Second round of tripartite consultations on EPF & MP Act amendments held

Bandaru Dattatreya Chairs Tripartite Consultations 

 

The Second Round of Tripartite Consultations on Employees Provident Fund and Miscellaneous Provisions Act,1952 (EPF &MP Act) Amendments was held on March 31st, 2015. Shri Bandaru Dattatreya, the Minister of State, Labour & Employment (I/C) chaired the second round of tripartite consultations on EPF & MP Act Amendments. The consultations gain greater importance in view of the new amendments proposed in the backdrop of the Union budget proposals impacting the functioning of EPFO. 

 

Inaugurating the consultations, Shri Dattatreya briefly dwelt upon the major changes being mulled in the proposals. They include bringing down the minimum no. of employees required for coverage under the Act from the existing 20 to 10, doing away with the Schedule Head for coverage and bringing in a negative list instead, special provisions for encouraging the functioning of small-scale units, provisions for setting up of multiple Appellate Authorities under the Act, removing ambiguities in the implementation of the Act, ensuring greater clarity in the definitions under the Act, especially with regard to wages which qualify for deduction for the purposes of the Act, introducing greater transparency and accountability in the enforcement of the Act by having an objective inspection scheme, introducing a scheme for unorganized workers and providing a choice to the worker by giving an option to join NPS / EPFO, which is in tune with the proposals mentioned in the Union Budget. 

 

Taking part in the discussions, the representatives of the employers’ associations and federations generally welcomed the various proposals contained in the amendments under consideration. They generally voiced the opinion that the introduction of NPS would mean greater choice for the worker. However, there were also views that NPS cannot match the benefits offered by EPFO and therefore, are not comparable. It was also felt that the amendments would help in sharpening the competitiveness of Indian Industry and would enable India to become a manufacturing hub. However, there was a need to further encourage the concessions granted to the small-scale industries. Increase of coverage also received wide acceptance, both from employers’ and employees’ side. 

 

Opposing certain amendments proposed, representatives of the Trade Unions expressed reservations especially to the move to introduce NPS as a substitute to EPFO. They also expressed reservations regarding the inspection scheme which they argued brought about centralization in the decision making process which is contrary to the prevailing wisdom which favours decentralization. 

 

Summing up the discussions, Shri Shankar Aggarwal, Secretary, MOL&E assured that the concerns of all stakeholders will be addressed when giving final touches to the legislative amendments. Further, the objective behind bringing in the changes is to further strengthen the delivery of social security benefits. 

 

In his concluding remarks, Shri Dattatreya stressed upon the need to focus on the unorganized sector of the workforce which constitutes 93% of the total workforce. He said that the need of the hour is to include more segments of the workforce like Anganwadi works into the ambit of social security legislations. He also informed that the Ministry is contemplating issue of smart cards to the labour workforce so that social security benefits reach each intended beneficiary. He also assured that the Act would be amended taking into account the sensitivities of all concerned. 

 

Shri Sharad Patil, EFI (Employers Federation of India), Shri S.S. Patil, AIMA (All India Manufacturers Association), Shri Bhardwaj, Laghu Udhyog Bharati, Shri Sushant Singh, CII (Confederation of Indian Industries), Shri A.K. Padmanabhan, CITU, Shri A.D. Nagpal, HMS, Shri B.L Sachdeva, AITUC, Shri Ashok Singh, INTUC were some of the notable representatives of employers’ associations and employees’ associations (trade unions) who took part in the deliberations in addition to the representatives of various state governments.