SC Judgement 1205/2009 EPF Contribution over and above statutory maximum wage ceiling limits
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Presently, under EPF, the contributions are payable on maximum wage ceiling of Rs 6500/- by employee and employer. The employee can pay at a higher rate and in such case employer is not under any obligation to pay at such higher rate. To pay contribution on higher wages, a joint request from Employee and employer is required [Para 26(6) of EPF Scheme]. In such case employer has to pay administrative charges on the higher wages (wages above 6500/-)
Recently , Empoyees Provident Fund Organization (EPFO) has advised all Regional Provident Fund Commissioners not to inforce employers to contribute over and above the statutory wage ceiling in respect of their employees.
This circular has been issued in the light of decision of Hon’ble Supreme Court in the case related to Marathwada Gramin Bank where EPFO has decided not to go for a review against the said judgement.
An excerpt from the decision of the Hon’ble Court is as under:
“The respondent bank cannot be compelled to pay the amount in excess of its statutory liability for all times to come just because the respondent bank formed its own trust and started paying provident fund in excess of its statutory liability for some time. ”
The
Hon’ble
Supreme
Court
while referring to the appealed judgement of Single Judge of Bombay High Court also commented,
“ The learned Single Judge observed that in the instant case it is the express term of employment that the contribution of the bank shall be in accordance with the provisions of the 1952 Act. The learned Single Judge thus observed that the bar of Section 12 will not operate as otherwise held by the Tribunal in the impugned award.”
Copy of EPFO Circular >>
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