EPFO Evaluates Response to Karnataka HC Judgement on International Workers
The Karnataka High Court, in its judgement, struck down the provisions of including international workers within the ambit of employees’ provident fund and pension schemes. The court termed these provisions “unconstitutional and arbitrary.”. The EPFO, while expressing the highest regard for the court’s decision, stated that it is actively evaluating the course of action in response to this judgement.
In a significant development, the Employees’ Provident Fund Organization (EPFO) is currently evaluating its course of action in response to a judgement by the Karnataka High Court. The judgement, which was delivered on May 7, 2024, deemed the inclusion of foreign workers in the provident fund ‘unconstitutional’. This decision has far-reaching implications for the retirement fund body and its operations.
The Karnataka High Court, in its judgement, struck down the provisions of including international workers within the ambit of employees’ provident fund and pension schemes. The court termed these provisions “unconstitutional and arbitrary.”. The EPFO, while expressing the highest regard for the court’s decision, stated that it is actively evaluating the course of action in response to this judgement.
The judgement pertains to specific provisions for International Workers outlined in Paragraph 83 of the Employees’ Provident Fund Scheme, 1952, and Paragraph 43A of the Employees’ Pension Scheme, 1995. These provisions were deemed to be inconsistent with Article 14 of the Constitution, which provides that the state shall not deny to any person equality before the law or the equal protection of the laws within the territory of India, on grounds of religion, race, caste, sex, or place of birth.
Paragraph 83 of the Employees’ Provident Fund Scheme, 1952, relates to special provisions in respect of international workers. This clause provides that, with effect from October 1, 2008, every international worker whose basic wages (basic pay and dearness allowance) are up to ₹15,000 per month, shall be mandatorily covered under the scheme.
India presently has social security agreements with 21 countries. These agreements ensure continued social security coverage for employees from these nations on a mutually reciprocal basis. The EPFO explained that when citizens from these countries take up employment in each other’s territories, their social security coverage remains uninterrupted.
Social security agreements between countries are sovereign agreements established by the Government of India with its counterparts. These agreements aim to guarantee uninterrupted social security coverage to employees during international employment. The agreements must adhere to internationally recognized principles and are not necessarily restricted by wage ceilings applicable to domestic EPF members. These agreements are very important for India, as they promote international mobility and leverage the demographic dividend.
The EPFO serves as the operational agency in India for such social security agreements. The EPF Act empowers the Central Government to formulate separate schemes for different employee categories. The EPF scheme acknowledges this by including special provisions for specific groups, such as newspaper employees, cine workers, and international workers. These groups have distinct enrollment and contribution regulations.
In conclusion, the recent judgement by the Karnataka High Court has sparked a re-evaluation of the provisions for international workers in the provident fund and pension scheme. As the EPFO evaluates its course of action, the impact of this judgement on the retirement fund body and its operations remains to be seen. The outcome of this evaluation will undoubtedly have significant implications for the future of social security coverage for international workers in India.
Stay tuned, to PropleManager.co.in for further updates on the evolving workplace paradigm.
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