‘Basic Wage’ Under EPF Act, Cannot Be Equated With ‘Minimum Wage’ Under Minimum Wages Act: Supreme Court

The Supreme dismissed an appeal by the Assistant Provident Fund Commissioner against an order of a division bench of the Punjab and Haryana High Court holding that when the term ‘basic wage’ has been described under Section 2(b) of the Employee Provident Fund Act 1952, there is no need to make a reference to definition of ‘minimum rate of wages’ under Section 4 of the Minimum Wages Act, 1948 to give it a more expansive meaning.

The case of the appellant was that for the purposes of determining the amount to be paid towards the provident fund, the employer (respondent in the appeal) had wrongly split the wage structure and treated the reduced wage as the basic wage in an attempt to evade paying the correct amount towards provident fund. This was to the detriment of the employees, according to the appellant.

However, the Appellate Tribunal, single bench and division bench of the High Court had rejected the Appellant’s contention.

A division bench of Justice Hima Kohli and Rajesh Bindal while dismissing the appeal observed:

“In our opinion, once the EPF Act contains a specific provision defining the words ‘basic wage’ (under Section 2b), then there was no occasion for the appellant to expect the Court to have travelled to the Minimum Wages Act, 1948, to give it a different connotation or an expansive one, as sought to be urged. Clearly, that was not the intention of the legislature.”

Additional Solicitor General, Vikramjeet Banerjee had argued before the Apex Court that for determining the basic wage under the EPF Act, the ‘minimum rate of wages’ under Section 4 of the Minimum Wages Act, 1948 must be referred to. However, the Apex Court rejected this contention, agreeing with the High Court’s view that ‘basic wage’ need not be equated with ‘minimum wage’:

“This aspect has been considered in paragraph 6 of the impugned judgment and turned down holding that there was no compulsion to hold the definition of ‘basic wage’ to be equated with the definition of ‘minimum wage’ under the Minimum Wages Act, 1948.”

For Petitioners: AOR Brijesh Kumar Tamber, Adv. Vinay Singh Bist, Adv. Prateek Kushwaha, Adv. Yashu Rustagi, Adv. Sahas Bhasin 

For Respondents: Sr. Adv. Dr. Abhishek Manu Singhvi, Sr. Adv. Rakesh Khanna, Sr. Adv. Amitabh Chaturvedi, Adv. Harvinder Singh, Adv. Ankit Monga, Adv. Prakriti Jalan, AOR. Gagan Gupta, AOR. Nishit Agrawal, AOR Kanishka Mittal, Adv. Shrey Kapoor, Adv. Anuj Tyagi, Adv. Upasna Agrawal

Case Title: Assistant Provident Fund Commissioner V. M/S G4s Security Services (India) Ltd. & Anr.

Citation : 2023 LiveLaw (SC) 722 

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