A Newsletter from MYND India Volume 3, Feb - March 2017

STRICTLY

STATUTES

www.myndsolution.com

Editor's Note

Hello Readers,

We are happy to present the latest issue of our Mynd Newsletter “Strictly Statutes” which looks at a

variety of areas, including recent court decisions, updates on labour laws and – of course – the

upcoming amendment and proposals.

This newsletter is indeed a great medium to spread information and keep everyone updated on the

latest Judgements, news, amendments on various statutory labour laws.

The latest amendments includes reduced rate of contribution applicable to new implemented area,,

ESI beneficiary can seek direct admission at tie up hospitals, introduction of pension claim form,

administrative charges reduced to 0.65% etc…

In “News to note” we have covered Inter-State Migrant Workmen (Regulation of Employment and

Conditions of Service), government to amend EPF Scheme on home buys, unified annual return to

replace the existing half yearly annual return etc..

In our newsletter we have addressed recent judgments of the honorable Supreme Court and the

honorable High courts covering issues like casual workers are also employee as defined under ESI Act,

Gratuity is a constitutional right that can’t be taken away from employee etc.

We hope you find the contents of this newsletter relevant and useful. We welcome your thoughts and

feedback. Please write to mynd-labourlawupdates@myndsol.com

Table of Contents

Latest Amendments

Employee State Insurance Act

New Districts covered under ESI Scheme 5

Reduced rate of Contribution applicable to new implemented 5

areas under ESI (Central) Rules

ESI beneficiary can seek direct admission at tie up hospital 6

Employees Provident Funds and Miscellaneous Provisions Act

Introduction of Composite Claim Forms by EPFO 7

Introduction of Pension Claim Form (Aadhaar) 8

Aadhaar not needed for pension withdrawals for now 9

Administrative Charges reduced to 0.65% 9

EPFO introduces composite claim form for death cases 10

PF and withdrawal benefit on date of leaving service to International workers 10

Extension of Employees Enrolment Campaign, 2017 12

Other Acts

Ease of Compliance to maintain registers under various Labour Laws Rules, 2017 13

Punjab Factory (Haryana amendment) Rules, 2016 13

Compliance for Contractual Employees 14

The Payment of wages (Amendment) Act 2017 15

The Maternity Benefit (Amendment) Act, 2017 16

TN Government allows establishments to remain open on all 365 days 17

News to Note

Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) 19

Government to amend EPF Scheme on buys homes 20

EPFO exempts S'pore citizens from mandatory PF contributions 21

Unified Annual Return to replace the existing half yearly annual return 22

Important Judgement SC: Casual workers are also employees as defined under ESI Act 23

SC: Central PF Authorities have no authority over exempted establishments 24

SC: Benefits of Actual salary exceeding wage limit 25

HC: Gratuity is a constitutional right that can’t be taken away from employee 26

New Districts Covered under ESI Scheme

The ESI Corporation has extended the coverage of ESI Scheme to more districts of the following states

The details of the same is being given here under-;

West Bengal Entire Hooghly district is covered under ESIC from January 1, 2017.

2. UP: Districts of UP are covered under ESIC from January 1, 2017.

3. Kerala: 14 Districts of Kerala are covered under ESIC from February 1, 2017.

4. Madhya Pradesh: 29 Districts of MP are covered under ESIC from February 1, 2017.

Reduced rate of Contribution applicable to new implemented areas under ESI (Central) Rules

The Ministry of Labour and Employment by way of a notification no. GSR 959(E) dated 6th October 2016 has incorporated Rule 51B in ESI Rules 1950, which provides that in the area where the scheme is implemented for the first time, the Employer’s contribution and the employee’s contribution would be as follows for the initial period of 24 months from the day it’s been implemented

1. Employer’s contribution: A sum (rounded to the next higher rupee) equal to 3% of the wages payable to an employee.

Employee’s contribution: A sum (rounded to the next higher rupee) equal to 1 % of the wages payable to an employee.

LATEST AMENDMENTS

After completion of the aforesaid 24 months, the rate of contribution would be the same as existing i.e. 4.75% in respect of employer and 1.75% in respect of employee.

Further vide notifications dated 15th December 2016 and 13th February 2017, the Government made clarifications on the above notification dated 6th October 2016 and also set out the process to be followed while making contribution at reduced rates by the eligible employers through portal/ application as follows:

1. After logged in on the portal a separate link is given on the employer side to put the request of availing the benefit of reduced rate of contribution which is not working properly and accordingly the corporation has advised to file the monthly contribution with reduced rate of contribution i.e. employer contribution of 3% instead of 4.75% and employees contribution of 1% instead of 1.5% in the same manner as presently doing for full contribution.

