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KARACHI: Employers’ Federation of Pakistan (EFP) and Employees Old-age Benefits Institution (EOBI) are at loggerheads over the issue of serving notices to companies for the payment of arrears, and collection of contributions, in the wake of Sindh High Court’s judgement of December 3, 2021.

The EFP has pointed finger at the EOBI for ‘unfairly’ issuing notices to companies, demanding arrears of contribution at ‘enhanced’ rate and using ‘coercive’ means for its recovery, despite what it said “the matter is subjudice before the Supreme Court (SC).”

EFP President Ismail Suttar and Vice President Zaki Ahmed Khan in a letter (dated February 10) to Chairman EOBI Shakeel Ahmad Mangnejo said that EOBI offices have stated issuing notices to companies for payment of arrears on the basis of judgement of the Sindh High Court dated 03-12-2021.

Highlighting the background of the matter, EFP said that through EOBI notifications, the Federal Government’s amendment in the Minimum Wage Ordinance 1969 applicable to the Islamabad Capital territory were made applicable to all the provinces. These notifications were challenged in all the Provincial High Courts and stay orders were issued under the said notifications by all the Provincial High Courts through interim orders.

Later the Honorable High Court of Lahore through its judgment dated 13-05-2016 in Case No. W.P. 10433/2016 finally disposed of the matter by declaring that the impugned circular dated 01-03-2016 issued by EOBI in pursuance of the aforesaid amendment act has no application to the Province of Punjab.

As a consequence, the demand raised against the petitioners by EOBI in Punjab in pursuance to the impugned circular was held to be unconstitutional and illegal and hence set aside.

Similarly, Peshawar High Court through its Judgment dated 30-01-2018 in case no. W.P. 1465-P/2016 declared that the impugned notices issued by the EOBI in pursuance of the amendment act is not applicable to the Province of Khyber Pakhtunkhwa and therefore the upwardly demand against the petitioners by the EOBI in KP in pursuance to the impugned notices is held to be unconstitutional and illegal and hence set aside.

The matter is still pending in the Balochistan High Court and is awaiting a final order.

The Sindh High Court disposed of the CP by its judgment dated 03-12-2021 in which the petitions were dismissed, among others, mainly on the ground that since the impugned notification was issued under the EOBI Act 1976 which was not challenged by the petitioners, the instant petitions were not tenable in law.

The Employers Federation of Pakistan along with petitioner companies has already filed appeal against the Judgment of the Sindh High court in the Supreme Court of Pakistan and the matter is pending before the Supreme Court for admission and hearing.

In the light of the above background, it is extremely unfair for the EOBI to issue notices, demanding arrears of contribution at enhanced rate and using coercive means for its recovery, particularly when the matter is subjudice before the Supreme Court.

Moreover, it has also been brought to our notice that EOABI has decided to collect contribution through its portal and has directed banks not to accept contribution paid by the companies at a rate less than Rs. 13,000/- per month and the same has been notified for not only Sindh but also Punjab and Peshawar.

Since the High Court of Lahore and Peshawar have set aside EOABI notification demanding contribution at rates as demanded in the impugned notifications, the EOBI’s act of setting the above limitation in the portal system may amount to contempt of Court and needs to be immediately withdrawn in the Province of Punjab and KP.

If it is not done, this will only result in unrest and frustration among our members and they may once again be forced to approach the Court of Law for forced demand of contribution by EOABI at higher rates through the portal system which is meant to facilitate rather than creating barriers in smooth payment process, says the EFP.

We understand that the dialogue process initiated by EFP with EOABI under your leadership was a genuine and sincere exercise in improving the current stalemate caused by the litigation environment which somehow could not be carried out because of reasons best known to us.

EFP is still of the opinion that the social dialogue should continue to find a better solution to the current issues and challenges faced by Employers and EOBI based on voluntary initiatives.

EFP will be most willing to discuss the above matter in a meeting which you may like to convene on the subject as soon as possible if you agree to the proposition.

On January 10, 2022, EOBI has issued a circular, advising its officials concerned to take necessary measures for recovery of EOBI contributions on the revised rates as mentioned in Circular dated 17.02.2016, accordingly. It said the SHC accepted arguments of EOBI and rejected prayers of petitioners by dismissing the petitions being devoid of merit.

Consequent to judgment announced on 3.12.2021 by Sindh High Court

vide Constitution Petition No.D-1995/2016-titled M/s Dairy Land (Pvt Limited Vs Federation of Pakistan & others, whereby the said titled petition along with 51 others petitions were dismissed being devoid of merit.

The Petitioners had made following prayers.

That to declare Sindh EOBI Act 2014 as valid piece of legislation and to declare EOBI Act, 1976 has been repealed to the extent of Sindh Province;

That to hold for imposing of notification dated 01,03.2016 from retrospective effect, as it is applicable to Islamabad Capital Territory and not to the Sindh Province.

The SHC did not accept the aforesaid prayers of petitioners and dismissed all 52 petitions on the following grounds

That petitioners did not challenge vires of Act, 2016 but impugned the notification dated

01.03.2016 issued under the Act, 2016. The SHC held that a challenge to application of notification only without assailing the vires of the Act, under which notification has been issued, legally cannot be made particularly where things notified are with reference to the Act, itself;

That EOBI has not devolved to the provinces and EOB Act, like beneficial legislation

where object is to secure the rights of certain class of the people can not be allowed to be frustrated in name of passing of the provincial enactment alone, particularly where

petitioners have not challenged depositing of contribution under Federal Law which is an admitted position on non-implementation of the provincial law in its letter and spirit.

The perusal of language of two clauses as amended reflects that minimum wages ordinance was amended, hence they cannot take plea that this is applicable only for Federal Capital territory of Islamabad when it shows that such amendments are in the Act itself.

Since, SHC accepted arguments of EOBI and rejected prayers of petitioners by dismissing the petitions being devoid of merit.

Meanwhile, Azfar Shamim, Chairman EOBI pensioners Welfare Association Karachi has welcomed the SHC decision.

Also, he asked EOBI, and EFP to protect the interests of around 4 lac pensioners and tens of thousands employees, registered with the institution.

Copyright Business Recorder, 2022


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