Time to end Pro-rata scheme
Employees pay their share to the provident fund while in service in proportion to their salary. Anyone with a sense of justice will understand that this ratio should be followed when paying a pension. However, the Employees' Provident Fund Organisation (EPFO), formed to protect the welfare and rights of workers, is not yet convinced of the plight of pensioners. The employees had to fight for their rights by filing cases in the High Courts and the Supreme Court for many years. Even after the final decision was made to pay pension in proportion to salary, the EPFO tried new tricks to delay the decision by filing a review petition against it. The Central Labour Department, the PF Board and the civil service officers who lead it have always been the obstacles to paying the increased pension.
The amount remaining with the EPFO without any claimants to withdraw is around Rs 40 lakh crore. If this amount is made into a fixed deposit, an increased pension can be given without much liability. However, the officials cite rules for not moving ahead with the plan. The minister, who is a political representative and heads the Union Labour Department, should show the will to change it. When Kamaraj, the former Chief Minister of Tamil Nadu, came to assess the flood relief efforts, he asked the Collector to give an increased amount to the flood victims. The Collector showed apprehension and cited that the law doesn’t allow such a provision. "The law is made for the welfare of the people. If it becomes an obstacle to that, then the law should be changed. Grant a larger amount by recording that it is being given as per the instructions of the Chief Minister" - this was Kamaraj's order. Kamaraj was able to say so because he firmly believed that justice is more important than the law.
Over time, political leaders started valorising law and technical issues over humanity and justice. That is why employees and others have to approach the courts and others to get fair rights.
Pro rata was included in the amendment brought in 2014 to the Employees' Pension Scheme of 1995. According to this, a pension is granted by calculating the period before and after 2014 separately. It is natural justice that while granting a pension to a person, his service should be considered as one. Accordingly, the pensioners demanded that the pension should be determined by taking the average of the last 60 months of salary.
They approached the courts against the EPFO's rejection of this proposal.
Last year, a single bench of the Himachal Pradesh High Court ruled that the pro-rata system was unfair, but later the division bench stayed the EPFO's appeal. Now, a single bench of the Punjab and Haryana High Court has also cancelled the pro-rata system. EPFO will not be able to appeal against that either. No matter how long the case is filed, it can be assumed that this system will eventually be eliminated. Therefore, the Union Ministry of Labour should take a political decision to cancel this system and adopt a straightforward way to provide a pension without having to file cases for years and entangle pensioners.