CHAPTER 14

Employees Provident Fund (Miscellaneous Provisions) Act, 1952

(AND

14.1. EMPLOYEES PROVIDENT FUND MISCELLANEOUS PROVISIONS) ACT, 1952

14.1.1. Introduction to the Act

The Employees Provident Fund and Miscellaneous Provisions Act, 1952 is one of the important social security legislations which provides for the institution in factories and other establishments compulsorily provident funds for the employees. The Preamble to the Act states that the object of the Act is to provide for provident fund pension and insurance.

14.1.2. Scope/Extent of the Act [Section 1]

Section 1 provides that this Act extends to the whole of India except the State of Jammu and Kashmir. The Act was brought into force from November, 1952. The latest amendments to the Act were made in 1988 on the basis of a high level committee appointed by the government to review the working of the Employees Provident Fund organization.

14.1.3. Objective of the Act

The objective of this Act is to provide for the institution of provident fund, family pension fund and depositlinked insurance fund for employees in factories and other establishments.

14.1.4. Applications of the Act [Section 1(2)]

The Act shall apply: 1) To every establishment which is a factory engaged in any industry specified in Schedule 1 to the Act and in which twenty or more persons are employed; and 2) To any other establishment employing twenty or more persons or class of such establishment which the Central Government may, by notification in the official Gazette, specify in this behalf. The Central Government may after giving not less than two months notice of its intention so to do by notification in the official Gazette apply the provisions of the Act to any establishment employing such number of persons less than twenty as may be specified in the notification. An establishment to which the Act applies shall continue to be governed by this Act not with standing that the number of persons employed therein at any time falls below twenty. Where an establishment consists of different departments or has branches whether situated in the same place or in different places all such departments or branches shall be treated as parts of the establishment.

14.1.4.1. Act Not to Apply to Certain Establishments [Section 16]

The Act shall not apply to certain establishments, namely: 1) Any establishment registered under the Cooperative Societies Act employing less than fifty persons and working without the aid of power: or 2) To any other establishment belonging to or under the control of the Central Government or a State Government and whose employees are entitled to the benefit of contributory provident fund or old age pension in accordance with any scheme or rule framed by the Central Government or the State Government governing such benefits: or

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3) To any other establishment set up under any Central. Provincial or State Act and whose employees are entitled to the benefits of contributory provident fund or old age pension in accordance with any scheme or rule framed under that Act governing such benefit; or 4) To any other establishment newly set-up until the expiry of a period of three years from the date on which such establishment is or has been set-up.

14.1.5. Definitions [Section 2]

1) Appropriate Government [Section 2(a)]: Appropriate Government means: i) In relation to an establishment belonging to, or under the control of, the Central Government or in relation to an establishment connected with a railway company, a major port, a mine or an oilfield or a controlled industry, or in relation to an establishment having departments or branches in more than one State, the Central Government; and ii) In relation to any other establishment, the State Government. 2) Authorized Officer [Section 2(aa)]: Authorized officer means the Central Provident Fund Commissioner, Additional Central Provident Fund Commissioner or such other officer as may be authorized by the Central Government, by notification in the Official Gazette. 3) Basic Wages [Section 2 (b)]: The definition of basic wages in Section 2 (b) is both inclusive and exclusive. It includes all emoluments which are earned by an employee while on duty or on holidays with wages in accordance with the terms of the contract of employment and which are paid or payable in cash to him. The following are not included in basic wages: i) The cash value of any food concession; ii) Any dearness allowance (that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the cost of living), e.g.: a) House-rent allowance, b) Overtime allowance, c) Bonus, d) Commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment; iii) Any presents made by the employer. 4) Contribution [Section 2 (c)]: It means a contribution payable in respect of a member under the Employees Provident Fund Scheme or the contribution payable in respect of an employee to whom the Employees Deposit-linked Insurance scheme applies. 5) Controlled Industry [Section 2 (d)]: Any industry the control of which by the Union has been declared by an Act of Parliament to be expedient in the public interest. 6) Employer [Section 2 (e)]: Employer means: i) In relation to an establishment which is a factory, the owner or occupier of the factory, including the agent of such owner or occupier and the legal representative of a deceased owner or occupier. Where a person has been named as a manager of the factory under the Factories Act, 1948, the person so named is the employer. ii) In relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment. Where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent is the employer. 7) Employee [Section 2 (f)]: Employee means any person who: i) Is employed: a) For wages, b) In any kind of work, manual or otherwise, or c) In or in connection with the work of an establishment, and ii) Gets his wages directly or indirectly from the employer. 8) Exempted Employee [Section 2 (ff)]: It means an employee to whom a Scheme or the Insurance Scheme (as the case may be) would, but for the exemption granted under Section 17 have applied.

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9) Exempted Establishment [Section 2 (fff)]: It means an establishment in respect of which an exemption has been granted under Section 17, from the operation of all or any of the provisions of any scheme, or the Insurance Scheme as the case may be, whether such exemption has been granted to the establishment as such or to any person or class of persons employed therein. 10) Factory [Section 2 (g)]: It has been defined to mean any premises, including the precincts thereof, in any part of which a manufacturing process is being carried on or is ordinarily so carried on, whether with the aid of power or without the aid of power. 11) Family Pension Fund [Section 2 (gg)]: It means the family pension fund established under the Family Pension Scheme. 12) Fund [Section 2 (h)]: Fund means the provident fund established under a Scheme. 13) Industry [Section 2 (i)]: It means any industry specified in Schedule I, and includes any other industry added to the Schedule by notification under Section 4. 14) Insurance Fund [Section 2 (i-a)]: Insurance Fund means the deposit-linked insurance fund established under sub-section (2) of Section 6C of the Act. 15) Insurance Scheme [Section 2 (i-b)]: Insurance Scheme means the Employees Deposit-linked Insurance Scheme framed under sub-section (1) of Section 6C of the Act. 16) Manufacture or Manufacturing Process [Section 2 (i-c)]: Manufacture or Manufacturing process means any process for making, altering, repainting, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal. 17) Member [Section 2 (j)]: Member means a member of the Fund; 18) Occupier of a Factory [Section 2 (k)]: means the person who has ultimate control over the affairs of the factory, and, where the said affairs are entrusted to a managing agent, such agent shall be deemed to be the occupier of the factory. 19) Pension Fund [Section 2 (k-A)]: means the employees pension fund established under sub-section (2) of Section 6-A. 20) Pension Scheme [Section 2 (k-B)]: means employees pension scheme framed under sub-section (1) of Section 6-A. 21) Recovery Officer [Section 2 (kb)]: means any officer of the Central Government, State Government or the Board of Trustees constituted under Section 5-A, who may be authorized by the Central Government, by notification in the official Gazette, to exercise the powers of a Recovery Officer under this Act; 22) Tribunal [Section 2 (m)]: Tribunal means the Employees Provident Funds Appellate Tribunal constituted under Section 7-D.

14.1.6. Schemes under the Act

The Act empowers the Central Government to frame three types of schemes for the benefit of the employees or any class of employees. These schemes are: 1) Employees Provident Fund Scheme, 2) Employees Family Pension Scheme and Employees Pension Scheme, 3) Employees Deposit Linked Insurance Scheme.

14.1.7. Employees Provident Fund Scheme and Authorities [Section 5]

1) The Central Government may, by notification in the Official Gazette, frame a Scheme to be called the Employees Provident Fund Schemes for the establishment of provident funds under this Act for employees or for any class of employees and specify the establishments and class of establishments to which the said Scheme shall apply and there shall be established, as soon as may be after the framing of the scheme, a fund in accordance with the provisions of the Act and the scheme. 2) Sub-Section 1A: The Fund shall vest in and be administered by, the Central Board constituted under section 5A.

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3) Sub-Section 1B: Subject to the provisions of this Act, a scheme framed under sub-section (1) may provide for all or any of the matters specified I Schedule II. 4) A Scheme framed under sub-section (1) may provide that any of its provisions shall take effect either prospectively or retrospectively on such date as may be specified in this behalf in the scheme.

14.1.7.1. Establishment of Fund

As soon as may be after the framing of the Employees Provident Fund Scheme, there shall be established Employees Provident Fund in accordance with the provisions of the Act and the Employees Provident Fund Scheme [Section 5(1)]. The Fund shall vest in, and be administered by the Central Board constituted under Section 5-A [Section 5(1-A)]. Any of the provisions of the Employees Provident Fund Scheme shall take effect either prospectively or retrospectively on such date as may be specified in this behalf in the Scheme [Section 5(2)]. The Scheme may provide for all or any of the matters specified in Schedule II [Section 5(1-B)]. The Employees Provident Fund Scheme applies to all factories and other establishments to which the Act applies or is applied under Section 1(3), 1(4) and Section 3. The applicability of the Scheme is subject to the provisions in the Act in Section 16 (exempting from its purview certain establishments) and in Section 17 (giving power to the appropriate Government to exempt certain establishments).

