Retention allowance paid to seasonal workers must be included in basic wages

The Maharashtra State Co-operative Cotton Growers Marketing Federation Limited (“Petitioner”) approached the Bombay High Court vide Writ Petition No. 1268 of 2011 to challenge the order of appellate tribunal, Employees’ Provident Fund, whereby the Petitioner was ordered by the Assistant Provident Fund Commissioner to pay INR 14,21,145/-to the credit of respective EPF accounts of the employees. This order was challenged with the contention that retention allowance paid by the Petitioner to the employees is not basic wage as defined under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. Further, the employees are engaged on seasonal basis, there is no continuity of employment and therefore payment of provident fund is not attracted. It was observed by the Bombay High Court, Nagpur bench observed that the Petitioner is paying retaining allowance therefore it will be under obligation to contribute to the provident fund.