ProfVident Fund is one of the most important benefits available to Indian workers. The workers of the country were conducting continuous strike and legal battles against the anti-labour clauses imposed by the central government in the provident fund pension scheme. 73 lakh workers are members of PF pension scheme today. The Employees’ Provident Fund and Miscellaneous Provisions Act came into force on 4th March, 1952. The Employees’ Provident Fund Scheme came into existence in September 1952 by virtue of Section V of this Act. The Employees Pension Scheme 1995 was brought into existence under Section 6A of the same Act. It was formed on 16th November of that year.
In 2014, the Central Government amended the Provident Fund Pension Scheme which was extremely anti-employee. The Kerala High Court quashed this. The decision of the Kerala High Court was upheld twice by the Supreme Court. The Supreme Court heard the matter yesterday and passed an important judgment.
The Supreme Court has announced a judgment that can give partial relief to the employees in the PF pension issue. A bench comprising Chief Justice U U Lalit, Justices Aniruddha Bose and Sudhamshu Dhulia upheld the legal viability of the Employees’ Pension (Amendment) Scheme introduced by the central government in 2014, but struck down certain provisions of the amendment that were objectionable to workers. The bench struck down the amendment requiring those earning more than Rs 15,000 to pay an additional contribution of 1.16 per cent of their salary to the pension scheme. All employees who are currently eligible to join the scheme have been extended the deadline to join the scheme by another four months. The Bench upheld the provision in the amendment that the average salary of 60 months prior to retirement shall be considered for determining pension. This will result in significant loss of pension.
The Central Government and the Employees Provident Fund Organization have approached the Supreme Court challenging the judgments of the Kerala, Rajasthan and Delhi High Courts which quashed various provisions of the Pension Amendment Scheme introduced by the Central Government. The EPFO and the Ministry of Labor have argued that paying pension in proportion to salary would be a huge financial burden and would affect the viability of the scheme. 12 lakh crores of rupees are still hanging in the Provident Fund Board.
In the Supreme Court, the central government has mainly challenged the Kerala High Court judgment which struck down the Rs 15,000 limit (as per the 2014 Act) for calculating an employee’s contribution to the pension scheme. The Supreme Court overturned this judgment and upheld the limit of Rs 15,000. The court also granted the government a reprieve to find funds to meet the losses arising from the repeal of the provision requiring employees to pay an additional contribution of 1.16 per cent for amounts above Rs 15,000. Average salary of 60 months before retirement is considered for determining pension. The decision to increase the pension to 60 months instead of the last 12 months of salary is a big blow to the workers.
In 2019, the Supreme Court dismissed the appeal filed by the EPFO and the Union Ministry of Labor against the Kerala High Court’s verdict upholding the higher pension. It is also worth mentioning that the Supreme Court rejected the appeals against the Kerala High Court judgment twice. The central government had strongly argued that the Kerala High Court had quashed the decision that the pensionable salary should be calculated on the basis of 60 months instead of the last 12 months. These people made a strange argument there that all the ordinary workers and women are likely to have a reduced salary in the last year due to illness and so on, which will lead to a reduced pension. This was an argument that had nothing to do with the facts.
In any case, it is a relief to the workers that the Supreme Court bench has declared that the administrative charge of 1.16 per cent on proportionate amount of salary above Rs 15,000 is illegal. About six crore employees in the country are members of provident funds. With the 12 percent share given by each of them, the purpose is about 12 lakh crore rupees in the provident fund. Therefore, there is no reason for this board to show any reluctance in providing fair pension to the workers. Unfortunately the PF Board and EPOF are currently researching how to deny workers their rights. This verdict is expected as well as deeply worrying for the workers who have been agitating since 1995 for a dignified EPF pension.
There have been mixed reactions from the labor unions regarding the EPFO pension verdict of the Supreme Court. One of the fundamental rights of the workers of the country is to get fair provident fund pension. No one can deny this right. Therefore, extensive agitation activities and legal battles to get full pension benefits have been created. Various labor organizations in the country are preparing for this jointly.