• By Lakmal Sooriyagoda 

In a recent legal ruling, the Court of Appeal concluded that the entity identified as the Foundation for Environment, Climate and Technology does not fall under the category of an employer within the scope defined by the EPF Act. As a result, the organisation is deemed not responsible for the payment of Employee Provident Fund (EPF).The Court of Appeal further issued a Writ of Certiorari, nullifying the Commissioner of Labour’s decision that mandated the petitioner organisation to settle Rs 1.86 million as alleged arrears, along with associated surcharges, purportedly linked to outstanding EPF contributions.

Petitioner Foundation for Environment, Climate and Technology through its application dated 22.11.2019 has sought to challenge the decisions to recover arrears of contributions to the Employees’ Provident Fund (EPF) in relation to Samsudeen Zeenas who claims to have been employed under the Petitioner.

The Petitioner alleges that the  Labour Commission’ s decision that the Petitioner organisation as an employer liable to pay EPF is illegal in terms of the Employees Provident Fund Act. The Petitioner claims to be a “non-profit charitable organisation” incorporated on 31.12.2003, under and in terms of Section 21 of the Companies Act No. 17 of 1982 and thereafter re-registered under the Companies Act No. 7 of 2007 as a Company Limited by Guarantee. 

The Petitioner was allowed to dispense with the word ‘Limited’ since the Registrar of Companies was satisfied that the objectives of the Petitioner were in accordance with Section 34 of the said Act No.7 of 2007. The Petitioner also registered as a Voluntary Service Organisation on 26.05.2017 under and in terms of Voluntary Social Service Organisations (Registration and Supervision) Act No 31 of 1980.
In its writ application before Court of Appeal The Petitioner said the company does not have more than 10 employees. 

In this context, the Petitioner had obtained the services of the third respondent Samsudeen Zeenas on an ad hoc basis wherein she had rendered her services for certain projects and her commitment towards such projects ended with the closure of such projects. The third respondent subsequently had instituted action against the Petitioner organisation with two others at the Labour Tribunal No 3 of Kandy by through an application dated 26.05.2017 claiming that she was employed as a Document Assistant under the Petitioner since 01.02.2002 and that she was unjustly terminated from service.

The Petitioner’s fundamental position is that it is a small, non-profit, charitable organization with less than 10 employees and thus, the Petitioner is not liable to contribute to the EPF in accordance with Section 10(3) of the EPF Act.
Court of Appeal two-judge-bench comprised Justices Mohammed Laffar and Wickum Kaluarachchi. President’s Counsel Faisza Markar with Zainab Markar instructed by Dilini Gamage appeared for the Petitioner. Deputy Solicitor Chaya Sri Nammuni appeared for the Commissioner of Labour.