The Hindu : Andhra Pradesh / Visakhapatnam News : PF officials launch prosecution against HSL

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Saturday, Feb 13, 2010
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Andhra Pradesh

Andhra Pradesh - Visakhapatnam

PF officials launch prosecution against HSL

B. Madhu Gopal

Similar case likely to be filed against BSNL, says Regional PF Commissioner

Both companies ‘collected’ PF contributions from employees with retrospective effect
Cases filed by PF officials in the Chief Metropolitan Magistrate Court at Gajuwaka

VISAKHAPATNAM: After private organisations, it now seems to be the turn of Public Sector Undertakings to care two hoots for Provident Fund rules. Hindustan Shipyard Limited (HSL) and Bharat Sanchar Nigam Limited (BSNL) “disregarded” PF rules by collecting PF contributions from employees with retrospective effect.

HSL has recovered the employees’ share of PF contributions for the period April to September in 2008 amounting to Rs. 55,51,765 in three equal instalments from their wages payable for the months of October, November and December 2008.

But the PF rules do not permit the collection of employee’s share by the employer with retrospective effect.

HSL had contributed only 10 per cent as PF and collected an equal share from the employees during the period as against the mandatory 12 per cent in violation of the provisions of Sub Section (1) of Para 32 of the EPF Scheme, 1952.

‘Excuse’

The HSL management is believed to have taken a decision in October 2008 to pay the balance of two per cent share payable by the employer for the said period, but decided to contest the payment of difference in PF prior to that period showing erosion of the net worth of the company as an excuse, according to sources in the Sub-Regional PF Office here.

The HSL management not only paid its share for the said period, but also deducted the employee’s share in violation of the PF rules. The PF officials brought the violation to the notice of the HSL officials and sought refund of the two per cent difference collected from the staff at a later date. The HSL management, however, failed to take the advice seriously and notices were issued in 2009 for refund of the money recovered from the staff salaries.

The PF officials have now filed cases in the Chief Metropolitan Magistrate Court at Gajuwaka under Section 14(2), 14 (2A), 14 A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 read with Para 76 (d) of the EPF Scheme, 1952 and Rule no. 48 of the PF Fund for the Employees of HSL for prosecution of HSL and its Chairman and Managing Director.

Regional PF Commissioner Ajeet Kumar confirmed that prosecution proceedings were launched against HSL and its CMD. He also admitted that action was being contemplated against BSNL in a similar case.

Individual consent

When contacted, an HSL official said that the management collected the two per cent difference from the employees with the consent of the union.

However, the PF office raised the objection saying that unions could not give undertaking on behalf of all employees and individual consent had to be taken. There is no irregularity committed on the part of HSL, he claimed.

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