PF alert! Employer obligated to pay damages for delay in payment of EPF contribution, says SC

New Delhi: An employer is under an obligation to pay the damages for delay in payment of the contribution of Employees' Provident Fund (EPF) of an employee, the Supreme Court said on Wednesday.

A bench of Justices Ajay Rastogi and Abhay S Oka said Employees Provident Fund & Miscellaneous Provisions Act is legislation for providing social security to the employees working in any establishment and engaging 20 or more persons.

The top court said that the Act casts an obligation upon the employer to make the compulsory deduction for provident fund and to deposit in the workers' account in the EPF office.

We are of the considered view 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 levy of damages under Section 14B of the Act 1952 and mens rea or actus reus is not an essential element for imposing penalty/damages for breach of civil obligations/liabilities, the bench said.

The top court was hearing an appeal filed against the judgement of the Karnataka high court which held that the employer is liable to pay damages if he has failed to deposit the contribution of EPF.