Immediately Repeal EPF withdrawal rules – No to Temporary Suspension of Rules

New Delhi, 19 April 2016: The New Trade Union Initiative strongly condemns the action of the Bengaluru city police and the police in various districts of Karnataka who have turned their wrath against the tens of thousands of garment workers, mostly women, who have been peacefully demonstrating against the unilateral changes made by the Government of India to the rules disallowing workers to withdrawing their earned monies from the Employees’ Provident Fund.

The NTUI salutes the courage of the workers who have come out in opposition to the unilateral changes made in the EPF rules. The NTUI congratulates the leadership and membership of its affiliate, the Garment and Textile Workers Union (GATWU), who led a campaign, amongst garment workers, against the new PF rules.

The new EPF withdrawal rules allow workers to withdraw only their share of the EPF contribution during the course of and at the loss of employment. The employer’s contribution to PF can now only be withdrawn when a worker reaches the age of 58, which has in effect been fixed as the age of retirement.

Reality is that a vast majority of workers do not have uninterrupted employment until the age of retirement. The majority of workers in industries, such as the garment manufacturing, receive intermittent employment typically for no more than 10 or 15 years. In the absence of any possibility of life-time employment or provision for an unemployment benefit, workers have no choice but to rely on their retirement funds to survive between jobs and hence are forced to withdraw their PF monies. Further, workers today are being increasingly victimised by employer for increased productivity and therefore growing intensity of work, for resisting harassment on the shopfloor, including sexual harassment, and for joining a trade union. PF monies come handy when workers are illegally terminated on alleged disciplinary grounds, and find it difficult to get another job in the industry or in the area. This often forces workers, who once came to the city looking for a job, back to their homes in rural areas or to other areas in search of jobs.

Workers must enjoy the continued and inalienable right to withdraw their earned EPF monies so long as government is unable to put in place public policy that guarantees full employment or, at the very least, guarantees a minimum wage linked unemployment allowance. Until such time as government is able to put in place these guarantees, government must not assume for itself the right to decide when a worker can withdraw earned EPF monies especially upon the loss of employment.

The change in the EPF rules for withdrawal is not for the benefit of workers. It comes on the back of rules being amended for EPF monies to be invested in the stock market. It comes at a time when government would like to offer workers the right to opt out of the only legislatively guaranteed retirement fund in favour of private pensions. It comes when government has left no stone unturned to advantage private pension funds.

This change also comes at a time when the country’s rate of savings is at about its lowest point in a decade. In the absence of savings, the rate of investment will continue to remain low and hence not allow government to meet its promise of economic growth. In turn, the country will have to increase its dependence on foreign loans and foreign investment. While the BJP government is not concerned about foreign dependence, it recognises that investment from overseas will be insufficient to grow the economy. With no capacity to inspire confidence in the very private sector that it supports, the BJP government is seeking to secure at least half of the monies in the EPF over an entire working life span of 35-40 years of workers to create a ‘stable’ resource base for the BJP government to place at the disposal of private capital.

This change in the EPF rules is a part of the BJP governments’ effort to systematically dismantle workers rights and workers protection.

The NTUI demands an immediate and unconditional withdrawal of Gazette Notification of 10 February 2016 No.G.S.R.158(E) for amendment in Paragraph 68NN, 68 O and 69 and introduction of new paragraph 68 NNNN in the Employees Provident Fund Scheme 1952.

Gautam Mody
General Secretary