Madras High Court ruling on the applicability of Provident Fund (PF) contribution on certain allowances. Reynolds Pens India Pvt. Ltd. Vs Regional Provident Fund Commissioner (Madras High Court)- The Madras High Court in aforesaid case has held that certain allowances such as conveyance, educational allowances, food concession, medical allowance, special holidays, night shift incentive, city compensatory allowances etc. should be treated as part of basic wages under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (‘EPF Act’.) and accordingly, provident fund contributions should be remitted on such allowances.
PF department contended that the allowances paid by petitioners to their employees come within the realm of basic wages and therefore should be included while making contribution towards PF. To support the argument, the department placed reliance on the ruling of the honourable Supreme Court in the case of Daily Pratap vs. RPFC and Calcutta High Court ruling in the case of RPFC (II), West Bengal and another vs. Vivekananda Vidya Mandir.
It is pertinent to note that in aforesaid cases, courts have held that certain allowances paid to their employees by employer, will form part of the basic wages for the purpose of PF contribution. However, review petitions have been filled in various High Courts against aforesaid judgements and hence the same are not conclusive as yet. The matter is also under the consideration of the Ministry of Labour. The issue will attain finality only if appropriate changes are made in the respective Acts or if the Supreme Court gives a ruling in the matter.
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 07.06.2011
W.P.Nos. 15823, 22480, 25442 and 25443 of 2010, 3427 of 2011, 19751 of 2010,
970, 3986,1853 and 2908 of 2011 and M.P.Nos. 1,1,1 and 1 of 2010,
1 of 2011, 1 of 2010, 1,1,1 and 1 of 2011
