EPFO 'actively' evaluating
options in response to Karnataka HC judgment
The
Employees' Provident Fund Organisation (EPFO) is actively' evaluating its
options following a recent Karnataka High Court judgment that has struck down
the inclusion of international workers under the ambit of Employees' Provident
Fund (EPF), terming it as unconstitutional and arbitrary .
The
EPFO acknowledges the recent judgment issued by the esteemed High Court of
Karnataka. The EPFO is actively evaluating the course of action in response to
this judgment, the social security organisation said in a statement on
Tuesday.
Earlier
in April, hearing a bunch of writ petitions filed by the employees and
employers belonging to sectors such as education, logistics, real estate and
technology, a bench headed by Justice K S Hemalekha held that the EPF is
established to guarantee retirement benefits for employees in lower salary
brackets. She emphasised that it would be inaccurate to argue that employees
earning higher salaries should also receive benefits under this law.
Paragraph
83 of the Employees' Provident Fund Scheme, 1952 and Paragraph 43A of the
Employees' Pension Scheme, 1995 which were struck down were introduced in 2008.
Sonu
Iyer, partner at EY India says the petitioners argued in the court that
international workers are covered under the scheme irrespective of the amount
of salary drawn. Whereas domestic workers who draw monthly pay exceeding the
prescribed statutory ceiling (Rs 15,000 per month) are outside the purview of
the provident fund scheme.
The
petitioners further argued that international workers work in India only for a
limited period and requiring them to pay contributions on their entire global
salary would cause irreparable injury, Iyer said.
The
Karnataka High Court also rejected the government's argument to mandate
contributions under these provisions as a form of reciprocity to uphold social
security agreements, deeming it unsustainable .
The
EPFO in its response to the judgment also added that India presently has social
security agreements with 21 countries and these agreements ensure continued
social security coverage for employees from these nations on a mutually
reciprocal basis.
When
citizens from these countries take up employment in each other's territories,
their social security coverage remains uninterrupted. These agreements aim to
guarantee the uninterrupted social security coverage of employees during
international employment. These agreements are very important for India for
promoting International mobility and leverage the demographic dividend, said
the EPFO.
Pointers
Para
83 & 43-Struck down by the Karnataka High Court for being unconstitutional
and arbitrary and in violation of Article 14
Wage
ceiling of Rs 15,000 per month was not applicable to foreign workers working in
India
India
has social security agreements with 21 countries, which ensure continued social
security coverage for employees from these nations on a mutually reciprocal
basis.
www.business-standard.com
dt. 08.05.2024