EPFO Scheme Deemed More Beneficial, RPFC Rules In Favour Of Construction Workers

New Delhi: In a significant development for labour welfare in India, the Regional Provident Fund Commissioner (RPFC), Kochi, has ruled that the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (EPF Act) offers more beneficial protection to construction workers than the Building and Other Construction Workers (BOCW) Act, 1996.

This decision came after the Kerala High Court, while hearing a writ petition filed by Veegaland Homes Pvt. Ltd., directed the RPFC to determine which of the two central legislations better serves the interests of construction workers. The case brought attention to the long-standing issue of dual compliance under both acts, raising concerns over the practical implications for employers and the efficacy of benefits for workers.

Key Advantages of EPF Scheme

The RPFC order, authored by Uttam Prakash, highlighted multiple strengths of the EPF scheme. These include:

Lifetime Pension: Coverage under the Employees’ Pension Scheme (EPS) ensures long-term financial security.

Insurance Benefits: Substantial death and disability benefits are provided through the Employees' Deposit-Linked Insurance Scheme (EDLI).

Portability: Benefits are portable across states and employers, which is crucial for the migrant-heavy construction workforce.

Structured Savings: Workers benefit from long-term, higher-return savings.

Digital Access: Technology-backed systems offer better service delivery and grievance redressal.

Shortcomings of BOCW Welfare Boards

In contrast, the RPFC found serious deficiencies in the BOCW welfare boards' functioning. Despite collecting significant welfare cess, many boards fail to deliver core services due to:

Inefficiency and Low Coverage: Many workers remain outside the net of BOCW benefits.

Underutilisation of Funds: Collected welfare funds are often left unspent.

Poor Registration Mechanisms: Complex procedures hinder worker access to the scheme.

The RPFC noted that these systemic issues undermine the intended welfare impact of the BOCW Act.

Legal and Policy Implications

This ruling is expected to set a precedent for integrating informal workers into a more reliable and centralised social security system. Experts suggest the Kerala High Court's directive and the RPFC’s order together may form the basis for policy reforms aimed at unifying and strengthening labour welfare across India.

The move underscores the need for enforceable, portable, and transparent welfare mechanisms that truly serve India’s massive informal workforce.