2. However Employers have to get their eligibility verified from RO/ SRO, so that Corporation should not take any action in this regard.

3. This option is applicable from the date of notification w.e.f. 6th October 2016 not from 1st April 2016 and all contributions made during 1st April 2016 to 5th October 2016 even by the eligible employers must

be deposited at full percentage of 6.5%.

To read the notification: Click here.pdf

ESI beneficiary can seek direct admission at tie -up hospital This has reference to the notification dated March 17, 2017 wherein ESI Corporation has amended/ eased the norms with regard to direct admission of ESI beneficiaries in tie-up hospitals. In case of emergency situations like road accident, employment injury, ESI beneficiary can seek direct admission at tie up hospital. In turn tie up hospital have to provide stabilizing treatment and simultaneously tie up hospital will send e-mail to the nearest SMC office for getting the approval for continuing the medical care. Upon receiving the request, nearest SMC office will constitute the committee/ designate an official at ESIC hospital to verify the condition and other details of beneficiary. On determining the genuinity of the case, the referral letter may be issued to tie up hospital for cashless treatment.

To read the notification: Click here.pdf

Introduction of Composite Claim Form

EPFO has introduced Composite PF Claim Forms (Aadhar based and Non-Aadhar based), vide Order dated February 20, 2017, and has replaced/ withdrawn existing Claim Forms No. 19, 10C, 31, 19 (UAN), 10C (UAN) and 31 (UAN) to embark upon next phase of e-governance reforms, with a view to make its services available to its stakeholders in an efficient and transparent manner. This order of the EPFO is applicable w.e.f. February 20, 2017 i.e. it’s operational with immediate effect.

Earlier, the EPFO had prescribed new Forms 19 (UAN), 1oC (UAN) & 31 (UAN) vide Order dated December 1, 2015 , for all employees whose Aadhar number and Bank account details had been seeded with Universal Account Number (UAN).

Now, the EPFO has modified its earlier Order to prescribe a Composite Claim Form (Aadhar) to replace the existing Forms No. 19 (UAN), 10C (UAN) & 31 (UAN) with a view to simplify the submission of claim forms by subscribers.

New Composite Claim Form (Aadhar) also can be submitted to EPFO without attestation of the employer. On the other hand, new Composite Claim Form (Non-Aadhar) has been prescribed by the EPFO to replace the existing Forms No. 19, 10C & 31 to simplify submission of PF claim forms by subscribers. The new Composite Claim Form (Non-Aadhar) can be submitted by subscriber after attestation of employers to the EPFO.

Submission of Composite PF Claim Forms (Aadhar)/ (Non-Aadhar) will be further simplified/ modified to include self-certification by PF members/ subscribers, in place of various certificates requirements at present, like:

i) Para 68B: The “New Declaration Form” required to be appended with Form No. 31 for housing loan/ purchase of site/ house/ flat or for construction/ addition, alteration in existing house/ repayment of housing loan shall stand discontinued. Similarly, the present practice of calling for “Utilization Certificate” shall also be dispensed with. No document would be required to be submitted by the subscriber in respect of these partial withdrawals.

ii) Para 68H: Grant of advances in case of closure of factories: No document would be required to be submitted by the subscriber along with the Composite Claim Forms (Aadhar)/ (Non-Aadhar).

iii) Para 68K: Marriage advance & for availing advance for post-matriculation education of children: No document, including marriage card, would be required to be submitted by the subscribers.

iv) Para 68L: Advance in abnormal condition: Member may self-certify that his property has been damaged. No document would be required to be submitted by the subscriber.

v) Para 68 J & 68N: Orders in respect of certificates under these paras will be issued separately.

The records related to EPF of employees and the returns are already being maintained by the employers

on line. However, the provision for maintaining and uploading of nomination forms appear to take some

time that we need to keep watch for.

Further Ministry of Labour & Employment has requested to issue following directions:-

“If any employer/ establishment makes available registers/ records in electronic form and accessible

to the inspector/ authority so as to be usable for a subsequent reference, then that employer/

establishment should not be required to produce print/ hard copy of these documents”

As per the circular the EPFO has instructed their officers to accept and entertain the digitize records of

employees concerning inspections, returns etc. that may be produced by the employer.

