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Showing contexts for: epf in P.Sasikumar vs Union Of India (Uoi) on 12 October, 2018Matching Fragments
W.P.(C). 13120/2015 & con.cases
14. Advocate Titus Mani points out that the amendments are ultra vires the Act. According to the learned Counsel, money is authorised to be extracted only as per Sections 5 and 6 of the EPF Act. No such power is conferred by Section 6A of the Act. Section 6A only empowers the authorities to appropriate a portion of the provident fund amounts to constitute the pension fund. In the absence of any power the amendment fastening financial liability on the employees is unsustainable. Section 5 defines the class of persons to whom the EPF Act applies. The authorities have no power under Section 6A of the Act to define a different class. Therefore, the classification created by the scheme is ultra vires, it is contended. The option contemplated by paragraph 26(6) of the EPF Scheme is intended only to get over the difficulty of making the employer liable to pay a contribution that is not stipulated by the EPF Act. The amendments, according to the learned counsel W.P.(C). 13120/2015 & con.cases are therefore unsustainable and liable to be set aside.
16. We have considered the respective contentions advanced by the counsel on either side anxiously. In many of the cases before us, the validity of the amendments made to the pension scheme are under challenge. The Pension Scheme is made under Section 6A of the EPF Act. Therefore, it is necessary for us to consider the scope of the provisions of the EPF Act first. In the above context, it is necessary to take note of the W.P.(C). 13120/2015 & con.cases background in which the EPF act was enacted. The industrial revolution that brought about drastic changes in the structure of our society created a large and distinct section of people, the industrial workers. The large industrial establishments that started springing up all around, required the services of workers of various categories. They came in large numbers from the rural areas in search of better salaries, better living conditions and better career prospects. They settled down close to the industries spurring the growth of urban settlements, that later developed into our cities. Such workers, when they became old and infirm were found to be left with no income or means of sustenance. The west, where the above ill-effects of the industrial revolution were first felt, found a solution by introducing old age pension, to be paid by the State to persons above a particular age and survivor's pension to the dependents of employees who met with premature deaths. Though the W.P.(C). 13120/2015 & con.cases industrial revolution reached our country only much later, with the establishment of large industries, in our country also a sizeable industrial work force came into existence. The conditions of such workers when they became old and unable to work was found to be pathetic. In view of the obligation in the Directive Principles, to ensure social justice to one and all, the State had to find some means to ameliorate the conditions of the old and infirm industrial workers. Taking into account the fact that the financial resources at the hands of the State was limited, an alternative method of constituting a fund with contributions extracted from both the employers and employees has been statutorily put in place by the EPF Act. The Provident Fund so created is made up of the contributions of both the employers and employees, with no contribution from the State Exchequer.
so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that notification."
W.P.(C). 13120/2015 & con.cases
26. The effect of the above provisions is that, a scheme has to be framed under Sub section 1 of Section 5 of the EPF Act. Such scheme as already noticed above, is for establishing a provident fund for the employees of the establishment to which the scheme shall apply. Such scheme has been made subject to the provisions of the EPF Act by Section 5(1D) of the Act. Therefore, there cannot be any doubt that the scheme to be framed by the Central Government and the modification to be effected thereto by Section 7 shall be subject to the provisions of the EPF Act. In view of the above, it has next to be examined whether the provisions of the impugned pension scheme have exceeded the limits of the power conferred.
27. It is clear from the Scheme of things discernible from an examination of the above provisions that, the legislative intention has been to constitute a Pension Fund utilizing 8 1/3% of the employer's contribution made under Section 6 of the EPF W.P.(C). 13120/2015 & con.cases Act. Sub paragraph 6 of paragraph 26 of the EPF Scheme gives an option to the employee to remit contributions at the rate of 12% of the actual salary drawn by him, provided a joint request is made by the employer and the employee for such purpose. Thereupon, the employer's contribution would also be 12% of the actual salary drawn. Since Section 6 has limited the employer's contribution to 10% or 12% of the salary of the employee and has specifically stipulated that "the employer shall not be under an obligation to pay any contribution over and above his contribution payable under this Section", any contribution in excess of the statutory limit cannot be insisted upon. A joint request to be voluntarily made by the employer and the employee offering to pay contributions on the basis of the actual salary drawn by the employee was the only solution. Therefore, the option that was required to be exercised jointly by the employer and the employee under paragraph 26(6) of the EPF W.P.(C). 13120/2015 & con.cases Scheme was to tide over the above situation. It is further clear from the Scheme of the enactment that the beneficial provisions thereof as well as the Schemes framed thereunder are to apply uniformly to the homogeneous class of employees of the establishments covered by the provisions of the enactment. Therefore, any attempt at classifying or categorizing them on the basis of dates as sought to be done by the authorities here, cannot be countenanced unless there exists a proper rationale for such classification and an object that justifies such classification.