The move, which will relieve the burden on the employees who had subscribed to the Employees’ Pension Scheme, will be retrospective in nature, it said in a statement issued late on Wednesday night.
The spirit of the Employees’ Provident Fund & Miscellaneous Provisions Act as well as the Code on Social Security do not envisage contribution from the employees into the pension fund, the labour ministry said in a statement.
“Accordingly, keeping in mind the letter and spirit of the EPF & MP Act and the Code , it has been decided to draw 1.16 % additional contribution from within the overall 12% of the contribution of the employers into the provident fund,” it said, adding that this provision is retrospective in nature.
The Supreme Court, in its order on pension on higher wages, had held the requirement of the members to contribute at the rate of 1.16% of their salary to the extent such salary exceed Rs 15000 per month as an additional contribution under the amended scheme to be ultra vires of the provisions of the Employees’ Provident Fund and Miscellaneous Provisions Act,1952 (EPF & MP Act) and directed the authorities to make necessary adjustments in the Scheme within a period of six months.
“For implementing the above direction, all aspects of the matter including legal and administrative were examined in detail. It was decided that since the Code on Social Security,2020 (the Code ) has already been notified, it would be appropriate to bring relevant provisions of the Code into effect,” it said, citing the earlier instance when Section 142 of the Code was operationalised as a singular provision.
Further since the Code provides for repeal of EPF & MP Act, the labor ministry said certain provisions of the EPF & MP Act get repealed while giving effect to the relevant provisions of the Code. Accordingly, the ministry of labour and employment has issued two notifications on Wednesday implementing the above decision.In its notifications issued in compliance of the SC judgement dated November 4, 2022 in the case pertaining to pension on higher wages, the labour ministry said it had promptly taken all actions within the stipulated deadlines to comply with the directions of the Supreme Court in the said order, including extension of deadline to June 26 to allow beneficiaries to file for higher pension.