To read the notification: Click here.pdf

Introduction of Pension Claim Form (Aadhaar) As per earlier instructions of EPFO dated June 23, 2016, simplified UAN based pension claim form No. 10D (UAN) was introduced in respect of all employees whose Aadhaar Number and Bank details have been seeded and have been duly verified by the employer using digital signature and the details in Form No. 11 have been completed. Subsequently, the Central Government had notified on January 4, 2017 that members/ pensioners under EPS desirous of continuing to avail pension/ membership with Central Government’s contribution/ subsidy under that Scheme, are required to furnish proof of the possession of the Aadhaar number or to undergo Aadhaar authentication.

Accordingly, the EPFO has revised/ replaced UAN based Pension Claim Form 10D with new form named as Pension Claim Form (Aadhaar), applicable w.e.f. March 3, 2017, subject to certain terms and conditions, as under:

(i)The AADHAAR Number and the Bank A/c number of the employee are duly seeded and digitally verified by the employer.

(ii) All the details of the employee should have already been furnished to EPFO in Form No. 11 (New), i.e. UAN process should be complete.

(iii) A cancelled cheque containing the name of the employee, Bank A/c number and IFS Code is to be attached with the Pension Claim Form.

In view of above, all pensioners/ members/ employees making application for pension claim may, after satisfying above conditions, submit Pension Claim Form (Aadhaar) directly to the respective jurisdictional EPFO.

To read the notification click here: Click here.pdf

Aadhaar not needed for pension withdrawals for now EPFO has recently issued a notification dated February 28, 2017 wherein procedural changes are being notified with regard to furnishing of Aadhaar as mandatory identity document:-

1. It has been clarified that for time being in case of submitting Form 10D Aadhaar is mandatory.

2. At the same time for withdrawal cases Aadhaar is not compulsory to be submitted along with

Form 10C

To read the notification click here: Click here.pdf

Administrative Charges reduced to 0.65% The Ministry of Labour and Employment decided to reduce PF administrative charges payable by employers. As per gazette notification no S.O. 827 (E ) issued on 15th March, 2017 new rate of contribution towards PF administrative charges will be 0.65% (zero point six five per cent) with effect from 1st April, 2017. Further by way of a notification no S.O. 828 (E) dated March 15, 2017, it is also decided, that no sum shall be payable for the time being by the employer in relation to his employees as the further sum payable by the employer every month to the Deposit-Linked Insurance Fund for the meeting the expenses in connection with the administration of the Employees Deposit-Linked Insurance Scheme, 1976 other than the expenses towards the cost of any benefits provided by or under that scheme.

To read the notification click here: Click here.pdf

EPFO introduces composite claim form for death cases EPFO had introduced composite claim forms

(Aadhaar and non-Aadhaar) by replacing the

erstwhile forms 19, 1OC and 31 to simplify the

submission of claims by subscribers.

Recently EPFO launched Composite Claim Form

for their members in death cases. Earlier, the

process consists of submitting different forms to

claim separately for EPF, Insurance (EDLI) and

monthly pension (EPS) by the nominee or legal

heir of an employee. Now EPFO launched “EPF

Composite Claim Form in death cases”, which

mainly used in case of death of an employee to

claim all benefits of EPF in a single form. The new

document replaces existing forms 20, 5-IF and

10-D.

To read the notification click here: Click here.pdf

PF and Withdrawal Benefit on date of leaving service to International Workers The Ministry of Labour and Employment has issued notification published on March 23, 2017, to facilitate payment of Provident Fund and withdrawal benefit under Employee Pension Scheme, 1995 to International workers on the date of leaving service in India. Initially in 2012 Employees' Provident Fund Scheme, 1952 and Employees' Pension Scheme, 1995 was amended in respect to International workers and in pursuance to it Government has been trying to ease the procedures for International workers.

Employer should make payment of contribution within first three days of the month through separate ECR.

Employer shall submit the claim forms by 6th of the month in which IW is leaving service.

The RPFC/ OIC shall monitor the settlement of such retirement claim and credit the settlement amount of IW in their respective bank account on the date of leaving service in India.

Further, if IW wants interest on the month of retirement also, in such case PF claim amount can be credited to the IW account on the first day of next month.

To read the notification: Click here.pdf

Extension of Employees Enrolment Campaign, 2017 The Ministry of Labour and Employment has issued notifications published in the official Gazette on dated March 29, 2017 with regard to amending Employees' Provident Funds Scheme, 1952, Employees' Pension Scheme, 1995 and Employees' Deposit Linked Insurance Scheme 1976.

