Trade Unions Oppose Proposal To Empower Government To Reduce EPF Contribution
Indian five hundred rupee banknotes are arranged for a photograph in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Trade Unions Oppose Proposal To Empower Government To Reduce EPF Contribution


As many as 10 central trade unions on Tuesday opposed a proposal to empower government to reduce or modify employees' provident fund contribution by employers and employees in an amendment bill.

The proposed amendment can increase take-home pay of organised sector workers and reduce contributions by employers.

"10 central trade unions have boycotted a meeting called by Labour Ministry to discuss proposed amendments in the Employees' Provident Fund and Miscellaneous Provision Act on Sept. 24."

"Among other amendments, it is proposed to empower central government to modify or reduce the EPF contribution for employees and employers. This would defeat the purpose of social security scheme run Employees Provident Fund Organisation," Hind Mazdoor Sabha General Secretary HS Sidhu told PTI.

The unions have demanded that the proposed amendment should be deleted.

"In Section 6, proviso Para 2, which is empowering Central Government to modify, as and when it deems fit, the rates of contribution from employers as well as employees from '12 percent' to '10 percent', is a blatant attempt to dismantle our well tested social security system- that is EPF," the unions in a joint letter to the Labour Ministry said.

The unions said it is the most dangerous that proviso Para 3 under section 6, with all its audacity, trying to hit the final nail in the coffin of entire EPF system as it empowers the government to announce any rate of contribution, for any class of employee for any period of time.

In other words, they added that this amendment empowers the government both directly and indirectly in an open-ended manner to reduce employers' contribution along with that of employees in EPF just by executive order in their pet project of ensuring ease of doing business.

The unions also asked the government to include special allowance as part of the basic wages, which is the base for computing EPF contributions.

"As you have not invited one of our important Central Trade Unions, INTUC (Indian National Trade Union Congress), for the meeting, we are constrained to place on record our strong objections once again for this unfair and untenable action of the Government which is against the spirit of tripartism. So, we all central trade unions have decided not to participate in this meeting.

"As you have not been seriously taking our opinion into consideration in any tripartite consultations, we have decided to send our comments only in writing to you, rather than attending in person....we...are sending our comments on the proposed Amendments," the letter said.

The unions which shot off the joint letter are -- INTUC, All India Trade Union Congress, Hind Mazdoor Sabha, Centre of Indian Trade Unions, All India United Trade Union Centre, Trade Union Coordination Centre, Self-Employed Women's Association, All India Central Council of Trade Unions, Labour Progressive Federation and United Trade Union Congress.

They also demanded deletion of the proposal which invokes the concept of limitation from the Act.

They pointed out that the proposed new sections are aimed at helping and/or indulging the employers to violate the law and evade the penalty.

The unions said the proposed amendment for giving an option to the Employees' Provident Fund Organisation subscribers to join National Pension System should be deleted.

Also read: Labour Ministry Notifies 8.65% Interest Rate On EPF For FY19

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