14.1.7.2. Contributions to the Fund

1) Rate of Contribution [Section 6]: As per (Section 6) of the Act, the contribution paid to the Fund by the employer shall be 10% of the basic wages and the dearness allowance and retaining allowance and the contribution payable by the employee shall be equal to the employers contribution. Employees, if they desire may make higher contribution. The Central Government may, by notification, specify contribution to be 12% in certain industries/class of establishments. Each contribution shall be calculated to the nearest rupee; fifty paise or more to be counted as the next higher rupee and fraction of a rupee less than 50 paise to be ignored. Further, the contributions shall be calculated on the basis of wages and dearness allowance and retaining allowance, if any, actually drawn during the whole month whether paid on daily, fortnightly or monthly basis [Para 29 of the Scheme]. 2) Payment of Contribution: The employer shall, in the first instance, pay both the contribution payable by himself and also on behalf of the member employed by him directly or through a contractor, the contribution payable by such member. In respect of employees employed by or through a contractor, the contractor shall recover the members contribution and shall pay to the principal employer the amount of the members contribution so deducted together with an equal amount of employers contribution and also administrative charges [Para 30]. 3) Not to Deduct Employers Contribution from Wages [Para 31]: Notwithstanding any contract to the contrary, the employers shall not be entitled to deduct the employers contribution from the wages of a member or otherwise to recover it from him. 4) Recovery of a Members Share [Para 32]: Notwithstanding any contract to the contrary, any provision in the Scheme or any law, employees contribution shall be recoverable by means of deduction from wages of the member.

14.1.7.3. Investment
The amount received by way of Provident Fund contributions is to be invested by the Board of Trustees in accordance with the investment pattern approved by the Government of India. The members get interest on the money standing to their credit at a rate recommended by the Board of Trustee and approved by the Government of India.

14.1.7.4. Advances and Withdrawals

Advances and withdrawals upto certain limits are allowed for certain specified purposes only.

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14.1.7.5. Administration
The Fund shall be administered by the Central Board and other agencies discussed hereunder: 14.1.7.5.1. Central Board [Section 5-A] The Central Government may by notification in the Official Gazette constitute with effect from such date as may be specified therein a Board of Trustees for the territories to which this Act extends (hereinafter in this Act referred to as the Central Board) consist of the following persons as members namely: 1) A Chairman and a Vice-Chairman to be appointed by the Central Government; aa) The Central Provident Fund Commissioner ex officio; 2) Not more than five persons appointed by the Central Government from amongst its officials; 3) Not more than fifteen persons representing Government of such States as the Central Government may specify in this behalf, appointed by the Central Government; 4) Ten persons representing employers, or the establishment to which the Scheme applies appointed by the Central Government after consultation with such organizations of employers as may be recognized by the Central Government in this behalf; and 5) Ten persons representing employees in the establishment to which the Scheme applies appointed by the Central Government after consultation with such organizations of employees as may be recognized by the Central Government in this behalf. The scheme shall provide for the following: 1) The terms and conditions subject to which a member of the Central Board may be appointed, and 2) The time, place, and procedure of the meetings of the Central Board shall be such as may be provided for in the Scheme. Functions of Central Board 1) The Central Board shall subject to the provisions of Section 6A and Section 6C administer the fund vested in it in such manner as may be specified in the Scheme. 2) The Central Board shall perform such other functions as it may be required to perform by or under any provisions of the Scheme Family Pension Scheme and the Insurance Scheme. 3) The Central Board shall maintain proper accounts of its income and expenditure in such form and in such manner as the Central Government may after consultation with the Comptroller and Auditor-General of India specify in the Scheme. Audits of the Accounts of Central Board 1) The accounts of the Central Board shall be audited annually by the Comptroller and Auditor-General of India and any expenditure incurred by him in connection with such audit shall be payable by the Central Board to the Comptroller and Auditor-General of India. 2) The Comptroller and Auditor-General of India and any person appointed by him in connection with the audit of the accounts of the Central Board shall have the same rights and privileges and authority in connection with such audit as the Comptroller and Auditor-General has in connection with the audit of Government accounts and in particular shall have the right to demand the production of books accounts connected vouchers documents and papers and inspect any of the offices of the Central Board. 3) The accounts of the Central Board as certified by the Comptroller and Auditor-General of India or any other person appointed by him in this behalf together with the audit report thereon shall be forwarded to the Central Board which shall forward the same to the Central Government along with its comments on the report of the Comptroller and Auditor-General. 4) It shall be the duty of the Central Board to submit also to the Central Government an annual report of its work and activities and the Central Government shall cause a copy of the annual report the audited accounts together with the report of the Comptroller and Auditor-General of India and the comments of the Central Board thereon to be laid before each House of Parliament. 14.1.7.5.2. Executive Committee [Section 5-AA] The Central Government may by notification in the Official Gazette constitute with effect from such dates as may be specified therein an Executive Committee to assist the Central Board in the performance of its functions.

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Members of the Executive Committee Sub-section (2): The Executive Committee shall consist of the following persons as members namely: 1) A Chairman appointed by the Central Government from amongst the members of the Central Board; 2) Two persons appointed by the Central Government from amongst the persons referred to in clause (b) of sub-section (1) of Section 5A; 3) Three persons appointed by the Central Government from amongst the persons referred to in clause (c) of sub-section (1) of Section 5A; 4) Three persons representing the employers elected by the Central Board from amongst the persons referred to in clause (d) of sub-section (1) of Section 5A; 5) Three persons representing the employees elected by the Central Board from amongst the persons referred to in clause (e) of sub-section (1) of Section 5A; 6) The Central Provident Fund Commissioner ex officio. Terms and Conditions of Appointment The terms and conditions subject to which a member of the Central Board may be appointed or elected to the Executive Committee and the time place and procedure of the meetings of the Executive Committee shall be such as may be provided for in the Scheme. 14.1.7.5.3. State Board [Section 5-B] 1) The Central Government may after consultation with the Government of any State by notification in the Official Gazette constitute for that State a Board of Trustees (hereinafter in this Act referred to as the State Board) in such manner as may be provided for in the Scheme. 2) A State Board shall exercise such powers and perform such duties as the Central Government may assign to it from time to time. 3) The terms and conditions subject to which a member of a State Board may be appointed and the time, place and procedure of the meetings of a State Board shall be such as may be provided for in the Scheme. Board of Trustees to be Body Corporate [Section 5-C] Every Board of Trustee constituted under Section 5A or Section 5B shall be a body corporate under the name specified in the notification constituting it having perpetual succession and a common seal and shall by the said name sue and is sued. Appointment of Officers [Section 5-D] 1) The Central Government shall appoint a Central Provident Fund Commissioner who shall be the chief executive officer of the Central Board and shall be subject to the general control and superintendence of that Board. 2) The Central Government may also appoint a Financial Advisor and Chief Accounts Officer to assist the Central Provident Fund Commissioner in the discharge of his duties. 3) The Central Board may appoint subject to the maximum scale of pay as may be specified in the Scheme as many Additional Central Provident Fund Commissioners, Deputy Provident Fund Commissioners, Regional Provident Fund Commissioners, Assistant Provident Fund Commissioners, and such other officers and employees as it may consider necessary for the efficient administration of the Scheme the Family Pension Scheme and Insurance Scheme. 4) No appointment to the post of the Central Provident Fund Commissioner or a Financial Advisor and Chief Accounts Officers or any other post under the Central Board carrying a scale of pay equivalent to the scale of pay of any Group A or Group B post under the Central Government shall be made except after consultation with the Union Public Service Commission; provided that no such consultation shall be necessary in regard to any such appointment: i) For a period not exceeding one year, or ii) If the person to be appointed is at the time of his appointment a) A member of the Indian Administrative Service, or b) In the service of the Central Government or a State Government or the Central Board in a Group A or Group B post.

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5) A State Board may with the approval of the State Government concerned appoint such staff as it may consider necessary. 6) The method of recruitment salary and allowances discipline and other conditions of service of the Central Provident Fund Commissioner and the Financial Adviser and Chief Accounts Officer shall be such as may be specified by the Central Government and such salary and allowances shall be paid out of the Fund. 7) i) The method of recruitment, salary and allowances, discipline and other conditions of service of Additional Central Provident Fund Commissioner, Deputy Provident Fund Commissioner, Regional Provident Fund Commissioner, Assistant Provident Fund Commissioner and other officers and employees of the Central Board shall be such as may be specified by the Central Board in accordance with the rules and orders applicable to the officers and employees of the Central Government drawing corresponding scales of pay; provided that where the Central Board is of the opinion that it is necessary to make a departure from the said rules or orders in respect of any of the matters aforesaid it shall obtain the prior approval of the Central Government. ii) In determining the corresponding scales of pay of officers and employees under clause (a) the Central Board shall have regard to the educational qualifications method of recruitment duties and responsibilities of such officers and employees under the Central Government and in case of any doubt the Central Board shall refer the matter to the Central Government whose decision thereon shall be final. 8) The method of recruitment, salary and allowances, discipline and other conditions of service of officers and employees of State Board shall be such as may be specified by that Board with the approval of the State Government concerned. Acts and proceedings of the Central Board or its Executive Committee or the State Board not to be invalidate on certain grounds. No act done or proceeding taken by the Central Board or the Executive Committee constituted under Section 5AA or the State Board shall be questioned on the ground merely of the existence of any vacancy in or any defect in the constitution of the Central Board or the Executive Committee or the State Board as the case may be. Delegation [Section 5-E] The Central Board may delegate to the Executive Committee or to the Chairman of the Board or to any of its officers and a State Board may delegate to its Chairman or to any of its officers subject to such conditions and limitations if any as it may specify such of its powers and functions under this Act as it may deem necessary for the efficient administration of the Scheme, the Family Pension Scheme and the Insurance Scheme.

