The Karnataka High Court Struck Down The Special Provisions For International Workers Under The EPF Act As Unconstitutional

Posted On - 15 May, 2024 • By - King Stubb & Kasiva

[1]The Central Government vide notification dated 01.01.2008 introduced para 83 under the Employees’ Provident Fund Scheme, 1952 and Para 43A under the Employees’ Pension Scheme, 1995 covering “international workers” as a special category of employees for the Employees’ Provident Fund (EPF) coverage.

A petition challenging the said notification was filed before the Karnataka High Court and the High Court pronounced its judgement on April 25, 2024, stating that

(a) there is a discrimination between the Indian employees working in a non-SSA country (who are not international workers as per definition) and foreign employees from non-SSA working in India who are classified as international workers. There is no rational basis for this classification nor there is reciprocity that compels to classify foreign employees from non-SSA countries as international workers;

(b) introduction of special provisions for working journalists and cine workers under para 80 and 81 of the EPF Schemes cannot be equated with the special provisions for international workers, considering that the working journalists and cine workers undergo a lot of risk on duty;

(c) non-citizen employees working in India and employees who are citizens of India, when working in India, are equals, however, they are treated differently which violates Article 14 of the Constitution; and

(d) the classification made is unreasonable, does not have intelligence differentia and there is no presence of nexus between the object of the EPF Act and the basis of classification.

The High Court held that the special provision is arbitrarily and unreasonably enacted and violative of Article 14 of the Constitution, and consequently, all the orders passed thereof are unenforceable. 

[1] WP No. 18486/2012 (L-PF)