EMPLOYEES

PROVIDENT FUNDS
AND
MISCELLANEOUS
PROVISIONS ACT,
1952
 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.
 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...
 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
Act passed on 4th March 1952.

 Object of the act

The object of the act is

to provide substantial security
timely monetary assistance to

EMPLOYEES AND THEIR

FAMIILY
MEMBERS
 This act extends to the
whole of INDIA except the
state of JAMMU AND
KASHMIR
 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
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.
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
 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
 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.
What does this Act include?
This Act includes :
(i) Employees Provident Fund
Scheme

(ii) Employees Pension scheme

(iii) Employees Deposit-linked

Insurance
Scheme.
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
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.
 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.
 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.
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...
 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.
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...

.
 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.
 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.
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
 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.
 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.
 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...
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.
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...
 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...
 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.
 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
 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.
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...
 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

 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
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.
 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
 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
 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...
 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.
 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 payment
NOTE: The rate of interest specified in the
scheme shall not exceed the lending rate of
interest charged by any scheduled bank
 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...

 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.
 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...
 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
 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...
 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
 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...
 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...
 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.
 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
 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.
EMPLOYEES
PROVIDENT FUND
FORM
EMPLOYEES
PENSION SCHEME
FORM
 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.