In Brief
In this case involving six consolidated appeals, the Supreme Court addressed whether special allowances paid by various establishments (schools, factories, companies) constitute "basic wages" subject to provident fund deductions under the Employees' Provident Fund Act, 1952. The Court held that payments universally and ordinarily paid to all employees in a category are basic wages liable to deduction. Conversely, allowances that are variable, linked to production incentives exceeding normal work norms, or paid only to some employees are excluded. Finding that establishments failed to demonstrate the allowances were incentive-based or variable, the Court upheld the authorities' findings that the allowances were camouflaged basic wages. One appeal by the Commissioner was allowed; the others by establishments were dismissed.
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