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SC order to pave way for pension in private sector

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GUWAHATI, April 2 - The Supreme Court of India has dismissed a special leave petition filed by the Employees� Provident Fund authorities that challenged a Kerala High Court order passed on October 12, 2018, on pension benefits of retired employees of private firms. This is expected to pave the way for a hassle-free monthly pension for the private sector employees.

The Kerala High Court had set aside the amendments made to the Employees� Pension (Amendment) Scheme, 2014 brought into force by the Notification No. GSR 609(E) dated 22.8.2014. This amendment to the pension scheme allegedly created differences among the pensioners on the basis of a date � 1.9.2014, the date on which the amended scheme came into force. The object sought to be achieved is stated to be prevention of depletion of the Pension Fund. The Kerala High Court observed that this �cannot be accepted as a justification to support the classification.�

The Supreme Court bench of Chief Justice of India (CJI) Ranjan Gogoi and Justices Deepak Gupta and Sanjiv Khanna in its judgement yesterday said that after hearing the learned counsel for the petitioners and perusing the relevant materials it finds �no merit in the special leave petition. The same is accordingly dismissed.�

A two-member bench of the Kerala High Court, comprising Justices K Surendra Mohan and AM Babu, in its said order in writ petition No. 602/2015 and 13120/2015 and the connected cases, stated that inasmuch as the statutory scheme is to make the Pension Fund enure the benefit of the homogeneous class of the totality of employees covered by the Provident Fund, a further classification of the said class by formulating a scheme is ultra vires the power available to the Central government under Sections 5 and 7 of the EPF Act. Therefore, it has to be held that, the impugned amendments are arbitrary, ultra vires the EPF Act and unsustainable.

The petitioners (116 in number) were entitled to succeed, said the Kerala High Court. It also allowed the writ petitions as i) The Employees� Pension (Amendment) Scheme, 2014 brought into force by notification No. GSR 609(E) dated 22.8.2014 evidenced by Ext.P8 in WP(C) No. 13120 of 2015 is set aside.

The Kerala High Court also said that all consequential orders and proceedings issued by the Provident Fund authorities/respondents on the basis of the impugned amendments shall also stand set aside various proceedings issued by the Employees Provident Fund Organisation declining to grant opportunities to the petitioners to exercise a joint option along with other employees to remit contributions to the Employees Pension Scheme on the basis of actual salaries drawn by them were also set aside.

It further said that the employees shall be entitled to exercise the option stipulated by paragraph 26 of the EPF Scheme without being restricted in doing so by the insistence on a date.

One of the major observations made by the Kerala High Court was that the Pension Fund is created for the purpose of providing succour to the employees in their old age, taking into account the fact that the fund is created by collecting contributions from the employers and employees, casting no financial burden on the state, and it follows no scheme that defeats the purpose of the enactment by reducing the pension payable to the employees in their old age to a ridiculously low amount, which is not sufficient even for ensuring a decent life to them.

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SC order to pave way for pension in private sector

GUWAHATI, April 2 - The Supreme Court of India has dismissed a special leave petition filed by the Employees� Provident Fund authorities that challenged a Kerala High Court order passed on October 12, 2018, on pension benefits of retired employees of private firms. This is expected to pave the way for a hassle-free monthly pension for the private sector employees.

The Kerala High Court had set aside the amendments made to the Employees� Pension (Amendment) Scheme, 2014 brought into force by the Notification No. GSR 609(E) dated 22.8.2014. This amendment to the pension scheme allegedly created differences among the pensioners on the basis of a date � 1.9.2014, the date on which the amended scheme came into force. The object sought to be achieved is stated to be prevention of depletion of the Pension Fund. The Kerala High Court observed that this �cannot be accepted as a justification to support the classification.�

The Supreme Court bench of Chief Justice of India (CJI) Ranjan Gogoi and Justices Deepak Gupta and Sanjiv Khanna in its judgement yesterday said that after hearing the learned counsel for the petitioners and perusing the relevant materials it finds �no merit in the special leave petition. The same is accordingly dismissed.�

A two-member bench of the Kerala High Court, comprising Justices K Surendra Mohan and AM Babu, in its said order in writ petition No. 602/2015 and 13120/2015 and the connected cases, stated that inasmuch as the statutory scheme is to make the Pension Fund enure the benefit of the homogeneous class of the totality of employees covered by the Provident Fund, a further classification of the said class by formulating a scheme is ultra vires the power available to the Central government under Sections 5 and 7 of the EPF Act. Therefore, it has to be held that, the impugned amendments are arbitrary, ultra vires the EPF Act and unsustainable.

The petitioners (116 in number) were entitled to succeed, said the Kerala High Court. It also allowed the writ petitions as i) The Employees� Pension (Amendment) Scheme, 2014 brought into force by notification No. GSR 609(E) dated 22.8.2014 evidenced by Ext.P8 in WP(C) No. 13120 of 2015 is set aside.

The Kerala High Court also said that all consequential orders and proceedings issued by the Provident Fund authorities/respondents on the basis of the impugned amendments shall also stand set aside various proceedings issued by the Employees Provident Fund Organisation declining to grant opportunities to the petitioners to exercise a joint option along with other employees to remit contributions to the Employees Pension Scheme on the basis of actual salaries drawn by them were also set aside.

It further said that the employees shall be entitled to exercise the option stipulated by paragraph 26 of the EPF Scheme without being restricted in doing so by the insistence on a date.

One of the major observations made by the Kerala High Court was that the Pension Fund is created for the purpose of providing succour to the employees in their old age, taking into account the fact that the fund is created by collecting contributions from the employers and employees, casting no financial burden on the state, and it follows no scheme that defeats the purpose of the enactment by reducing the pension payable to the employees in their old age to a ridiculously low amount, which is not sufficient even for ensuring a decent life to them.

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