07.04.2014

Shri Oscar Fernandes,
Minister for Labour and Employment,
Govt. of India, New Delhi

Dear Shri Oscar Fernandes ji,

    It is reported in the print media that Govt. of India has directed EPFO, to amend the circular of Central Provident Fund Commissioner, dated 30th November 2012  which relates to, inter alia, definition of wages for the purpose of PF contribution.  I register my strongest protest over this decision of Govt. of India, which would reduce the PF related obligation of the employers at the huge cost of the workers- who are EPF subscribers.  

    After the circular was issued by the then CPFC Shri R.C. Mishra, it was put in abeyance.  A tripartite working group was formed to “examine various aspects of the circular” which had  CBT members representing employers and workers and also higher officials of EPFO.  I was also a member of the working group.     The unanimous decisions of the working group upholding the content of the EPFO Circular was finalized on 29th March 2013  and sent to Govt. Now after passage of more than one year the unanimous recommendation of the Working Group is nullified  and  the most important portion of this circular  is being now done away with by the Govt to benefit the employers class at the cost of workers.

    The most important part of the circular was on definition of wages.  It has been our experience that wages are split in several heads to keep basic pay low to evade PF contributions, by the employers.  The circular had clearly noted “the subterfuge of splitting wages to exclude PF liabilities”.     To my knowledge, after the then CPFC Shri R.C. Mishra, two successor CPFCs had also endorsed the circular as was unanimously recommended by the working group.

        I would also like to point out that this is happening in the background of two other important decisions – enhancing the minimum pension to Rs.1000 and increasing the wage ceiling for eligibility for PF enrolment to Rs.15,000 from Rs.6500 lying unimplemented, again to favour the same employers’ class at the cost of workers.  

    These decisions were taken by Central Board of Trustees under your Chairmanship only after the concurrence of the Finance Ministry. You and your colleagues had claimed that the Govt. wants to accept the long pending demands of workers.  It was also reported widely that cabinet had approved these proposals.

    Taken together, all these issues connected with the EPFO are being acted upon in such a way that legitimate dues to the workers are being denied while the employers being unduely favoured.

    I urge upon you that the Circular of EPFO as unanimously upheld by the Working Group of CBT be implemented forthwith. I also demand that the decisions on enhancement of Minimum Pension under EPS, 1995 and enhancement of wage-ceiling be implemented with effect from 01-04-2014 as already announced and propagated by the Govt of India.   

 With regards,

Yours sincerely,

(A.K. Padmanabhan)
Member, CBT, EPFO,
President, CITU