profVident Fund is one of the most important benefits available to Indian workers. The country’s workers waged continuous strikes and legal battles against the anti-work clauses imposed by the central government in the pension scheme of the pension fund. Today 73 lakh workers are members of the PF pension scheme. On March 4, 1952, the law on the employee pension fund and various provisions came into force. The employee pension fund scheme entered into force in September 1952 by virtue of section V of this law. The 1995 Employee Pension Scheme was established under Section 6A of the same law. It was established on November 16 of the same year.
In 2014, the central government changed the Pension Fund’s pension scheme, which was extremely anti-dependent. The Kerala High Court overturned this. The Kerala High Court decision was confirmed twice by the Supreme Court. The Supreme Court heard the matter yesterday and issued an important ruling.
The Supreme Court has issued a ruling that can give partial relief to employees in matters of PF pension. A court composed of UU Supreme Court Chief Justice Lalit, Judges Aniruddha Bose and Sudhamshu Dhulia upheld the legal feasibility of the employee pension (amendment) scheme introduced by the central government in 2014, but overturned some provisions of the amendment that were questionable for workers. The dealer overturned the amendment requiring those earning more than Rs 15,000 to pay an additional 1.16 percent contribution of their salary to the pension scheme. All employees currently eligible to join the program have been extended the deadline for joining the program by an additional four months. The Board accepted the provision of the amendment according to which the average salary of 60 months before retirement must be taken into consideration for the determination of the pension. This will result in a significant pension loss.
The central government and the Employee Welfare Fund Organization have appealed to the Supreme Court challenging the rulings of the Kerala, Rajasthan and Delhi High Courts which overturned various provisions of the pension modification regime introduced by the central government. The EPFO and the Ministry of Labor have argued that paying the pension in proportion to the salary would represent a huge financial burden and undermine the viability of the scheme. 12 million lakhs of rupees still hang on the board of the pension fund.
In the Supreme Court, the central government has mainly challenged the Kerala High Court ruling which removed the limit of Rs 15,000 (as required by the 2014 law) for calculating an employee’s contribution to the pension scheme. The Supreme Court overturned this ruling and upheld the limit of Rs 15,000. The court also granted the government a respite to find funds to meet losses resulting from the repeal of the provision requiring employees to pay an additional 1.16 percent contribution for amounts in excess of Rs 15,000. For the purposes of determining the pension, the average salary of 60 months before retirement is taken into account. The decision to raise the pension to 60 months instead of the last 12 months’ salary is a severe 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 verdict confirming the higher pension. It is also worth mentioning that the Supreme Court has twice dismissed the appeals against the Kerala High Court ruling. The central government had strongly argued that the Kerala High Court had overturned the decision that the retirement salary should be calculated on the basis of 60 months rather than the last 12 months. These people have made a strange argument that all 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 illegal the administrative charge of 1.16 per cent on the prorated amount of salary in excess of Rs 15,000. About six million employees in the country are members of retirement funds. With the 12 percent share given by each of them, the goal is about 12 million million rupees in the retirement fund. Therefore, there is no reason for this advice to show any reluctance to provide a fair pension to workers. Unfortunately, the PF Board and the EPOF are currently studying how to deny workers their rights. This verdict is expected as well as deeply worrying for workers who have been agitating for a decent EPF pension since 1995.
There have been mixed reactions from unions regarding the Supreme Court’s EPFO retirement verdict. One of the fundamental rights of the country’s workers is to obtain a fair social security pension. Nobody can deny this right. Therefore, extensive agitation activities and legal battles were created to obtain the full retirement benefits. Several trade union organizations in the country are jointly preparing for this.
