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STRICTLY STATUTES A Newsletter from ADP India

EDITOR’S NOTE

NOVEMBER 2013

TABLE OF CONTENTS Pages

Hello Readers, The month of October saw some technology updates from EPFO. The EPFO has facilitated the online submission of transfer claims to employees. This good initiative from EPFO will make life easy for members and employees, in addition to bringing complete transparency to the whole process. This month also saw the Central Government increasing the ESI cover by adding more locations under various districts across India, which is expected to bring the much needed medical support and access to a larger workforce. The courts have been favouring employees and their families this month. The Kerala High Court has ruled that Sales incentive will form part of the wages for ESI contribution and Bombay High Court has ruled that when an insured employee dies of heart attack, his widow is entitled to benefits. This issue covers these interesting judgments and other happenings in the statutory compliance space. We hope you enjoy reading this issue and find it useful. Please do share your inputs / suggestions and help us to enrich the newsletter content. You may write to us at contactadp@adp.com Regards, Editor

Compliance Calendar for November 2013…

02

EPFO facilitates online submission of transfer claims for Members…

03

Beta version of software launched for settlement of transfer claims…

03

Central Government announces new districts for ESI cover…

03

Sales incentive will be considered “wages” for ESI contributions…

04

Widow of insured employee is entitled to benefits…

04

Internal rules can’t prevail over gratuity act…

04


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STRICTLY STATUTES

A Newsletter from ADP India

Compliance Calendar for November 2013 Due Date

Scope

Due Under

Mode

Professional Tax Remittances 10th Nov 13

Andhra Pradesh & Madhya Pradesh

State-wise regulations

By Challan

15th Nov 13

Gujarat

Gujarat PT regulations

By Challan

20th Nov 13

Karnataka

Karnataka PT regulations

By Challan

21st Nov 13

West Bengal

WB PT regulations

By Challan

30th Aug Nov 13

Maharashtra, Assam & Orissa

State-wise State Wise regulations regulations

By Challan

Kerala

Kerala State Labour Welfare Fund

By Challan

15th Nov 13

Central - Remittance of Contribution

EPF & MP Act 1952

By Challan

15th Nov 13

Central - International worker with wages and nationality

EPF & MP Act 1952

Statement in 7 I W

Main Code & Sub Codes - Remittance of Contribution

ESIC Act 1948

By Challan

Labour Welfare Fund Remittances 20th Nov 13

PF

ESI 21st Nov 13


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STRICTLY STATUTES

A Newsletter from ADP India

Circulars EPFO facilitates online submission of transfer claims for Members EPFO has introduced a new system to facilitate online submission of transfer claims by Members with an objective to make the transfer process transparent, efficient and comfortable for the employees. EPFO has urged the employers to bring this facility to the notice of all their employees, which is available on EPFO's Member portal. A member has an option to submit his claim either through his present employer or the previous one. All claim requests can be seen with ease, verify/correct member details, approve and submit the requests online through this portal. For online submission of the claims, the Digital signature (Class II or above) of the authorized person is required. User name and password for this portal is same which is used in ECR portal by the establishments and accordingly may be used with high diligence. For further information, please visit http://www.epfindia.gov.in/employer_OTCP.html

Beta version of software launched for settlement of transfer claims As per the recent EPFO circular No. IS/Project I – Transfer Claims/12573, it may be understood that the EPFO had released Beta version of software for revised process of settlement of transfer claims. Claims can be submitted through previous employer or present employer, there would be no movement of physical papers between EPFO offices. In addition to the physical form, the members can submit the claims online through digital mode.

Central Government announces new districts for ESI cover In exercise of the powers conferred by sub-section (3) of section 1 of Employees’ State Insurance Act, 1948, the central government enforces the act to be covered in the areas under the districts of Kobra, Janggir-Chamba, http://www.moia.gov.in/services Rajnandangaon of Chattisgarh State, Bhiwani, Mahendergarh Haryana State, Uttar Karnataka of Karnataka State, .aspx?ID1=285&id=m4&idp=81& Khurda, Angul of Odisha and KAncheepuram of Tamil Nadu. mainid=73 Please visit www.esic.nic.in for additional details


