Govt. amenable to TU concerns in Pension Fund Bill

SC determines Bill consistent with Constitution and Pension Fund sufficiently safeguarded
By Chandani Kirinde

The Government has agreed to amend the Employee’s Pension Fund Bill (EPFB) to accommodate concerns raised by trade unions which challenged the Bill’s constitutionality before the Supreme Court.
These would include the provision for a surviving spouse of a member of the fund to be a beneficiary of a lump sum payment in the event of the death of the member under the age of 60, at which age the pension becomes payable.

Previously, the Bill only allowed a child below the age of 18 or a mentally or physically handicapped child to be a beneficiary of such a payment. The Bill was challenged on the grounds that some of its clauses violated the fundamental rights of workers. However, the Court held that most of the clause challenged was, in fact, consistent with the Constitution.These included the provisions in the Bill to pay into the Employees Pension Benefit Fund, 10% of the annual profit of the Employees Trust Fund (ETF).

Petitioner claimed that such a move would deprive the members of the ETF of their due entitlements.
However, Court held that it was quite evident that dividends of the ETF were being utilised for the benefit of its members, and that the objective of the Bill was to provide a pension scheme for those in certain categories of employments, who are also members of the ETF.

Petitioners also challenged the clause in the Bill under which any loss of monies on account of theft, misappropriation or overpayment, as well as any loss of articles including furniture, office equipment etc, to be deducted from the income from the investment of monies of the Fund.

State Counsel told Court that the provision has not been laid down to circumvent any criminal proceedings against any type of perpetrators of an offence in respect of the Fund, but intended to set off any loss on account in matters where recovery would not be feasible. State Counsel also noted the existence of a similar provision in the Employees Provident Fund (EPF) Act.

The Court held that it is abundantly clear that this clause is not introduced for the first time to give legal recognition of protection of criminal acts, which, under normal circumstances, are considered offences.
The Petitioners also challenged the requirement in the Bill that the total amount due to an employee, as gratuity, to be paid to the Fund by the employer in one installment on the day the employee becomes a member of the Fund.This was challenged under Article 14 (1) of the Constitution, which guarantees the freedom for citizens to engage individually, or in association with others, in any lawful occupation, profession, trade, business or enterprise.

Court however, said that the said fundamental right is subject to such restrictions as may be prescribed by law provided and in terms of this Article, and hence, this right cannot be taken as unrestricted in its application, as “there cannot be absolute or unrestricted rights existing in any modern State.”

Court asserted that the Bill itself provides sufficient safeguards with regards to the security of the monies in the Employees Pension Benefit Fund, with the Commissioner General of Labour being in charge of general administration, as well as the Fund being subject to annual audits by the Auditor General.

The Supreme Court in its determination sent to the Speaker of Parliament Chamal Rajapaksa, said that, neither the Bill nor any of its provisions were inconsistent with the Constitution. The Bench comprised Justices Dr. Shirani Bandaranayake, N.G. Amaratunga and R.K.S. Suresh Chandra.

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