Court affirms employees' rights to higher pension contributions based on actual wages, aligning with Supreme Court precedents.
In a significant ruling, the Karnataka High Court has granted employees of exempted establishments the right to claim higher pensions under the Employees' Pension Scheme, 1995. The decision, issued by Justice Anant Ramanath Hegde, allows employees who have contributed to their Provident Fund on actual wages to exercise a joint option for a higher pension, even if they did not opt for higher contributions before the 2014 amendment.
The judgment came as a relief to the Bharath Earth Movers Employees Association and others who filed multiple writ petitions challenging the rejection of their higher pension claims. The petitioners argued that their contributions to the Provident Fund on actual wages should entitle them to higher pension benefits, a stance supported by previous Supreme Court judgments in the cases of R.C. Gupta and Sunil Kumar.
The court quashed the orders of the Assistant Provident Fund Commissioner, which rejected the joint options on grounds that the employees had not contributed to the pension fund on higher wages or that the trust rules did not allow such contributions. The High Court emphasized that statutory rights under the Employees' Pension Scheme override conflicting trust rules, provided other eligibility criteria are met.
Justice Hegde highlighted that the 2014 amendments to the Pension Scheme apply equally to both exempted and unexempted establishments, thus rejecting higher pension claims based solely on the establishment's exempt status is unsustainable. The ruling aligns with the Supreme Court's interpretation that employees who contributed on actual wages are not constrained by previous cut-off dates or trust rules in claiming higher pensions.
The court directed the Employees' Provident Fund Organisation to accept the joint options exercised by the employers and employees and to recalculate pensions based on actual wages. This recalculation must be completed within 90 days from the receipt of the court order.
The judgment provides clarity and relief to thousands of employees in exempted establishments, affirming their rights to higher pension benefits as per the statutory provisions and the Supreme Court's interpretation. The court's decision reinforces the principle that beneficial schemes should not be undermined by procedural technicalities or restrictive rules.
Bottom line:-
Employees of exempted establishments, who contributed to the Provident Fund on actual wages, can exercise a joint option under Paragraph 11(4) of the Employees' Pension Scheme, 1995, to claim a higher pension, even if no option was exercised under Paragraph 11(3) prior to the 2014 amendment, subject to other eligibility criteria.
Statutory provision(s): Employees' Pension Scheme, 1995, Paragraphs 11(3) and 11(4), Employees' Provident Funds and Miscellaneous Provisions Act, 1952.