It is basically the extension of amnesty scheme which was earlier notified on December 30, 2016 and is also known by the name "Enrollment and Establishment coverage campaign 2017 " to encourage employer to enrol their employees by paying nominal rate of damages of Rs. 1 per annum for those employees who are eligible to become member of the scheme on or after April 1, 2009 but on or before December 31, 2016. However, due to any reason could not be enrolled. Moreover all special provisions inserted in EPF, EPS and EDLI Schemes respectively like waiver of member’s contribution, nil administration charges, etc under the scheme shall remain same. This notification is more about change in the cessation date from March 31, 2017 to June 30, 2017.

The special provision with respect to Employees’ Enrollment Campaign, 2017 was inserted in Paragraph 82A of the EPF Scheme, 1952 which also states about the period of campaign that is from 1st day of January, 2017 and shall cease to operate from 31st day of March, 2017. As per amendment, period of campaign has been changed till 30th day of June, 2017. The scheme shall be called Employees' Provident Funds (Seventh Amendment) Amendment Scheme, 2017 which will be effective from April 1, 2017.

Similarly Employees' Pension Scheme (Seventh Amendment) Scheme, 2016 is being amended with date has been changed June 30, 2017. The scheme shall be called Employees' Pension Scheme (Seventh Amendment) Amendment Scheme, 2017 which shall come into force from April 1, 2017.

On the same lines Employees' Deposit Linked Insurance (Second Amendment) Scheme, 2016 has been amended with date has been changed to June 30, 2017. The scheme shall be called Employees' Deposit Linked Insurance (Second Amendment) Amendment Scheme, 2017 which shall come into force from April 1, 2017.

To read the notification: Click here.pdf

Ease of Compliance to maintain registers under various Labour Laws Rules, 2017 The notification with regard to Ease of Compliance to maintain Registers under various Labour Laws Rules, 2016 was published on November 4, 2016 wherein Government of India had asked for suggestions and objections till February 7, 2017 with regard to proposed amendments GOI likely to introduced in respect to maintenance of Registers. After considering the suggestions and objection received from public, Central Government has eventually published the notification on February 21, 2017 with the objective to reduce the number of registers and information should be easily accessible to public through electronic means to bring more transparency into the system.

Punjab Factory (Haryana Amendment) Rules, 2016 The Haryana Government, vide its notification dated 17th Feb 2017 has amended Punjab Factory Rules, 1952 ( as applicable to State of Haryana) and now will be called as Punjab Factory (Haryana amendment) Rules, 2016. As per the notification the amendments have been made that are summarized as under:

In the form of application form for grant of certificate of competency to a person (as provided in Rule2A) the Applicant would be required to mention his email Id after affixing the official seal at the place provided therein.

As regards submission of plans, in sub-rule (a) of Rule 3 wherein site of the factory with immediate surrounding are required to be provided, the word “sewerage” has been inserted after the word “drains”.

Sub rule 3 has been added in Rule 4 which now provides that if on an application for the acceptance of stability certificate in Form-1 B, submit to the State Government or Chief Inspector no order is communicated to the applicant within a period of 45 days from the date of its receipt the said application shall be deemed accepted.

From the above besides procedural amendments now a very important amendment to Rule 4 has been made as regard to deemed acceptance of stability certificate in case the appropriate authority does not communicate within a period of 45 days from the date of receipt of application.

Compliance for contractual employees

The Employees Provident Fund Organization (“EPFO”) has recently issued a letter on 2nd February, 2017, clarifying the obligations of Principal Employer for ensuring compliance under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (“EPF Act”) in respect of employees engaged by or through contractors.

Background:

In India, large number of employees are hired on contractual basis by various Principal Employers including Government Departments, PSUs, financial organizations, etc. However, it has been observed that such contract employees are not provided social security benefits under the EPF Act which they are entitled to.

Reiterating the various provisions under the EPF Act, the EPFO clarifies that as per Para 30 (3) of the EPF Scheme, the Principal Employer has the responsibility to pay both the contribution payable by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor and also administrative charges.

Further, the EPF Act defines employee (as per Section 2(f) of the EPF Act) as any person who is employed for wages in any kind of work, manual or otherwise, in connection with the work of an establishment and who gets his wages directly or indirectly from the employer, and includes any person employed by or through a contractor in connection with the work of the establishment. Therefore, the EPFO clarifies that the EPF Act does not differentiate between casual, contractual and regular employees.

Recent direction issued in the letter dated 2nd February, 2017:

With a view to providing social security benefits to contract employees and in pursuance of the statutory liability of a Principal Employer under the EPF Act, the EPFO has advised the Principal Employers to comply with the following:

The Principal Employer must ensure that the contractor is registered with EPFO before awarding

any contract. After award of the contract, the contractor details should be entered in the EPFO

portal.

