Delhi High Court: International Workers Employed In India Required To Contribute To Employees’ Provident Fund
Isabella Mariam
The High Court of Delhi, Division Bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela has held that international workers employed in Indian establishments, who are not covered under a social security system in their home country, are required to enroll in and contribute to the Employees’ Provident Fund (EPF). Delivering its decision on November 4, the Court upheld the validity of government notifications extending the EPF Scheme to such workers, rejecting arguments that the measure was discriminatory or unconstitutional. The Bench observed that the Central Government is empowered under the Employees’ Provident Funds and Miscellaneous Provisions Act to include international employees within the scheme, noting that the move ensures social security for all employees and aligns with India’s obligations under international agreements.
SpiceJet Ltd v. Union of India & Anr and LG Electronic India Private Limited v. Union of India & Others were heard together and decided by a common judgment delivered on 04.11.2025. The petitions raised common questions of law concerning the Employees’ Provident Fund Scheme, 1952 (the “Scheme”) as amended by notifications dated 01.10.2008 and 03.09.2010, which inserted Paragraph 83 (International Workers) and substituted Paragraph 69 (withdrawals).
The petitioner questioned the distinction created by Paragraph 83 between foreign employees working in India and domestic employees, contending that mandating contributions from foreign employees irrespective of pay while requiring contributions from domestic employees only up to ₹15,000/month lacked reasonable basis under Article 14. The Court framed issues on whether this classification violated Article 14 and whether the substituted Paragraph 69 was arbitrary in permitting withdrawal for foreign employees only upon retirement at/after 58 years despite typically shorter tenures in India (2–5 years).
Respondents argued the basis of classification was “economic duress” faced by Indian employees due to longer service until superannuation, which is absent for foreign employees serving shorter stints; they also explained the Section 7A notice followed non-submission of statutory returns and that any lack of detail in the notice was curable.
The judgment records the statutory framework, including the Central Government’s power to frame the Scheme under Section 5 and the adjudicatory powers under Section 7A (including inquiry powers and procedural safeguards). The text of Paragraph 69 (as set out in the judgment) details the circumstances permitting full withdrawal (e.g., retirement, incapacity, migration, VRS, closure/transfer scenarios).
The Court recorded that “mandating the foreign employees to become member of the scheme/fund irrespective of the monthly pay they draw and requiring only those Indian employees to become member of the fund/scheme who are drawing pay below Rs.15,000/- a month, has a rationale based on the economic duress which is caused to the Indian employees… which is absent in case of the foreign employees for the reason that they come to India for employment for shorter period of 2 to 5 years.”
It observed: “For the said reason… the classification made by inserting and later on substituting Para 83 in the principal scheme, is reasonable… [and] satisfies the test of permissible classification… [and] cannot be said to be violative of Article 14.”
While acknowledging the applicability of Article 14 to foreign nationals, the Bench stated: “It is true that Constitutional protection as enshrined in Article 14… is applicable to the foreign nationals… [but] right of equality… is subject to reasonable classification… We have already held… that the classification… has a reasonable basis.”
In discussing precedent, the Court recorded reliance on the Bombay High Court’s judgment in Sachin Vijay Desai, noting that “International Workers forms a separate and distinct class by themselves” and reproducing its reasoning; the Court found those observations persuasive.
As to the Karnataka High Court’s contrary view in Stone Hill Education Foundation, the Bench stated: “We… are unable to agree with the reasoning… for the reason that the reasonability of the classification based on the economic duress… has not been considered… This persuades us to observe that the same cannot be treated to be a precedent… we respectfully disagree.”
On Paragraph 69 for foreign employees, the Court observed: “paragraph 83 in the Scheme has been added to implement India’s international treaty obligations and entering into an international treaty is a sovereign prerogative… if such a provision is struck down, that will amount to taking away the legal basis for entering into and applying the SSA.”
Consequently, it recorded: “we are unable to find any good ground to observe that substituted paragraph 69… suffers from any illegality which warrants striking down the provision.”
The Court recorded that “the challenge to the impugned notifications dated 01.10.2008 and 03.09.2010, whereby paragraph 83 was introduced and later on substituted, fails.” It further stated that “the challenge to the letter dated 14.03.2011 and summons dated 15.03.2012, the same also fails, for the reason that we have already upheld the validity of paragraph 83 of the Scheme.” In consequence, the Court ordered that “these writ petitions, along with pending application(s), if any, are also hereby dismissed.”
“The proceedings under Section 7A shall be drawn afresh by the EPFO strictly fulfilling the requirements given therein in respect of the petitioners in both the petitions which shall be concluded within a reasonable time period.” With respect to W.P.(C) 6330/2021, after referring to the earlier findings concerning the validity of notifications dated 01.10.2008 and 03.09.2010, the Court stated that “challenge to the notifications incorporating minor amendments, dated 04.05.2012, 24.05.2012 and 05.10.2012, also fails.”
The Court additionally recorded that “the challenge to these impugned circulars, also fails,” referring to the circular letters dated 30.08.2011 and 25.05.2012 that reiterated compliance requirements for International Workers. It further stated that “any challenge to such notice/summons also fails,” in reference to the notices/summons issued on 06.08.2015 which were based on paragraph 83.
“in view of the aforesaid, these writ petitions… are also hereby dismissed.”
Advocates Representing the Parties
For the Petitioners: Mr. Atul Sharma, Ms. Abhilasha Sharma, Mr. Dipan Sethi; Mr. Sudhir Nandrajog, Sr. Adv. with Mr. Rishi Awasthi, Mr. Amit Awasthi, Mr. Piyush Vatsa.
For the Respondents: Ms. Manisha Agrawal Narain, CGSC with Mr. Nipun Jain, Ms. Ananya Arora; Mr. Siddharth, SC for EPFO with Mr. Amit Kumar, Mr. Prateek Goyal, Mr. Harshit Manwani; Mr. Vikram Jetly, CGSC with Ms. Shreya Jetly.
Case Title: Spice Jet Ltd v. Union of India & Anr.; LG Electronic India Private Limited v. Union of India & Others.
Neutral Citation: 2025:DHC:19670-DB
Case Numbers: W.P.(C) 2941/2012; W.P.(C) 6330/2021.
Bench: Chief Justice Devendra Kumar Upadhyaya, Justice Tushar Rao Gedela.
