Proceedings should not be initiated for levy of penal damages in case there is a delay in payment of provident fund contributions or administrative dues for any period during the COVID-19 lockdown, as these delays are without mens rea of the employer, the Employees Provident Fund Organisation said in a notification to all its offices across the country.
The EPFO headquarters said establishments covered under the EPF and MP Act, 1952 are distressed and not able to function normally, due to the extended lockdown announced by the government to counter the COVID-19 pandemic.
“Considering the difficulty faced by the establishments in timely deposit of contributions during the period of lockdown due to operational and economic reasons, it is evident that such delays are without mens rea or culpable state of mind of the employer,” the notification said referring to a Supreme Court judgement in McLeod Russel India Ltd vs RPFC in 2014 and later reaffirmed in another case of the Assistant PF Commissioner vs Management of RSL Textiles.
“Thus the delay in the deposit of contributions during the period of lockdown announced in terms of the Disasters Management Act, 2005, cannot be attributed to any culpable state of mind of the employer and will not, therefore, attract the provisions of Sec 14B of the EPF Act,” it said.