epf chennai order

8/8/2019 Epf Chennai Order

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~.~ I Emall: [email protected]~ - NVebsite: www.epfochennai.tn.nic.in BYREGD. ~:>STWITH ACK.DUE~ "Tele.: 044-28132700~ I FC'x : 044-28132188erR'/Telegram :'mt~/'Bhavishyanidhi'~--

ChA~ltr ~ erftt otidlo.llEMPLOYEES'PROVIDENT FUND ORGANISATION(~"Qcj"~~, mr~ I MINISTRYOFLABOURANDEMPLOYMENT,(IVf.OFINDIA)~ q,1.qrl('t.q / RegionalOffice37. ~ ~ ~ . ~ -600014/ 37, Royapettah HighRoad,Chennm- 600 014

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CC-II!TN/RO/CHN/ 50452/Reg1/2010 ['ate: 01.09.2010

BEFORETHEREGIONALPROVIDENTFUNDCOMMISSIONER,EMPLOYEES'PROVIDENTFUNDORGANISATIONREGIONALOFFICE,CHENNAI:00 014PRESENT: SHRI RAMAN DHANASEKAR,

RegionalProvident Fund CommissionerIn the matter of deciding under Para 26B of the Employees' Provident Fund

Scheme,1952, the date from which Shri.N.J.P.Shilohu Rao, Junior Telecom Officer working inM/s.ChennaiTelephones (BSNL) ~avingCode'No.TN/S0452,is entitled or required to become amember .under the Employees' Provident Fund Scheme,1952.

The above establishment has been covered under the Employees' Provident FUndsand Miscellaneous ProvisionsAct, 1952 and the Schemes framed thereunder.

ORDERWHEREAS a grievance had been registered under' BhavishyaNidhiAdalat conducted

during January 2010 from Shri.NJ.P.Shiiohu Rao, Junior Telecom Officer and others about non -extension of membership from- their...pre-induction training 'period among other grievances.Accordingly, an Enforcement Officer was directed vide. letter No.CCII/23!TN/50452/Enf/10 dated22/01/10 to visit the establishment and submit a report. T Accordinglythe EnforcementOfficersubmitted a report duly enclosing a copy of letter dated 27.01.2010 from Deputy GeneralManager(Corporate Accounts), Chennai Telephones stating that the officials on recruitment fromopen market based on qualificationswere paid stipend for the pre-induction training and the wages asper the definition under EPFAct 1952 does not include any stipend and further 'wages' is defined asthe payment 'earned' for the 'duty' performed as per the work assigned during the period underconsiderationandassuchtheseofficialsdonot comeunder the categoryof apprentices.

AND WHEREAS the enforcement qfficer was further directed to inspect the issue ofback period membership in detail among other issues and submit a report before 12/2/2010.Accordinglythe enforcement officer v!sited the establishment on 09/2/2010 and reported that theemployer stated that appointment order is issued only after completion of the training and hence theywill have to get orders from their Head Office if deductions are to be made for training period also.Therefore the enforcement officer had recorded his observations on the visit note and further alsoissued an Inspection Report Part IIvide letter no. TN/PF/50452/EO/2010 dated 09/02/2010 addressedto The General Manager (Finance), BSNL,Chennai Telephones, 78, Purasawalkam High Road,


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.deduction of contributions for the training period among other issues. The above communications was'received by one Shri.G.Muthukumarasamy Accol,mts Officer (CA-II).

ANDWHEREAShe Deputy General, Manager (Corporate Accounts) BSNLChennaiTelephones had vide letter No.BSNLjCHTD/CAII/EPF/2008-09 dated 16.02.2010 had replied to theobservations communicated vide the above inspection report part II. On the issue of non-recovery ofcontribution for the pre-induction training it was stated therein that '7he direct recruit employeesmostly JTOs had undergone induction training prior to their appointment, During the period of trainingthey were paid stipend; They were not performing any duty during the training period; rather theywere shaped up to perform the duty which they were expected to do on their appointment to the postafter successful completion of their training. Salary or wages are emoluments paid to an employee torecompense for his labour whereas the stipend is paid to the trainee to get him trained for the job. Inview of the above, the contributions recovered and remitted by BSNLChennai Telephones is in order.We have apprised the BSNL Corporate Office of the developments in the matter".

