Employer liable for default in contribution to PF, rules Supreme Court

NEW DELHI: The Supreme Court has ruled that the proceedings for the recovery of damages can be initiated against the employer for their default in making payment of contribution to the provident fund even though they come under the 'exempted establishments' under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.

"We hold that in a case of default by the employer by an exempted establishment, in making its contribution to the Provident Fund, Section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, will be applicable," said a SC bench in its judgement on Wednesday.

The 'exempted establishments' means an establishment in respect of which an exemption has been granted under Section 17 of the Act from the operation of all or any of the provisions of any scheme or the insurance scheme, as the case may be, whether such exemption has been granted to the establishment as such or to any person or class of persons employed therein.

The SC set aside the order of the Calcutta High Court, saying it failed to discern the correct principle of interpretation of a social welfare legislation. "Under the Directive Principles, the state has the obligation for securing just and humane conditions of work which includes a living wage and decent standard of life, the SC said.