Monday, April 14, 2008

After a pound of my flesh

In Shakespeare’s Merchant of Venice, 1596, the insistence by the Jewish moneylender, Shylock for the payment of Antonio's flesh was the central plot of the 18th century play. Shylock insisted that ‘The pound of flesh which I demand of him Is deerely bought, 'tis mine, and I will have it.’ It now carries the meaning of ‘something which is owed that is ruthlessly required to be paid back..’ The figurative use of the phrase refer to 'any lawful but nevertheless unreasonable recompense’ - to quote from Wikipedia.

Imagine being booked by a policeman for a traffic offence. You paid the compound fines and yet you have to appear in court for another round of punishment for the same offence because the law says you have committed an offence and that offence in punishable. I use the phrase ‘the law says’ to denote an interpretation by this one person. Okay, I am not a lawyer. But as I understand the law, an offense once punished can’t be punished again. A compound is a punishment so I should not be hauled to the court again for the same offence. Or was my understanding all wrong?

Last Thursday, EPF visited me. Handed me a summon to sign. I was to appear in Court this Monday 14 April 2008. The offence was for not making EPF contribution to one of my staff in May 2007. That was almost a year ago. I checked my record and proved that payment was made. Late of course but paid all the same. I was willing to pay all the fines and dividends, but the dividend statement is forthcoming. Not my fault fully. Still the EPF guy is insistent.

So I checked the EPF Act.

Clause 43(2) says I’m liable if I fail to pay within time.
So I’m guilty on that ‘within time’ count. But why can’t I resort to the other clauses which somehow accept delay to the contributions provided that I pay the dividends and interest on top of the contributions?

Clause 45(3) says if I don’t pay within time I can be liable to pay for dividends.
Clause 45(4) says if I don’t pay the dividends I’m liable to imprisonment (3 years maximum) or fine (maximum 10K).

Furher down,

Clause 49 says I’m also liable for interest for unpaid contribution.

So my understanding is I can be charged only if I don’t pay the contribution or if I don’t pay the dividend. Repeat, if I don’t pay the dividend! Not for late contributions.

So why take me to court?

‘Well, you have not contributed to the Feb, March and April’ he said.

‘Sir! Yes I was late for Feb and March. But April wasn’t even due till 15 this month, a day after my due appearance in court. Don’t charge me for an offence I was yet to commit. And still you can’t bring me to court for the two months that was not even in the charge sheet.’

That I think is a blackmail. Okay, arm-twisting, if blackmail was too harsh a word.

The fictional episode is one of the many events that we must all face because we had chosen to leave the comfort of withdrawing salaries to one that pay salaries. Migrating from being an employee to an employer.

Most of the laws governing employment, especially EPF Law regards all employers as someone with a deep pocket and an ever flowing fountain of cash. EPF contributions must be made not later than the 15th every month, come hell or high water. Damn you if can’t scrape enough to meet the salary. Damn you too if your salary payment was made after 15th. Pay EPF first. Fill the coffer and leave your staff hanging dry if you have to.

So all of you budding entrepreneur, beware, be afraid, be very afraid. Be not like me. Pay EPF religiously. You have to.

The law as it is, was intended to protect employees from some unscrupulous employers. But not all employers are bad as not all are rich. Many are simply entrepreneur who struggles to make ends meet. Yet they contributed to the socio economy by employing people when these people were otherwise jobless. Not all employees are bad too, not all will willingly kill the goose that lay the golden eggs, not all will haul their employer to court for reason of late EPF contributions. But EPF will; in the name of the employee, haul the employer. The way things are, some quarters in EPF considers all late contributor as bad employer, penalties alone are no longer enough. The way things are, some quarters in EPF will be happy that employers close shop, so that none pay EPF late. Nevermind if the employees end up jobless.

Maybe some explanation is necessary.

Late contribution can be due to several reasons. One, the employee preparing the payment made a mistake or forgotten about the dateline. Two, the money wasn’t there. At least not yet.

The law maker in drafting the law I believe saw that possibility. So they wisely introduced a penalty clause. Any employer who’s late because of some employee inefficiency or was simply broke at that point in time can at least when they can afford it pay the penalties, escape the hassle of court appearance and continue doing business.

For unfortunate employer like me, summoning me to court means punishment not once but thrice. They have taken claim, collected my money and now after my pound of flesh.


No comments: