Prosecuting employers under the Employees Provident Act or preventing directors from leaving the country is not an effective way for the Employees Provident Fund (EPF) to recover unremitted contributions.

According to news reports, 9,500 employers have defaulted on EPF contributions and the EPF has given 1,204 names of company directors to the Immigration Department to stop them from going overseas. EPF has also filed 5,772 civil cases against companies and their directors as at September 2005.

The above raises questions on the procedures followed by EPF in tracking down errant employers. With its enforcement monitoring system, EPF is supposed to be able to detect - and subsequently - prosecute defaulting employers who do not pay up within three months, but complaints we receive have proved otherwise. If EPF had been closely monitoring these employers, they would have been charged earlier, before the sum owed ballooned and made recovery difficult.

The fact that employers continue to default on EPF payments means that the Act does not instill fear in them. A greater incentive for employers to diligently forward their contributions to EPF would to charge defaulting employers for criminal breach of trust.

This will act as a deterrent because a person who is guilty of criminal breach of trust shall be imprisoned for a term for not less than one year and not more than 10 years and with whipping, and also be liable to a fine.

Therefore, we urge EPF to step up its enforcement and charge errant employers for criminal breach of trust in order to recover the missing millions in contributions.

The writer is Consumers Association of Penang president.