in favour of brother is invalid

Ans.


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EMPLOYEES PROVIDENT FUND FORM


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EMPLOYEES’ PENSION SCHEME FORM


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Concluding remark

Though the Employees Provident Fund and Miscellaneous Provisions Act is a much more comprehensive Statute incorporating much more details, the discussed things could very well be identified as the crux of the Statute as they reflect the heart and soul of the Act and brings out its welfare nature.


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