Home  /  Code on Social Security, 2020  /  Section 20

Section 20: Determination of amounts due from employers

The Code on Social Security, 2020 (Act No. 36 of 2020) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter III: Employees' Provident Fund
Competent Labour Forum
Act No. 36 of 2020
Section 19 All 163 Sections of Code on Social Security, 2020 Section 21

Legal Commentary & Landmark Judgments: Section 20

Section 20 of the Code on Social Security, 2020 specifies statutory exemptions excluding designated categories of establishments—such as small cooperative societies and government establishments with independent pension systems—from the operation of Chapter III, subject to strict conditions of non-prejudice to worker benefits.

  • Statutory Exemption Categories: Section 20(1) exempts establishments registered under Cooperative Societies Acts employing less than fifty persons working without the aid of power, and establishments belonging to or under the control of the Central or State Government whose employees are entitled to independent statutory pension/PF schemes.
  • Principle of Non-Derogation of Benefits: Exemption cannot be granted or maintained if the existing benefits provided by the establishment are in any way inferior to or less favorable than the benefits conferred under the Code's schemes.
  • Official Gazette Promulgation & Continued Regulatory Audit: Exemptions must be notified in the Official Gazette by the appropriate Government; exempted establishments remain subject to periodic inspections to ensure maintenance of statutory equivalence.
Key Landmark Precedents:
  • Regional Provident Fund Commissioner v. Sanatan Dharam Girls Secondary School (2007) 1 SCC 268: The Supreme Court held that institutions claiming exemption from EPF coverage must strictly prove that their independent rules provide retirement benefits equal to or superior to statutory schemes, and that formal statutory exemption was granted.
  • M.P. Shikshak Congress v. R.P.F.C. (1999) 1 SCC 396: The Supreme Court held that state enactments or local government schemes cannot exclude the operation of central EPF law unless an explicit, valid statutory exemption notification under the central statute has been promulgated.
  • B.P.L. Ltd. v. R.P.F.C. (2002) 10 SCC 408: Reaffirmed that exemption under social security law is a privilege conditioned on strict compliance with regulatory standards, not an inherent managerial right.
Courtroom Practice & Strategic Litigation Guidance:

Educational institutions, government-aided bodies, and cooperative societies claiming exemption from Chapter III must maintain a certified copy of the specific Official Gazette notification granted by the appropriate Government. If an establishment merely operates a private pension scheme without official gazetted exemption, EPFO enforcement squads can levy retrospective assessments with interest and damages.

Section 19 All 163 Sections of Code on Social Security, 2020 Section 21