Labour Minister claims Rs. 12 b worth of EPF not paid

Friday, 1 January 2021 00:22 - - {{hitsCtrl.values.hits}}

16,000 cases before Magistrate Courts; cases to be referred to Labour Tribunal due to delay in Courts
Minister says extension relief may be considered due to COVID-19 impact on businesses

Labour Minister Nimal Siripala de Silva

Labour Minister Nimal Siripala de Silva has revealed that non-payment of contributions to the Employees Provident Fund is Rs. 12 billion.

In a statement the Minister also said that there were 16,000 cases before Magistrate Courts against non-payment of EPF up from 11,549 in January 2020.

Silva warned stern action against employers who default on contributions to the EPF as it is a violation of the laws and defrauding the working class.

The Labour Minister said that given the delays in Courts, cases against EPF non-payment would be referred to Labour Tribunals shortly under the 1958 EPF Act to expedite collection of dues.

However he also said considering the economic and business difficulties faced owing to the COVID-19 pandemic, the Government would consider granting relief in deadlines to pay EPF contributions in discussion with employers. This will be done by Commissioner General of Labour Prabath Chandrakeerthi.

According to Central Bank data, the total value of EPF in 2019 increased by Rs. 251.1 billion to Rs. 2,540.4 billion at end-2019 from Rs. 2,289.4 billion recorded by end-2018 recording an 11% growth.

This increase was due to the combined effect of the net contributions of the members (contributions less refund payments) and the income generated through investments of the Fund. Total liability to the members stood at Rs. 2,497.6 billion at end-2019 recording a 10.8% increase from Rs. 2,254.2 billion at end-2018.

The total contribution for the year 2019 increased by 8.4% to Rs. 157.2 billion while the total amount of refunds made to the members and their legal heirs in 2019 was Rs. 126.3 billion, which was an increase of 17.0% over 2018. Accordingly, the net contribution was Rs. 30.9 billion compared to Rs. 37.0 billion recorded in the previous year.

The annual profit of the Fund increased by 16.9% to Rs. 222.8 billion in 2019 from Rs. 190.6 billion from the previous year. This was mainly due to the increase in the interest income of Rs. 25.2 billion compared to 2018 and the reduction of marked to market losses from listed equity investments from Rs. 10.9 billion in 2018 to Rs. 1.9 billion in 2019.