https://www.livelaw.in/top-stories/e...reduced-143999
In a major relief to many employees, the Supreme Court has dismissed the Special Leave Petition filed against a Kerala High Court Judgment setting aside Employee's Pension (Amendment) Scheme, 2014 that capped maximum pensionable salary to Rs.15, 000 per month.
The bench comprising the CJI Ranjan Gogoi, Justice Deepak Gupta and Justice Sanjiv Khanna in limine dismissed the SLP filed by Employees Provident Fund Organisation observing that it does not find any merit in it.
The Kerala High Court, in October, last year, had allowed the writ petitions filed by employees of various establishments covered by the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. Their grievance was with the changes brought about by the Employees' Pension (Amendment) Scheme, 2014, which drastically reduces the pension payable to them.
From India, Pune
3124In a major relief to many employees, the Supreme Court has dismissed the Special Leave Petition filed against a Kerala High Court Judgment setting aside Employee's Pension (Amendment) Scheme, 2014 that capped maximum pensionable salary to Rs.15, 000 per month.
The bench comprising the CJI Ranjan Gogoi, Justice Deepak Gupta and Justice Sanjiv Khanna in limine dismissed the SLP filed by Employees Provident Fund Organisation observing that it does not find any merit in it.
The Kerala High Court, in October, last year, had allowed the writ petitions filed by employees of various establishments covered by the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. Their grievance was with the changes brought about by the Employees' Pension (Amendment) Scheme, 2014, which drastically reduces the pension payable to them.
From India, Pune
Dear Nath Rao,
Thanks for sharing. I also read the news in dailies. I have no complete info. on implications on who & when & how much. Especially as to how the EPFO is going to face the challenges in meeting the addl. financial implications. It's very much sure that thousands of employees will be benefited whose EPS contribution was curtailed on the capping issue which is the crux of the SC judgment. It will be interesting if we would follow the course of action the EPFO travel in implementing the judgment. Pl.keep in touch with info on devts. in the matter.
From India, Bangalore
Thanks for sharing. I also read the news in dailies. I have no complete info. on implications on who & when & how much. Especially as to how the EPFO is going to face the challenges in meeting the addl. financial implications. It's very much sure that thousands of employees will be benefited whose EPS contribution was curtailed on the capping issue which is the crux of the SC judgment. It will be interesting if we would follow the course of action the EPFO travel in implementing the judgment. Pl.keep in touch with info on devts. in the matter.
From India, Bangalore
After this whether employees whose salary is above 15000 has to make contribution of 12% of his actual salary????
From India, Kochi
From India, Kochi
Hi Vinod,
Your doubt is reasonable. However,
I think we should await full text of the judgment to answer this query. Even the EPFO website also so far not updated with this judgment. Presumably, it's unlikely to imply such major decision of 12% contribution on full 'salary' without capping it at Rs.15000/- as you asked, because the subject matter dealt is allocating the contribution to EPS a/c without limiting to Rs.6500/15000. I feel it may not involve/impact the very contribution to EPF a/c. itself. Let us await the full text which may be available in a couple of days. And study the implications carefully. No clue of any review petition on this judgment to my knowledge.
Members please share the full text of SC judgment if it's in possession.
------------
Now got access to the SC order (attached). But we should read with the contents of the Kerala HC judgment to have a clear idea on the implications.
Also PFA the text of Kerala HC judgment of 12.10.2018 which is to be read in the context.
Since SC upheld the verdict of Kerala HC, we for all practical purposes, should properly understand & follow the contents of Kerala HC as it disposed hundreds of pleas relevant to the issue. That apart, since there is an element of EPFO's Notification in the whole case is a pertinent issue, it's prudent to await the follow up action of the EPFO, if any, (still not known) in this regard.
From India, Bangalore
Your doubt is reasonable. However,
I think we should await full text of the judgment to answer this query. Even the EPFO website also so far not updated with this judgment. Presumably, it's unlikely to imply such major decision of 12% contribution on full 'salary' without capping it at Rs.15000/- as you asked, because the subject matter dealt is allocating the contribution to EPS a/c without limiting to Rs.6500/15000. I feel it may not involve/impact the very contribution to EPF a/c. itself. Let us await the full text which may be available in a couple of days. And study the implications carefully. No clue of any review petition on this judgment to my knowledge.
Members please share the full text of SC judgment if it's in possession.
