Page 186 - DCOM207_LABOUR_LAWS

Unit 11: Employees’ Provident Fund Act, 1952

unable to meet family and social obligations and to protect them in old age, disablement, early Notes
death of the bread-winner and in some other contingencies.
The Act provides for a scheme for the institution of provident fund for specified classes of
employees. Accordingly, the Employees’ Provident Fund Scheme was framed under Section 5 of
the Act, which came into force on 1st November 1952.
!

Caution On a review of the working of the scheme over the years, it was found that
provident fund was no doubt an effective old age and survivorship benefit; but in the event
of the premature death of an employee, the accumulations in the fund were not adequate
enough to render long-term financial protection to his family.
This lacuna led to the introduction of the Employees’ Family Pension Scheme with effect from
1st March 1971.

Did u know? The Act was further amended in 1976 with a view to introducing Employees’
Deposit Linked Insurance Scheme, a measure to provide an insurance cover to the members
of the provident fund in covered establishments without the payment of any premium by
these members. Thus; three schemes have been framed under the Employees’ Provident
Funds and Miscellaneous Provisions Act.

11.1.2 Applicability of the Act

The Employees’ Provident Funds Act, 1952 is applicable from the date of functioning or date of
set-up of establishments provided the factory/establishment employed twenty or more persons.
The Act, however, does not apply-to co-operative societies employing less than 50 persons
and working without the aid of power. The Central Government is empowered to apply the
provisions of this Act to any establishments employing less than 20 persons after giving not less
than two months’ notice of its intention to do so by a notification in the Official Gazette. Once
the Act is applied, it does not cease to be applicable even if the number of employees falls below
20. An establishment/factory, which is not otherwise coverable under the Act, can be covered
voluntarily with the mutual consent of the Act.

11.1.3 Administration

The Employees’ Provident Fund Organisation is in charge of all the three schemes. These schemes
are administered by the Central Board of Trustees, a tripartite body consisting of the chairman,
nominees of the central and state governments and employees’ and employers’ organizations
The Central Provident Fund Commissioner is the chief executive officer of the organisation
and secretary to the Central Board of Trustees. He is assisted by the Regional Provident Fund
Commissioner, one in each state and in Delhi.

Example: The regional communities advise the Central Board on matters connected with
the administration of the scheme in their respective States. Sub-regional provident fund offices
have been opened in some region’s to render better services to the subscribers of the fund.

Provident fund inspectors are appointed to carry out inspections and to-perform an advisory
role vis-a-vis the employers and workers in different covered establishments. They conduct
surveys to ensure that all coverable establishment/factories are covered under the Act. They also
recommend and file prosecutions in the courts against defaulting employers and pursue these
cases till their final disposal.

LOVELY PROFESSIONAL UNIVERSITY 181