Employees get a breather from High Court on PF pension

The demand for additional payment of 1.16 per cent of their salaries exceeding `15,000 is unsustainable, held the court.

Published: 13th October 2018 01:07 AM  |   Last Updated: 13th October 2018 10:36 AM   |  A+A-

By Express News Service

KOCHI: In a major relief for thousands of retired employees, who have been deprived of the option to avail higher pension by the Employees Provident Fund Organisation (EPFO), the High Court on Friday set aside the orders of the organisation declining to grant opportunities to the employees to exercise a joint option to remit contributions to the Employees Pension Scheme on the basis of actual salaries drawn by them.

While allowing a batch of 507 writ petitions filed by various employees’ organisations and employees challenging the amendment, a Division Bench comprising Justice K Surendra Mohan and Justice A M Babu also set aside the Employees Pension (Amendment) Scheme 2014.

“There was no justification for stealing bread from the mouths of the pensioners to secure the pension fund. Though the fund is replenished by the present workers, its beneficiaries are the old and infirm former workers. The fund is meant for their sustenance. Hence, the amendments are ultra vires the EPF Act and unsustainable,” the bench held.

The court also ordered employees shall be entitled to exercise the option stipulated by the scheme without being restricted in doing so by the insistence on the date.

As per the amendments, the maximum pensionable salary has been fixed at `15,000 thereby disentitling the persons who have contributed on the basis of their actual salaries to any benefits of the excess contributions made by them. The provision is arbitrary and unsustainable.

The employees, who have been making contributions on the basis of their actual salaries after submitting a joint option with their employers as required by the pension scheme, are denied the benefits of their contributions by the amendments without any justification. 

Apart from that, to cap the salary at `15,000 for quantifying pension was absolutely unrealistic. A monthly salary of `15,000 works out only to about `500 per day.

It was common knowledge that even a manual labourer was paid more than the amount as daily wages. Therefore, to limit the maximum salary at `15,000 for pension would deprive most of the employees a decent pension in their old age.

Since the pension scheme was intended to provide succour to the retired employees, the object would be defeated by capping the salary. The duty of the trustees of the fund is to administer it for the benefit of the employees by wise investment and efficient management. They have no right to deny the pension legitimately due to them on the ground the fund will get depleted.

The demand for additional payment of 1.16 per cent of their salaries exceeding `15,000 is unsustainable, held the court.

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