14.1.8. Employees Family Pension Scheme and Employees Pension Scheme

14.1.8.1. Employees Family Pension Scheme
Section 6A of the Act provides for the Employees Family pension scheme for the purpose of providing family pension and life insurance benefits to the employees of any establishment or class of establishment to which the Act applies. In the Employees Family Pension fund shall be paid from time to time in respect of each employee: 1) Such portion not exceeding one fourth of the amount payable under Section 6 as contribution by the employer as well as the employee as may be specified in the Family Pension Scheme; 2) Such sums as are payable by the employer of an exempted establishment u/s 17; 3) Such sums being not less than the amount payable in pursuance of clause (a) out of the employers contribution u/s 6 as the Central Government may after the appropriation made by Parliament by law in this behalf specify. The family pension fund shall vest in and be administered by the Central Board.

14.1.8.2. Employees Pension Scheme [Section 6-A]

The Government has promulgated an ordinance whereby Employees Family Pension scheme has been substituted by the Employees Pension Scheme. The employees pension scheme shall provide for: 1) Superannuation pension, retiring pension or permanent total disablement pension to the employees of any establishment or class of establishments to which the EPF Act applies; and 2) Widow or widowers pension, children pension or orphan pension payable to the beneficiaries of such employees.

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On the establishment of the Pension Fund, the Family Pension scheme shall cease to operate and all assets of the ceased scheme shall vest in and shall stand transferred to and all liabilities under the ceased scheme shall be enforceable against the pension fund. The Central Government may grant exemption to any establishment or class of establishment from the operation of the scheme if the employees of the establishments are either members of any other pension scheme or propose to be members of a pension scheme wherein the pensionary benefits are at par or more favorable than the benefits provided under this scheme.

14.1.9. Employees Deposit Linked Insurance Scheme [Section 6-C]

Under Section 6C of the Act the Central Govt. has formulated the scheme Deposit Linked Insurance Scheme for the purpose of providing life insurance benefits to the employees of any establishment or class of establishments to which the EPF Act applies. Under the scheme Employees Deposit linked insurance fund is created. The employer from time to time in respect of every employee in relation to which he is the employer shall such amount not being more than 1% of the aggregate of the basic wages, dearness allowance and retaining allowance, if any, for the time being, payable in relation to such employee as the Central Government may by notification in the official gazette specify. The employee shall pay into the insurance fund such further sum of money not exceeding one fourth of the contribution which he is required to make as noted above, as the Central Government may from time to time determine to meet all the expenses in connection with the administration of the insurance scheme, other than the expenses towards the cost of any benefits provided by or under that scheme. After the promulgation of the ordinance to amend the EPF Act substituting the Employee Pension Scheme in place of Family pension scheme, the following provisions relating to deposit linked insurance scheme have been omitted: 1) After due appropriation made by Parliament by law the Central Government shall contribute to the insurance fund in relation to each employee of any establishment or class of establishments an amount representing on half of the contribution which an employer is required to make. 2) The Central Government shall after appropriation made by Parliament pay into the insurance fund such further sums of money represent one half of the sums payable by the employer to meet all the expenses in connection with the administration of the Fund.

14.1.10. Employees Provident Funds Appellate Tribunal [Section 7-D]

1) The Central Government may by notification in the Official Gazette constitute one or more Appellate Tribunals to be known as the Employees Provident Funds Appellate Tribunal to exercise the powers and discharge the functions conferred on such Tribunal by this Act and every such Tribunal shall have jurisdiction in respect of establishments situated in such area as may be specified in the notification constituting the Tribunal. 2) A Tribunal shall consist of one person only to be appointed by the Central Government. 3) A person shall not be qualified for appointment as the Presiding Officer of a Tribunal (hereinafter referred to as the Presiding Officer) unless he is or has been or is qualified to be a Judge of a High Court.

14.1.10.1. Term of Office [Section 7-E]

The Presiding Officer of a Tribunal shall hold office for a term of five years from the date on which he enters upon his office or until he attains the age of sixty-two years whichever is earlier.

14.1.10.2. Resignation [Section 7-F]

The Presiding Officer may by notice in writing under his hand addressed to the Central Government resign his office; provided that the Presiding Officer shall unless he is permitted by the Central Government to relinquish his office sooner continue to hold office until the expiry of three months from the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his term of office whichever is the earliest.

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14.1.10.3. Salary and Allowances and Other Terms and Conditions of Service of Presiding Officer [Section 7-G]
The salary and allowances payable to, and other terms and conditions of service (including pension gratuity and other retirement benefits) of the Presiding Officer shall be such as may be prescribed; provided that neither the salary and allowances nor the other terms and conditions of service of the Presiding Officer shall be varied to his disadvantage after his appointment.

14.1.10.4. Staff of Tribunal [Section 7-H]

1) The Central Government shall determine the nature and categories of the officers and other employees required to assist a Tribunal in the discharge of its functions and provide the Tribunal such officers and other employees as it may think fit. 2) The officers and other employees of a Tribunal shall discharge their functions under the general superintendence of the Presiding Officer. 3) The salaries and allowances and other conditions of service of the officers and other employees of a Tribunal shall be such as may be prescribed.

14.1.10.5. Appeals to Tribunal [Section 7-I]

1) Any person aggrieved by a notification issued by the Central Government or an order passed by the Central Government or any authority under the proviso to sub-section (3) or sub-section (4) of Section 1 or Section 3 or sub-section (1) of Section 7A or Section 7B except an order rejecting an application for review referred to in sub-section (5) thereof or Section 7C or Section 14B may prefer an appeal to a Tribunal against such notification or order. 2) Every appeal under sub-section (1) shall be filed in such form and manner within such time and be accompanied by such fees as may be prescribed.

14.1.10.6. Procedure of Tribunal [Section 7-J]

1) A Tribunal shall have power to regulate its own procedure in all matters arising out of the exercise of its powers or of the discharge of its functions including the places at which the Tribunal shall have its sittings. 2) A Tribunal shall for the purpose of discharging its functions have all the powers which are vested in the officers referred to in Section 7A and any proceeding before the Tribunal shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 and for the purpose of Section 196 of the Indian Penal Code 1860 and the Tribunal shall be deemed to be a Civil Court for all the purposes of Section 195 and Chapter XXVI of the Code of Criminal Procedure 1973.

14.1.10.7. Right of Appellant to Take Assistance of Legal Practitioner and of Government, etc., to Appoint Presenting Officers [Section 7-K]
1) A person preferring an appeal to a Tribunal under this Act may either appear in person or take the assistance of a legal practitioner of his choice to present his case before the Tribunal. 2) The Central Government or a State Government or any other authority under this Act may authorize one or more legal practitioners or any of its officers to act as presenting officers and every person so authorized may present the case with respect to any appeal before a Tribunal.

14.1.10.8. Orders of Tribunal [Section 7-L]

1) A Tribunal may after giving the parties to the appeal an opportunity of being heard pass such orders thereon as it thinks fit confirming modifying or annulling the order appealed against or may refer the case back to the authority which passed such order with such directions as the Tribunal may think fit for a fresh adjudication or order as the case may be after taking additional evidence if necessary. 2) A Tribunal may at any time within five years from the date of its order with a view to rectifying any mistake apparent from the record amend any order passed by it under sub-section (1) and shall make such amendment in the order if the mistake is brought to its notice by the parties to the appeal; provided that an amendment which has the effect of enhancing the amount due from or otherwise increasing the liability of the employer shall not be made under this sub-section unless the Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard. 3) A Tribunal shall send a copy of every order passed under this Section to the parties to the appeal. 4) Any order may by a Tribunal finally disposing of an appeal shall not be questioned in any Court of law.

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14.1.10.9. Filling up of Vacancies [Section 7-M]

If for any reason a vacancy occurs in the office of the Presiding Officer the Central Government shall appoint another person in accordance with the provisions of this Act to fill the vacancy and the proceedings may be continued before a Tribunal from the stage at which the vacancy is filled.

14.1.10.10. Finality of Orders Constituting a Tribunal [Section 7-N]

No order of the Central Government appointing any person as the Presiding Officer shall be called in question in any manner and no act or proceeding before a Tribunal shall be called in question in any manner on the ground merely of any defect in the constitution of such Tribunal.

