Employees Provident Fund Organization (EPFO) logo. File | Photo credit: KAMAL NARANG
Provident fund body EPFO on May 7 said it was assessing the course of action in view of the Karnataka High Court’s judgment declaring inclusion of foreign workers in the provident fund as “unconstitutional”.
The Karnataka High Court has struck down provisions relating to the inclusion of international workers in the scope of the Employees’ Provident Fund and Pension Scheme, saying it was “unconstitutional and arbitrary”. “While the EPFO (Employees Provident Fund Organization) has the utmost respect for the decision of the Court, it is actively assessing the course of action in response to this judgment,” the EPFO said in response to questions about the judgment.
The judgment concerns specific provisions relating to international workers set out in Section 83 of the Employees’ Insurance Fund of 1952 and Section 43A of the Employees’ Pension Scheme of 1995, which were found to be inconsistent with Art. 14 of the Constitution, EPFO noted.
Section 83 of the Employees’ Provident Fund Scheme 1952 refers to the Special Provisions relating to international workers.
This clause states that, with effect from 1 October 2008, any international worker whose basic salary (basic pay and attendance allowance) is up to £15,000 per month will be compulsorily covered by the scheme.
Article 14 of the Constitution of India states that the State shall not deny to any person equality before the law or equal protection of the laws within the territory of India on account of religion, race, caste, sex or place of birth.
India currently has social security agreements with 21 countries. These agreements ensure the continuity of social security for employees from these countries, on a reciprocal basis. EPFO has clarified that when nationals of these countries take up employment in each other’s territories, their social security coverage remains uninterrupted.
Guarantee of uninterrupted social security
Social Security Agreements between countries are sovereign agreements entered into by the Government of India with its counterparts. These agreements aim to guarantee employees continued social security coverage while employed abroad.
It said the agreements must be in line with internationally recognized principles and not necessarily be constrained by salary caps applicable to national EPF members. She noted that these agreements are very significant for India to promote international mobility and capitalize on the demographic dividend.
It said that EPFO acts as the operational agency for such social security arrangements in India.
The EPF Act empowers the central government to formulate separate schemes for different categories of workers, she said, adding that the EPF scheme acknowledges this by including special provisions for specific groups such as newspaper workers, cinema workers and international workers. These groups have separate regulations regarding subscriptions and contributions.
