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Report No. 137

2.5.5. Employers' failure to deposit deductions made from employees' wages and/or their own share.-

Under para 29 of the Scheme of 1952 framed under the Employees' Provident and Miscellaneous Provisions Act, 1952, both the employer and the employee are required to contribute equally, subject to a maximum of 8.33% towards the Provident Fund. Para 32 prescribes the mode of recovery of the employees' share or contribution. It provides that the amount of the employee's contribution shall, notwithstanding the provisions of the Scheme of 1952 or any law for the time being in force or any contract to the contrary, be recoverable by means of deduction from the wages of the employee.

Under para 38(1) of the Scheme of 1952, each employer is, within fifteen days of the close of every month, required to pay the employees' contribution together with his own contribution as well as administrative charges, if any, to the Fund by separate bank drafts or cheques on account of contributions and administrative charges.

Sub-para (2) of para 38 further provides that the employer shall forward to the Commissioner, within twenty five days of the close of the month, a monthly consolidated statement, in such form as the Commissioner may specify, showing recoveries made from the wages of each employee and the amount contributed by the employer in respect of each employee.

Though there is a statutory obligation on the employer to deposit, within fifteen days of the close of the month, his and the employee's contribution to the Fund and submit the requisite return to the Commissioner within twenty-five days of the close of the month, in practice it has been noticed that the 'employers' quite often do not deposit their contribution to the fund regularly and sometime continuously for months together.

They often fail to deposit the deductions made from the wages of the employees. The result is that the cases are not finally settled till the outstanding amount is received form the employer. To illustrate the point, the case of Shri R.A. Swami of Narrtaul may be mentioned. He retired from the services of Jaora Sugar Mills on June 3, 1987. While his own contribution towards Provident Fund has been refunded, only 65 per cent. of the employer's contribution has been paid to him so far.

The balance of 35 per cent. of the employer's contribution has not been paid to him on the ground that the employer has not deposited the same so far. The case is still pending final settlement though about two and half years have passed since the retirement of Shri Swami who is helpless in the sense that while he cannot take any legal steps against the employer, the authorities adopt a nonchalant attitude and do not take the steps which only they can take.

Need for creating Office of Ombudsman and for Evolving Legislative - Administrative measures Inter alia to relieve hardships caused by Inordinate Delays in settling Provident Fund claims of Beneficiaries Back

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