14.1.10.11. Deposit of Amount Due on Filing Appeal [Section 7-O]

No appeal by the employer shall be entertained by a Tribunal unless he has deposited with it seventy-five per cent of the amount due from him as determined by an officer referred to in Section 7A; provided that the Tribunal may for reasons to be recorded in writing waive or reduce the amount to be deposited under this section.

14.1.10.12. Transfer of Certain Applications to Tribunal [Section 7-P]

All applications which are pending before the Central Government under Section 19A before its repeal shall stand transferred to a Tribunal exercising jurisdiction in respect of establishments in relation to which such applications had been made as if such applications were appeals preferred to the Tribunal.

14.1.10.13. Interest Payable by the Employer [Section 7-Q]

The employer shall be liable to pay simple interest at the rate of twelve per cent per annum or at such higher rate as may be specified in the Scheme on any amount due from him under this Act from the date on which the amount has become so due till the date of its actual payment; provided that higher rate of interest specified in the Scheme shall not exceed the lending rate of interest charged by any scheduled bank.

14.1.10.14. Mode of Recovery of Money Due from Employers [Section 8]

Any amount due: 1) From the employer in relation to an establishment to which any Scheme or the Insurance Scheme applies in respect of any contribution payable to the Fund or as the case may be the Insurance Fund damages recoverable under Section 14B accumulations required to be transferred under sub-section (2) of Section 15 or under sub-section (5) of Section 17 or any charges payable by him under any other provision of this Act or of any provision of the Scheme or the Insurance Scheme; or 2) From the employer in relation to an exempted establishment in respect of any damages recoverable under Section 14B or any charges payable by him to the appropriate Government under any provision of this Act or under any of the conditions specified under Section 17 or in respect of the contribution payable by him towards the Pension Scheme or the Insurance Scheme under the said Section 17 may if the amount is in arrears be recovered in the manner specified in Sections 8B to 8G. 14.1.10.14.1. Recovery of Money by Employers and Contractors [Section 8A] 1) The amount of contribution (i.e., to say the employers contribution as well as the employees contribution in pursuance of any Scheme and the employers contribution in pursuance of the Insurance Scheme); and any charges for meeting the cost of administering the Fund paid or payable by an employer in respect of an employee employed by or through a contractor may be recovered by such employer from the contractor either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor. 2) A contractor from whom the amounts mentioned in sub-section (1) may be recovered in respect of any employee employed by or through him may recover from such employee the employees contribution under any Schedule by deduction from the basic wages dearness allowance and retaining allowance (if any) payable to such employee. 3) Notwithstanding any contract to the contrary no contractor shall be entitled to deduct the employers contribution of the charges referred to in sub-section (1) from the basic wages dearness allowance and retaining allowance (if any) payable to an employee employed by or through him or otherwise to recover such contribution or charges from such employee. Explanation: In this section the expression dearness allowance and retaining allowance shall have the same meanings as in Section 6.

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14.1.10.14.2. Issue of Certificate to the Recovery Officer [Section 8B] 1) Where any amount is in arrears under Section 8 the authorized officer may issue to the Recovery Officer a certificate under his signature specifying the amount of arrears and the Recovery Officer on receipt of such certificate shall proceed to recover the amount specified therein from the establishment or as the case may be the employer by one or more of the modes mentioned below: i) Attachment and sale of the movable or immovable property of the establishment or as the case may be the employer; ii) Arrest of the employer and his detention in prison; iii) Appointing a receiver for the management of the movable or immovable properties of the establishment or as the case may be the employer; Provided that the attachment and sale of any property under this section shall first be effected against the properties of the establishment and where such attachment and sale is insufficient for recovering the whole of the amount of arrears specified in the certificate the Recovery Officer may take such proceedings against the property of the employer for recovery of the whole or any part of such arrears. 2) The authorized officer may issue a certificate under sub-section (1) notwithstanding that proceedings for recovery of the arrears by any other mode have been taken. 14.1.10.14.3. Recovery Officer to Whom Certificate is to be Forwarded [Section 8C] 1) The authorized officer may forward the certificate referred to in Section 8B to the Recovery Officer within whose jurisdiction the employer: i) Carries on his business or profession or within whose jurisdiction the principal place of his establishment is situated; or ii) Resides or any movable or immovable property of the establishment or the employer is situated. 2) Where an establishment or the employer has property within the jurisdiction of more than one Recovery Officers and the Recovery Officer to whom a certificate is sent by the authorized officer: i) Is not able to recover the entire amount by the sale of the property movable or immovable within his jurisdiction; or ii) Is of the opinion that for the purpose of expediting or securing the recovery of the whole or any part of the amount it is necessary so to do he may send the certificate or where only a part of the amount is to be recovered a copy of the certificate certified in the prescribed manner and specifying the amount to be recovered to the Recovery Officer within whose jurisdiction the establishment or the employer has property or the employer resides the thereupon that Recovery Officer shall also proceed to recover the amount due under this section as if the certificate or the copy thereof had been the certificate sent to him by the authorized officer. 14.1.10.14.4. Validity of Certificate and Amendment Thereof [Section 8D] 1) When the authorized officer issues a certificate to Recovery Officer under Section 8B it shall not be open to the employer to dispute before the Recovery Officer the correctness of the amount and no objection to the certificate on any other ground shall also be entertained by the Recovery Officer. 2) Notwithstanding the issue of a certificate to a Recovery Officer the authorized officer shall have power to withdraw the certificate or correct any clerical or arithmetical mistake in the certificate by sending intimation to the Recovery Officer. 3) The authorized officer shall intimate to the Recovery Officer any order withdrawing or canceling a certificate or any correction made by him under sub-section (2) or any amendment made under sub-section (4) of Section 8E. 14.1.10.14.5. Stay of Proceedings under Certificate and Amendment or Withdrawal Thereof [Section 8E] 1) Notwithstanding that a certificate has been issued to the Recovery Officer for the recovery of any amount the authorized officer may grant time for the payment of the amount and thereupon the Recovery Officer shall stay the proceedings until the expiry of the time so granted. 2) Where a certificate for the recovery of amount has been issued the authorized officer shall keep the Recovery Officer informed of any amount paid or time granted for payment subsequent to the issue of such certificate.

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3) Where the order giving rise to a demand of amount for which a certificate for recovery has been issued has been modified in appeal or other proceeding under this Act and as a consequence thereof the demand is reduced but the order is the subject-matter of a further proceeding under this Act the authorized officer shall stay the recovery of such part of the amount of the certificate as pertains to the said reduction for the period for which the appeal or other proceeding remains pending. 4) Where a certificate for the recovery of amount has been issued and subsequently the amount of the outstanding demand is reduced as a result of an appeal or other proceeding under this Act the authorized officer shall when the order which was the subject-matter of such appeal or other proceeding has become final and conclusive amend the certificate or withdraw if as the case may be. 14.1.10.14.6. Application of Certain Provisions of Income Tax Act [Section 8G] The provisions of the Second and Third Schedules to the Income Tax Act 1961 (43 of 1961) and the Income Tax (Certificate Proceedings) Rules 1962 as in force from time to time shall apply with necessary modifications as if the said provisions and the rules referred to the arrears of the amount mentioned in Section 8 of the Act instead of to the Income Tax; provided that any reference in the said provisions and the rules to the assessee shall be construed as a reference to an employer as defined in this Act.

14.1.10.15. Protection against Attachment [Section 10]

1) The amount standing to the credit of any member in the Fund or of any exempted employee in a provident fund shall not in any way be capable of being assigned or charged and shall not be liable to attachment under any decree or order of any Court in respect of any debt or liability incurred by the member or the exempted employee and neither the official assignee appointed under the Presidency Towns Insolvency Act 1909 nor any receiver appointed under the Provincial Insolvency Act 1920 shall be entitled to or have any claim on any such amount. 2) Any amount standing to the credit of a member in the Fund or of an exempted employee in a provident fund at the time of his death and payable to his nominee under the Scheme or the rules of the Provident Fund shall subject to any deduction authorized by the said Scheme or rules vest in the nominee and shall be free from any debt or other liability incurred by the decreased or the nominee before the death of the member or the exempted employee and shall also not be liable to attachment under any decree or order of any Court. 3) The provisions of sub-section (1) and sub-section (2) shall so far as may be apply in relation to the family pension or any other amount payable under the Pension Scheme and also in relation to any amount payable under the Insurance Scheme as they apply in relation to any amount payable out of the Fund.

14.1.10.16. Priority of Payment of Contributions Over Other Debts [Section 11]

1) Where any employer is adjudicated insolvent or being a company an order for winding up is made the amount due: i) From the employer in relation to an establishment to which any Scheme or the Insurance Scheme applies in respect of any contribution payable to the Fund or as the case may be the Insurance Fund damages recoverable under Section 14B accumulations required to be transferred under sub-section (2) of Section 15 or any charges payable by him under any other provision of this Act or of any provision of the Scheme or the Insurance Scheme; or ii) From the employer in relation to an exempted establishment in respect of any contribution to the provident fund or any insurance fund (in so far as it relates to exempted employees) under the rules of the provident fund or any insurance fund any contribution payable by him towards the Pension Fund under sub-section (6) of Section 17 damages recoverable under Section 14B or any charges payable by him to the appropriate Government under any provision of this Act under any of the conditions specified under Section 17 shall where the liability therefore has accrued before the order of adjudication or winding up is made be deemed to be included among the debts which under Section 49 of the Presidency Towns Insolvency Act 1909 or under Section 61 of the Provincial Insolvency Act 1920 or under Section 530 of the Companies Act 1956 are to be paid in priority to all other debts in the distribution of the property of the insolvent or the assets of the company being wound up as the case may be. Explanation: In this sub-section and in Section 17 insurance fund means any fund established by an employer under any Scheme for providing benefits in the nature of life insurance to employees whether linked to their deposits in provident fund or not without payment by the employees of any separate contribution or premium in that behalf.

