The tripartite panel set up by the Labour Ministry has broadly endorsed the controversial EPFO circular that had proposed clubbing of wages. The circular, issued on November 30, 2012, had been kept in abeyance after an outcry over it being anti-employee and -employer.
“We have revived the circular. It has been signed and sent to the Labour Ministry,” a senior official of the Employees Provident Fund Organisation (EPFO) said on the sidelines of an event here on Thursday.
Employer and employee representatives in the panel confirmed that the proposals had been broadly endorsed with “minor” tweaking. However, Labour Ministry sources said they had not yet received anything from the EPFO.
The circular, issued on the last day of the previous Central PF Provident Commissioner – had kicked up a lot of dust as it had proposed clubbing of key allowances to calculate wages, and had also set a time of seven years for inquiry into defaulting companies.
Major trade unions had opposed the Labour Ministry’s move to keep the circular in abeyance. “The stipulation made regarding calculation of provident fund contribution in said circular…is nothing more than the reiteration of what has been provided under EPF Act,” they had said.
“The re-stipulation made in the circular has been the urgent need of the hour since there has been large number of violations by the employers, particularly in private sector…” Tapan Sen, General Secretary of Centre of Indian Trade Unions, had said.
He had alleged that several private employers were calculating PF contributions only on a part of wages being paid to minimise their own obligation of a matching contribution.
At present, there are over five crore PF subscribers. Employees are required to contribute a statutory minimum of 12 per cent of basic salary, with a matching contribution by employers.
As regards the move for a time limit for initiating inquiries against defaulting companies, which was opposed by trade unions and members of Parliament, as huge worker PF dues are pending in sectors such as construction and real estate, an EPFO official said the proposal had been misread, as “any case, in which proper paper work has been done, will be inquired into.”