THIS is in response to the news item “Employers ask EOBI to withdraw notice”. The Director-General (Operations) / spokesperson for the EOBI strongly denies the contents of the news item that suggests that, despite the legal bar, the EOBI continues to demand contribution at the enhanced rate from companies through its web facilitation system.

No court has restrained the EOBI from functioning under the provisions of the EOBI Act, 1976. However, the EOBI’s circular of March 3, 2016, notifying the enhanced rate of contribution, based on Minimum Wages of Unskilled Workers (Amendment) Act, 2016, has been impugned by employers in the high courts because of its applicability to the Islamabad Capital Territory only.

Barring the Lahore High Court, which has declared the said circular ultra vires, no high court has made any such order or restrained the EOBI from collecting EOBI contributions. The Sindh, Balochistan and Peshawar high courts have only restrained the EOBI from initiating any coercive measures for the recovery on the basis of demands raised against the enhanced rate of contribution.

The pension payable to EOBI pensioners is based on the rate of contribution paid by employers and employees. The contribution rate is further tied to minimum wages. The EOBI collects contribution as per minimum wages of 2016, i.e., Rs13,000 per month though the federal government and all the provinces have enhanced minimum wages to Rs14,000 per month. The pensioners of employers paying contribution at the enhanced rate of Rs780 are getting an enhanced pension of up to Rs10,680 per month as compared to the minimum pension of Rs5,250.

The litigations have mainly ensued owing to the non-devolution of the EOBI to the provinces, a matter that is sub judice before the supreme court. Irrespective of the decision of the supreme court or the federal government regarding the fate of the EOBI (to continue as a provincial or federal body) the employers are bound to pay EOBI contributions. The non-payment of contribution or payment at the reduced rate under the garb of sub judice may result in the disruption of EOBI pension.

The EOBI urges the business community to come forward to pay EOBI contribution to secure the well-being of their employees.

Abdul Wahid Uqaily

EOBI Director-General (Operations)

Karachi

Published in Dawn, April 30th, 2017