EPFO APFC 2023 General Studies · Question 27 of 120

Correct — A, (a) Fifty. The provision is Section 16(1)(a) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, which is the exclusion clause rather than the coverage clause, and it must be read as a negative: the Act shall not apply to any establishment registered under the Co-operative Societies Act, 1912, or under any corresponding State law relating to co-operative societies, employing less than fifty persons and working without the aid of power. Turn that around and you have the answer the stem asks for — such a society is outside the Act while it has fewer than fifty employees, so fifty is the number at which it comes within the Act's purview. Two conditions must hold together for the exclusion to operate, and this is where candidates lose the mark: the establishment must be a registered co-operative society and it must work without the aid of power. A co-operative society that uses power is not covered by the exclusion at all, and falls back to the ordinary coverage rule in Section 1(3), which brings in any establishment employing twenty or more persons. So the Act sets two different thresholds for two different situations, twenty in the general case and fifty for the powerless co-operative, and the stem has carefully specified both of the facts that select the second. The reason for the special treatment is straightforward policy: a small co-operative working by hand is close to a self-employed group of members rather than an employer facing a workforce, and Parliament chose not to load provident fund administration on to it until it reached a size at which the machinery is worth running. Note the stem's syntax — 'employed by an establishment functioning without the aid of power and is registered under the Cooperative Societies Act, 1912' — is the booklet's own and is reproduced here unaltered.

• (b)One hundred — One hundred is a real threshold in this Act, which is exactly why it is offered here, but it belongs to a different section and a different subject. Under Section 16A the Central Government may, on an application by the employer together with the majority of employees of an establishment employing one hundred or more persons, authorise that employer to maintain provident fund accounts himself instead of remitting to the central fund. That is a question about who keeps the accounts of a covered establishment; the present question is about whether a co-operative society is covered at all. This paper in fact tests both figures within a few questions of each other, so a candidate who has stored a bare 'hundred' without the section attached will meet it twice and get one of them wrong.
• (c)One hundred twenty — One hundred twenty is not a threshold anywhere in the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. It is filler, and its function in the option set is to make the interval between fifty and one hundred fifty look like a graded scale so that a candidate who is guessing feels drawn to a middle value. Recognising which numbers the statute actually uses — twenty for general coverage under Section 1(3), fifty for the powerless co-operative under Section 16(1)(a), one hundred for self-maintained accounts under Section 16A — is enough to eliminate this option without any reasoning about co-operatives at all.
• (d)One hundred fifty — One hundred fifty is likewise not a figure the Act uses, and choosing it usually reflects a general sense that co-operatives must enjoy a generous exemption rather than any recollection of Section 16(1). It is worth seeing how modest the concession really is: the exclusion is confined to societies that both are registered under the co-operative societies legislation and work without the aid of power, and it lapses at fifty employees. A co-operative running any powered machinery is treated like any other establishment and is covered at twenty, which is a far lower bar than any of the numbers printed in this option set.

Coverage under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 is decided by three provisions read together. Section 1(3) is the positive rule: the Act applies to every establishment which is a factory engaged in an industry specified in Schedule I and employs twenty or more persons, and to any other establishment employing twenty or more persons that the Central Government notifies. Its proviso lets the Central Government extend the Act to an establishment with fewer than twenty employees after giving not less than two months' notice, and Section 1(4) allows voluntary coverage where the employer and the majority of employees agree and the Central Provident Fund Commissioner notifies it. Section 1(5) supplies the continuity principle that examiners like: once the Act applies to an establishment it continues to apply even if the number of employees later falls below the threshold. Section 16 is the negative rule, listing what the Act does not touch — the co-operative society with fewer than fifty employees working without power, and establishments of or under the control of government, or set up under a Central or State Act, whose employees already enjoy contributory provident fund or old-age pension benefits — with a power in the Central Government to exempt further classes on financial or other grounds. Three schemes then run on the covered establishments: the Employees' Provident Funds Scheme of 1952, the Employees' Pension Scheme of 1995 and the Employees' Deposit Linked Insurance Scheme of 1976.

