Whether bonus paid to employees of contractors performing regular/essential work be termed as basic wages as defined under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 for the purpose of determination of Provident Fund?

Last updated: 31 July 2014

Court :
Delhi High Court

Brief :
The petitioner alleged that a team of Enforcement Officers visited the establishment of the respondent and found that the respondent-establishment failed to extend Provident Fund benefits to transport contractors’ workers; failed to pay Provident Fund contributions on special allowance and also failed to pay arrears of Provident Fund dues on salaries upto to the limit of Rs. 3500/- with respect to 19 employees w.e.f. November 01, 1990. On October 15, 1991, summons were issued for determination of Provident Fund dues payable by the respondent-establishment. On December 02, 1994, the competent authority under Section 7A of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (Act, in short) held that the respondent-establishment was liable to pay dues with respect to the transport contractors’ employees for the period effective from November 01, 1990 till that date and further, was directed to produce records for determination of dues. Held that there is no iota of doubt that the bonus being paid by the respondent cannot be included in the definition of ‘basic wages’ as defined under the Act.

Citation :
Regional P.F. Commissioner – Petitioner – Versus – Siel Foods and Fertilizer Industries – Respondent