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2) Without prejudice to the provisions of sub-section (1) if any amount is due from an employer whether in respect of the employees contribution (deducted from the wages of the employee) or the employers contribution the amount so due shall be deemed to be the first charge on the assets of the establishment and shall notwithstanding anything contained in any other law for the time being in force be paid in priority to all other debts.

14.1.10.17. Employer Not to Reduce Wages, etc. [Section 12]

An employer in relation to an establishment to which any Scheme or the Insurance Scheme applies shall not reduce, whether directly or indirectly the wages of any employee to whom the Scheme or the Insurance Scheme applies or the total quantum of benefits in the nature of old age pension, gratuity or provident fund to which the employee is entitled under the terms of his employment, express or implied. But the above reductions by the employer shall not be made for the reasons only of his liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme.

14.1.11. Inspectors [Section 13]

Section 13 empowers the appropriate Government, by notification in the Official Gazette, to appoint such persons as it thinks fit to be Inspectors for the purpose of the Act, the Employees Provident Fund Scheme, the Pension Scheme or the Employees Deposit-linked Insurance Scheme. It may also define the jurisdiction of the Inspectors.

14.1.11.1. Powers of Inspector

The Inspector has been given certain powers for the purpose of: 1) Inquiring into the correctness of any information furnished in connection with the Act or with any Provident Fund Scheme or the Employees Deposit linked Insurance Scheme, or 2) Ascertaining whether any of the provisions of the Act or any Provident Fund Scheme or the Insurance Scheme have been complied with in respect of an establishment to which any Provident Fund Scheme or Insurance Scheme applies, or 3) Ascertaining whether the provisions of the Act or any Provident Fund Scheme are applicable to any establishment, to which the Provident Scheme or the Insurance Scheme has not been applied, or 4) Determining whether the conditions subject to which exemption was granted under Section 17 are being complied with by the employer in relation to an exempted establishment. The powers conferred on the Inspector for the above purposes include the following, viz., power to: 1) Require an employer or any contractor from whom any amount is recoverable under Section 8-A to furnish such information as he may consider necessary; 2) At any reasonable time (with necessary assistance) enter and search any establishment or any premises connected therewith and require any one found in share thereof to produce before him for examination any accounts, books, registers and other documents relating to the employment of persons or the payment of wages in the establishment; 3) Examine the employer or any contractor from who any amount is recoverable under Section 8-A, his agent or servant or any other person found in charge of the establishment (or any premises connected therewith); 4) Make copies of or take extracts from any book, register or other documents maintained in relation to the establishment. Where he has reason to believe that any offence under the Act has been committed by any employer, he may seize, with such assistance as he may think fit, such book, register or other document or portions thereof as he may consider relevant in respect of that offence; 5) Exercise such other powers as the Provident Fund Scheme or the Insurance Scheme may provide.

14.1.12. Penalties and Offences

14.1.12.1. Penalties [Section 14]
Sub-section (1): Whoever for the purpose of avoiding any payment to be made by himself under this Act, the Scheme, the Pension Scheme or the Insurance Scheme or of enabling any other person to avoid such payment knowingly makes or causes to be made any false statement or false representation shall be punishable with imprisonment for a term which may extend to one year or with fine of five thousand rupees or with both.

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Sub-Section (1A): An employer who contravenes or makes default in complying with the provisions of Section 6 or clause (a) of sub-section (3) of Section 17 insofar as it relates to the payment of administrative charges shall be punishable with imprisonment for a term which may extend to three years but; 1) Which shall not be less than one year and fine of ten thousand rupees in case of default in payment of employees contribution which has been deducted by the employer from the employees wages; 2) Which shall not be less than six months and fine of five thousand rupees in any other case; provided that the court may for any adequate and special reasons to be recorded in the judgment impose a sentence of imprisonment for a lesser term. Sub-Section (1B): An employer who contravenes or makes default in complying with the provisions of Section 6C or clause (a) of sub-section (3A) of Section 17 in so far as it relates to payment of inspection charges shall be punishable with imprisonment for a term which may extend to one year but which shall not be less than five thousand rupees; provided that the court may for any adequate and special reasons to be recorded in the judgment impose a sentence of imprisonment for a lesser term. Sub-Section (2): Subject to the provisions of the Act, the Scheme, the Pension Scheme or the Insurance Scheme may provide that any person who contravenes or makes default in complying with any of the provisions thereof shall be punishable with imprisonment for a term which may extend to six months but which shall not be less than one month and shall also be liable to fine which may extend to five thousand rupees. Sub-Section (2A): Whoever contravenes or makes default in complying with any provision of this Act or of any condition subject to which exemption was granted under Section 17 shall if no other penalty is elsewhere provided by or under this Act for such contravention or non-compliance be punishable with imprisonment which may extend to six months but which shall not be less than one month and shall also be liable to fine which may extend to five thousand rupees.

14.1.12.2. Offences by Companies [Section 14A]

If the person committing an offence under this Act, the Scheme or the Family Pension Scheme or the Insurance Scheme is a company, then the following shall be deemed to be guilty of the offence: 1) Every person, who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company; and 2) The company itself. They shall be liable to be proceeded against and punished accordingly. But any such person shall not be liable to any punishment, if he proves that the offence was committed without his knowledge to prevent the commission of such offence [sub-section (1)]. In case an offence under this Act, the Scheme or the Family Pension Scheme or the Insurance Scheme has been committed by a company any it is proved that the same was committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director or manager, secretary or other officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly [Section 2]. 14.1.12.2.1. Certain Offences to be Cognizable [Sections 14AB and 14AC] Section 14AB provides that notwithstanding anything contained in the Code of Criminal Procedure, an offence relating to default in payment of contribution by the employer punishable under this Act shall be cognizable. Section 14AC provides for cognizance and trial of offences. No court shall take cognizance of any offence punishable under this Act, the Scheme, the Family Pension Scheme or the Insurance Scheme except on a report in writing of the facts constituting such offence made with the previous sanction of the Central Provident Fund Commissioner or such other officer as may be authorized by the Central Government, by notification in the Official Gazette in this behalf, by an inspector appointed under Section 13. Further, no Court inferior to that of a Presidency Magistrate or a Magistrate of the First class shall try any offence under this Act or the Scheme, the Family Pension Scheme or the Insurance Scheme.

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The essential conditions of cognizance of offences are: 1) There must be a report in writing of the facts constituting such offence, 2) This report must be made with the previous sanction of the: i) Central Provident Fund Commissioner, or ii) Such Officer as may be authorized by the Central Government; 3) The report must be made by an Inspector appointed under Section 13. These conditions being co-existent, no Court inferior to that of a Presidency Magistrate or a Magistrate of the first class shall try any offence under this Act, or the Scheme or the Family Pension Scheme or the Family Pension Scheme or the Insurance Scheme. 14.1.12.2.2. Power to Recover Damages [Section 14B] This section provides the circumstances under which an employer shall be liable to pay damages. These are: 1) Where he fails to pay any contribution to the Fund, the Family Pension Fund or the Insurance Fund; or 2) Where he commits a default in transfer of accumulation required to be transferred by him, under Section 15(2) standing to the credit of the Fund established under the Scheme; or 3) Where he commits a default in transfer of accumulations, required to be transferred by him under Section 17(5), to the credit of every employee to whom exemption has been granted under Section 17; or 4) Where he commits a default in the payment of any charges payable under any other provisions of this Act or any Scheme or Insurance Scheme or under any of the conditions specified under Section 17. The Central Provident Fund Commissioner or such other officer, as may be authorized by the Central Government, by notification in the official gazette in this behalf, may recover from the employer by way of penalty, such damages not exceeding the amount of arrears as may be specified in the Scheme. However, this is subject to the following two provisions: 1) Before levying and recovering such damages, the employer shall be given a reasonable opportunity of being heard. 2) The Central Board may reduce or waive the damages in relation to an establishment which is a sick industrial company and in respect of which a Scheme for rehabilitation has been sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) established under Section 4 of the Sick Industrial Companies (Special Provisions) Act, 1985, subject to such terms and conditions as may be specified in the Scheme. Section 14 of the E.P.F. Act also prescribes for penalties, which are:
Sl. No. 1) For avoiding any payment knowingly makes any false statement or representation. 2) An employer who contravenes Section 6 (re. contributions) or Section 17(3)(a) for payment of inspection charges or para 38 re. payment of Administration Charges. Details of Violation Penalty Shall be punishable with imprisonment upto 1 year or fine of `5,000.00 or both. Shall be punishable with imprisonment upto 3 years but: i) Will not be less than 1 year and fine of `10,000.00 if it relates to payment of employees contribution, which has been deducted by the employer. ii) Will not be less than 6 months and fine of ` 5,000.00, in any other case. The court can decide a lesser term for imprisonment but for reasons recorded. Shall be punishable with imprisonment upto 1 year but will not be less than 6 months and fine of upto `5,000.00. Shall be punishable with imprisonment upto 1 year or with fine of upto `4,000.00 or both. Be punishable with imprisonment upto 6 months but not less than 1 month and also fine upto `5,000.00.

