The Cabinet cannot override judicial settlements regarding pension rights, affirming that executive decisions must align with established laws.

Dhammika Ganepola, J.

Factual Matrix

The 1st Petitioner is a registered trade union comprising approximately 8375 members who are employees of the Department of Samurdhi Development, formerly Department of Divineguma Development (hereinafter referred to as “Department”), which was established under Divineguma Act No. 1 of 2013 . With the enactment of the Divineguma Act, all the members of the 1st Petitioner opted to join the Department of Divineguma under Section 44(e)(ii) of the Divineguma Act.

Prior to the establishment of the Department of Divineguma Development, the members of the 1st Petitioner were employed in the Samurdhi Authority of Sri Lanka, the Southern Development Authority of Sri Lanka and the Udarata Development Authority of Sri Lanka. At the relevant times, the members of the 1st Petitioner were contributors to the Employees Provident Fund [EPF] under the Employees Provident Fund Act No. 15 of 1958 . The Department of Divineguma Development had been established by amalgamating the Samurdhi Authority of Sri Lanka, the Southern Development Authority of Sri Lanka and the Udarata Development Authority of Sri Lanka by the Divineguma Act.

Between April and May 2014 four Circulars i.e. 2014/01(P2a), 2014/02(P2b), 2014/3(P2c) and 2014/04(P2d) had been issued by the Department specifying the relevant options available to the officers in joining the Department. In September 2014, the employees who opted to join the Department under Section 44(e)(ii) had been issued with a formal letter of appointment. Subsequently, the 2nd Respondent by letter dated 2014.12.12 (P3a) had informed the Department that the 12% contribution by the Employer would be released to the Treasury instead of being paid out to the Employees. The Ministry of Finance and Planning also by its letter dated 20.12.2014 (P3b) indicated that aforesaid funds would be transferred to the Treasury. Thereafter, by Gazette Extraordinary No.1902/54 dated 20.02.2015 [P4], it was published that after relevant deductions for the W&OP, the 20% contribution jointly made to EPF by the officer and the Authority, would be repaid to the relevant officers. The relevant Minister also issued directions to the then Director General of the Divineguma Development Department to set off the balance payment on the same lines by letter dated 20.02.2015[P6].

The Petitioners state that the officers of the Department moved to get back the 12% State Authority share of the EPF in contravention of the said decision. However, in the Fundamental Rights Application bearing No. SC/FR/252/2015 filed by the Petitioners before the Supreme Court, the matter was settled on the following conditions:

i. Withdraw the payments necessary for the Widows and Orphans Pension required by Section 44(e)(ii) of the Divineguma Act with interest accrued on them as per the Pension Salary Circular No.03/2008 dated 30.01.2008.

ii. Withdraw any loan or advance amount obtained under the provisions of the EPF Act by the EPF beneficiary employees along with the interest on them from the EPF and

iii. Release the entirety of the rest of such money lying to the credit of their individual accounts of EPF in terms of the applicable law to the Petitioners. [see P7]

Accordingly, the Director General of Divineguma Development Department had issued a letter dated 28.09.2016 [P10] for the purpose of releasing the 20% contribution to EPF to the relevant officers.

The Petitioners state that although the EPF money was released to the members of the 1st Petitioner, the 1st Respondent Department has failed to forward the relevant files and papers of its retiring employees to the 3rd Respondent unless the said 12% of the Employers’(Government) share of the EPF of the Employees is paid back to the Department by those officers who obtained it legally on the approval of the authorities. The 1st Respondent issued Circular bearing No.3/2019 dated 04.04.2019 [P11] superseding the effect of Circulars P2(a), P2(b), P2(c), P2(d) and Circular No.16/2018