EMPLOYEES’ OLD-AGE
BENEFIT LEGISLATION
Workshop on Labour Laws
Jointly Organized by
Small & Medium Enterprises Development Authority,
F. B. Area Association of Trade & Industry
&
BLP
BUREAU OF LABOUR PUBLICATIONS
December 2010
EMPLOYEES’ OLD-AGE BENEFIT
LEGISLATION
Facilitator:
Co-author:
Editor:
PERWEZ SHAFI, M.A. MS, Ph.D.
LABOUR CODE OF PAKISTAN
EASTERN WORKER
Journal of Labour Laws, Industrial Relations, HR &
Social Compliance
Advice & Consulting:
To number of national and multinational companies
Tel :
(021) 241-4975
701-1600
Email:
blplabourlaws@yahoo.com
Website: www.blplabourlaws.com
EOBI
• In SOCIAL SECURITY LEGISLATION
presentation:
• Principle of social security coverage -- Article 25
of the “Universal Declaration of the Human
Rights”, UN 1948:
“EVERY ONE HAS A RIGHT TO SECURITY IN THE
EVENT
OF
UNEMPLOYMENT,
SICKNESS,
DISABILITY, WIDOWHOOD, OLD-AGE OR LACK OF
LIVELIHOOD IN CIRCUMSTANCES BEYOND HIS
CONTROL”.
Purpose of
Employees’ Old-Age Benefits Act, 1976
To provide
•
•
•
•
Old-Age Pension/allowance
Old-Age Grant
Survivors’ Pension
Invalidity Pension
Employees’
Old-Age Benefits Act, 1976
Applicability 1(4)(i)
•
•
•
•
5 or more persons employed (July 2008)
directly or through any other person,
during the preceding 12 months,
Act shall continue to apply even if the
number of persons falls below 5.
Employees’ Old-Age Benefits Act,
1976
Voluntarily Applied 1(4)(i-a)
• If less than 5 persons are employed
• voluntarily applies for application of Act
• Act applies from date of application.
Employees’ Old-Age Benefits Act, 1976
Applicable by Notification
1(4)(ii)
• Federal Govt. may apply EOBI Act to any
establishment (even with less than 5
persons) by issuing a Notification in the
official Gazette.
• Employers’ responsibility to find out
whether Act is applicable to them or not.
Employees’ Old-Age Benefits Act,1976
Definition of Employee 2(bb)
• “employee” means any person employed,
whether directly or through any other person for
wages to do any skilled or unskilled, supervisory,
clerical, manual or other work under a contract
of service or apprenticeship whether written,
oral, express or implied & includes laid off
person.
• Director of a limited Co./Corp. shall not be an
employee under this Act irrespective of wages.
Employees’ Old-Age Benefits Act, 1976
Definition of Wages 2(p)
• “wages” means the rate of wages as
declared under the Minimum Wages for
Unskilled Worker Ordinance, 1969 (2005).
• Min. wage (July 2008) =
• Min. wage (July 2010) =
Rs. 6000. pm
Rs. 7000. pm
Employees’ Old-Age Benefits Act, 1976
9. Contributions
• Pay contribution at the rate of 5% (2008)
of employees’ wages.
• No contribution payable of an insured
person:
• Who is in receipt of Old-Age pension
under this Act, OR has attained the age
of 60, or 55 if woman.
Employees’ Old-Age Benefits Act, 1976
9. Contributions
• (2) If employee does not receive any
wages for any period, the Institution will
determine the wages & contribution.
• (3) Employer shall not deduct/recover his
portion of contribution from insured
employees’ wages, notwithstanding any
agreement.
Maximum EOBI Contributions
after Finance Act, 2008 (July 1, 2008)
_________________________________________________________________________
________ Maximum Share of
Contributions by
Max. Total
employer pm (sec.9)
worker pm (sec. 9B)
Contribution
5% x Minimum Wages* 1% x Minimum Wages*
pm
_________________________________________________________________________
_______
Rs. 300
Fr July 1, 2010 Rs. 350
Rs. 60
Rs. 70
Rs. 360
Rs. 420
* Rs. 6000 (7000) is the minimum wage for unskilled
worker in the Schedule (col. 2) of the Minimum
Wages for Unskilled Workers Ordinance, 1969.