AND WHEREASfor the purpose of resolving the doubt as to from which dateShri:N.J.P.Shiiohu Rao, Junior Telecom Officer and others are entitled or required to becomemembers of the Employees' Provident Fu'ndScheme, 1952 as to whether from the date of joining theestablishment for pre-induction training or from the date of joining the place of posting,both employer and employee including the office bearers of the concerned Union were advised toappear on 01.07.2010 either in person or through an authorised representative to provide themwith an opportunity as stipulated under Section 26Bof the Act before resolving the above doubt.

AND WHEREAS Shri.G.Rajasekhar, CAO(Corporate Accounts), BSNL andShri.G.Muthukumaraswamy Accounts Officer (Corporate Accounts),BSNL Shri.NJ.P.Shiiohu Rao, JTO,ShrLK.SenthilKumar, Secretary, AIGETOA, Shri.V.S.Chockalingam, JTO, Shri.SJayakumar, JTO hadappeared.

AND WHEREASShri.G.Rajasekhar,CAOand Shri.G.MuthukumaraswamyAO(Corporate Accounts) had stated that after the recruitment process an offer of training would begiven to selected candidates. There will be an acceptance of the offer of training and after that theywill undergo a pre-induction training for 14 weeks -comprising of Phase I theoretical training for 10weeks followed by phase IIfield training for 4 we,eks.At the end of training there will be a test at astretch. On successful completion of the test, an offE!f"of appointment would be given. Onacceptance of such offer of appointment; the trained candidates will be posted. As per FundamentalRule(FR)this Pre-inductionrainingperiodwouldcountas qualifyingserviceandtakenfor incrementalso: However, they contended that it i$ not termed a1 duty vide DOPTOm NO.16/6/89-estt (pay-I)dated 22/10/19990 and OM NO.16/16/92-estt(pay-lI} dated 31/3/1992. Theyfurther stated that theissue need to be decided on a central level, rather than locally, as the implications are on an AllIndiabasis. Theyalso requested to take up the issue through EPFO'sHeadOfficeto BSNL'sHeadQuarters.

ANDWHEREAS Shri.NJ.P.Shilohu Rao, JTO was represented by Shri.SurinderKumar,JAO,who stated that there will be an offer of appointment initiallybefore the training and onacceptance through execution of security bond the training will commence. On successful trainingcompletion, the candidates are posted to their respective offices. Hefurther added that there is a linkfor the stipend and the basic, (i.e.) stipend is 70%of the basic and Dearness Allowance is paid on suchstipend. The period of training is considered as qualifying service under the Gratuity Act, 1972and that their Membership under EPF&MPAct need to commence from the date of entering into thetraining institute or first date of reporting at the institute. The above stand was also accepted byShri.K.Senthilkumar,Shri.V.S.Chockalingam,Shri.SJayakumar and Shri.K.Sandeep,JTOsalso.


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ANDWHEREASTherepresentativesfrom BSNLhad further stated that they arenot in a position to say that the trainees are engaged under the Apprentices Act, 1961 or under ~nystanding orders of the establishment.

ANDWHEREASTheJTOspresent duringthe enquiryhad further stated that thetrainees are not covered by the Apprentices Act or the under the standing orders of theestablishment.

ANDWHEREAShri.Sashi,EnforcementOfficerhad deposedthat the abovetrainingperiod would be considered for membership under the schemes and that the trainees would requiredto be covered from the date of joining the training as they are an employee as per the definition undersection 2(f) of the EPF& MP Act, as they are not engaged as an apprentice, under Apprentices Act1961or underthe standingOrders. '

As per Section 2(f) of the EPF& MPAct, 1952 "employee" means any person who isemployed for wages in any kind of work, manual or otherwise, in or in connection with the work of anestablishment and who gets his wages directly or indirectly from the employer,' and includes anyperson, -i. Employed by or through a contractor in or in connection with the work of the establishment;

ii. Engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961(52 of 1961) or under the standing orders of the establishment;

