skipping or splitting of minimum wages

8/13/2019 Skipping or Splitting of Minimum Wages

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The Addl. Central P.F. Commissioner (Compliance)Bhavishya Nidhi Bhawan14, Bhikaji Cama PlaceNew Delhi - 110 066.

SPLITTING OF MINIMUM WAGES FOR PROVIDENT FUND CONTRIBUTIONS

Sir,

Our attention has been invited to your Circular No.Coord/4(6)2003/Clarification/Vol-II/7394 dated 23.5.2011 under the caption ofSplitting of minimum wages for the purpose of Provident Fund contribution notpermissible.

While we appreciate the efforts made in digging out the old cases even from

1961 onwards and concluding wherever the matter regarding splitting of wagesis challenged or pending in a court of law, the stand of department alongwith allrules and guidelines of Honble Supreme Court should be effectively utilised todefend the case. It is also mentioned that nothing said above shall come in wayof implementation/execution of any order of a court of law . However, we mustsay that the conclusion drawn in your circular is bereft of any merit, devoid oflegality and a sheer colourable exercise by turning Nelson's eye to the latest

judicial pronouncement directly on the subject.

Much emphasis has been laid down on the judgment of Division Bench ofKarnataka High Court in the matter of G4S Guardings Limited vs. RPFC and the

judgment of Supreme Court in Airfreight Ltd. vs. State of Karnataka & Ors. Infact, the main issue of wages got obfuscated in the judgment of Karnataka HighCourt. It did not settle the law with regard to splitting of minimum wages forProvident Fund contributions hence; no weightage can be accorded to it since ithad been left open to the Authorities to decide. But it hardly needs to beunderlined that they (Authorities) can never go beyond the parameters as laiddown by the legislature defining wages under clause (h) of the Minimum WagesAct, 1948 and sub-section (b) of section 2 of the Employees Provident Funds &Miscellaneous Provisions Act, 1952. Needless to state, that at the time ofenactment of section 2(b) defining basic wages under the Employees ProvidentFunds & Miscellaneous Provisions Act, 1952, the definition of wages was alreadythere under the Minimum Wages Act, 1948.

So far as the case of Airfreight Limited (supra) is concerned, this has not beenunder the Employees Provident Funds & Miscellaneous Provisions Act but indifferent context.


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skipping or splitting of minimum wages

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