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STRICTLY STATUTES SIGNIFICANT RECENT JUDGMENTS SALES INCENTIVE WILL BE CONSIDERED “WAGES” FOR ESI CONTRIBUTIONS In a recent judgment (Ins. Appeal No 6/2008, D/-21-3-2013), Kerala High Court has ruled that Sales Incentives paid to the employees by the employer would form part of the wages to attract ESI contributions under Employees State Insurance Act 1948 – Section 40. According to the ruling pronounced in the case of KPL Oil Mills (P) Ltd. Versus Employee State Insurance Corporation, Regional Office, Thrissur, the court has observed that when the employer fails to prove that it was being paid on the basis of an agreement with the

A Newsletter from ADP India

employees or that it was being paid unilaterally and voluntarily at three months interval, the sales incentive would form part of wages to attract ESI contributions. However the court also ruled that the City Compensatory Allowance paid by the employer to employee to defray special expenses entailed by nature of their employment and not by nature of posting, same would not constitute as wages to attract ESI contributions. The ruling also stated that the primary liability for payment of ESI contributions for the employees engaged by the contractor (immediate employer) will be of principal employer more so when the control and supervision upon the employees of the Packing contractor was being exercised by the principal employer. When the principal employer is required to pay ESI contribution for the employees engaged through the contractor, the law provides that the recovery can be

WHEN AN INSURED EMPLOYEE DIES OF HEART ATTACK, HIS WIDOW IS ENTITLED TO BENEFITS In a recent judgment in a case (C.A.J. W.P. No. 9340/2012, Dt/-5-9-2013) between Bhagyashree Bharguram Mahadik versus ESIC & Ors., the Bombay High Court has ruled that when the insured employee dies of heart attack while on duty and he has no previous history of heart ailment, his widow would be entitled to dependant’s benefits, as stipulated by section 51 A of ESI Act. The court observed that the theory of notional extension would be applicable when an employee dies of heart arrack while during the course of employment.

INTERNAL RULES CAN’T PREVAIL OVER GRATUITY ACT The Delhi High Court has recently ruled that internal rules of the employer corporation cannot prevail over section 4(6) of the Payment of Gratuity Act, 1972 i.e. statutory law. In a case (W.P. © No. 11750/2006, D/-23-5-2013) between Mahavir Singh Tyagi and Food Corporation of India, the court ruled that the employer can adjust penalties amount, if any, from the other retiral dues except the gratuity. The ruling further states that forfeiture of gratuity amount has to be effected only for prescribed eventualities – Monetary penalties imposed upon petitioner in various departmental disciplinary orders may be recovered from the retiral benefits except the amount payable as Gratuity, as provided under section 4 (6) of the Payment of Gratuity Act, 1972.


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STRICTLY STATUTES

ADP Global

A Newsletter from ADP India

ADP India

With more than $11 billion in revenues and more than 60 years of experience, ADPÂŽ (NASDAQ: ADP) serves approximately 620,000 clients in more than 125 countries. As one of the world's largest providers of business outsourcing and human capital management solutions, ADP offers a wide range of human resource, payroll, talent management, tax and benefits administration solutions from a single source, and helps clients comply with regulatory and legislative changes, such as the Affordable Care Act (ACA). ADP's easy-to-use solutions for employers provide superior value to companies of all types and sizes. ADP is also a leading provider of integrated computing solutions to auto, truck, motorcycle, marine, recreational vehicle, and heavy equipment dealers throughout the world.

ADP India offers a wide range of payroll, statutory and HR solutions, both as managed services and on cloud. ADP partners with organisations to assist with their complex, yet critical functions of payroll, statutory compliance and HR administration tasks effectively. ADP’s proven Managed and On Cloud Payroll, Statutory Compliance, Leave Management and Time & Attendance solutions are designed to address the scalable and dynamic needs of an organisation. ADP partners with small, mid-sized and large enterprises to streamline their Payroll, Compliance and HR administration processes. ADP India is an ISO 9001:2008 and ISO 27001:2005 certified and SSAE 16 Type II compliant company and serves clients from all industries across the country. For more information about ADP India or to contact a local ADP sales office, reach us at 1-800-4190-237 or visit the company's Web site at www.adp.in

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ADP India-Strictly Statutes october-2013