Karnataka HC strikes down amendment extending EPF, EPS to foreign workers

Hyderabad Desk

Bengaluru: In a significant ruling, the Karnataka High Court has deemed unconstitutional the amendment made by the Central Government in 2008, which sought to bring foreign workers residing in the country under the purview of the Employees’ Provident Fund (EPF) and Employees’ Pension Scheme (EPS).

The decision came in response to an application filed by various organisations, including the Stone Hill Education Foundation, and was reviewed by Justice KS Hemalekha, who presided over a single-member bench. 

Expressing its stance, the court highlighted the disparity created by the 2008 amendment, which removed the salary limit for foreign workers, unlike their Indian counterparts who are subject to a monthly salary cap of Rs 15,000 under the EPF and EPS coverage. 

Furthermore, the court emphasised that the intent behind the EPF and Miscellaneous Provisions Act was to provide post-retirement benefits to low-wage earners, rather than extending such benefits to individuals earning substantial sums each month. Citing the stringent provisions within the EPF and MP Act, the court underscored that while the legislation aims to safeguard employees, it should not be manipulated to cater to the financial needs of affluent foreign workers.

Moreover, the court elucidated that the Acts were devised to ensure security and welfare for employees posted abroad from India, and any amendments should align with the intended purpose of the legislation. The petitioner organizations raised concerns regarding the adverse impact of including foreign workers in the EPF and EPS schemes, arguing that such measures could jeopardize their interests, especially considering their temporary employment status.

In light of these arguments, the court ruled against the extension of EPF and EPS benefits to foreign workers, affirming that such individuals should be treated separately under distinct categories.

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