The Centre of Indian Trade Unions (CITU) denounces the proposal of the Union Govt to further give more concessions to wilful defaulting employers of their statutory obligations/dues under EPF & Miscellaneous Provisions Act by way of  sharply reducing the rate of statutory penal damages recovery retrospectively from defaulting employers in depositing the PF, Pension and EDLI contributions of the workers with EPFO.

The proposal shall reduce crores of rupees penal damages in total levied under section 14B of EPF & Miscellaneous Provisions Act, 1952 for the offence of wilful default by the employers in the payment of contributions and other statutory dues under the Act at varied rates of damages for varied period of default in the pending disputes before 14^th June 2024.  This is done in the guise of Alternative Disputes Resolution Mechanism (ADR) just to help the defaulting employers at the cost of employee’s interest and their retirement benefits.      

Through this the Modi Govt is retrospectively giving effect to its earlier notification dated 14^th June, 2024, through which it had reduced all damage rates for all defaults of the employers in respect of EPF, to mere 1% per month, i.e., 12% per annum across the board to all Schemes, done apparently, in the name promoting ease of doing business, shamelessly defeating the very purpose of the EPF Act and its strict compliance. Prior to  14^th June, 2024, the penal charges were calculated at the rate of 5% per annum for default period of less than two months, 10% for default period of two months and above but less than four months, 15% for four months and above but less than six months and 25% for six months and above. Last year, at the behest of employers in a single stroke Modi regime had reduced it to 1% per month as soon as assuming office for the third time. At that time all Central Trade Unions including CITU vehemently opposed such a move then itself. Such atrocious move of the Govt vide its notification dated 14^th June 2024 was a virtual license to the employers/corporate to violate the EPF Act liberally besides promoting and legitimising a pilferage on workers lifetime savings in provident fund and related benefits.

But the lust for bigger loot on workers of the employers’ class does not end there itself. And the Modi Govt has gone a step further in shamelessly extending the concessions for its masters in the employers’ class to loot on workers in all the pending cases of defaults and related cases of litigations prior to 14^th June 2024 retrospectively. At the dictate of the Govt and the Ministry, the Additional Central Provident Fund Commissioner (Legal) EPFO, in the meeting of Central Trade Unions for a consultation held on 29.4.2025, has shamelessly proposed the extension/retrospective application of the earlier order on drastic reductions in penalty-damage rate for wilful default in EPF dues, dated 14^th June 2024 to all cases of similar defaults by employers prior to 14^th June 2024. All the trade union representatives including CITU present in the meeting have vigorously opposed such notoriously shameless proposal made by EPFO in the meeting.        

The meeting with the CTUs on 29-04-2025 was called by EPFO to discuss the so-called implementation of Alternative Dispute Resolution (ADR) Mechanism in EPFO. Disputes pertained to issue of numerous cases of wilful defaults by the employers in paying their statutory dues to workers provident fund pending prior to 14^th June 2024. The Govt through EPFO proposed a mechanism of virtually legitimising all such defaults through liberal reduction of the damage rates, instead of making them to strictly comply with the law of the land under section 14B of EPF Act.      

The sections 7Q & 14B of the Act are only deterrent provisions against such defaults and, in addition, that are the only instruments to ensure the compliance of Act passed by the sovereign Parliament. The policy of waiver of tax dues of defaulting rich and big business under Modi regime in the name of “Vivaad Se Vishwas & Samasya Se Samadhan” for ease of doing business is being attempted to be implemented even in social security legislations meant for the betterment of the working people and their post retirement benefits. The decriminalisation process of the 180 provisions of 41 legislations done through Jan Vishwas Act 2023 is being done through this executive order in the EPF Act just to aid the wilful defaulting employers, that too retrospectively.   

The pro corporate face of Modi regime is glaringly visible through this proposal even in encouraging them to violate the only extant social security legislation- the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 – that guarantees some minimum benefits like provident fund, pension and some assured benefits in the event of death in harness- that too mostly for organised work force in our country.

CITU demands the Union Government to rescind this anti-labour and default-promoting pro-employer proposals immediately and calls upon the working people to intensify the ongoing preparations and campaigns to make 20^th May General Strike a success in order to defeat such pro corporate anti- worker machinations by the Corporate-Communal ruling dispensation at the centre.

Issued by
Tapan Sen 
General Secretary