BLINKERED: Consumers say the recent ruling is not enough

It’s like the curate’s egg — good only in parts. Just a few months back, scores of retired employees fighting for dues denied, had hailed it as a much-needed reform. A speedy road to justice. We are referring to the Supreme Court of India ruling which made it possible for errant employers (who don’t deposit the provident fund amounts docked from their employees’ salaries every month) to be taken to the consumer courts. The apex court held that any member of the employees’ provident fund (EPF) scheme is a ‘consumer’ and has the right to seek redress in consumer forums if there is any deficiency in ‘service’.

Doubtless, the ruling is a major boost to the country’s fledgling consumer movement (previously, retired employees had no other option but to seek justice in time-consuming civil courts). But the whoop of delight appears to be a bit precipitate. The ruling seems to be dogged by far too many snags and loopholes. Just a few months old and the consumer groups are already up in arms. The reason? The lack of more user-friendly rules for provident fund irregularities. The all-India Consumer Co-ordination Council is toying with several ideas. The word is out that they are going to petition the Supreme Court and the Union government. The groups in Calcutta met up last week to chart out a future plan of action.

The ruling applies only to the provident fund and nothing else. The doors of the consumer courts are pretty much closed if one is fighting for one’s gratuity or other retirement benefits denied to one. What went wrong (or right) was the National Consumer Disputes Redressal Commission (NCDRC) ruling that the Consumer Protection Act (CPA) does not cover any disputes regarding retirement benefits other than the provident fund. The rest are dismissed essentially as disputes between employers and employees.

Consumer activists find the anomalies galling, to say the least. They point out that the distinction the NCDRC has made between the provident fund and gratuity, for instance, is not only perplexing, but against the spirit of the CPA, which seeks to protect the interest of the consumers in all respects. “If provident fund can be brought under it, why not pension and gratuity? It just doesn’t make sense,” says Shyam Sunder Gupta, former mayor and president of Consumer Consciousness, a Calcutta-based rights group. Disposing of a case between one of the regional provident fund commissioners and one Shiv Kumar Joshi, the Supreme Court, in a ruling in December 1999, had rejected outright the argument that a member of the employees’ provident fund scheme cannot be considered a consumer since he does not pay any administrative charges. It also refused to “accept the argument that the regional provident fund commissioner, being the central government, cannot be held to rendering service,” as defined in the CPA of 1986. It said categorically that the CPA “can be invoked” against the provident fund commissioner by a member of the scheme or, in other words, an employee.

Consumer activists all over the country had been overjoyed when the apex court passed the judgment. “We felt that many elderly people who were denied their retirement benefits by the errant employers would finally get justice,” Anil Karmakar of the Council of Consumer Guidance Centre, says. But that was not to be. In August last year, D.P. Wadhwa, president of NCDRC, ruled that any disputes relating to “pension, death-cum-gratuity benefits, family pension and the group provident fund” were outside the purview of the consumer courts. He held that the CPA would cover only the employees’ provident fund scheme (EPF), nothing else. The ruling has virtually sealed the fate of many retirees who have moved consumer courts hoping for quick redressal. “Many people, unaware of the national commission’s ruling, keep moving consumer forums for non-payment of gratuity or pension. They are sorely disappointed when consumer courts squash such petitions,” says Prabir Basu, a lawyer and working president of the Bengal Federation of Consumer Organisations.

Any industry or establishment employing 20 or more people must register with the employees’ PF scheme, says regional provident fund commissioner A. Mahendra Raju. Some units, however, are allowed to manage their own PF funds if they can “meet our requirements and satisfy us,” the commissioner says. These units, which opt for what is known as the general provident fund, comprise only 10 per cent of the total establishments that have signed up for the EPF, but make up nearly 40 per cent of the country’s PF corpus. (They are mostly big companies or multinationals.) According to the national commission’s rulings, employees of these companies will not be able to take their employers to consumer courts in case of any disputes regarding their provident fund. “The EPF is now under the Consumer Act, but not the general provident fund or GPF or for that matter gratuity,” Basu says.

Besides consumer courts, those who are members of the employees provident fund scheme could petition the regional provident fund commissioner’s office in case of any disputes, including non-payment of provident fund. The PF commissioner, under the Employees Provident Act of 1952, has quasi-judicial power to settle any disputes. Between last April and January this year, a total of 68 industrialists were arrested in West Bengal for non-payment of provident fund. “We also attach property to recover the dues in certain cases,” Raju says. Basu says bringing pension or GPF under the CPA would bring great relief to the consumers. But he doesn’t see it happening in the near future.

Right now, however, the consumer groups have started lobbying hard. “We are sure something will come of it,” asserts Karmakar. “And our struggle will not end till the consumer courts take up all cases relating to retirement benefits.”