The Madras High Court has turned down a plea of several industries and multinational companies in Tamil Nadu to give ‘advance ruling' whether a particular payment to workers was a “basic wage” in terms of Section 2(b) of the Employees Provident Fund & Miscellaneous Provisions Act, 1952.
Though looking attractive, this Court cannot clutch on to a jurisdiction which it did not have, Mr Justice K. Chandru said while dismissing 10 writ petitions – from Reynolds Pens India Pvt Ltd, Saint-Gobain Glass India Ltd, Mando India Ltd, and Hinduja Foundries Ltd – all in Sriperumbudur Taluk, L.M. Van Moppes Diamond Tools India Ltd, Sembiam, Chennai, Vetri Software India Pvt Ltd, Chennai, Madras Advertising Co (P) Ltd.
The petitioners contended, inter alia, that allowances paid by them under different heads – conveyance, educational allowance, food concessions, medical, special holidays, night shift incentive, city compensatory allowances – amounted to ‘wages' within the meaning of the term ‘basic wage'.
The court's ruling, by holding that certain allowances would not constitute wages, would be binding on the PF authorities and employers could arrange their affairs based on the said ruling.
“The limited power of judicial review can be exercised only when statutory authorities make an order and still it required an appropriate correction by way of judicial review”, the judge observed. The petitioners could not construe the High Court exercising power under Article 226 of the Constitution as an advance ruling authority.
The court could not give ruling based on apprehension or on academic issues. It was preciously for this reason, the authorities had been created and a judicial appellate Tribunal had been constituted.
The Judge said the appeal power given to the PF Commissioner enabling him to determine the appeal only after hearing the parties.
The appeal power was a comprehensive one and the Tribunal constituted under the Act could go into both questions of law and facts. The petitioners would have to necessarily avail themselves of remedies under the Act.
Referring to the petitioners challenging notices issued u/s 7A of the PF Act by the respondent (Regional PF Commissioner II), Chennai, the Judge, while citing a judgment of the apex court in HR Adyanthaya vs Sandoz (I) Ltd [reported in (1994) 5 SCC 737], said that in present case, it was contended that the employer and the employees were allowed to exclude certain items for not being covered by the provisions of the Act. There was internal evidence to show that these allowances would not come within the definition of the term ‘basic wage'. This Court was unable to agree with this submission of petitioners.
The judge ruled that in view of legal precedents set out in various judgments, this court was not able to countenance the prayers of the petitioners. It was not a case where interference by exercising extraordinary jurisdiction of this was called for.
All the writ petitions would stand dismissed, the judge held.