Payments due to the contractor should be made only after verifying that the statutory PF

payments have been made to EPFO. This can be verified either directly from the EPFO portal or

insisting on a payment receipt obtained by the contractor from the EPFO portal while making

payment.

If the contractors have separate PF code number, the overall responsibility of ensuring the

compliance under the EPF Act, for the employees working through the contractors rests with the

Principal Employer.

The Principal Employer is empowered to deduct EPF dues from the contractor’s bill and deposit

the same against the contractor’s code number or their own code number.

Also, a provision on the official website of the EPFO has been added under the “establishment

search option” to verify whether the contractors are regularly depositing Provident Fund

Contributions in respect of their employees.

The Payment of Wages (Amendment) Act 2017

The Ministry of Law and Justice issued notification dated 16/02/2017, whereby Section 6 of The Payment of Wages Act 1936 has been amended.

The key highlights of The Payment of wages (Amendment) Act 2017 are as under:

It shall be deemed to have come into force on December 28, 2016.

An employer shall make payment of wages to its employee in current coin or currency notes, by cheque or by crediting it into his bank account.

(iii)The appropriate Government may by

way of notification specify certain Industrial or other establishments where the employer would be compulsorily required to pay his employees only by: (i) cheque or (ii) crediting the wages in his bank account.

Prior to the above amendment, an employer was permitted to make payment of wages to its employees only by way of current coin or currency which stands modified.

The above shall be seen in regards to the said structure and shall further be seen and shall also be regarded in the said structure as and when required and as and when seen and shall further be seen in regards to this as per the required details

The Maternity Benefits Amendment Act 2017 The Ministry of Law and Justice issued notification published on 28th March 2017. The said notification amends the Maternity Benefit Act, 1961

The amendment shall take effect from 1st April 2017 except as regards working from home which shall take effect from 1st July 2017

Duration of maternity leave: The Act states that every woman shall be entitled to maternity benefit of 12 weeks. After amendment maternity benefit increases to 26 weeks.

As per the Act, this maternity benefit cannot be availed before six weeks from the date of expected delivery. After amendment maternity benefit can be availed before eight weeks of expected delivery.

In case of a woman who has two or more children, the maternity benefit will continue to be 12 weeks, which cannot be availed before six weeks from the date of the expected delivery.

Maternity leave for adoptive and commissioning mothers: The Act also extended the benefit of 12 weeks of maternity leave to: (i) a woman who legally adopts a child below three months of age; and (ii) a commissioning mother. A commissioning mother is defined as a biological mother who uses her egg to create an embryo implanted in another woman.

The 12-week period of maternity benefit will be calculated from the date the child is handed over to the adoptive or commissioning mother.

Option to work from home: The Act introduces a provision that states that an employer may permit a woman to work from home. This would apply if the nature of work assigned to the woman permits her to work from home. This option can be availed of, after the period of maternity leave, for a duration that is mutually decided between the employer and the woman.

Crèche facilities: Every establishment with 50 or more employees to provide crèche facilities within a prescribed distance. The woman will be allowed four visits to the crèche in a day. This will include her interval for rest.

Informing women employees of the right to maternity leave: The Act also make it mandatory for every establishment to intimate a woman at the time of her appointment of the maternity benefits available to her. Such communication must be in writing and electronically

To read the notification: Click here.pdf

TN Government Allows establishments to remain open on all 365 days The Government of Tamil Nadu vide its notification dated March 22, 2017, in public interest, has exempted all establishments from the provision of sub-section (1) of Section 11 of the Tamil Nadu Shops and Establishment Act and has permitted all the establishments in the State of Tamil Nadu to keep open

on all 365 days of the year, for a further period of three years with effect from March 23, 2017, unless it is revoked, subject to the following key conditions: 1. Every employee shall be given one day holiday in a week on rotation basis.

2. Employer shall exhibit the details of the employees who are on holiday, on daily basis, in a

conspicuous place in the shops.

3. The wages including overtime wages of the employees shall be credited to their saving bank

account.

4. No employee shall be made to work for more than 8 hours a day and 48 hours a week and overtime

by an employee shall not exceed 10 hours a day and 54 hours a week.

5. Women employee shall not be allowed to work beyond 8 p.m. in any day and transport

arrangements shall be made for women employees who work in shifts.