This is the statute the post itself administers, so the Commission asks it at the level of detail an officer would need on the file rather than at the level of a general reader. Coverage disputes are the daily work of a provident fund office: whether a unit is an establishment, whether the count of twenty is met, whether an exclusion applies, whether coverage once attached survives a fall in headcount. The examinable form of that work is a numerical stem with four numbers in the options, and the only defence is a table of the Act's figures keyed to sections. Notice also that the stem here is doing something more than asking for a number: it supplies two qualifying facts — registered under the co-operative societies legislation, and functioning without the aid of power — and both are load-bearing. Removing either one changes the answer from fifty to twenty. Reading a labour-law stem for its qualifying conditions before looking at the options is the habit this item rewards, and it is the same habit that decides the exemption and applicability questions in the rest of this block.

• Section 16(1)(a) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 excludes from the Act any establishment registered under the Co-operative Societies Act, 1912 or a corresponding State law that employs fewer than fifty persons and works without the aid of power, so fifty is the size at which such a society comes within the Act.
• Both conditions in that clause must hold: a co-operative society that works with the aid of power gets no benefit from the exclusion and is covered by the general rule in Section 1(3), which applies the Act to establishments employing twenty or more persons.
• Section 1(3) covers factories engaged in an industry specified in Schedule I employing twenty or more persons and other establishments employing twenty or more persons that the Central Government notifies; the proviso allows extension to smaller establishments after not less than two months' notice, and Section 1(4) allows voluntary coverage by agreement between the employer and the majority of employees.
• Section 1(5) provides that once the Act has applied to an establishment it continues to apply even if the number of employees subsequently falls below the threshold — the principle usually summarised as once covered, always covered.
• Section 16 also excludes establishments belonging to or under the control of the Central or a State Government, and establishments set up under a Central or State Act, whose employees are already entitled to contributory provident fund or old-age pension benefits, and empowers the Central Government to exempt other classes of establishment on financial or other grounds.

• Reading Section 16 as a coverage rule; it is an exclusion, so the number in it marks where the Act stops applying, and the answer to a stem about coming within the purview is that number itself
• Dropping one of the stem's two conditions — the exclusion needs both registration as a co-operative society and working without the aid of power, and a co-operative that uses power is covered at twenty like anyone else
• Storing the figure of one hundred without its section: it belongs to Section 16A on self-maintained provident fund accounts, and this paper asks about that provision separately
• Assuming coverage lapses when the workforce shrinks; Section 1(5) keeps the Act applicable to an establishment once it has attached, whatever the later headcount

Applicability and exclusion under the 1952 Act are among the most reliably repeated themes in this paper, because every number in Sections 1 and 16 is a ready-made stem. The variants to expect are the general threshold of twenty, the co-operative society exclusion at fifty, self-maintained accounts at one hundred under Section 16A, the two months' notice in the proviso to Section 1(3), and the once-covered-always-covered rule in Section 1(5). Prepare them as one block rather than singly, since the distractors for each are drawn from the others.

No directly related past PYQ was found.

• practice — not a real PYQ

  Apart from a factory engaged in an industry specified in Schedule I, the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 applies to any other notified establishment employing not less than how many persons?

  • (a)Ten
  • (b)Twenty
  • (c)Fifty
  • (d)One hundred

  Answer(b) Twenty — Section 1(3) applies the Act to every factory engaged in a Schedule I industry employing twenty or more persons and to any other establishment employing twenty or more persons that the Central Government notifies, with a proviso allowing extension to smaller establishments after not less than two months' notice. Fifty is the exclusion figure for a co-operative society working without power under Section 16(1)(a), and one hundred belongs to Section 16A.

• practice — not a real PYQ

  Where the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 has once become applicable to an establishment and the number of persons employed later falls below the statutory threshold, the Act

  • (a)ceases to apply from the date the number falls below the threshold
  • (b)continues to apply to that establishment
  • (c)ceases to apply after a period of one year
  • (d)applies only if the Central Government issues a fresh notification

  Answer(b) continues to apply to that establishment — Section 1(5) provides that an establishment to which the Act applies shall continue to be governed by it notwithstanding that the number of persons employed therein at any time falls below the threshold. The principle is usually summarised as once covered, always covered, and it prevents an employer from escaping provident fund obligations by shedding a few employees.