3) An employer who contravenes Section 6C Re. EDLI or Section 17(3A)(a) re. inspection charges. 4) Failure to comply with any provision of the Act or Schemes. 5) Contravenes any provision or condition for which exemption u/s 17 was given and no other penalty is prescribed.

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CHAPTER 15
14.2.

Workmens Compensation Act, 1923

WORKMENS COMPENSATION ACT, 1923

14.2.1. Introduction to the Act

The Workmens Compensation Act, 1923 is one of the earliest labor welfare and social security legislation enacted in India. It recognizes the fact that if a workman is a victim of accident or an occupational disease in course of his employment, he needs to be compensated. The Act does not apply to those workers who are insured under the Employees State Insurance Act 1948. Section 53 of the Employees State Insurance Act provides: An insured person or his dependents shall not be entitled to receive or recover whether from the employer of the insured person or from any other person any compensation or damages under the Workmens Compensation act 1923 or any other law for the time being in force or otherwise in respect of an employment injury sustained by the insured person as an employee under this Act.

14.2.2. Objectives of the Act

The Workmens Compensation Act, aims to: 1) Provide workmen and/or their dependents some relief or to consider compensation payable by an employer to his workmen in case of accidents arising out of and in the course of employment and causing either death or disablement of workmen as a measure of relief and social security. 2) Provide for payment by certain classes of employers to their workmen compensation for injury by accident. 3) To enable a workmen to get compensation irrespective of his negligence. 4) It lays down the various amounts payable in case of an accident, depending upon the type and extent of injury. The employer now knows the amount of compensation he has to pay and is saved of many uncertainties to which he was subject before the Act came into force.

14.2.3. Scope of the Act

1) The Act is confined to industries which are more or less organized. 2) The workmen whose occupation is hazardous should be included within the scope of this Act.

14.2.4. Features of the Act

1) Act provides for cheaper and quicker mode of disposal of disputes through special proceedings than possible under Civil Laws. 2) Act provides compensation to workmen for injury caused by accident and occupational disease arising out of and in the course of employment. 3) The Act is applicable to apprentices also. 4) Procedure for settlement of claim is through Commissioners.

14.2.5. Definitions
1) Commissioner [Section 2 (1) (b)]: Commissioner means a Commissioner for Workmens Compensation appointed under Section 20. 2) Compensation [Section 2(1) (c)]: Compensation means compensation as provided for by this Act.

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3) Dependent [Section 2(1) (d)]: Dependent means any of the following relatives of a deceased workman, namely: i) A widow, a minor, legitimate or adopted son, an unmarried legitimate or adopted daughter or a widowed mother; and ii) If wholly dependant on the earnings of the workman at the time of his death a son or a daughter who has attained the age of 18 years and who is infirm; iii) If wholly or in part dependant on the earnings of the workman at the time of his death: a) A widower, b) A parent other than a widowed mother, c) A minor, illegitimate son, an unmarried illegitimate daughter, or a daughter legitimate or illegitimate or adopted if married and a minor or if widowed and minor, d) A minor brother or an unmarried sister or a widowed sister if a minor, e) A widowed daughter-in-law, f) A minor child of a pre-deceased son, g) A minor child of a pre-deceased daughter where no parent of the child is alive, or h) A paternal grandparent if no parent of the workman is alive. 4) Employer [Section 2(1) (e)]: Employer includes any body or persons whether incorporated or not and any managing agent of an employer and the legal representative of a deceased employer and when the services of a workman are temporarily lent or let on hire to another person by the person with whom the workman has entered into a contract of service or apprenticeship means such other person while the workman is working for him; 5) Managing Agent [Section 2(1) (f)]: Managing agent means any person appointed or acting as the representative of another person for the purpose of carrying on such other persons trade or business but does not include an individual manager subordinate to an employer; 6) Minor [Section 2(1) (ff)]: Minor means a person who has not attained the age of 18 years; 7) Disablement: Disablement means loss of capacity to work or to move. Disablement of a workman may result in loss or reduction of his earning capacity. In the latter case, he is not able to earn as much as he used to earn before his disablement. Disablement may be partial, or total. Further Partial disablement may be permanent, or temporary. i) Partial Disablement [Section 2 (1) (g)]: This means any disablement as reduces the earning capacity of a workman as a result of some accident. Partial disablement may be temporary or permanent. a) Temporary partial disablement means any disablement as reduces the earning capacity of a workman in any employment in which he was engaged at the time of accident which resulted in such disablement. b) Permanent partial disablement is one which reduces the earning capacity of a workman in every employment which he was capable of undertaking at the time of injury. ii) Total Disablement [Section 2 (1) (l)]: It means such disablement, whether of a temporary or permanent nature, as incapacitates a workman for all work which he was capable of performing at the time of the accident resulting in such disablement. It refers to that condition where a workman becomes unfit for every type of work and is not able to get job anywhere due to that disablement. Total disablement is deemed to result from every injury specified in Part I of Schedule I or from any combination of injuries specified in Part II thereof where the aggregate percentage of the loss of earning capacity, as specified in Part II against those injuries, amounts to 100 per cent or more. Where an employee becomes unfit for a particular class of job but is fit for another class which is offered to him by the employer, the workman is entitled to claim compensation only on the basis of partial disablement and not total disablement. 8) Qualified Medical Practitioner [Section (2) (i)]: Qualified medical practitioner means any person registered under any Central Act or an Act of the Legislature of a State providing for the maintenance of a register of medical practitioners or in any area where no such last-mentioned Act is in force, any person declared by the State Government by notification in the Official Gazette to be a qualified medical practitioner for the purpose of this Act;

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9) Wages [Section 2(1) (m)]: Wages includes any privilege or benefit which is capable of being estimated in money other than a traveling allowance or the value of any traveling concession or a contribution paid by the employer of a workman towards any pension or provident fund or a sum paid to a workman to cover any special expenses entailed on him by the nature of his employment. 10) Workman [Section 2(1) (n)]: Workman means any person (other than a person whose employment is of a casual nature and who is employed otherwise than for the purposes of the employers trade or business) who is: i) A railway servant as defined in section 3 of the Indian Railways Act 1890 not permanently employed in any administrative district or sub-divisional office of a railway and not employed in any such capacity as is specified in Schedule II, or a) A master seaman or other member of the crew of a ship. b) A captain or other member of the crew of an aircraft. c) A person recruited as driver, helper, mechanic, cleaner, or in any other capacity in connection with a motor vehicle. d) A person recruited for work abroad by a company and who is employed outside India in any such capacity as is specified in Schedule II and the ship aircraft or motor vehicle or company as the case may be is registered in India or; ii) Employed in any such capacity as is specified in Schedule II whether the contract of employment was made before or after the passing of this Act and whether the contract is expressed or implied oral or in writing; but does not include any person working in the capacity of a member of the Armed Forces of the Union; and any reference to a workman who has been injured shall where the workman is dead includes a reference to his dependants or any of them.

14.2.6. Workmens Compensation

14.2.6.1. Employers Liability for Compensation [Section 3]
An employer is liable to pay compensation to a workman: 1) For personal injury caused to him by accident, and 2) For any occupational disease contracted by him. 1) Personal Injury: Personal injury includes: i) Must have been caused during the course of his employment; and ii) Must have been caused by accident arising out of his employment. An accident alone does not give a workman a right to compensation. To entitle him to compensation at the hands of the employers the accident must arise out of and in the course of his employment. The language in Section 3 shows that injury is caused by accident and not by an accident. So the injury should be caused by accident by some mishap, unexpected or unforeseen. The personal injury caused to the worker must have resulted in total or partial disablement of the workman for a period exceeding three days or it must have resulted in the death of the worker. The injury should not have been caused by accident which is directly attributable to: i) The workman having been under the influence of drink or drugs at the time of the accident; ii) Willful disregard of instruction relating to safety precautions given by the employer; and/or iii) The willful disregard of the usage of the safety device or safety guard provided for the purpose of securing safety of the workman by the employer. 2) Occupational Disease: Section 3(2) of the Act also recognizes that the workman employed in certain types of industries of occupation risk exposure to certain occupational disease peculiar to that employment. This section states that the contracting of any of these occupational diseases shall be deemed to be: i) An injury by accident within the meaning of the Act and compensation is payable to the workman who contracts such disease;

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ii) The types of employment which exposes the workman to occupational disease as well as the list of occupational diseases are contained in Schedule III of the Act. Schedule III is divided into three parts, viz., A, B and C. No specific period of employment is necessary for a claim for compensation with respect to occupational diseases mentioned in Part A. For diseases specified in Part B the workman must be in continuous service of the same employer for a period of six months in the employment specified in that part. For diseases in Part C the period of employment would be such as is specified by the Central Government for each of such employment whether in the service of one or more employers. If a workman employed in any employment mentioned in Part C of the Schedule II contracts any occupational disease peculiar to that employment, the contracting whereof is deemed to be an injury by accident within the meaning of Section 3 and such employment was under more than one employer then all the employers shall be liable for the payment of compensation in such proportion as the commissioner in the circumstances may deem just.

