The Kerala High Court has reiterated that right of employees to pension is a constitutional right which is akin to right to property under Article 300.
Brief Facts of the Case
The petitioners are former workers of the Kerala Books and Publications Society (KBPS), a company that is entirely possessed by the Keralan government. The Employees Provident Fund and Miscellaneous Provisions Act, 1952, was applied to society's employees.
Additionally, the Employees Pension Scheme became applicable. While this was the case, the labour unions sought that, in terms of pay and benefits, the employees of the Society be subject to the rules of the Kerala Service Rules. The Government referred the dispute to the Labour Court, and a ruling was made ordering the management of the Society to consider whether to convert KPBS into a government-run printing unit under the Education Department or to apply the Kerala Service Rules to its employees and to make the necessary decisions within four months.
The Society had decided to organise a two-member committee to investigate the idea of creating a separate pension fund for its employees after having a thorough conversation with the Government. The decision in that regard was made in response to a demand from the labour unions, who noted the stark pay and pension differences between Government employees and Society employees despite KBPS's full ownership by the Government. The committee had advised paying pensions according to the guidelines in Part III of KSR. Prior to the Government approving authority to enforce the 2014 Pension Regulations, this topic was also studied and thought through. This Court gave the Government order due consideration and adopted it.
However, the qualified pension amount was not paid to the retired employees even after the Regulations were published. As a result, certain employees prayed for a writ of mandamus ordering respondents to pay retired employees their monthly pensions in accordance with the 2014 Pension Regulations. The Employees Provident Fund Organization had refused to reimburse the contribution sent to the Society's pension scheme, thus the Society took the position in that writ case that it lacked the finances for disbursing pensions. With instructions, the government briefly broke the deadlock. The petition was dropped in light of this development.
On the basis of the government's directives and in accordance with the Pension Regulations of 2014, additional petitions filed in the current case seek a determination that the petitioners are entitled to receive a full pension beginning on the date of their retirement. Employees in service then file petitions asking for a declaration that they have the right to continue being members of the Employees Provident Fund and Miscellaneous Provisions Act, 1952. Employees Provident Fund and Miscellaneous Provisions Scheme, Employees Pension Scheme, and Employees Deposit Linked Insurance Scheme and that the Government order notifying the Pension Regulations, 2014 be quashed.
Additionally, one of the petitioners filed a contempt of court case, charging failure to follow the instructions given in the judgement.
Submissions of Counsel
The learned counsel for the petitioner submitted that The employees of the KBPS are covered under the EPF and MP Act, 1952. All the employees had been contributing towards the Employees Provident Fund. The corpus for the fund under the Pension Regulations, 2014 is created, to a large extent, by utilising the amount to be refunded by the EPF organisation.
However, the EPF organisation has refused to transfer the fund in the absence of any exemption under Section 17 of the EPF and MP Act. This resulted in a delay in settling the
pensionary benefits of the employees. Furthermore, the society appropriated the entire amount available in its pension fund for paying retirement benefits to 106 employees who
had already retired, leaving very little amount in balance to meet future commitments. Hence, the counsel contended that unless exemption is granted under Section 17 of the EPF Act, the conduct of pension schemes under the Pension Regulations, 2014, is illegal and the petitioners do not want to be shifted from the EPF Pension Scheme to the Scheme under the Pension Regulations, 2014.
Learned counsel appearing for the society argued that The Pension Regulations, 2014 was accordingly formulated under the belief that the contribution in the Employees Provident Fund will be returned. Unfortunately, in spite of repeated requests, the Regional Provident Fund Commissioner refused to return the amount. On the other hand, it was informed that the EPFO is initiating proceedings under Section 7A of EPF and MP Act to recover the defaulted payments due towards the EPF account. The stand taken by the EPF is that the State Government has no authority to exclude any establishment from the purview of the EPF Act and such power is exclusively vested with the Central Government under Section 16(2).
The governing body of the Society and the Pension Board has opined that the pension scheme needs further clarity and consensus of all stakeholders. Furthermore, The submission that the society is running under huge profit is factually incorrect and in any event, under the prevailing circumstances, the revenue generated by the society cannot be utilised for payment of pensions to retired employees. Therefore, the full pension can be paid only if the contribution already made is refunded by the Employees Provident Fund Organisation or the huge amounts due from the Government, for the works executed by the, are paid at the earliest.
The Standing Counsel for the EPF Organisation contended that Exemption from the employee's pension scheme can be granted only in accordance with Section 17(1C) of the
EPF and MP Act, The provision for exclusion from the purview of the Act is laid down in Section 16(2), as per which the competent authority is the Central Government. The
Government of Kerala is hence not empowered to grant exclusion. The Society having not been exempted or excluded from the provisions of the Act, the implementation of the Pension Regulations, 2014 is of no avail and the Society is bound to remit the contribution of the employees. Having failed to do so, proceedings having initiated for recovery of the dues under Sections 7A and 7Q of the Act.
Court’s Observation
The learned single bench held that as per the regulation, an employee will become entitled to a pension from the next day of his retirement. There is no provision, enabling the employer to pay any amount lesser than what is legitimately due to the pensioner. It may be true that a significant portion of the corpus of the pension fund consists of the amount to be refunded by the EPF Organisation. Furthermore while addressing the question of whether the retired employees can be denied pension on that ground, referred to D.S.Nakara (supra) and Sudhir Chandra Sarkar(supra) wherein it was reiterated that pension is a right, the payment of which does not depend upon the discretion of the employer. Furthermore, they highlighted that in the State of Jharkhand v. Jitendra Kumar Srivastava, the Apex Court declared the right to receive a pension as akin to a right in property.
The court noted that the legal position emanating from precedents is that, pension is no longer a bounty to be paid at the whims and fancies of the employer. The right to pension, if not a fundamental right, is definitely a constitutional right. A retired employee cannot be deprivedof this right, save by authority of law. In the instant case, the court opined that having formulated the pension regulations and having stopped payment of contribution to the EPF pension fund, the society cannot wriggle out of its responsibility by pleading paucity of funds. It is for the society to stimulate the required funds, either from its profit or revenue.
Consequently, the dispute with the EPF Organisation and the delay in receiving back the EPF contribution, are not acceptable as an excuse for non-payment of eligible pension to the retired employees.
In the light of the above discussions, the court found the petitioners to be entitled to the relied sought and other grievances attached to be redressed by the issuance of the government order which stipulates that the existing regular employees are exempted from the Pension Regulations, 2014 and reinstated to the EPF pension scheme. The court disposed off the petitions with directions.
CASE DETAILS: WP(C) NO. 11306 OF 2015
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