Implement Loyalty-Cum-Life Benefit For Employees Under Provident Fund Scheme, CITU Urges Union Labour Minister

The Centre of Indian Trade Unions (CITU) has written to Union labour minister Santosh Gangwar, demanding implementation of the loyalty-cum-life benefit under the Employees’ Deposit Linked Insurance (EDLI) scheme for employees in the organised sector.

The EDLI — run by the Employees’ Provident Fund Organisation (EPFO) — is an insurance policy scheme meant to contribute towards a life cover for the employees. It is mandatorily provided to all subscribers of the Employees’Provident Fund (EPF) scheme.

The Central Board of Trustees (CBT) — of which Gangwar as labour minister is the chairman — of the EPFO had unanimously decided in a meeting held on 12 April last year to provide under the EDLI a loyalty-cum-life benefit of up to Rs 50,000 for the employees retiring from service after 20 years or more. The Board had also decided on a minimum assurance benefit of Rs 2.50 lakh on account of EDLI for the employees who die while in service. These were to be initially implemented on a pilot basis for two years and to be reviewed thereafter.

Read More: Housing Initiative Led by CITU in Solapur, Maharashtra Wins International Award

But in a meeting of the CBT on 26 June this year, Gangwar had reportedly informed that the law ministry and finance ministry had “rejected/turned down that unanimous recommendation of CBT, without assigning any reason whatsoever,” writes Tapan Sen, general secretary of CITU, in the letter dated 28 June.

Calling this rejection of the unanimous recommendation of the Board by the government as “totally unjust, unfounded besides being autocratic”, Sen writes that “it was made clear in that meeting itself” that the loyalty-cum-life benefit is “financially sustainable and workable.”

The benefit would be “totally and sustainably funded” by the workers’ own savings with the EPFO.

In fact, as Sen writes, the EPFO officials present during the CBT meeting had “quite assertively” presented that both “the benefits taken together will cost hardly 80 per cent of the funds at disposal comprising interest earned on the corpus and contributions received during the year.”

Read More: Solapur : Unorganised Workers Build Largest Housing Cooperative

The loyalty-cum-life benefit would be paid as a lump sum to all employees who have contributed to the scheme for 20 years or more when they retire from service at the retirement age of 58 or 60 years. In the case of employees with permanent disability, they would get the benefit even if they have contributed for less than 20 years to the scheme.

The benefit would be paid in a graded manner on the basis of the average monthly wage level drawn. Employees with average basic wages up to Rs 5,000 would get a loyalty-cum-life benefit of Rs 30,000. Those whose average basic wages are more than Rs 5,000 and up to Rs 10,000 would get Rs 40,000. And employees with wages of more than Rs 10,000 would receive Rs 50,000 once they retire.

The CITU general secretary had earlier written to the labour minister on 13 March this year demanding notification of the implementation of the CBT’s unanimous recommendation. But even after three months, there was no response from the government, nor was any progress made regarding implementation of the benefit more than a year after the decision was taken by the CBT.

Read More: CITU Opposes Selling Off of Coal India Limited Shares to the Private Companies

Sen says the government’s rejection of the decision has “severely undermined” the CBT, a statutory tripartite forum — the three represented parties being the central and state governments, the employers and the workers. He said the rejection was “striking at the credibility of such tripartite exercise besides imposing deprivation on the mass of the employees of their legitimate benefits to be generated out of their own funds.”

Registering the CITU’s “vehement protest” against this, the letter urges the labour minister to intervene to ensure that the loyalty-cum-life benefit under EDLI scheme is implemented immediately “through separate notification in the interest of fairness and propriety.”