The top court said this while dealing with a question on whether special allowances paid by an establishment to its employees would fall within the expression "basic wages" under the provision of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 for computation of deduction towards provident fund.
Act, 1952 for computation of deduction towards provident fund.
A bench comprising justices Arun Mishra and Navin Sinha dismissed the appeals filed by several companies challenging the decision of the Provident Fund Commissioner clubbing basic pay with special allowances for deduction towards provident fund.
It, however, allowed the appeal filed by West Bengal's regional provident fund commissioner (II) against the order of a division bench of the Calcutta High Court, which had held that since special allowance was not linked to consumer price index, it did not fall within the definition of "basic wage".
"The wage structure and the components of salary have been examined on facts, both by the authority and the appellate authority under the Act, who have arrived at a factual conclusion that the allowances in question (special allowance) were essentially a part of the basic wage, camouflaged as part of an allowance, so as to avoid deduction and contribution accordingly to the provident fund account of the employees. There is no occasion for us to interfere with the concurrent conclusions of facts," the apex court said in its verdict.
The top court observed that no material was placed by the companies "to demonstrate that the allowances in question being paid to its employees were either variable or were linked to any incentive for production, resulting in greater output by an employee, and that the allowances in question were not paid across the board to all employees in a particular category or were being paid especially to those who avail the opportunity".
11 comments:
No Company can pay the two salary to theirs employees one for Basic pay other parts of basic pay as a special allowance to curtail the benefits of their employees for calculation of P F and others
This decision may not be in benefit of bank employees as usual, as employees unions have agreed detrimental to employee's benefits in Bipartite settlement.
Any agreement made against the law/rules is invalidated ab initio. The agreement made in bipartite settlement is against badic rules and law of land in invalid and not enforceable
It is totally wrong.Special Allowance will be a part of Basic Pay.It should be implemented with retrospect effect.
Absolutely special allowance is part of Basic pay.Whatever we are earning if that's not considered while calculating the pension then our Union and leaders are directly responsible.
It should be implemented immediately so that those who have retired can be benefited.
Special Allowance and special pay whatever you call, is actually an integral part of Basic Pay. It's very easy to conclude that by categorising Basis Pay into different parts, employer cannot justify the Special Allowance or Pay to be paid to the employees without any specific requirements. In this way, employer is just depriving the employee of his legitimate claim that reducing the Basic Pay by giving Special Allowance or Special pay, employer will save the amount of PF and Gratuity. This is employer's cleverer move. It is very clear that Special Allowance and special Pay are an integral part of the Basic Pay. It should be paid to the employees on reprospective effect.
Special Pay is part of BP, as per SC, judgement also... It should be from 01.11.2012....
Same as above....
Shedding crocodile tears on da freeze ,,,AMT rs 24000 at the most ,,,, but due to special pay you dented pocket of poor retirees in Lacs ,,, shame on your double standard
Special allowance is a integral part of the basic pay. Employers I.e bank Management is saving amount of Gratuity n P.F.It should be paid with retrospective effect.
Company are making befooling to their employees in consultation with Trade Unions leaders by making special allowance as a part of Basic pay so that they may curtail the benefits of the employee for calculation of P F and Supernation benifits,This is being done by making under hand dealing among Management and Trade Unions leaders
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