Bombay HC Directs EPFO To Grant Higher Pension To Employees Of Exempted Firms

The Bombay High Court has instructed the Employees' Provident Fund Organisation (EPFO) to process and grant higher pensions to employees and retirees of exempted establishments, rejecting the notion that private provident fund trust rules can supersede statutory pension benefits. Justice Sandeep Marne ruled in favor of six employees associated with establishments such as BEST, Abbott India, and Tata Communications, dismissing orders that denied them higher pensions.

The court emphasized that employees should not be denied higher pensions simply because their employers' provident fund trusts set wage ceilings, limited contributions, or lacked provisions for joint pension claims on higher wages. The court upheld the employees' entitlement to higher pensions, irrespective of internal trust rules that restrict contributions or do not expressly provide for higher pensions within the Employees' Pension Scheme (EPS) of 1995.

Advocate Satyam Surana argued that employees' higher pensions could not be restricted by trust rules, especially when they had contributed actual wages exceeding the statutory wage ceiling. However, the EPFO's advocate, Payoja Gandhi, contended that some employers failed to submit necessary trust rules, forms, and records to determine eligibility.

Drawing from judgments of other High Courts, Justice Marne held that internal trust rules cannot undermine statutory pension benefits and that the absence of historical records should not automatically lead to claim rejection. When documents were unavailable, alternative verification methods, including employee hearings, should be employed.

The court noted that several petitioners were retirees and urged the EPFO to expedite the processing of their cases. Allowing all six petitions, the court struck down the EPFO's rejection orders and directed it to grant the joint options for higher pensions within eight weeks.