Page 185 - DCOM207_LABOUR_LAWS

Labour Laws

Notes Objectives

After studying this unit, you will be able to:

l z Explain the genesis of the Act
l z Discuss the definitions under this Act
l z Get an overview of the Employees’ Pension Scheme, 1995

l z Describe the Employees’ Provident Fund Scheme, 1952
l z Discuss the Employees’ Deposit-Linked Insurance Scheme, 1976
l z Get an overview of determination and recovery of money due to employer
l z Explain the penalties under this Act

Introduction

As per Preamble to the Act, the EPF Act is enacted to provide for the institution of provident
funds, pension fund and deposit lined insurance fund for employees in factories and other
establishments. The Employees’ Provident Funds and Miscellaneous Provisions Act is a social
security legislation to provide for provident fund, family pension and insurance to employees.
Employee has to pay contribution towards the fund. Employer also pays equal contribution. The
employee gets a lump sum amount when he retires, which will be useful to him after retirement.
The Act covers three schemes i.e. PF (Provident Fund scheme), FPF (Family Pension Fund scheme)
and EDLI (Employees Deposit Linked Insurance scheme). The EPF Act contains basic provisions
in respect of applicability, eligibility, damages, appeals, recovery etc. The three schemes formed
by Central Government under the Act make provisions in respect of those schemes. The purpose
of this Unit is to enable the students to comprehend basic expressions. At the end of this unit you
should be able to understand various concepts regarding various schemes included in EPF Act.

11.1 Genesis of the Act

In the previous unit, we dealt with the Trade Union Act. Legislation for compulsory institution
of contributory provident fund in industrial undertakings was discussed several times at
tripartite meetings in which representatives of the Central and State governments and of
employers and workers took part. A large measure of agreement was reached on the need for
such legislation. A non-official Bill on this subject was introduced in the Lok Sabha in 1948 to
provide for the establishment and grant of provident fund to certain classes of workers by their
employers. The Bill was withdrawn only on an assurance by the government that it would
soon consider the introduction of a comprehensive bill. There was also a persistent demo that
the Central Government extend the benefits of Coal Mines Provident Fund Scheme to workers
employed in other industries. The view that the proposed legislation should be undertaken was
largely endorsed by the Conference of Provincial Labour Ministers’ held in January 1951. On
15th November 1951, the Government of India promulgated the Employees’ Provident Funds
Ordinance which came into force on that date. It was subsequently replaced by the Employees’
Provident Funds Act passed on 4th March 1952.
11.1.1 Object of the Act

The Act was passed with a view to making some provision for the future of the industrial worker
after his retirement or for his dependants in case of his early death and inculcating the habit of
saving among the workers. The object of the Act is to provide substantial security and timely
monetary assistance to industrial employees and their families when they are in distress and/or

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