Jahanvi Agarwal
The Supreme Court dismissed an appeal filed by the Assistant Provident Fund Commissioner against an order passed by a division bench of the Punjab and Haryana High Court, which stated that since the term “basic wage” has already been defined under Section 2(b) of the Employee Provident Fund Act of 1952, there is no need to refer to Section 4 of the Minimum Wages Act, 1948, to give it a more comprehensive meaning.
According to the Appellant’s case, the employer (Respondent in the appeal) split the pay structure incorrectly and treated the reduced wage as the basic wage to avoid paying the correct amount into the provident fund. The Appellant claimed that this was due to the detriment of the employees.
The Appellant’s claim, however, had been dismissed by the High Court’s single bench, division bench, and the Appellate Tribunal.
A division bench consisted of Justice Hima Kohli and Rajesh Bindal, who observed that:
“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 traveled 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.”
Vikramjeet Banerjee, Additional Solicitor General, contended before the Apex Court that the “minimum rate of wages” under Section 4 of the Minimum Wages Act, 1948, must be taken into consideration for computing the basic wage under the EPF Act. The Apex Court, however, rejected this argument and agreed with the High Court that “basic wage” need not be equated with ‘minimum wage’.
The Court was of the opinion that:
“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.”
Case Name: Assistant Provident Fund Commissioner v. M/S G4S Security Services (India) Ltd. & Anr.
Diary Number: 9284/ 2013
Bench: Hon’ble Ms. Justice Hima Kohli and Justice Rajesh Bindal