14.2.6.2.

Amount of Compensation [Section 4]

Section 4 of the Act prescribes the amount of compensation payable under the provisions of the Act. The amount of compensation payable to a workman depends on: 1) The nature of the injury caused by accident. 2) The monthly wages of the workman concerned, and 3) The relevant factor for working out lump-sum equivalent of compensation amount as specified in Schedule IV (as substituted by Amendment Act of 1984). There is no distinction between an adult and a minor worker with respect to the amount of compensation. New Section 4 (as substituted by the Amendment Act of 1984) provides for compensation for: 1) Death; 2) Permanent total disablement; 3) Permanent partial disablement; and 4) Temporary disablement total or partial. 1) Compensation for Death: Where death results from an injury, the amount of compensation shall be equal to 50 percent of the monthly wages of the deceased workman multiplied by the relevant factor, or Rs. 85,000 whichever is more. The formula for calculating the amount of compensation in case of death resulting from an injury will be as follows: 50 Monthly wages Relevant factor or ` 80,000 whichever is more. 100
2) Compensation for Permanent Total Disablement: Where permanent total disablement results form an injury, the amount of compensation payable shall be equal to 60 percent of the monthly wages of the injured workman multiplied by the relevant factor, or Rs. 90,000, whichever is more. The formula for calculating the amount of compensation in case of permanent total disablement resulting from an injury will be as follows: 60 Monthly wages Relevant factor or `90,000 whichever is more. 100 3) Compensation for Permanent Partial Disablement: i) In the case of an injury specified in Part II of Schedule I, such percentage of the compensation which would have been payable in the case of permanent total disablement as is specified therein as being the percentage of the loss of earning capacity caused by the injury; and in other words, the percentage of compensation payable is proportionate to the loss of earning capacity permanently caused by the scheduled injury. Thus, if the loss of earning capacity caused by an injury specified in Part II of Schedule I is 30 percent, the amount of compensation shall be 30 percent of compensation payable in case of permanent total disablement.

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ii) In the case of an injury not specified in Schedule I such percentage of the compensation payable in the case of permanent total disablement as is proportionate to the loss of earning capacity (as assessed by the qualified medical practitioner) permanently caused by the injury. 4) Compensation for Temporary Disablement: A half monthly payment of the sum whether total or partial results equivalent to 25% of monthly wages of the from the injury workman to be paid in the manner prescribed. 5) Compensation to be Paid when due and Penalty for Default: Section 4A provides for the payment of compensation and the penalty for default. It provides that compensation shall be paid as soon as it falls due. Section 4 mandates employer to pay compensation amount as soon as it falls due to victim or his or her legal heirs. However, where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts, and such payment shall be deposited with the Commissioner or made to the workman, as the case may be, without prejudice to the right of workman to make any further claim.

14.2.6.3.

Distribution of Compensation/Procedure for Compensation [Section 8]

Section 8 of the Act provides for the deposit of the compensation before the Commissioner, as also to the distribution of compensation by the Commissioner. Section 8 lays down following rules with regard to distribution of compensation: 1) No payment of compensation in respect of workman whose injury has resulted in death, and no payment of lump sum as compensation to a woman or a person under a legal disability, shall be made otherwise then by deposit with the Commissioner, and no such payment made directly by an employer shall be deemed to be a payment of compensation. 2) Any other sum amounting to not less than ten rupees which is payable as compensation may be deposited with the Commissioner on behalf of the person entitled thereto. 3) The receipt of the Commissioner shall be a sufficient discharge in respect of any compensation deposited with him. 4) On the deposit of any money under sub-section (1), as compensation in respect of a deceased workman the Commissioner shall, if he thinks necessary, cause notice to be published or to be served on each dependant in such manner as he thinks fit, calling upon the dependents to appear before him on such date as he may fix for determining the distribution of the compensation. If the Commissioner is satisfied, after any inquiry which he may deem necessary, that no dependant exists, he shall repay the balance of the money to the employer by whom it was paid. 5) Compensation deposited in respect of a deceased workman shall, subject to any deduction made under subsection (4), be apportioned among the dependants of the deceased workman or any of them in such proportion as the Commissioner thinks fit or may, in the discretion of the Commissioner, be allotted to any one dependant. 6) Where any compensation deposited with the Commissioner is payable to any person, the Commissioner shall, if the person to whom the compensation is payable is not a workman or a person under a legal disability, and may, in other cases, pay the money to the person entitled thereto. 7) i) Where any lumpsum deposited with the Commissioner is payable to a woman or a person under a legal disability, such sum may be invested, applied or otherwise dealt with for the benefit of the woman, or of such person during his disability, in such manner as the Commissioner may direct. ii) Where a half-monthly payment is payable to a person under legal disability, the Commissioner may pay it to any dependant of the workman or to any other person whom the Commissioner thinks best fitted to provide for the welfare of the workman. 8) The Commissioner may, on account of neglect of children on the part of a parent or on account of the variation of the circumstances of any dependant, or for any other sufficient cause, vary his earlier orders regarding distribution or investment of compensation. But no such order prejudicial to any person shall be made unless such person has been given an opportunity of showing because why the order should not be made.

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9) Where the Commissioner varies any order under sub-section (8) by reason of the fact that payment of compensation to any person has been obtained by fraud, impersonation or other improper means any amount so paid to or on behalf of such person may be recovered as an arrear of land revenue.

14.2.6.4.

Notice and Claim for Compensation [Section 10]

Section 10 of the Act prescribes that a claim for compensation shall be entertained by the commissioner only after a notice of the accident has been given to him. Such notice should be given as soon as practicable after the date of the accident. The claim of compensation however be preferred within 2 years form the date of accident or death. In case of deemed accident arising out of occupational disease the date of accident will be recorded as the first day on which the workman starts absenting himself continuously as a consequence of the disease. Failure to give notice shall not bar the entertainment of the claim by the commissioner under the following circumstances, namely: 1) If the death of a workman resulting from the accident occurred on the premises of the employer or at any place where the workman at the time of accident was working under the control of the employer and the workman died at such place or at such premises belonging to the employer and died without having left the vicinity of the premises or the place where the accident occurred; or 2) If the employer or any of the several employers or his manager has knowledge of the accident from any other source at or about the time when it occurred. Every notice shall be served upon the employer. It may be served by delivering it at or sending it by registered post and addressed to the residence or any of office or place of business of the person on whom it is to be served. Where a workman has given a notice of accident he should submit himself for medical examination if required by the employer. And such medical examination shall take place within 3 days from the date of service of the notice of accident to the employer Refusal to submit himself for medical examination will result in the suspension of the right of the workman for compensation during the period of refusal During the period of suspension of the right no compensation shall be paid to the workman. 14.2.6.4.1. Power to Require from Employers Statements Regarding Fatal Accident [Section 10A] 1) Where a Commissioner receives information from any source that a workman has died as a result of an accident arising out of and in the course of his employment he may send by registered post a notice to the workmans employer requiring him to submit within thirty days of the service of the notice a statement in the prescribed form giving the circumstances attending the death of the workman and indicating whether in the opinion of the employer he is or is not liable to deposit compensation on account of the death. 2) If the employer is of opinion that he is liable to deposit compensation he shall make the deposit within thirty days of the service of the notice. 3) If the employer is of opinion that he is not liable to deposit compensation he shall in his statement indicate the grounds on which he disclaims liability. 4) Where the employer has so disclaimed liability the Commissioner after such inquiry as he may think fit may inform any of the dependants of the deceased workman that it is open to the dependants to prefer a claim for compensation and may give them such other further information as he may think fit. 14.2.6.4.2. Reports of Fatal Accidents and Serious Bodily Injuries [Section 10B] 1) Where by any law for the time being in force notice is required to be given to any authority by or on behalf of an employer of any accident occurring on his premises which results in death or serious bodily injury the person required to give the notice shall within seven days of the death or serious bodily injury send a report to the Commissioner giving the circumstances attending the death or serious bodily injury; provided that where the State Government has so prescribed the person required to give the notice may instead of sending such report to the Commissioner send it to the authority to whom he is required to give the notice. Explanation: Serious bodily injury means an injury which involves or in all probability will involve the permanent loss of the use of or permanent injury to any limb or the permanent loss of or injury to the sight or hearing or the fracture of any limb or the enforced absence of the injured person from work for a period exceeding twenty days.

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2) The State Government may by notification in the Official Gazette extend the provisions of sub-section (1) to any class of premises other than those coming within the scope of that sub-section and may by such notification specify the person who shall send the report to the Commissioner. 3) Nothing in this section shall apply to factories to which the Employees State Insurance Act 1948 applies.

14.2.6.5.

Medical Examination [Section 11]

1) Where a workman has given notice of an accident he shall, if the employer before the expiry of three days from the time at which service of the notice has been effected offers to have him examined free of charge by a qualified medical practitioner submit himself for such examination and any workman who is in receipt of a half-monthly payment under this Act shall if so required submit himself for such examination from time to time; provided that a workman shall not be required to submit himself for examination by a medical practitioner otherwise than in accordance with rules made under this Act or at more frequent intervals than may be prescribed. 2) If a workman on being required to do so by employer under sub-section (1) or by the Commissioner at any time refuses to submit himself for examination by a qualified medical practitioner or in any way obstructs the same his right to compensation shall be suspended during the continuance of such refusal or obstruction unless in the case of refusal he was prevented by any sufficient cause from so submitting himself. 3) If a workman before the expiry of the period within which he is liable under sub-section (1) to be required to submit himself for medical examination voluntarily leaves without having been so examined the vicinity of the place in which he was employed his right to compensation shall be suspended until he returns and offers himself for such examination. 4) Where a workman whose right to compensation has been suspended under sub-section (2) or sub-section (3) dies without having submitted himself for medical examination as required by either of those subsections, the Commissioner may if he thinks fit direct the payment of compensation to the dependants of the deceased workman. 5) Where under sub-section (2) or sub-section (3) a right to compensation is suspended no compensation shall be payable in respect of the period of suspension and if the period of suspension commences before the expiry of the waiting period referred to in clause (d) of sub-section (1) of section 4 the waiting period shall be increased by the period during which the suspension continues. 6) Where an injured workman has refused to be attended by a qualified medical practitioner whose services have been offered to him by the employer free of charge or having accepted such offer has deliberately disregarded the instructions of such medical practitioner then if it is proved that the workman has not thereafter been regularly attended by a qualified medical practitioner or having been so attended has deliberately failed to follow his instructions and that such refusal, disregard or failure was unreasonable in the circumstances of the case and that the injury has been aggravated thereby, the injury and resulting disablement shall be deemed to be of the same nature and duration as they might reasonably have been expected to be if the workman had been regularly attended by a qualified medical practitioner whose instructions he had followed and compensation if any shall be payable accordingly.

14.2.6.6.

Contracting [Section 12]

1) Where any person (hereinafter in this section referred to as the principal) in the course of or for the purposes of his trade or business contract with any other person (hereinafter in this section referred to as the contractor for the execution by or under the contractor of the whole or any part of any work which is ordinarily part of the trade or business of the principal the principal shall be liable to pay to any workman employed in the execution of the work any compensation which he would have been liable to pay if that workman had been immediately employed by him; and where compensation is claimed from the principal this Act shall apply as if references to the principal were substituted for references to the employer except that the amount of compensation shall be calculated with reference to the wages of the workman under the employer by whom he is immediately employed. 2) Where the principal is liable to pay compensation under this section he shall be entitled to be indemnified by the contractor or any other person from whom the workman could have recovered compensation and where a contractor who is himself a principal is liable to a pay compensation or to

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indemnify a principal under this section he shall be entitled to be indemnified by any person standing to him in the relation of a contractor from whom the workman could have recovered compensation and all questions as to the right to and the amount of any such indemnity shall in default of agreement be settled by the Commissioner. 3) Nothing in this section shall be construed as preventing a workman from recovering compensation from the contractor instead of the principal. 4) This section shall not apply in any case where the accident occurred elsewhere that on in or about the premises on which the principal has undertaken or usually undertakes as the case may be to execute the work or which are otherwise under his control or management.

14.2.6.7.

Returns as to Compensation [Section 16]

The State Government may, by notification in the Official Gazette direct that every person employing workmen or that any specified class of such persons shall send at such time and in such form and to such authority as may be specified in the notification a correct return specifying the number of injuries in respect of which compensation has been paid by the employer during the previous year and the amount of such compensation together with such other particulars as to the compensation as the State Government may direct.

14.2.6.8.

Contracting Out [Section 17]

Any contract or agreement whether made before or after the commencement of this Act whereby a workman relinquishes any right of compensation from the employer for personal injury arising out of or in the course of the employment shall be null and void in so far as it purports to remove or reduce the liability of any person to pay compensation under this Act.

14.2.7. Penalties [Section 18A]

1) Whoever: i) Fails to maintain a notice-book which he is required to maintain under sub-section (3) of section 10, or ii) Fails to send to the Commissioner a statement which he is required to send under sub-section (1) of section 10A, or iii) Fails to send a report which he is required to send under section 10B, or iv) Fails to make a return which he is required to make under section 16 shall be punishable with fine which may extend to five thousand rupees. 2) No prosecution under this section shall be instituted except by or with the previous sanction of a Commissioner and no Court shall take cognizance of any offence under this section unless complaint thereof is made within six months of the date on which the alleged commission of the offence came to the knowledge of the Commissioner.

14.2.8. Enforcement of the Act

14.2.8.1. Commissioners [Section 19]
1) If any question arises in any proceedings under this Act as to the liability of any person to pay compensation (including any question as to whether a person injured is or is not a workman) or as to the amount of duration of compensation (including any question as to the nature or extent of disablement) the question shall in default of agreement be settled by a Commissioner. 2) No Civil Court shall have jurisdiction to settle decided or deal with any question which is by or under this Act required to be settled decided or dealt with by a Commissioner or to enforce any liability incurred under this Act.

14.2.8.2.

Appointment of Commissioner [Section 20]

1) The State Government may, by notification in the Official Gazette, appoint any person to be a Commissioner for Workmens Compensation for such area as may be specified in the notification. 2) Where more than one Commissioner has been appointed for any area the State Government may by general or special order regulate the distribution of business between them.

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3) Any Commissioner may for the purpose of deciding any matter referred to him for decision under this Act choose one or more persons possessing special knowledge of any matter relevant to the matter under inquiry to assist him in holding the inquiry. 4) Every Commissioner shall be deemed to be a public servant within the meaning of the Indian Penal Code (45 of 1860).

14.2.8.3. Power of Commissioner to Require Further Deposit in Cases of Fatal Accident [Section 22A]
1) Where any sum has been deposited by an employer as compensation payable in respect of a workman whose injury has resulted in death and in the opinion of the Commissioner such sum is insufficient the Commissioner may by notice in writing stating his reasons call upon the employer to show cause why he should not make a further deposit within such time as may be stated in the notice. 2) If the employer fails to show cause to the satisfaction of the Commissioner the Commissioner may make an award determining the total amount payable and requiring the employer to deposit the deficiency.

14.2.8.4.

Powers and Procedure of Commissioners [Section 23]

The Commissioner shall have all the powers of a Civil Court under the Code of Civil Procedure 1908 for the purpose of taking evidence on oath (which such Commissioner is hereby empowered to impose) and of enforcing the attendance of witnesses and compelling the production of documents and material objects and the Commissioner shall be deemed to be a Civil Court for all the purposes of section 195 and of Chapter XXVI of the Code of Criminal Procedure 1973.

14.2.8.5.

Appeals [Section 30]

1) An appeal shall lie to the High Court from the following orders of a Commissioner namely: i) An order as awarding as compensation a lump sum whether by way of redemption of a half-monthly payment or otherwise or disallowing a claim in full or in part for a lump sum; ii) An order awarding interest or penalty under section 4A; iii) An order refusing to allow redemption of a half-monthly payment; iv) An order providing for the distribution of compensation among the dependants of a deceased workman or disallowing any claim of a person alleging himself to be such dependant; v) An order allowing or disallowing any claim for the amount of an indemnity under the provisions of subsection (2) of section 12; or vi) An order refusing to register a memorandum of agreement or registering the same or providing for the registration of the same subject to conditions; provided that no appeal shall lie against any order unless a substantial question of law is involved in the appeal and in the case of an order other than an order such as is referred to in clause (b) unless the amount in dispute in the appeal is not less than three hundred rupees; provided further that no appeal shall lie in any case in which the parties have agreed to abide by the decision of the Commissioner or in which the order of the Commissioner gives effect to an agreement come to by the parties; provided further that no appeal by an employer under clause (a) shall lie unless the memorandum of appeal is accompanied by a certificate by the Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed against. 2) The period of limitation for an appeal under this section shall be sixty days. 3) The provisions of section 5 of the Limitation Act 1963 (36 of 1963) shall be applicable to appeals under this section.

14.2.8.6.

Withholding of Certain Payments Pending Decision of Appeal [Section 30A]

Where an employer makes an appeal under clause (a) of sub-section (1) of section 30 the Commissioner may and if so directed by the High Court shall pending the decision of the appeal withhold payment of any sum in deposit with him.