------------
Now got access to the SC order (attached). But we should read with the contents of the Kerala HC judgment to have a clear idea on the implications.
Also PFA the text of Kerala HC judgment of 12.10.2018 which is to be read in the context.
Since SC upheld the verdict of Kerala HC, we for all practical purposes, should properly understand & follow the contents of Kerala HC as it disposed hundreds of pleas relevant to the issue. That apart, since there is an element of EPFO's Notification in the whole case is a pertinent issue, it's prudent to await the follow up action of the EPFO, if any, (still not known) in this regard.
From India, Bangalore
Dear Kumar Sir, Word file Doc pertaining to SC Judgment on EPF Pension 31.03.19 is enable kindly resend it with disable to view. Regards,
From India, Andheri
From India, Andheri
Hi ,
I have few queries. Please help me with this.
1. Is conveyance Allowance part of CTC
2. Is PF is calculated on 12 % of Basic+Special Allowance?
3. If Basic is less than 15k and Basic +Special Allowance is greater than 15k, Can we take PF has
12 % of 15K?
4. EPS is calculated on only Basic or Basic +Special Allowance?
5. For Eg: Basic - 8400, SA - 7690 PF(Employee contribution - 1800) and (Employer contribution - EPF - 590 and EPS - 1340 so total 1930). Is this correct?
Kindly help me
Thank You,
Savita
From India, Bengaluru
I have few queries. Please help me with this.
1. Is conveyance Allowance part of CTC
2. Is PF is calculated on 12 % of Basic+Special Allowance?
3. If Basic is less than 15k and Basic +Special Allowance is greater than 15k, Can we take PF has
12 % of 15K?
4. EPS is calculated on only Basic or Basic +Special Allowance?
5. For Eg: Basic - 8400, SA - 7690 PF(Employee contribution - 1800) and (Employer contribution - EPF - 590 and EPS - 1340 so total 1930). Is this correct?
Kindly help me
Thank You,
Savita
From India, Bengaluru
Hi Savita,
For most of your queries you ticked right-
"I have few queries. Please help me with this.
1. Is conveyance Allowance part of CTC - (Yes)
2. Is PF is calculated on 12 % of Basic+Special Allowance? (Yes)
3. If Basic is less than 15k and Basic +Special Allowance is greater than 15k, Can we take PF as 12 % of 15K? (Yes)
4. EPS is calculated on only Basic or Basic +Special Allowance? (Yes, no change to computation for EPS. But how, pl.see here -
= EPS is nothing but part of contributions to EPF recovered from employees and matching contribution from employers is clubbed. As you know contributions are made @ 12 each by employees concerned and their employers. While employees' 12% in full goes to EPF a/c (UAN) directly, the other part- equivalent employers' contribution is bifurcated into two, one @ 8.33% is sent to EPS A/c of employees & balance of 3.67% diverted/deposited into employees' EPF A/c as the employers' contribution.
5. For Eg: Basic - 8400, SA - 7690 PF(Employee contribution - 1800) and (Employer contribution - EPF - 590 and EPS - 1340 so total 1930). Is this correct?
= Employees' contribution as well as employer's contribution is limited to the maximum salary of Rs.15,000 only. While employees are free to contribute for more also voluntarily, employer's liability is limited to only Rs.15,000/- however % shall remain @ 12% thereon only.
Also please read attached notes for general info. on this.
From India, Bangalore
For most of your queries you ticked right-
"I have few queries. Please help me with this.
1. Is conveyance Allowance part of CTC - (Yes)
2. Is PF is calculated on 12 % of Basic+Special Allowance? (Yes)
3. If Basic is less than 15k and Basic +Special Allowance is greater than 15k, Can we take PF as 12 % of 15K? (Yes)
4. EPS is calculated on only Basic or Basic +Special Allowance? (Yes, no change to computation for EPS. But how, pl.see here -
= EPS is nothing but part of contributions to EPF recovered from employees and matching contribution from employers is clubbed. As you know contributions are made @ 12 each by employees concerned and their employers. While employees' 12% in full goes to EPF a/c (UAN) directly, the other part- equivalent employers' contribution is bifurcated into two, one @ 8.33% is sent to EPS A/c of employees & balance of 3.67% diverted/deposited into employees' EPF A/c as the employers' contribution.