6. Every employer shall constitute a Complaints Committee dealing with complaints relating to sexual

harassment of women

To read the notification: Click here.pdf

The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Central (Amendment) Rules

This has reference to the notification dated March 9, 2017 issued by Ministry of Labour and Employment, wherein following amendments are proposed in Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Central (Amendment) Rules:

For rule 56 "Periodical Returns" following rule shall be substituted namely "Returns" whereby new form XXIII is inserted after form XXII by the name Unified Annual Return Form according to which Principal Employer and Contractors have to upload the Unified Annual return form XXIII on web portal before 1-February of every year to the year it pertains or to the concerned authorities manually. However presently as per Rule 56 "Periodical Returns" Contractor have to file the half yearly return in Form XXIII and Principal Employer have to file Annual return in Form XXIV. After proposed amendment get notified in official Gazette since Central Government has asked for suggestion and objection in thirty days the old Form XXIII will be omitted. Further Employer can maintain records in electronic form also under The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979 (30 of 1979) and the rules made thereunder which shall be produced for verification at the time of inspection

NEWS TO NOTE

Government to Amend EPF Scheme for Home Buys

The Government will amend EPF scheme to enable around 4 crore members of EPFO to withdraw up to 90% of their fund for making down payments while buying homes. The amendment will also allow the EPFO subscribers to use their accounts for paying EMIs of home loans.Under the new proposed provision in the EPF scheme, EPFO subscribers would have to form a cooperative society with at least 10 members for availing the facility. "The Government has taken a decision for modification in the Employees' Provident Funds (EPF) Scheme, 1952, to add a new paragraph 68 BD." Labour Minister Bandaru Dattatreya said in a written reply to Rajya Sabha on a query about Housing Scheme for the members of EPFO.

The new proviso provides that "a member of Employees' Provident Fund (EPF) being a member of a co-operative society or a housing society having at least 10 members of EPF, can withdraw up to 90 per cent from the fund for purchase of dwelling house/flat or construction of dwelling house/acquisition of site."The proposed proviso also provides that "monthly instalments for repayments of any outstanding payments or interest may also be paid from the amount standing to the credit of the member, to the

Government/housing agency/primary lending agency or banks concerned." The minister also told the House that the proposed paragraph to be inserted in EPF scheme has not been notified, therefore, no targets have been fixed (for giving advances under this facility).

EPFO exempts S'pore citizens from mandatory

PF contributions

The Retirement fund body EPFO has asked its field offices not to insist on provident fund deduction from the salaries of Singaporean citizens working purely as temporary workers in India.

"All field offices are therefore advised not to insist on deduction of EPF and EPS contributions from salaries of Singapore citizens working purely as temporary workers in establishments covered/coverable under the EPF & MP Act 1952 and who do not hold the status of permanent residents in India," the Employees' Provident Fund Organisation (EPFO) headquarters said in an order.

Referring to the Comprehensive Economic Cooperation Agreement between India and Singapore which is effective from August 1, 2005, the EPFO notes that the field offices are not taking due cognizance of the provisions regarding the "excluded employees" as defined under Para 83 read with Para 2 (f)(ii) of the EPF Scheme, 1952.

Para 2 (f) (ii) of the scheme provides that excluded employee means an international worker is the one who is contributing to a social security programme of his country of origin, either as a citizen or a resident, with whom India has entered into a bilateral comprehensive economic agreement containing clause on social security prior to October 1, 2008, which specifically exempts natural persons of either country to contribute to the social security fund of the host country.

A senior EPFO official said the clause clearly provides that the Singaporean working on purely temporary basis or short term and covered under social security scheme in their own country are not required to be covered under these schemes run by the EPFO here. He further stated that the Indian workers working on purely temporarily basis in Singapore and covered under the social security schemes run by the EPFO are also exempted from the mandatory contributions in Singapore.

Apart from this, India currently has social security agreements operational with 17 countries – The Netherlands, Belgium, Germany, Switzerland, Denmark, Luxembourg, France, South Korea, Sweden, Czech Republic, Austria, Finland, Japan, Canada, Australia, Norway and Hungary.

Unified Annual Return to replace the existing half

yearly annual return

The Ministry of Labour and Employment (“Ministry”) has issued the Draft Contract Labour (Regulation & Abolition) Central (Amendment) Rules, 2017 (“Draft Rules”) which proposes to amend the Contract Labour (Regulation and Abolition) Central Rules, 1971 (“Principal Rules”).

The Draft Rules will be taken into consideration after the expiry of a period of 30 days from the date on which the Draft Rules have been published in the Official Gazette (i.e. 30 days from 7th March, 2017).

In this regard, the Ministry has sought suggestions or objections from the persons likely to be affected by the enactment of the Draft Rules till April 6th, 2017.

The suggestions and objections must be addressed to the Joint Secretary to the Government of India and Director General (Labour Welfare), Ministry of Labour & Employment, Jaisalmer House, 26, Mansingh Road, New Delhi-110011.

