#Columns: Linking the UAN to the Aadhar


Harini Subramani & Adil Ladha

In September this year, VP Joy, the Central PF Commissioner spoke about ongoing attempts to link the Aadhaar with the Universal Account Numbers (UAN) of all employees covered under the Employees’ Provident Funds and Miscellaneous Provisions Act of 1952 in order to facilitate “faster transactions” for the benefit of employees.

He had indicated that the linking/seeding exercise was being undertaken in order for the online services to be effective by March 31 next year, a deadline which appears to contradict the timeline stated in a recent letter dated November 21, 2016 [pdf] issued by the Employees’ Provident Fund Organization (EPFO).

For the uninitiated, the UAN is a 12-digit umbrella number to link an employee’s multiple provident fund numbers.

This confusion regarding the deadline appears to have left employers in the lurch. On the one hand they are receiving letters from the EPFO to comply with the Aadhaar-UAN linking, and on the other hand, receiving letters from the employee refusing to obtain/link the Aadhar due to its non-mandatory nature.

The move to link the two, i.e. the UAN and the Aadhaar, in itself is a flip-flop by the Ministry. Sample this: In January 2013, the EPFO had issued a circular [pdf] making Aadhaar mandatory for new EPF members joining on or after March 1, 2013. However, to a query raised in the Lok Sabha in December 2014, the then labour minister had categorically stated that the Aadhaar would not be mandatory.

This recent November letter addressed to additional central PF commissioners refers to a December 31, 2016 deadline proposed by the Ministry of Labour & Employment following a PRAGATI discussion in August this year. (PRAGATI, an acronym for Pro-Active Governance And Timely Implementation, is a platform launched by Prime Minister Modi in 2015 to highlight Government programmes, initiatives and their progress.).

The minutes available on the PRAGATI website however show no such point.

Instead, the minutes of another PRAGATI meeting, held in October this year, point to a discussion regarding the seeding of Aadhaar in relation to employees’ provident fund and a March 2017 deadline.

Setting aside the debate around the voluntary nature of the Aadhaar, how should an employer address this situation? The two pertinent questions from their point of view would be: (a) what should be considered the official deadline? and, (b) should they mandate their employees to enrol for an Aadhaar?

To answer the first question, it would be important to examine the EPFO’s authority.

The EPFO is a statutory authority set up under the Employees’ Provident Funds and Miscellaneous Provisions Act of 1952. In contrast, the PRAGATI is only a policy platform with no form of statutory recognition. The November letter proposing a deadline on the basis of a PRAGATI discussion is a deviation from standard procedure.

While the PRAGATI by itself has no legal basis, it is the directive issued by the EPFO which would hold water.

But where are we in number terms?

Ironically enough, the November letter admits to a low seeding rate as of end October: only twenty-three percent of those with a UAN under the EPF scheme had linked their Aadhaar numbers. How they plan to achieve one hundred percent coverage is anyone’s guess.

In any case, it would either be a case of supreme efficiency or an overtly ambitious attempt by the Ministry of Labour & Employment to complete the process of linking the UAN with the Aadhaar for all the employees before the end of this calendar year.

The second and overarching issue troubling companies is the undecided nature of the Aadhaar itself.

The Supreme Court’s interim order in August last year [pdf] very clearly emphasized that,

“The Union of India shall give wide publicity in the electronic and print media including radio and television networks that it is not mandatory for a citizen to obtain an Aadhaar card.”

And yet the Union of India has visibly done the opposite.

It was only subsequent to this, in October that year, that the Supreme Court, vide an order [pdf], explicitly allowed the EPF to be included in the ambit. In any case, the Supreme Court has been consistently unambiguous about the voluntary nature of the Aadhaar.

Further, the fact that while UAN is mandatory and that AADHAR is not, makes the situation rocky. Therefore, it would be impossible for an employer to force this upon his employee. In essence, the ball is now in the Supreme Court for this matter to gain some fruitful traction.

Harini Subramani & Adil Ladha

Harini Subramani is a Consultant and Adil Ladha is a Senior Associate with J. Sagar Associates, Advocates and Solicitors. The views expressed here are their own.