Employees Provident Fund and Miscellaneous Provisions Act, 1952 | Introduction | Applicability and Non-Applicability of the Act | CA, CMA, CS, LLB Student

• This act extends to whole of India.
• The act aims at providing social security and timely monetary assistance to industrial employees and their families when they are distress.

Applicability of the Act

Section 1(3) provides that subject to Section 16, this Act applies-

• Factories

1. To every establishment which is a factory
2. Engaged in any industry specified in Schedule I and 
3. In which 20 or more persons are employed.

• To any other establishment

1. Employing 20 or more persons or class of such establishments 
2. Which the Central Government may, by notification in the Official Gazette, specify in this behalf.

• Establishment employing less than 20 persons

1. The Central Government may apply the provisions of this Act 
2. To any establishment employing such number of persons less than 20 
3. As may be specified in the notification. 
4. Before issuing the notification Central Government shall give two months’ notice in advance to the establishment.

• Voluntary Applicability

1. Where it appears to the Central Provident Fund Commissioner, 
2. that the employer and the majority of the employees have agreed that the provisions of this Act should be made applicable to their establishment, 
3. he may, by notification, apply the provisions of this Act to that establishment on and from the date of such agreement or from any subsequent date specified in such agreement;

• Once Applicable Forever Applicable

1. Once the Act is covered to any establishment it shall continue to apply even if the number of the persons employed falls below 20 at any time.

Non-Applicability of the Act

Section 16(1) of the Act provides that this Act is not applicable to the following-

• Co-operative Societies

1. To any establishment registered under the Co-operative Societies Act, 1912 or 
2. Under any other law for time being in force in any State relating to co-operative Societies,
3. Employing less than 50 persons and working without the aid of the power.

• Government Undertaking

1. To any other establishment belong to or under the control of the Central Government or a State Government and 
2. whose employees are entitled to the benefit of contributory provident fund or old age pension
3. in accordance with any scheme or rule framed by the Central Government or the State Government governing such benefits; or

• Undertaking Constituted under an Act

1. To any other establishment set up under the Central, Provincial or State Act and 
2. Whose employees are entitled to the benefits of contributory provident fund or old age pension 
3. In accordance with any scheme or rule framed under that Act governing such benefits.

Important Definitions or Terms

Appropriate Government

Section 2(a) defines the term ‘appropriate Government’

in relation to an establishment belonging to, or under the control of, the Central Government or in relation to an establishment connected with-

1. a railway company;
2. a major port;
3. a mine or an oil field; or
4. a controlled industry; or
5. in relation to an establishment having departments or branches in more than one State, the appropriate Government is the ‘Central Government’;

in relation to any other establishment, the appropriate Government is the ‘State Government’.

Authorized Officer

Section 2(aa) defines the term ‘authorized officer’ as-

• the Central Provident Fund Commissioner;
• Additional Central Provident Fund Commissioner;
• Deputy Provident Fund Commissioner;
• Regional Provident Fund Commissioner; or

such other officer as may be authorized by the Central Government, by Notification in the Official Gazette.

Basic wages

Section 2(b) defines the term ‘basic wages’ as all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case, in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include-

• the cash value of any consideration;
• 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) house rent allowance, over time allowance, bonus, commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment;
• any presents made by the employer.

Contribution

Section 2(c) defines the term ‘contribution’ as a contribution payable in respect of a member under a scheme or the contribution payable in respect of an employee to whom the Insurance scheme applies.

Fund

It means Provident Fund established under the Scheme. [Section 2(h)]

Employer

Section 2(e) defines the term ‘employer’ as-

• in relation to an establishment which is a factory, the owner or occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and, where a person has been named as a manager of the factory, the person so named; and
• in relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment, and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent.

Employee

Section 2(f) defines the term ‘employee’ as any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment, and who gets, his wages directly or indirectly from the employer, and includes any person-

• employed by or through a contractor in or in connection with the work of the establishment;
• engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 or under the Standing orders of the establishment.

Factory

Section 2(g) defines the term ‘factory’ as 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 or power.

Occupier of a factory

Section 2(k) defines the term ‘occupier of a factory’ as the person who has ultimate control over the affairs of a factory, and, where the said affairs are entrusted to a managing agent, such agent shall be deemed to be the occupier of the factory.