Mishra and Navin Sinha, Jj.] vs Vivekananda Vidyamandir and Others

HELD: 1.1 Basic wage, would not ipso-facto take within its ambit the salary breakup structure to hold it liable for provident fund deductions when it was paid as special incentive or production bonus given to more meritorious workmen who put in extra output which has a direct nexus and linkage with the output by the eligible workmen. When a worker produces beyond the base or standard, what he earns was not basic wage. This incentive wage will fall outside the purview of basic wage. Basic wage, under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, has been defined as all emoluments paid in cash to an employee in accordance with the terms of his contract of employment. But it carves out certain exceptions which would not fall within the definition of basic wage and which includes dearness allowance apart from other allowances mentioned therein. But this exclusion of dearness allowance finds inclusion in Section 6. The test adopted to determine if any payment was to be excluded from basic wage is that the payment under the scheme must have a direct access and linkage to the payment of such special allowance as not being common to all. The crucial test is one of universality. The employer, under the Act, has a statutory obligation to deduct the specified percentage of the contribution from the employee’s salary and make matching contribution. The entire amount is then required to be deposited in the fund within 15 days from the date of such collection. [Para 7, 9][281-G-H, 282-A, 285-D-E]

1.2 Applying the tests to the facts of the instant appeals, no material has been placed by the establishments to demonstrate that the allowances in question being paid to its employees were either variable or were linked to any incentive for production resulting in greater output by an employee and that the allowances in question were not paid across the board to all employees in a particular category or were being paid especially to those who avail the opportunity. In order that the amount goes beyond the basic wages, it has to be shown that the workman concerned had become eligible to get this extra amount beyond the normal work which he was otherwise required to put in. There is no data available on record to show what were the norms of work prescribed for those workmen during the relevant period. It is therefore not possible to ascertain whether extra amounts paid to the workmen were in fact paid for the extra work which had exceeded the normal output prescribed for the workmen. The wage structure and the components of salary have been examined on facts, both by the authority and the appellate authority under the Act, who have arrived at a factual conclusion that the allowances in question were essentially a part of the basic wage camouflaged as part of an allowance so as to avoid deduction and contribution accordingly to the provident fund account of the employees. There is no occasion to interfere with the concurrent conclusions of facts. [Para 14][287-F-F, 288-A-B] Bridge and Roof Co. (India) Ltd. v. Union of India [1963] 3 SCR 978 - relied on.

Muir Mills Co. Ltd., Kanpur v. Its Workmen AIR 1960 SC 985 : [1960] SCR 488;Manipal Academy of Higher Education v. Provident Fund Commissioner (2008) 5 SCC 428 : [2008] 4 SCR 772; Kichha Sugar Company Limited through General Manager v. Tarai Chini Mill Majdoor Union, Uttarakhand (2014) 4 SCC 37:[2014]

1 SCR 157; The Daily Partap v. The Regional Provident Fund Commissioner, Punjab, Haryana, Himachal

Pradesh and Union Territory, Chandigarh (1998) 8 SCC 90 : [1998] 2 Suppl. SCR 482 – referred to.