Employer Liable to Pay Damages if EPF Contribution isn’t Paid on Time: SC

The Supreme Court of India (SC) in the matter of Horticulture Experiment Station Gonikoppal Vs. Regional Provident Fund Organization ruled out that an employer obligated to pay damages if an Employees’ provident fund (EPF) contribution is not paid on time.

Employees Provident Fund & Miscellaneous Provisions Act is law for providing social security to employees working in any firm employing 20 or more people.

According to the Supreme Court, the Act requires employers to make a mandatory deduction for provident fund and deposit it in the workers’ account at the EPF office.

The Bench Rule out that “We are of the considered opinion that any default or delay in the payment of EPF contribution by the employer under the Act is a sine qua non for the imposition of damages under Section 14B of the Act 1952, and mens rea or actus reus is not an essential element for the imposition of penalty/damages for breach of civil obligations/ liabilities”.

The Supreme Court was hearing an appeal against a Karnataka high court decision that declared that if an employer fails to make an EPF payment, he is responsible for damages.

The Judgment was made by Justices Ajay Rastogi and Justice Abhay S Oka.

To Read Judgment Download PDF Given Below: