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Informist, Tuesday, Nov. 4, 2025

 

--Delhi HC upholds law making EPF scheme applicable to international workers

--CONTEXT: Cos had opposed extending EPF scheme to international workers 

 

NEW DELHI – Rejecting petitions filed by SpiceJet Ltd. and LG Electronics India Ltd., the Delhi High Court Tuesday upheld the central government's notifications making the Employees' Provident Fund Scheme 1952 applicable to international workers with certain modifications. Through notifications in 2008 and 2010, the government had said every international worker, other than excluded employees, of an Indian establishment to which the Employees' Provident Fund Scheme applies is entitled and required to become a member of the Employees' Provident Fund.

 

Further, the government cast a duty on every employer to send to the EPF commissioner a consolidated return in such form as the commissioner may specify in respect of international workers. This return should depict certain information regarding basic wage, retaining allowance, and dearness allowance, the government said.

 

The government had also permitted international workers to withdraw the full amount standing to their credit in the EPF on retirement from service at any time after the attainment of 58 years of age, or on account of permanent and total incapacity for work due to some infirmity.

 

The high court rejected SpiceJet's challenge to a 2011 letter by the Employees’ Provident Fund Organisation asking the company to deposit the provident fund and other dues in respect of international workers. It also rejected SpiceJet's challenge to a summons issued in 2012 by the organisation, requiring the company to appear to give evidence and produce all relevant records for determination of provident fund and related dues payable by it in respect of international workers employed by it.

 

The court rejected a similar challenge to a letter and a summons issued to LG Electronics by the Employees' Provident Fund Organisation. "We also provide that proceedings under Section 7A (of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952) shall be drawn afresh by the EPFO strictly fulfilling the requirements given therein in respect of the petitioners in both the petitions which shall be concluded within a reasonable time period," the court said.

 

The petitioners had argued that requiring international workers to become members of the EPF and contribute to the fund was discriminatory. They reasoned that an Indian employee was required to contribute to the EPF only if drawing less than INR 15,000 per month whereas non-excluded international employees were required to contribute to the fund irrespective of the pay being drawn by them.

 

The court, however, agreed with the government's argument that such classification was based on the fact that foreign employees do not face economic duress if they are made members of the 1952 scheme as they come to India for employment for short periods of two to five years. Indian employees generally serve until they attain the age of superannuation and because of such long duration of employment, they could face economic duress if mandated to contribute to the scheme. The court noted that the classification done was reasonable and also meets the objective of providing social security.

 

The companies had argued that the protection of Article 14 of the Constitution extends even to non-citizens and therefore foreign employees enjoy equality before the law and equal protection of laws which, however, was being denied by adding them to the 1952 scheme. "...we may observe that the right of equality as enunciated by Article 14 of the Constitution of India is subject to reasonable classification, which is permissible provided such classification has an intelligible differentia and is based on some rationale," the court responded.

 

Tuesday, shares of SpiceJet ended unchanged at INR 36.28 on the BSE. Shares of LG Electronics India ended 1% lower at INR 1,633.40 on the National Stock Exchange.  End

 

Reported by Surya Tripathi

Edited by Rajeev Pai

 

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