The Centre of Indian Trade Unions (CITU) has opposed the Government’s reported move to change the definition of ‘wages’ for the purpose of provident fund (PF) contribution.

In a letter to Labour Minister Oscar Fernandes, CITU President AK Padmanabhan, who is also a member of the Board of Trustees of the Employees Provident Fund Organisation, said that the move to amend the circular of Central Provident Fund Commissioner, dated November 30, 2012, relating to definition of wages would take a heavy toll on eight crore PF subscribers.

“After the circular was issued by the then CPFC Shri R.C. Mishra, it was put in abeyance. A tripartite working group was formed to “examine various aspects of the circular” which had CBT members representing employers and workers and also higher officials of EPFO... The unanimous decision of the working group upholding the content of the EPFO circular was finalised on March 29, 2013 and sent to the Government. Now, after passage of more than one year, the unanimous recommendation of the working group is nullified and the most important portion of this circular is being done away with,” said the letter.

Padmanabhan said it was a common practice by employers to split wages into several heads to keep basic pay low to evade PF contributions and the circular had clearly noted “the subterfuge of splitting wages to exclude PF liabilities”.

He, therefore, urged the Minister to uphold the circular so that “legitimate dues of workers are not denied and employers being unduly favoured''.

Padmanabhan also pointed out that two other decisions – enhancing the minimum pension to Rs 1,000 and increasing the wage ceiling for eligibility for PF enrolment to Rs 15,000 from Rs 6,500 -- were lying unimplemented.

“These decisions were taken by the Central Board of Trustees under your Chairmanship only after the concurrence of the Finance Ministry,” said the letter, adding that these be implemented with effect from April 1, 2014 “as already announced by the Government''.

comment COMMENT NOW