Employees’ Provident Funds and Miscellaneous Provisions Act, 1952

The objective:

The objective of the act is to make the employee save some amount from his salary compulsory so
that it could be paid to him when he exits employment on reaching his age of superannuation.

It is a contributory scheme in which both the employee and employer are required to make
contribution. After gratuity this can be called the second social security benefit for the working class.

Applicability

The act is applicable to whole of India except for the state of Jammu and Kashmir
It is applicable to any establishment which is a factory engaged in the industry specified in the
Schedule-I and employs 20 or more person
To establishments employing 20 or more person which the central government has notified in the
official gazette in this behalf
The CG ,after giving notice of not less than 2 months, include establishment employing less than
20 person within the purview of the act.
The act will continue to apply to the establishment ,to which it is applicable, even if the number of
person in such establishment falls below 20

Some important definitions

Authorized officer

Means the Central Provident Fund Commissioner (CPFC), Additional CPFC, Dy.PFC, Regional PFC or
such other officer as may be authorized by the CG
Contributions

Means contribution payable in respect of a member under a Scheme

Exempted employee

Means an employee to whom a Scheme or the Insurance Scheme, as the case may be, would, but for
the exemption granted, have applied.

Exempted Establishment

Means an establishment in respect of which an exemption has been granted from the operation of
all or any of the provisions of any Scheme.

Fund

Means the Provident Fund established under a Scheme

Insurance Fund

Means the Deposit Linked Insurance Fund

Insurance Scheme

Means the Employees’ Deposit Linked Insurance Scheme (EDLIS)

Superannuation

In relation to an employee who is the member of the Pension Scheme means the attainment by the
said employee, the age of 58 years.

Section 2A: Establishment to include all departments and branches

Establishments consisting of different departments or branches, whether situated in the same place
or different places – shall be treated as part of the same establishment

TYPES OF SCHEMES UNDER THE ACT

Employees Provident Fund Scheme - 1952

Employees Pension Scheme – 1995

Employees Deposit Linked Insurance Scheme - 1976

Section 5: Employees P.F. Scheme

CG may frame a Scheme to be called the EPFS

 Specify the establishment / Employees to which the Scheme shall apply.
Establish a Fund as per provisions of this Act.
The Fund shall vest with the Central Board
Scheme shall cover matters provided under Schedule – II
Provisions may take effect prospectively or retrospectively

Central Board

Constituted by the CG and consist of the following persons as members:

· Chairman and a Vice Chairman appointed by the CG

· not more than 5 persons appointed by CG from amongst its official

· not more than 10 persons appointed by CG from states

· 10 persons representing employers

· 10 persons representing employees

Section 5AA: Executive Committee

It is constituted by the CG from amongst the members of the Central Board to assist the latter in the
performance of its functions

Section 5B: State Board

It is constituted by the CG in consultation with govt. of a State. Functions are assigned by the CG
Section5C: Board of Trustees to be body corporate

The Central Board and the State Board are body corporate. They shall be known by the name
mentioned in the notification. They have perpetual succession, a common seal and shall by the name
sue and can be sued

Section 6: Contributions and matters which may be provided for in the Schemes

Employer’s contribution to be 10% (12%) of the Basic Wage (BW) + Dearness Allowance (DA) +
Retaining Allowance (RA) of the employee
Employee’s contribution shall be equal to the employer’s contribution
Employee may contribute at a higher rate but in that case employer is not bound to pay beyond
10% (12%)

Section 6 A: Employees’ Pension Scheme

CG to frame the Scheme for the purpose of providing for:

Superannuation Pension, Retirement Pension or Permanent Total Disablement Pension payable to

the member/employee
Widow or Widower’s Pension, Children Pension or Orphan Pension payable to the beneficiaries of
employees
Creation of Pension Fund

Section 6C: Employees Deposit Linked Insurance Scheme

This Scheme is framed by the CG for the purpose of providing life insurance benefits to the
employees.
Employer’s contribution shall not be more than 1% of the (BW+DA+RA) of the employee (A)
Employer to contribute a further sum not exceeding 25% of “A” as Administrative Charges
Section 7A: Determination of moneys due from employers

In case a dispute arises with regard to the applicability of the act to certain establishments and the
amount of money due from the employer under the provision of the act, the CPFC may by order
decide such disputes and determine the amount of money due.
For the said purpose inquiry must be conducted and the employer be given fair chance to present
his case
If any of the parties fail to attend the enquiry or produce any document, the officer may conclude
the enquiry on the basis of the evidence & documents available on record ex-parte

Ex parte order passed

Employer may apply for setting aside that order if the show case notice was not duly served on the
employer or if the employer was prevented by any sufficient cause from appearing when the enquiry
was held – Officer passing the Order if satisfied may set aside the Order
However, no such order shall be set aside merely on the ground that there has been an irregularity
in the service of the show-cause notice, if the officer is satisfied that the employer had notice of
hearing and had sufficient time to appear before the officer
Where an appeal has been preferred under this Act against an order passed ex-parte and such
appeal has been disposed off otherwise than on the ground that the appellant has withdrawn the
appeal, no application shall lie for setting aside the ex-parte order

Section 7B: Review of orders passed u/s 7A

An aggrieved party may apply for a review of the order if:

No appeal has been preferred against that order

There is discovery of new important evidence which after the exercise of due diligence was not
within his knowledge
 The evidence could not be produced by him at the time when the order was passed
On account of some mistake or error apparent on the face of the record

If there is no sufficient reason the officer can reject the application for review. If the officer is of the
opinion that the review should be granted he should notify and hear all the parties and ask the
person making the application to provide the proof in favors of his allegation

No appeal shall lie against the order of the officer rejecting an application for review, but an appeal
under this Act shall lie against an order passed under review, as if the order passed under the review
were the original order passed by him under sec. 7A

Section 7C: Determination of escaped amount

Where an order determining the amount due from an employer u/s 7A or 7B has been passed and
the officer who passed the order:

Has reason to believe that by the reason of the omission or failure on the part of the employer to
make any document or report available, or to disclose, fully and truly, all material facts necessary for
determining the correct amount due from the employer, any amount so due from such employer for
any period has escaped his notice
Has, in consequence of information in his possession, reason to believe that any amount to be
determined u/s 7A or 7B has escaped from his determination for any period notwithstanding that
there has been no omission or failure on the part of the employer
He may within a period of 5 years from the date of communication of the order, re-open the case
and re-determine the amount. However the employer must be given an opportunity of being heard