SC Distinguishes Between 'Basic Wage' Under The EPF Act And 'Minimum Wage' Under The Minimum Wages Act


The Supreme Court has rejected an appeal by the Assistant Provident Fund Commissioner against a Punjab and Haryana High Court order. The High Court had concluded that there was no need to refer to the definition of 'minimum rate of wages' under the Minimum Wages Act, 1948, to interpret the term 'basic wage' under the Employee Provident Fund Act 1952. The appellant argued that the employer had manipulated the wage structure to avoid proper provident fund payments. The High Court and its division bench had previously rejected this argument.

Justice Hima Kohli and Rajesh Bindal, in their dismissal of the appeal, emphasized that the EPF Act already defines 'basic wage' under Section 2(b), eliminating the need to consult the Minimum Wages Act for a broader meaning. The Court stated that the legislature's intention was clear in this regard.

The Additional Solicitor General, Vikramjeet Banerjee, contended that the 'minimum rate of wages' should be considered for determining the basic wage under the EPF Act. However, the Supreme Court sided with the High Court's stance, asserting that 'basic wage' does not equate to 'minimum wage' as defined in the Minimum Wages Act, of 1948. The Court upheld the earlier judgment's position on this matter.

Author: Anushka Taraniya

News Writer, MIT ADT University