The
Delhi High Court on Tuesday upheld the central government's rules stating that international
workers must contribute to the Employees’ Provident Fund (EPF) even if they are
earning below ?15,000. Meanwhile, Indian employees need to contribute only if
their monthly earnings exceed the ?15,000 limit.
A
bench of Chief Justice D K Upadhyay and Justice Tushar Rao Gedela delivered the
verdict in the case filed by SpiceJet and LG Electronics India, which had
challenged government notifications issued in 2008 and 2010. These rules said
that both foreign employees working in India and Indian employees working
abroad should be covered under the provident fund system.
SpiceJet
argued that treating foreign and Indian employees differently was unfair,
discriminatory, and beyond the government's power. The airline said that the
law itself made no such difference between Indian and foreign workers, but the
government notification created one, which was not allowed based on
nationality.
However,
the court ruled that the government has full authority to extend the provident
fund scheme to international workers under the EPF Act. The government’s lawyer
defended the rule, saying the difference was reasonable. He explained that
asking all Indian employees to contribute to the fund, no matter their income,
would cause financial strain.
However,
this burden does not apply to most foreign employees, as they usually work in
India only for short periods of two to five years. This latest ruling is a big
setback for foreigners who come to India for short-term jobs of two to five
years.
The
companies also wanted the court to cancel the demand notices sent by the
Employees’ Provident Fund Organisation (EPFO). However, stating that the
notifications were made properly and within the law, the high court upheld the
EPFO’s notices directing SpiceJet and LG Electronics India to pay provident
fund and other dues for their international employees.
While the Delhi High Court’s ruling aligns with the
Bombay High Court’s view, the Karnataka High Court has taken a different
stance, according to a report by The Economic Times. Because of these
conflicting judgments, the matter is now expected to reach the Supreme Court
for a final decision.