The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, provides a comprehensive framework for the establishment, administration, and enforcement of provident funds, pension schemes, and deposit-linked insurance for employees. To ensure compliance and address grievances, the Act outlines the roles and functions of the Appellate Tribunal, as well as the penalties and offences associated with non-compliance.
Appellate Tribunal
Establishment and Composition
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Appellate Tribunal:
The Employees’ Provident Fund Appellate Tribunal is established to hear appeals against orders passed by the Employees’ Provident Fund Organization (EPFO), including those by the Provident Fund Commissioners.
- Composition:
The Tribunal typically comprises a Presiding Officer appointed by the Central Government. The Presiding Officer is usually a person who has been a judge of a High Court or has judicial experience.
Jurisdiction and Powers
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Hearing Appeals:
The Tribunal hears appeals from employers, employees, or any other person aggrieved by the orders of the EPFO. This includes orders related to determination and recovery of dues, imposition of damages, and other administrative decisions.
- Powers:
The Tribunal has the same powers as a civil court under the Code of Civil Procedure, 1908, for purposes such as summoning witnesses, requiring the production of documents, and taking evidence on oath.
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Final Decisions:
The decisions of the Appellate Tribunal are final and binding. However, appeals against the Tribunal’s decisions can be made to the High Court within a specified period.
Penalties and Offences
Penalties for Non-Compliance
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Non-Payment of Contributions:
Section 14: Failure to pay contributions or administrative charges can result in imprisonment for a term which may extend to three years and/or a fine of up to Rs. 10,000. For less serious offences, imprisonment may be up to one year with a fine of up to Rs. 5,000.
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False Statements or Representation:
Section 14: Making false statements or representations to avoid making due payments can attract imprisonment for up to one year and/or a fine of up to Rs. 5,000.
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Default in Complying with Provisions:
Section 14: General non-compliance with the provisions of the Act or Scheme, such as not maintaining required records or not furnishing returns, can result in imprisonment for up to one year and/or a fine up to Rs. 4,000.
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Failure to Pay Contributions to EDLI:
Section 14: Specific penalties are prescribed for non-payment of contributions towards the Employees’ Deposit Linked Insurance Scheme, similar to those for non-payment of Provident Fund contributions.
Offences and Prosecution
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Offences by Employers:
- Prosecution:
Employers who fail to deposit contributions deducted from employees’ wages can be prosecuted. They may face imprisonment and/or fines as specified under the Act.
- Enhanced Penalties:
For repeated offences, enhanced penalties including higher fines and longer terms of imprisonment may be imposed to deter persistent non-compliance.
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Offences by Contractors:
- Liability:
Contractors are also liable for ensuring contributions for contract workers are paid. Non-compliance can lead to similar penalties as those imposed on direct employers.
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Offences by Companies:
When an offence is committed by a company, every person who was in charge of, and responsible for, the conduct of the business at the time of the offence is deemed guilty. They can be prosecuted and punished accordingly unless they prove the offence was committed without their knowledge or they had exercised all due diligence to prevent the offence.
Enforcement Mechanisms
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Inspections and Audits:
- Inspectors:
EPFO appoints inspectors who have the authority to conduct inspections of establishments, examine records, and ensure compliance with the Act.
- Reports and Notices:
Based on inspections, inspectors can file reports leading to notices being issued to employers for compliance failures.
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Recovery Actions:
- Recovery Officers:
Appointed by the EPFO, Recovery Officers have the power to recover unpaid contributions from employers. They can attach and sell the employer’s property, garnish bank accounts, and take other measures to ensure dues are paid.
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Damages for Delay:
- Penal Damages:
Employers who delay payment of contributions are liable to pay penal damages. These damages are calculated as a percentage of the amount due and can be up to 37% per annum, depending on the duration of the delay.
Appeals and Legal Remedies
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Appeals to Appellate Tribunal:
- Filing Appeals:
Aggrieved parties can file appeals to the Appellate Tribunal within 60 days from the date of the order. The Tribunal can extend this period if sufficient cause is shown.
- Stay on Recovery:
The Tribunal has the power to grant a stay on the recovery of dues during the pendency of the appeal.
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Judicial Review:
- High Court:
Decisions of the Appellate Tribunal can be challenged in the High Court through writ petitions on grounds of legal errors or jurisdictional issues.
- Supreme Court:
In exceptional cases, further appeals can be made to the Supreme Court of India.