Govt. to amend EPF Act to speed up recovery of Rs.12bn employer dues

• Labour Minister says employers o we circa Rs.12bn to the fund
• Act amendment to allow legal actions to be filed at Labour Tribunal against errant employers, enabling quick recovery of dues

The government has announced plans to amend Employees’ Provident Fund (EPF) Act No. 15 of 1958, to expedite the recovery of approximately Rs.12 billion worth of dues owed by employers to the fund over the years, as the current provisions under the act for such an exercise proves to be time-consuming and lengthy.

Issuing a statement, Labour Minister Nimal Siripala de Silva yesterday announced plans to allow legal action to be filed at the Labour Tribunal against the default employers by amending the EPF Act, in order to swiftly recover the sums, as the current act only allows such legal actions to be filed at the Magistrate Courts.

He revealed that a record number of such legal action filed at the Magistrate Courts is awaiting verdicts for years, sometimes due to congestion.

While noting that the Labour Department has filed 11,549 cases against the private and state sector institutions for violating the EPF Act during the past five-year period up to January 1, 2020, with the overall outstanding cases at the Magistrate Courts, including the inactive cases with regard to non-payment or underpayment of the EPF contributions by employers at 16,000, he pointed out that it has become a lengthy process to collect the dues from these employers.

The minister noted that approximately Rs.12 billion in contributions to the EPF have been evaded.

Moving on, he vowed tougher legal action on these errant employers while emphasising that evasion of contribution to the EPF is not only a violation of the law of the country but it’s also a massive fraud against the country’s working class. 

According to the current EPF Act, in the event of underpayment or non-payment of contributions, the employees are empowered to make a written complaint to the Labour Commissioner. 

On receipt of the complaint and following an investigation, the employer receives a warning to settle the dues.
However, the minister pointed out that these employers continued to evade their contributions to the fund, disregarding the initial warning and red notices issued by the Labour Commissioner, compelling the commissioner to seek to legal action against them, to safeguard the rights of the employees.

He stressed that such behaviour wouldn’t be tolerated this year, under no circumstance. 

He expects that allowing cases to be heard at the Labour Tribunal would facilitate a quick recovery of the dues owed by the default employers.

In addition, the minister also announced his intentions to bring the necessary laws to making it mandatory for employers to register their employees within a six-month period of their recruitment. (NF)