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KARACHI: Sindh High Court (SHC) has declared that the old age benefit contributions would continue to be deposited with the federal government's Employees' Old-Age Benefits Institutions (EOBI) till the Sindh EOBI is made functional and the dues paid to federal EOBI will not be recovered by the province later on.

A division bench of the SHC headed by Justice Salahuddin Panhwar in a written order on a petition stated that priority must be given to the employees, as the old age benefit law is a beneficial law, aimed at to benefit the employees; therefore, in case the contribution amount is not received by the EOBI ultimately employees will suffer.

The order stated that that petitioners are registered with the EOBI under the EOBI Act 1976; depositing contribution under that law; that pursuant to the Constitution (Eighteenth Amendment) Act 2010 and subsequent promulgation of Sindh EOBI Act 2014, the EOBI established under the EOBI Act 1976 lost jurisdiction to take any action against petitioners; however, ignoring that aspect EOBI is raising demands for deposit of contribution by the petitioners while the provincial EOBI is not yet established under the Act of 2014.

Accordingly petitioners prayed to declare the impugned letters dated 28.1.2015, 30.1.2015, 9.2.2015 and 2.3.2015 issued by the EOBI as illegal, arbitrary, ultra vires to constitution, void ab-initio and without lawful authority and set aside/ strike down the same as the same have been issued under the EOB Act, 1976 which has been repealed by the Sindh EOB Act, 2014 and has ceased to be on the statute book to the extent of the Province of Sindh.

However, Sindh Government attorney told the court that province will not claim any dues from the petitioners until the issue is resolved between the federation and the provinces.

Deputy Attorney General told the court that since due to this enactment, the employers are not depositing the contributions to the EOBI; therefore, their employees are suffering, as the EOBI is an autonomous body with independent powers and has own means and ways to invest and work for the welfare and protection of the rights of the employees.

The court observed that why the petitioners are avoiding to pay the contribution under EOBI Act 1976 when they do not dispute their registration, as well as, payment of contributions before the 18th amendment, particularly when nothing has been brought on record that they (petitioners) are paying contributions under Act 2014.

The court declared that none can take an exception to the fact that such position shall result into no benefit of the 'employees, but shall surely affect their entitlement as was/ is aimed under the EOBI whether it be Act 1976 or Act 2014.

The court quoting Sindh Government attorney observed it was fair enough that province will not claim any dues from the petitioners until issue is resolved between the federation and the provinces. The contribution by the employers is normally deducted amount of the employees themselves, which by way of investment is to be returned to the employee(s) with profit; therefore, no useful purpose was/ is appearing by withholding or avoiding payment of such contribution.

The court disposed of the petition with the ruling that petitioners shall deposit the contributions and other dues according to EOBI Act 1976; all amount deposited with the Nazir shall be returned in favour of the EOBI established under the EOBI Act 1976 and declared that petitioners shall continue old practice while depositing contribution with the Federal EOBI until the issue is resolved between the Federation and the Province and legislation is being implemented and departments are functional, however, the province will not claim that amount from the employers (petitioners).

The court declared that if provinces feel that they have any claim with regard to contribution deposited with the federal EOBI, they would be at liberty to sue that remedy against the Federal EOBI and will not drag the employers for that controversy.

Copyright Business Recorder, 2021

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