The following are the changes that the Draft Rules propose to bring about:

Unified Annual Return to replace the existing half yearly annual return

i. The Draft Rules propose to introduce a Unified Annual Return in Form XXIV which will be required to be filed on the Ministry’s web portal on or before the 1st day of February following the close of the year to which it relates.

This Unified Annual Return proposes to replace the existing half yearly annual return and annual return.

Presently, every contractor is required to file half-yearly return in Form XXIV by not later than 30 days from the close of the half year. On the other hand, the principal employer of a registered establishment is required to file the annual return in Form XXV by not later than 15th February following the end of the year to which it relates.

ii. The Draft Rules further states that this Unified Annual Return in Form XXIV must be filed by the contractor or the principal employer manually to the concerned authorities on or before the 1st day of February following the close of the year to which it relates.

It is further specified that the contractor must mandatorily upload the Unified Annual Return on the web portal of the Ministry on or before the 1st day of February following the close of the year to which it relates.

SC Judgment: Casual workers are also Employee as defined under ESI Act In a case of Royal Western India Turf Club Ltd. Vs. E.S.I. Corporation, the Hon’ble Supreme Court through honorable justice V. Gopala Gowda and Arun Misra pronounced that Casual workers are covered under definition of employee as defined in Section 2 (9) of the Employee Sate Insurance Act, 1948.

Background

Apex Court Bench comprising of Justices V. Gopala Gowda and Arun Misra was hearing the appeal

preferred by Royal Western India Turf Club Ltd. The main question in this appeal was referred to a

three judge Bench which had held that the Turf Club would fall within the meaning of the word

‘shop’ as mentioned in the notification issued under the ESI Act. Thereafter it was placed before

Division

Bench

‘Employee’ definition very wide

The Court observed that the definition of “employee” is very wide and a person who is employed for wages in the factory or establishment on any work of, or incidental or preliminary to or connected with the work is covered. The definition brings various types of employees within its ken. The Act is a welfare legislation and is required to be interpreted so as to ensure extension of benefits to the employees and not to deprive them of the same which are available under the act.

IMPORTANT JUDGEMENTS

‘Employee’ covers Casual employees

‘Employee’ covers Casual employees The Court said that it is apparent from section 39 that an employee who is employed for a part of the wage period is also covered for the purposes of contribution the definition of the term “employee” in section 2 (9) is also wide enough to cover casual employees who are employed for part of wage period. A bare reading of the aforesaid provisions makes it clear that it would cover the “casual employees” employed for a few days on a work of perennial nature and wages as defined in section 2(22) and wage period as defined in section 2(23) does not exclude the wages payable to casual workers. They cannot be deprived of the beneficial provisions of the Act, the Bench observed.

The Court also referred to Regional Director, Employees’ State Insurance Corporation, Madras v.

South India Flour Mills (P) Ltd. [AIR 1986 SC 1686] in which it was held that casual employees come

within the purview of the ESI Act..

SC: Central PF Authorities have no authority over exempted establishments In case of Yeshwant Gramin Shikshan Sanstha vs. Assistant Provident Fund Commissioner, the Hon’ble SC pronounced that.

Once an establishment is covered under any one of the excepted category under Section 16 of

the Employees’ Provident Funds and Miscellaneous Provisions Act, the authorities under the

Central Act cannot exercise authority over it or call upon the establishment to comply with the

provisions of the Central Act.

The tribunal and the high court, in the instant case, had held that the Central Act will apply on

the ground that 16 part-time employees working in Yeshwant Gramin Shikshan Sanstha were

not eligible for benefits under the Provident Fund Scheme governing the rest of the regular

employees of the establishment

On appeal, a three-judge bench headed by Chief Justice of India JS Khehar observed that the

establishment, which receives 100% grant-in-aid as a school, in which 16 part-time employees

were working, is under the control of the state government and thus would fulfil the first

condition of section 16 (1) (b) of the Central Act

Once the establishment is covered by the excepted category specified in Section 16, to get

exemption, it is incomprehensible that the provisions of the Central Act can be invoked against

such establishment on the specious reasoning that few (16 in this case) part-time employees

working there at were not covered by the CPF Scheme of the State Government, as applicable

to rest of its employees

Allowing the appeal, the court held that initiation of action of recovery by EPF officials against

the establishment, which was otherwise exempted from application of the provisions of the

Central Act, is wholly without the authority of law.

