Physical Verification Mandatory Before Covering an Establishment under the EPF & MP Act

An order passed u/s 7A of the Employees’ Provident Fund & Miscellaneous Provisions Act, 1952 was challenged before the Employees’ Provident Fund Appellate Tribunal.

The Appellate Tribunal observed that the representatives of the EPF authority inspected the establishment and checked attendance and other records. The establishment informed the representative of the EPF that at no point of time the total eligible strength of employees touched 20. In spite of such submission, the Enforcement Officer passed an order determining the quantum to be paid by the establishment.

It is an admitted position that no physical verification of the employees were done.

In spite of this Act being social welfare in nature and each and every employer is bound to pay the dues but at the same time it is necessary to be sure that the establishment is legally covered under the EPF & MP Act.

Non production of necessary documents by the establishment is not exactly fatal as the EPF authority is vested with enough power similar to civil court in relation to examining a person on oath and discovering documents. But in this instant matter, the order u/s7A was passed without physically identifying the employees.

No separate enquiry was conducted by the EFP authority to determine the identity of the employees, their salary and their respective dues. The said order did not have the basis of calculation.

Hence, the Employees’ Provident Fund Appellate Tribunal set aside the order passed u/s7A of the EFP & MP Act, 1952 in November 2015.


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