- Employees Old-Age Benefits Institution chairman says that they are pursuing a new legislation, certain aspects of which are pro-employer
KARACHI: Employees Old-Age Benefits Institution (EOBI) Chairman Shakeel Ahmed Mangnejo said on Thursday that companies whose contributions are exceeding Rs100,000 would be bound to pay their contributions through EOIB’s automated Facilitation System (FS) from January 1, 2022. They would have no option to pay manually.
He further said that the EOBI is developing a mobile application in the next three to four months, and the biggest beneficiary of this app would be the employers. They can generate challans, make entries, etc. Employees would also be able to modify their profile and change other relevant data.
Addressing the ‘national consultative meeting on EOBI Law and its current legal implications’ organized by the Employers Federation of Pakistan (EFP) at a local hotel, he said, “We are pursuing a new legislation, certain aspects of which are pro-employer. We are working on a self-assessment scheme.
"Audits will be carried out randomly, and parametrically. There would be a cooling off period for at least a couple of years for those who have already been audited.”
Mangnejo continued that the minimum wage determination would also be made non-controversial and no one would be able to exploit it. "The government is willing to expand the scope of EOBI by bringing self-employed individuals and overseas Pakistanis into its social protection network," the EOBI chairman said.
Some companies, he said, are paying contributions at the rate of Rs20,000 considering either as a Corporate Social Responsibility (CSR) or their legal responsibility. He said all employers should also be paying at least a reasonable amount and fulfilling this obligation in their own larger interest.
"At least we should start paying at the rate of Rs13,000. Those who are not paying amount due to the issue of devolution of the labour, we are ready to facilitate them to clear their backlog. They can submit the amount of backlog through installments by June 30, 2022," he added.
Requesting the employers to pay the amount at least at the rate of Rs13,000, Mangnejo said that it is a philosophical theme that if an employer looks after his employees, protects their rights and secure his future, his productivity and profitability increase significantly. The employer should not consider the social protection of his employee as cost; rather he should consider him as an asset, he stated.
Some employers are paying contributions at the rate of Rs4,500, and some at Rs8,000. The government also does not pay its share, sometimes. Under the law it is bound to pay certain amount, as result the fund is not sustainable. Employers are hiding their employees, sometimes.
“EOBI Law framework is based upon cooperative, collaborative and tri-partied relationship that represents the government, the employer and the employee. The section 33, 34 and 35 of the EOBI Act stresses upon out of the court settlements. Litigation comes with the cost. Today we have 400,000 pensioners, and a much bigger number is in the pipeline."
On complaints of harassment raised by the event participants, the chairman said there is a need for some arrangements between us and the employers where we together could have a check and resolve the issue in a transparent manner. The appellate forum under section 35 can also address the grievances.
He said: “I believe EOBI Act is applicable to the whole of Pakistan.” This issue should be resolved through legislation, he added.
Fasihul Karim Siddiqui, Senior Advisor EFP, on this occasion discussed the objectives of the meeting and said after one and half a year of the devolution of labour department to the province under the 18th Constitutional Amendment, all the provinces adopted federal legislation. The federal government deputed the task of EOBI to the Ministry of Overseas Pakistanis and unfortunately, no province came out till 2014 with any amendment which could challenge the jurisdiction of the federal institution.
It was the year 2014 that the province of Sindh promulgated Sindh EOBI Act, and section IV of which provided that with effect from 1st July 2014, employers will pay the contribution to the institution to be created in the province, but they did not create any institution.
On the other hand, employers were already paying contributions to the federal institution. This was an impasse which brought the employers to a point where many organizations did not know what to do.
So, a number of organisations went to the Sindh High Court (SHC) challenging the jurisdiction of the EOBI to collect contribution as a federal subject. The SHC directed those companies to deposit the payment in the court with the Nazir of the court. The case was decided last month whereby a clear pronouncement has been made by the SHC that till such time the federal government and the provincial government do not decide the issue of devolution, the federal institution will continue to regulate EOBI in the province of Sindh in accordance with the EOBI Act 1976. The major impasse has been resolved, and there is no dispute at least on this issue as to whom the contribution should be paid.
The second impasse created was the quantum of contribution to be paid by the employers. Unfortunately, the 1976 Act provides that contribution to be paid on the basis of wages as defined in the EOBI Act 1976, and the minimum wage for the unskilled workers ordinance 1969 according to which, the minimum wage is Rs8,000. A number of employers were paying even less than Rs8,000 because of a decision of Supreme Court of Pakistan (SC). Even today, many companies are paying contribution of EOBI at a rate less than Rs8,000, and there was a big pandemonium as to what should be the basis for payment of contribution. Now, it is a simple thing. If the federal or provincial governments are really sincere, this problem could be solved easily through legislation.
Bulks of employees are on the verge of retirement, and the employers are bound to pay them in accordance with the Act. If Rs8,000 is the basis, the pension comes to Rs2,500 to be paid. EOBI will be perfectly in its jurisdictions to accord pension but at the rate of Rs2,500 to the retired employees which is against the interest of employee for whom the employer making contribution.
He said federal government had been generous enough to increase the quantum of pension to Rs8,500. He asked where the EOBI can meet this challenge of paying pension at the rate of Rs8,500 whereas it is receiving contribution at the rate of Rs400 per worker. Now this is an impasse which neither the federal government nor the provincial government is prepared to solve and till such time we are in a state of litigation. “How long will litigation continue,” he wondered.
The federal government has the jurisdiction to bring amendment in the minimum wage ordinance 1969 but unfortunately, it would be applicable only to the Islamabad Capital Territory, or the federally administrated areas. In the year 2015, the federal government made an amendment and increased the minimum wage limit under the minimum wage of unskilled workers ordinance 1969 to Rs12,000 and Rs13,000. In the meantime, the EOBI circulated a notification throughout Pakistan asking the organisations that the minimum wage has been increased and the payment should be made at a rate of Rs12,000 and Rs 13000.
That notification was challenged by EFP in all four high courts, simultaneously. Peshawar High Court nullified the notification. Unfortunately, in Sindh and Balochistan, there were stay orders.
The good thing EOBI did in order to accommodate the government’s announcement of paying pension at the rate of Rs8,500 was they fixed a threshold of Rs13,000. All those companies that pay contribution at the rate of Rs13,000 voluntarily or otherwise will be paid pension at the rate of Rs8,500. A number of companies have started paying contributions at the rate of Rs13,000, and there are some other companies who are paying even at the rate of minimum wage of Rs20,000.
Zaki Ahmed Khan Acting, President EFP, welcomed the guests. Representatives of all town associations were also present on this occasion.
Copyright Business Recorder, 2021