Good news! Govt puts on hold new PF withdrawal norms

Facing protest, the government on Tuesday kept in abeyance for three more months the proposed move to bar withdrawal of employer's contribution to the provident fund corpus until the employee attains the age of 58 years.

New Delhi/Bengaluru: Facing continuing protest, the government Tuesday put on hold till July-end the tighter rules for withdrawal of PF money as garment workers in Bengaluru set ablaze buses and attacked a police station on the second day of their agitation.

"The notification (tightening PF withdrawal norms) will be kept in abeyance for three months till July 31, 2016. We will discuss this issue with the stakeholders," Labour Minister Bandaru Dattatreya told reporters.

His announcement came in the midst of escalating protests by labour unions, especially the violent Bengaluru agitation, against the bar on withdrawing employer's contribution from the PF money till the age of 58 years.

In a placatory move, the Labour Ministry also said it was contemplating permitting withdrawal of all accumulations by Employees' Provident Fund Organisation's (EPFO) subscribers on grounds like purchase of house, serious illness, marriage and professional education of children. The matter has been referred to Law Ministry for clearance.

People have also launched online campaign against the decision, which was to be implemented from February 10 but was later put on hold till April 30.

Protesters pelted stones at Hebbagodi Police Station in Bengaluru and torched seized vehicles parked there, as the spontaneous agitation with no trade union leading it spun out of control.

Police said they had to resort to lathicharge and fire teargas shells to disperse violent protesters.

At least two Karnataka State Road Transport Corporation buses and one of Bengaluru Metropolitan Transport Corporation have been set on fire, they said.

Incidents of stone-pelting on buses and other vehicles were reported from different parts of the city such as Bannerghatta and Jalahalli cross, as also near the Electronics City, the hub of IT firms.

Traffic jams were reported at various entry and exit points in the city like Hosur Road, which leads to Electronics City and Tumkur Road, which has a large concentration of garment units.

In a bid to assure the agitating workers, Union Minister Ananth Kumar, an MP from Bengaluru, said the right of unorganised and garment workers would be restored and appealed to them to withdraw their protest.

City Police Commissioner N S Megharikh said the situation was under control, but there "are some issues" on the city's outskirts.

"...We are at work, our officers are at the spot, reinforcement has already gone there. The situation is being brought under control," he said.

Police said other workers too have joined garment workers in the protest today.

There are approximately over 12 lakh garment factory workers in Bengaluru, the city police chief said.

Workers opposing amendment to EPF Act have expressed fear that the new rule would take away their right over employer's contribution portion of provident fund till they attain 58 years.

Dattatreya said a meeting of the Central Board of Trustee would be called "to see how best the employers' contribution to EPF (3.67 percent of basic wages) can be utilised for workers."

In February, the ministry had issued a notification restricting 100 percent withdrawal of provident fund by members after unemployment of more than two months, among others.

Following the concerns raised by trade unions and other stakeholders, the ministry decided to keep the notification in abeyance till April 30. Its implementation has been again deferred till July 31, as per a Labour Ministry statement.

Now, the EPFO subscribers who are out of job for more than two months can file for full and final settlement of provident fund till July end.

"On the direction of Labour Minister, the said provision will now come into effect from August 1, 2016 by issue of an amended notification," the statement said.

The proposal to amend the scheme to allow all accumulations on different grounds like purchase of house, serious illness, marriage and professional education of children, has been sent for vetting by the Law Ministry.

The proposal also allows withdrawal of all accumulation by EPFO members who have joined an establishment or firm of central or state government and became the member of contributory provident fund or old age pension under any scheme frame by them.

The unions have been demanding complete rollback of the decision tightening the PF withdrawal norms.

Earlier in February, the EPFO had amended the EPF Scheme 1952 to tighten the various norms for withdrawal of provident fund including increasing age limit for filing such claims by retiring employees to 58 years from 54 years.

Besides, the EPFO had also restricted withdrawal of PF to own contribution of subscribers and interest earned on that, if the claimant has remained unemployed for more than two months. The member would be able to withdraw employer's contribution on maturity.

Earlier norms used to allow subscribers to claim 90 percent of their accumulations for investing in the scheme after attaining the age of 55 years.