PIGMY AGENT Or PIGMY COLLECTOR Or DEPOSIT COLLECTOR DOES NOT FALL WITHIN DEFINATION OF

PIGMY AGENT or PIGMY COLLECTOR or DEPOSIT COLLECTOR DOES NOT FALL WITHIN DEFINATION OF EMPLOYEE’ AS DEFINED UNDER SECTION 2(f) of P. F. & M.P. ACT,1952 & COMMISSION PAID TO THEM DOES NOT ATTRACT DEDUCTION OF PF CONTRIBUTION.

Across the country, to indoctrinate the culture of saving among the small investor(s), many co-operatives bank(s), to collect the saving from small investor, engages so-called ‘Pigmy Agent’ or ‘Pigmy Collector’ or ‘Deposit Collector’ on commission basis. The nature of job of ‘Pigmy Agent’ or ‘Pigmy Collector’ or ‘Deposit Collector’ is to collect fund on day to day basis, from door to door and deposits the same ‘collected-fund’ to the concerned co-operative bank in their individual bank account. In lieu of ‘collected-fund’ , the concerned ‘Pigmy Agent’ or ‘Pigmy Collector’ or ‘Deposit Collector’ gets only ‘commission’ from the bank which may fluctuate from 3% to 5% on ‘collected-fund’ , depending upon individual co-operative bank’s terms and conditions.

The issue/dispute of ‘Pigmy Agent’ was also examined by the Hon’ble Karnataka High Court in the matter of Sri Gokarnanatha Co-operative Bank Limited Vs. APFC, Mangalore , WP No. 35152 of 2010(L-PF). The Hon’ble Karnataka High Court categorically pronounced that the commission is paid to the pigmy collectors, did not constitute ‘Basic Wages’ within the definition of the said term under Section 2(b) of the Act,1952. The Hon’ble Karnataka High Court pronounced in paragraph 02 of the aforesaid judgment that “ In identical circumstance, when identical question arose, as to whether commission paid to pigmy collectors is not ‘basic wage’ as defined in Sec. 2(b) of the Act? Was answered in affirmative by order dated 14.06.11 in W.P.17999/2010 , in the case of Murugharajendra Co-operative Bank Ltd . Vs. Assistant Provident Fund Commissioner. Following the said decision and for the very same reasons, this writ petition is accordingly allowed”. The Assistant Provident Fund Commissioner, Mangalore , being aggrieved with judgment of single judge , preferred a writ appeal before the Hon’ble Karnataka High Court. The Division Bench , in the matter of APFC, Mangalore Vs. Sri Gokarnanatha Co-opertaive Bank Limited Vs. , WA No. 17717 of 2011(L-PF). ,inter-alia, decided that since the“Pigmy Collector” is paid commission. Commission is not treated “basic wage” as defined under Section 2(b) of the Act,1952.

In persuasion of the aforesaid WA No. 17717 of 2011(L-PF) , the PF authority has preferred SLP, bearing no. CC 11912 of 2013, before the Hon’ble Supreme Court which was dismissed on 10.07.2012. Therefore, now the law is settled that ‘Pigmy Agent’ or ‘Pigmy Collector’ or ‘Deposit Collector’ does not come within definition of ‘Employee’ as defined under Section 2(f) of the Act,1952 and commission paid to him,does not attract deduction of provident fund contribution as per Section 6 of the Act,1952.