VIJAYAN Vs. SECRETARY TO GOVERNMENT

JUDGEMENT

(1.) EXT. P1 Government Order dated 24. 9. 1998 directing the kerala Co-operative Milk Marketing Federation to comply with C1. 26a of the Employees provident Fund Scheme and directing the respondents from discontinuing or reducing the rate of employees contribution under the E. P. F. Act from 12% on the amount of salary in excess of Rs. 5,000/- per month was under challenge at the instance of some of the employees and the Ernakulam Regional Co-operative producers Union Officers Association.

(2.) HEARD the learned Counsel for the petitioner and the learned Government Pleader. The Kerala Co-operative Milk Marketing Federation was contributing an equal amount of contribution as employers share to the employees Provident Fund Scheme. The Audit Department raised objection noting that the share of contribution made by the employer was in excess of the limits under C1. 26a (2) of the Employees' Provident Fund Scheme. The above matter was brought to the notice of the Government. Accordingly, the Government issued ext. Pl letter to the Kerala Co-operative Milk Marketing Federation to discontinue the remittance of the employers share of contribution in excess of the statutory limits and comply with C1. 26a (2) of the Employees Provident Fund scheme. The above order (Ext. Pl) is under challenge at the instance of some of the employees as well as the representative of the trade Union.

(3.) THE main argument advanced by the learned Counsel for the petitioners was that Ext. P1 order was in violation of S. 12 of the Employees provident Fund and Miscellaneous Provisions Act, 1952 (for short the Act) and hence it was illegal. S. 12 of the Act would read : "employer not to reduce wages etc.- No employer in relation to (an establishment) to which any (Scheme or the Insurance Scheme)applies shall, by reason 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), 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 (provident fund or life insurance) to which the employee is entitled under the terms of his employment, express or implied)" S. 12 would prohibit the employer from reducing the wages of the employee for avoiding his liability to pay contribution to the E. P. F. Scheme. It would further stipulate that the employer should not reduce whether directly or indirectly the benefits in the nature of old age pension, Gratuity, provident Fund or Life Insurance to which the employee was entitled under the terms of his employment, express or implied. THE learned Counsel for the petitioner submitted that S. 12 should prohibit the employer to reduce the benefits enjoyed by the workmen either directly or indirectly and by reducing the quantum of contribution paid by the employer, there would be a reduction in the benefits and hence Ext. P1 was illegal. But S. 12 does not contemplate all such cases of reduction of the quantum of contribution by the employer. By S. 12 of the Act, an employer was prohibited from reducing the wages of the employee so as to escape from a liability for the payment of any contribution to the fund or to the E. P. F. Scheme. Likewise, when the employee was entitled to the benefits in the nature of old age pension, gratuity, P. F or Life Insurance under the terms of employment express or implied, such benefits should not be reduced by any act done from the part of the employer. THE petitioners had no case that for avoiding payment of the contribution, the wages of the employees had been reduced. THEy had no case that under the terms of their employment the employees were entitled to any such benefits and those benefits had been reduced by the respondents in any way. In the present case, the employer was contributing to the scheme the employers share in excess of the prescribed limit which was objected to by the audit department. Such deposit in excess of the prescribed limit could be by a mistake or without noticing the proviso to sub-cl. 2 of C1. 29a. By Ext. P1 the Federation was directed to comply with the statutory provision.