BY virtue of the 18th Amendment, the labour laws were devolved to the provinces in April 2010. While all the other labour laws were transferred to the provinces, the federal government for some inexplicable reasons retained the management of the Employees’ Old-Age Benefits Institution (EOBI) which was constituted under an Act of parliament passed in 1976. Since then, the pension scheme for the retired employees of industrial and commercial establishments has been facing tremendous difficulties, jeopardising its efficient running.

Any amendments brought to the relevant Act after the devolution now remain confined to the Islamabad Capital Territory (ICT), and do not extend to the rest of Pakistan. The federal government is unable to even increase the amount of monthly pension under the relevant law.

Whenever EOBI increases the amount of contribution by employers and employees towards the scheme, the same is challenged by the employers in the superior courts and they get favourable judgements.

In 2005, the government had made an amendment to the EOB Act, whereby the basis of paying the contribution was changed from certain percentage of a fixed amount to six per cent of the prevalent minimum wages. It declared that the term ‘Wages’ means the rates of wages as declared under the Minimum Wages for Unskilled Workers Ordinance, 1969.

After the devolution, the federal government is unable to make any amendment to the Ordinance of 1969, applicable to all the provinces, as its authority is confined only to the ICT. A few months ago, EOBI increased the amount of contribution payable by the employers in its online portal from 6pc of Rs13,000 to Rs25,000; an increase of 92pc. As per the decision, 1pc of the contributory amount was to be shared by the insured employees.

As the revised amount of minimum wage of Rs25,000 fixed under the Ordinance of 1969 is applicable only to the ICT, 75 employers based in Sindh challenged the revision before the Sindh High Court (SHC) through the Employers’ Federation of Pakistan. In its interim order, the court asked the employers, who are party to the petition, to deposit the amount of EOBI contribution with the court till the final disposal of the case.

As the last month’s contribution has been deposited in the SHC, in compliance with the latter’s order, EOBI has retaliated by not accepting the pension claims of new retirees from the petitioner companies. This act of the EOBI officials is highly unjustified and undignified, while it also constitutes a violation of the SHC’s order.

The retirees are being penalised even when they are not at fault as they have been regularly paying the 1pc share of contribution to EOBI, which is now refusing to entertain their pension claims.

The EOBI management should stop being vindictive and should start honouring the claims of new retirees, who are now also among senior citizens.

Name withheld on request
Karachi

Published in Dawn, February 8th, 2023