Employees Provident Fund Organisation may revive clause setting time limits for probe into PF defaults

Provident fund defaults that are older than seven years may no longer be probed or penalised as the Employees Provident Fund Organisation

Provident fund defaults that are older than seven years may no longer be probed or penalised as the Employees Provident Fund Organisation EPFO is set to revive an earlier circular that called for a time barring clause.

Currently,the Employees Provident Fund Act,1952 does not include any limitation period,meaning that officials can examine default cases going back to any period. In fact,a quick look at the top 50 defaulters with the EPFO includes cases stretching back to 1972. The EPFO considers default in crediting PF dues seriously and is considered a criminal offence under Sections 405 and 420 of the Indian Penal Code. The provision has been misused many times by our own officials to harass employers. So we decided to include a seven year time barring provision,similar to that in the Income Tax Act for probing default cases, said a senior PF official.

The move is a part of the EPFOs plan to bring back a controversial circular issued in November last year by former PF Commissioner RC Mishra that sought to review the agencys quasi judicial powers.

The labour ministry was forced to put the circular in abeyance,within weeks of its notification after public outcry. Critics had at the time said that such a time barring provision could hurt retirement savings of workers that are accumulated over a lifetime and could also encourage employers to default on PF contributions.

However,a four-member group consisting of representatives from both employers and employee unions was later set up,which recommended that some of its provisions can be brought back. The committees decisions were unanimous. In case a worker wants to put up a default case beyond the stipulated seven years,one can still approach the EPFO, said a member of the panel.

The EPFO is likely to issue a fresh circular in the next few days. It is also likely to include a new definition of compensation that would include wages as well as allowances of workers for the purpose of PF deduction.