EPF Pension Case: Employees Argue They Can't Be Asked To Contribute 1.16% Of Salaries Above Rs 15,000 [Supreme Court Hearing Day 4]

On the fourth day of the EPF Pension case hearing (Friday), the pensioners told the Supreme Court that asking the employees to contribute 1.16% for salaries above Rs 15,000 as per the Employee's Pension (Amendment) Scheme, 2014 has no statutory sanction and is against the parent Act, the Employees' Provident Funds And Miscellaneous Provisions Act, 1952. The submission was made by Senior Advocate R Basant appearing for pensioners from Kerala before a 3-judge bench comprising Justices UU Lalit, Aniruddha Bose and Sudhanshu Dhulia. The senior counsel was briefed by Advocate- on-Record Ragendh Basant. The Bench was hearing the appeals filed by the Employees Provident Fund Organization challenging the Kerala, Rajasthan and Delhi High Court judgments which had quashed the 2014 Amendment Scheme. In 2018, the Kerala High Court, while setting aside the Employee's Pension (Amendment) Scheme, 2014 [2014 Amendment Scheme], allowed paying pension in proportion to the salary above the threshold limit of Rs 15,000 per month. During the hearing on Friday, Basant submitted that according to the 2014 Amendment, if an employee wants to contribute on more than Rs 15,000, then 1.16% will have to be contributed by him. "Section 6A (2) of the (1952) Act clearly envisages the funds that come under the Pension Fund is 8.33% of the employer and 1.16% by the Central government. An employee putting in money for pension, is unheard of…. Unless the Act provides for it, a subordinate legislation (2014 Amendment Scheme) cannot go beyond the Act. For the first time, an imposition is placed on the employee to contribute 1.16", he submitted. As the hearing progressed, the court remarked, "See, so long as the 1.16% was getting contributed from the coffers of the government and 8.33% is coming from the employer's contribution, the employee had nothing substantial to do in the matter to the regime of 11 (3) and proviso. Correct?" Basant agreed. "So, his option, whether he gives or doesn't give is immaterial. I can go to that length and say that. According to your understanding and your submission, the moment something is getting deducted in excess of the salary level, which is the minimum level of Rs 6,500 and I am going by my normal salary for PF deduction. That is your base figure. Your base figure will tell you 12% of that. Once you get that into your kitty, the 8.33% must actually seep its way into the other portal. And going by normal ideology, 1.16% of Rs 6,500, that means government's contribution per employee is numbering the employees…..the government is also making contribution. In that scenario employee has nothing to do", the Court continued. Coming to the present scenario, the Court said, "….Anything in excess of 15,000, you (the employee) must contribute 1.16. Whether they are right or wrong in their assessment is a different thing. We are only saying that, where is the issue of option arising here? Because you are going to contribute that, 1.16%. So, theoretically, 1.16 must come from your pocket. Correct? In order to say Employees Pension Fund will always be replenished by this of monthly contributions from month to month. Therefore, you are accepting a liability on your shoulders or on your head and therefore, the option." "Milord, if 1.16% levy is legally impermissible, then option is relevant. I'll explain why…", Basant responded. "Your argument is basically that 1.16 has never been insisted upon", the court reiterated. "As your Lordships rightly noted, my contribution can only be x% of my salary. It can only be that. It can never exceed that, going by the statute. To the Pension Fund, I am not expected to contribute. That's why I want your Lordships to see section 6A (2). The government must contribute but I cannot be asked to contribute. If you ask the employee also to contribute then, the Act has to be amended." At this juncture, the court asked, "Earlier, if the salary was 6,500, who was contributing 1.16?" "The government", Basant replied. "Only for 6,500 the government was contributing. Any slab above 6,500 was left without any contribution, correct? The minimum level is 6,500", the court said. Option Aspect Is Irrelevant Basant also made pertinent submissions relating to the Cut-off date and option aspect relating to the 2014 Amendment Scheme. On the latter, he submitted that if you exercise an option under 26 (6) of the EPF Scheme,1952, then there is no requirement to exercise any further option under proviso to 11 (3) of the 2014 Amendment Scheme. The option under 11(3) is subsumed under the option one exercises under 26 (6), the counsel submitted. "Milord, what happened after RC Gupta decision is very important. This, they also accept. It says you cannot deny on the basis of any cut off date. And therefore, everyone has a right to opt……Non exercise of the option I submitted is of no...

EPF Pension Case: Employees Argue They Can't Be Asked To Contribute 1.16% Of Salaries Above Rs 15,000 [Supreme Court Hearing Day 4]

Rintu Mariam Biju

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EPF Pension Case: Employees Argue They Can't Be Asked To Contribute 1.16% Of Salaries Above Rs 15,000 [Supreme Court Hearing Day 4]

Rintu Mariam Biju

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