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Recap of Key Labour Law Developments of 2019 & Looking Forward to 2020

The year 2019 can be said to be a watershed year in relation to the employment law regime in India. The Indian government took various steps to simplify and streamline the dated employment legislations, veritably in a bid to rise up in the index of Ease of Doing Business in India. The courts in India too played their part in interpretation of the existing legal regime. Here, we not only look at some of the key, impactful developments, but also look forward to what 2020 may have in store for India Inc., in relation to the same:

A. Computation of Provident Fund (“PF”) Contribution:

In February, 2019, the Supreme Court (“SC”) in its judgment Regional Provident Fund Commissioner (II) West Bengal vs. Vivekananda Vidyamandir and Others[1] (“PF Judgment”) reaffirmed the principles laid down by the SC in the landmark decision of Bridge and Roof Co. (India) Limited vs. Union of India[2], and held that allowances which are universally, necessarily and ordinarily paid to employees across the board would be considered as part of ‘basic wages’ (“Basic Wages”) under the EPF Act on which PF contribution has to be calculated. While this Judgment did not establish any new principle, in view of the stay orders passed by various courts, it nonetheless offered clarity on the components that must be included to calculate PF contributions.

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