All allowances not to be included universally to form part of Wages: Kerala HC

All allowances not to be included universally to form part of Wages: Kerala HC

Recently, the High court of Kerala in Gobin (India) Engineering (P) Ltd. vs. The Presiding Officer, Central Government Industrial Tribunal Cum Labour Court and Ors. W.P.(C).No. 8057/2022, observed that EPF authorities cannot universally include all the components of wages payable to employee such as house rent allowance, medical allowance, site allowance, travelling and conveyance allowance etc. within the meaning of term ‘basic wages’ for the purpose of payment of EPF contribution merely by placing reliance on the judgment of Supreme Court given in Regional Provident Fund Commissioner (II), West Bengal and Ors. vs. Vivekananda Vidyamandir and Ors. 2019 (2) SCT 178 (SC) [“SC Judgement“]. Further, the Kerala High Court clarified that the true import of the SC Judgment is that the allowances would vary from work to work and it would not be applicable as a universal formula across the world to all the employees and therefore in order to determine the inclusions and exclusions for payment of EPF contribution a detailed examination of the record is required to be conducted by considering the nature and duties of the jobs including the timings etc.

Also Read: Employer liable to pay interest if compensation under the ECA is delayed: Uttarakhand HC

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March 2023

Resetting Performance & Rewards, March 2023 issue
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