The Provident Fund Authority of India has issued guidelines for initiating inquiries under Section 7A of the Employees’ Provident Funds and Miscellaneous Provision Act, 1952
The Employees’ Provident Fund Organisation (EPFO) has issued certain guidelines dated 14 February 2020 for conducting inquiries under Section 7A of the Employees’ Provident Funds and Miscellaneous Provision Act, 1952 (“EPF Act”), a form of social security legislation wherein the employers and the employees are required to individually contribute 12% of the sum of basic wages, dearness allowance and retaining allowance, if any, of the employee to the so-called provident fund, for the benefit of the employee.
As per Section 7A of the EPF Act, certain EPFO officials, may conduct an inquiry as they deem necessary and may, by order:
- in cases where a dispute arises regarding the applicability of the EPF Act to an establishment, decide such dispute;
- determine the amount due from an employer under any provisions of the EPF Act or its corresponding schemes.
In order to bring the procedure for conducting the abovementioned inquiry into uniformity, the EPFO has laid down certain guidelines which have been summarised as follows:
- inquiries should be initiated only for the purposes mentioned under Section 7A of the EPF Act.
- the minimum standard of evidence for commencement of a proceeding under Section 7A of the EPF Act is that there should be a prima-facie case.
- A mere complaint does not constitute a prima facie evidence sufficient to initiate inquiry under Section 7A of the EPF Act, as a complaint is only a source of information and not a legal proof of allegations. Therefore, a complaint is required to be investigated by an Enforcement Officer.
- The practice of initiating inquiries after a prolonged duration such as 5 to 20 years, without any evidence, should not be continued.
- Once an inquiry is initiated, the scope of the inquiry cannot be extended beyond the facts in issue. The scope of the inquiry should be determined at the beginning of the inquiry.
- Wherever the inquiries are intended to be initiated on the basis of credible evidence and meeting the requirements of principles narrated above, reasons for initiating an inquiry must be recorded in writing and a copy of all documents forming the basis for the initiation of the inquiry must be provided to the concerned parties, along with a notice to the concerned parties, stating that an inquiry has been initiated under Section 7A of the EPF Act (“Notice”).
- The Notice shall be assigned a computer generated diary number from the Compliance e-Proceedings portal, and any notice issued without such number shall be treated as non-est ( as if it “does not exist”).
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