In a major relief to many employees, the Supreme Court has dismissed the Special Leave Petition filed against a Kerala High Court Judgment setting aside Employee's Pension (Amendment) Scheme, 2014 that capped maximum pensionable salary to Rs.15, 000 per month.
The bench comprising the CJI Ranjan Gogoi, Justice Deepak Gupta and Justice Sanjiv Khanna in limine dismissed the SLP filed by Employees Provident Fund Organisation observing that it does not find any merit in it.
The Kerala High Court, in October, last year, had allowed the writ petitions filed by employees of various establishments covered by the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. Their grievance was with the changes brought about by the Employees' Pension (Amendment) Scheme, 2014, which drastically reduces the pension payable to them.
Employees' Pension (Amendment) Scheme, 2014
The Amendment had brought these changes in the pension scheme.
Defending these amendments, the EPFO had contended before the High Court that, payment of pension computed on the basis of the contributions made on their actual salaries by the employees would deplete the Pension Fund and would make the Scheme unworkable. The High Court rejected this contention and also found that the provision capping the maximum pensionable salary at Rs.15,000/- thereby disentitling the persons who have contributed on the basis of their actual salaries to any benefits on the basis of the excess contributions made by them, is arbitrary and unsustainable.
The division bench comprising Justice Surendra Mohan and Justice AM Babu had observed: "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 said amendments without any justification. Apart from the above, to cap the salary at Rs. 15,000/- for quantifying pension is absolutely unrealistic. A monthly salary of Rs.15,000/- works out only to about Rs.500/- per day. It is common knowledge that, even a manual labourer is paid more than the said amounts as daily wages. Therefore, to limit the maximum salary at Rs.15,000/- for pension would deprive most of the employees of a decent pension in their old age. Since the pension scheme is intended to provide succour to the retired employees, the said object would be defeated by capping the salary."