Just because the 16 part-time employees working in the appellant’s school were not eligible for the benefits of the State CPF Scheme, the exemption status of the establishment of the appellant acquired under Section 16 of the Central Act, will not ease or stand withdrawn automatically

SC Judgment: Benefits of Actual Salary exceeding wage limit

In a case of R.K Gupta and others vs. Regional Provident Fund, the Hon'ble Apex court observed

that:

Reference to the date of commencement of the Scheme or the date on which the salary exceeds

the ceiling limits are dates from which the option exercised are to be reckoned with for

calculation of pensionable salary. The said dates are not cut-off dates to determine the eligibility

of the employer-employee to indicate their option under the proviso to Clause 11(3) of the

Pension Scheme. The said dates are not cut-off dates to determine the eligibility of employer-

employee to indicate their option under the proviso to Clause 11(3) of the Pension Scheme.

A beneficial Scheme, ought not to be allowed to be defeated by reference to a cut-off date,

particularly, in a situation where (as in the present case) the employer had deposited 12% of the

actual salary and not 12% of the ceiling limit of Rs. 5000/- or Rs. 6500/- per month, as the case

may be .

In a situation where the deposit of the employer's share at 12% has been on the actual salary

and not the ceiling amount, the Provident Fund Commissioner could seek a return of all such

amounts that the concerned employees may have taken or withdrawn from their Provident fund

Account before granting them the benefits of the proviso to Clause 11 (3) of the Pension Scheme.

Once such a return is made in whichever cases is due, consequential benefits in terms of this

order will be granted to the said employees.

Thus a member contributing to the Provident Fund on the wages exceeding the statutory ceiling

or who had contributed to the Provident Fund on the wages exceeding the Statutory ceiling

cannot be debarred from exercising the option to contribute on such higher wages to the

pension fund

Chhattisgarh HC: Gratuity is a constitutional right that can’t be taken away from employee A bench comprising of Justice Sanjay K Agrawal and Justice Pritinker Diwaker held that gratuity is a property within the meaning of Article 300-A of the Constitution of India and as such, it is a constitutional right which cannot be taken away except by the authority of law. A bench comprising of Justice Sanjay K Agrawal and Justice Pritinker Diwaker made this observation while hearing a writ appeal preferred by a person superannuated from a public sector firm. His amount of gratuity was not paid by the government for the reason that the appellant did not obtain ‘no dues’ certificate and he did not vacate the allocated official quarters. His writ petition was dismissed by the single bench.

The appellant contended that gratuity is a right accrued to an employee and the employer is obliged to make payment of gratuity within 30 days from the date it becomes due to the employee. If the employer fails to pay gratuity with statutory limit of 30 days, then he will have to pay interest along with the amount due to employee.

But the authority resisted his plea, contending that he did not submit ‘no dues’ certificate, including

the quarter vacation certificate and has not vacated the company quarter till this date and is still occupying the same illegally even after his superannuation.

The bench, allowing his appeal, held that the controlling authority and the appellate authority were wholly and absolutely unjustified in declining to grant interest on the ground of non-vacation of the SECL quarter.

“Withholding of quarters allotted while in service, even after retirement, without vacating the

same has been viewed to be not a valid ground to withhold the disbursement of the terminal

benefits,” the bench said.

The bench observed that the attempt of the appellant to take away a part of pension or gratuity or even leave encashment without any statutory provision and under the umbrage of administrative instruction cannot be countenanced. A focused and studied perusal of the aforesaid provisions would show that under Section 7 (3) of the Act of 1972, the employer is obliged to make payment of gratuity within 30 days from the date it becomes due to the person to whom the gratuity is payable. Sub-section (3-A) of Section 7 provides for consequence of not making payment of gratuity within 30 days from the date it becomes due and the employer is saddled with statutory interest at the simple rate, not exceeding the rate notified by the Central Government.. Once the peremptory provision incorporated in Section 7(3) of the Act of 1972 is not complied with, the statutory consequence follows and the employer is statutorily bound to make payment of interest to the employee,” it said.... The Chhattisgarh High Court ordered the respondent for the payment of gratuity amount due to appellant along with the payment of interest to appellant....

Mynd Overview

Mynd Solutions is a leading global service provider in Business Process and Technology

Management, offering broad spectrum of services in Finance and Accounting (FAO), Human

Resource Outsourcing (HRO), Information Technology (IT) and Consulting.

We value order and discipline in processing as it drives front-end results such as customer

satisfaction and retention, revenue generation and profitability. Mynd Solutions combines

deep process knowledge and insights with a focused IT approach, targeted analytics and

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Mynd commenced operations in 2002 in India, with International presence today in Asia,

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