5. For Eg: Basic - 8400, SA - 7690 PF(Employee contribution - 1800) and (Employer contribution - EPF - 590 and EPS - 1340 so total 1930). Is this correct?
= Employees' contribution as well as employer's contribution is limited to the maximum salary of Rs.15,000 only. While employees are free to contribute for more also voluntarily, employer's liability is limited to only Rs.15,000/- however % shall remain @ 12% thereon only.
Also please read attached notes for general info. on this.
From India, Bangalore
Hello Sir, Thank you very much sir for clarifying the doubts. It was very helpful. Can performance bonus can be given every month?
From India, Bengaluru
From India, Bengaluru
Dear friends,
You can down load the SC order dt.1.4.2019 on the appeal of EPFO re: Kerala HC judgment on EPS on full salary from this link.
https://www.livelaw.in/top-stories/e...reduced-143999
If it's not opening you should try to open thru' google and if not able to save a copy you can take a print of the appended order and use it as your reference.
A typed version in Word is attached.
From India, Bangalore
You can down load the SC order dt.1.4.2019 on the appeal of EPFO re: Kerala HC judgment on EPS on full salary from this link.
https://www.livelaw.in/top-stories/e...reduced-143999
If it's not opening you should try to open thru' google and if not able to save a copy you can take a print of the appended order and use it as your reference.
A typed version in Word is attached.
From India, Bangalore
Hi Savita,
As the nomenclature itself suggest "Performance Bonus/incentives" are meant to reward the employees when their performances either accomplished the targets or exceed the 'bench mark' fixed for the purposes computed in accordance with the approved formula/ procedure. This will apply to both production staff as well as other admin/supervisory staff . The periodicity for qualifying for the grant of 'bonus/incentive' will vary depending on the target period/thresh hold limits earmarked. If the beneficiary performance exceed the par/ limits fixed, every month, they can be paid every month. Sometimes, admin./ supervisory staff will be fixed a minimum to be paid irrespective of the quantum thus exceeded every month, whereas production/utilities staff's bonus always linked to the quantum of productivity/production and therefore their upper limit bound to vary in which case a maximum ceiling can be fixed. This again depend on the policy of the organisation. The danger of fixing a max limit will result in production staff limiting their outputs once they qualify for the maximum and if thus happens it becomes a 'disincentive' in a way. Some times when the performance is linked to a project, like construction/fabrication/erection etc it may be difficult to work out performance linked bonus/incentives. In such cases a monthly allowance or a fixed incentive may be paid, adjustable by the end of project completion.
In some cases, a lump sum 'bonus' for a team of workmen may be paid, leaving the sharing methods to the head/lead of the team who are empowered to decide considering the actual performance of person(s) involved in execution.
Therefore a scheme commensurate with the nature of duty, productivity, costs etc has to be drafted. If it's a unionised unit concurrence of the recognised Union may also be necessary to implement the scheme.
From India, Bangalore
As the nomenclature itself suggest "Performance Bonus/incentives" are meant to reward the employees when their performances either accomplished the targets or exceed the 'bench mark' fixed for the purposes computed in accordance with the approved formula/ procedure. This will apply to both production staff as well as other admin/supervisory staff . The periodicity for qualifying for the grant of 'bonus/incentive' will vary depending on the target period/thresh hold limits earmarked. If the beneficiary performance exceed the par/ limits fixed, every month, they can be paid every month. Sometimes, admin./ supervisory staff will be fixed a minimum to be paid irrespective of the quantum thus exceeded every month, whereas production/utilities staff's bonus always linked to the quantum of productivity/production and therefore their upper limit bound to vary in which case a maximum ceiling can be fixed. This again depend on the policy of the organisation. The danger of fixing a max limit will result in production staff limiting their outputs once they qualify for the maximum and if thus happens it becomes a 'disincentive' in a way. Some times when the performance is linked to a project, like construction/fabrication/erection etc it may be difficult to work out performance linked bonus/incentives. In such cases a monthly allowance or a fixed incentive may be paid, adjustable by the end of project completion.
In some cases, a lump sum 'bonus' for a team of workmen may be paid, leaving the sharing methods to the head/lead of the team who are empowered to decide considering the actual performance of person(s) involved in execution.
Therefore a scheme commensurate with the nature of duty, productivity, costs etc has to be drafted. If it's a unionised unit concurrence of the recognised Union may also be necessary to implement the scheme.
From India, Bangalore
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