From the above definition it is very clear that even apprentices, subject to the aboveexclusions, are employees for the purposes of this Act. Further, the representatives of the MIs. BSNLhad not provided any proof that these trainees are apprentices covered under the Apprentices Act,1961 or the MIs. BSNLhas any standing or~ers. It is clear from the depositions made by therepresentatives of the MIs.BSNLhat they consitfer the training pedod tor the purposes of qualifyingservice as well as for the purpose of annual increment. M9fe'o\(er~!suc~'peQodis also considered asqualifyingservice for the purposes of the Gratuity Act, 1972. Bein"gso, itis'tlearthat M/s.BSNLfor thepurpose of commencement of PFcontributions, has inadVertently considered these newly recruitedJTDs similar to their earlier employees (recruited while M/s.BSNL was. un,der Department ofTeJec9mmunications and accordingly were governed by,the riJlesbf FR&SR,DoPT instructions andI()~r' rules ~pplR:abfefor Government Employees) and ac:cor:dinglyhad so far commenced the PFc.ootributions only from the date dn which they were actu~IIy posted i,ntheir regular place of duty.Whereas, these JTDsare g;vemelbythe EPF& MP Act, 1952 and as ~er the definition of employeeunder Section.2'(f)ofrth'E!l:A.ct,heir membership would need to commence from their date of joining inthe pre-induction training itself,which incidentally is considered as their date of joining service for thepurposes of determining their qualifyingservice as well as"forthe increment calculations.

Moreover, as per Nazeena Traders (Private) Umited V. The Regional Provident FundCommissioner- 1966 (1) LU.334:AIR .1965 AP.200:1965(2)An.W.R.326it was held that theEmployeesProvident Funds and MiscellaneousProvisionsAct of 1952 is a beneficial legislationenacted as a measure of socialjustice and shouldbe construed liberallyso as to confer benefit onthe employeesto the maximumextent. Asper BalbirKaurand another v.SteelAuthorityof India.,andothers;T.K.MeenakshiSmt)andanother v.SteelAuthorityof IndiaUmited.,and others -2000 (6)SCe.493: AIR.2000S.C.1596 it was held that The EmployeesProvident Funds and MiscellaneousProvisionsAct of 1952 is a beneficial piece of legislationand can amply be described as a socialsecurityStatute. The object of the Act isto ensure better future of the employee concernedon hisretirement and for the b~nefitof the dependantSIncaseof his earlier death and as per the RegionalProvident FundCommissioner,Punjabv. ShibuMetal Works- 1965(1)LU.473it was held that inconstruingthe provisionsof the Act,if two views are reasonablypossible,the courts should preferthe viewwhich helps the achievement of the object though for such purpose the straining of thewords to an unreasonable degree is not proper. Further, as per Otis ElevatorEmployes'Union,


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...

(1) LLN.450:2004LLR.63:004AIR.SC.3264t was held by the two members bench of the SupremeCourt that this scheme is for the welfare of the employees, and the same cannot be held to beviolativeof the Constitution.. Now therefore, I, RAMANDHANASEKAR,egional PFCommissioner, in exercise of the

powers conferred on me under para 26Bof the Employees' Provident FundScheme,1952, and keepingin view the submissions made by both the parties read with the above broad principles held byvariousjudicial forums resolve that Shri.NJ.P.Shilohu Rao, Junior Telecom Officer and other similarly placedemployeesworkingin M/s.ChennaiTelephones (BSNL)havingCodeNo.TN/S0452,are entitled tobecome members under the Employees' Provident Fund Scheme,1952 & other schemes from theirindividual date of joining or reporting for their pre-induction training and accordingly theircontributions are to be regulated. The contributions in respect of both the employee and employerdue for this period need to be worked out and remitted forthwith.

Please note that all belated remittances willattract levy of damages under Section 14Bof the Act, on a graded scale depending upon the period of delay besides levyof simple interest at therate of 12% per annum as per Section 7Q ofthe Act.

In case ifyou fail to remit the above balance amount as per the above.order within 15days of receipt of this order, action willbe initiated to determine the said dues under Section 7Aof theEPF& MPAct, 1952without any further notice. Besides, action willalso be initiated to file complaintsin the Court of Lawas per Section 14 of the Act. These actions will be without prejudice to any otheraction that may be initiated under the provisions of law for which the Establishment has rendereditself liable.

To

P-~Q..(RAMANDHANASEKAR)REGIONALPROVIDENTFUNDCOMMISSIONER,""RAMAN DHANASE~R"'Regl

epf chennai order

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