________________________________________________
_____
Compiled by: BLP, July 1, 2008.
Source: EASTERN WORKER -- Journal of Labour Laws & Industrial Relations,
Vol. 48, No. 3, May--June, 2008. [See later issues for any later amendments].
12. EOBI Officials to check
Employers’ Books/Records:
(1) An official of the Institution may check or
verify employers’ records & returns:
(a) as he may consider it necessary
(b) at any reasonable time, enter any
establishment & require them to produce &
allow him to examine books/docs relating
to employment of persons, payment of
wages, or any other document.
(c) examine records of employer, his agent
or any other person on any relevant matter.
12. EOBI Officials to check
Employers’ Books/Records:
(2) EOBI official cannot demand production of
account books/records for a period of 2 years
from date of registration or the July 1,2005
whichever is later if employer does not reduce #
of employees.
Provided if employer enhances # of employees
by 10% on expiry of 2 yr period it will be
accepted w/o question otherwise checking of
records will be done as in sub-section (1) & no
question will be asked about the previous 2
years. (2005)
12. EOBI Officials to check
Employers’ Books/Records:
(3) If employer fails to maintain records or
submit returns or otherwise fail to comply
with (1) & thereby makes it difficult to
ascertain the identity of persons insured or
the amount of contribution payable, the
contribution shall be assessed based on
any evidence available & deemed to be
satisfactory in the prescribed manner.
Employees’ Old-Age Benefits (Verification)
Regulations, 2007
3. Verification of employer's record.-The employer's record shall be subject to verification by
an EOBI team, if the employer:-(i) fails to pay contributions for consecutive 3
months; or
(ii) reduces the number of insured persons; or
(iii) fails to submit the returns required under the
EOAB (Contribution) Rules, 1976;
(iv) does not enhance the number of insured
persons (by 10%) section 12(2) of the Act; or
(v) a complaint with corroborative evidence is
received.
Employees’ Old-Age Benefits
(Verification) Regulations, 2007
2(c). “corroborative evidence“ means
(i)
(ii)
(iii)
(iv)
annual report or audited accounts;
published report of the establishment;
official record of any public office;
complaint from registered trade union or
CBA of the establishment; or
(v) comparative study of the industries or
establishments of similar capacity, their
process and machinery located in the
same area;
13. Increase of Unpaid contribution &
recovery of contribution
(1) If an employer fails to pay contribution
under section 9 on the due date, the
amount shall be increased (but not
exceeding 50% of the amount due) by
such percentage or amount as my be
prescribed.
14. Safeguard of insured person’s
right if employer default on
payment of contribution
• If an employee is an insured person
including any change in employment from
one establishment or industry to another,
in case of employer’s default on payment
of contribution, such insured person have
the same rights under the Act as if no such
default had occurred.
EOAB BENEFITS
22. Old-Age Pension:
Insured person entitled to Old-Age pension
at the rate specified in the Schedule.
Provided (a) he is over 60 years or 55 in
case of a woman
(b) contribution paid for not less than 15
years.
EOAB BENEFITS
22-A. Old-Age Grant:
If an insured person retires, not otherwise entitled
to old-age pension, & contribution were paid
for less than 15 years but not less than 2
years, he shall be entitled to a old-age grant
in a lump sum equal to his one month’s
average wages for every completed year of
insurable service or part thereof in excess of 6
months.
EOAB BENEFITS
22-B. Survivors’ Pension:
In case of death of an insured person who had
completed not less than 3 years, the surviving
spouse shall be entitled to a life pension at the
rate specified in the Schedule.
In case of death of an insured person while not in
insurable employment but after he had
completed 5 years of insurable employment,
the surviving spouse shall be entitled to a life
pension at the rate specified in the Schedule.
EOAB BENEFITS
23. Invalidity Pension:
(1) An insured person who sustains invalidity
shall be entitled to an invalidity pension
at the rate by a formula set out in the
Schedule.
Provided contributions paid not<15 yrs or
contributions paid bet. 3--5 yrs, and
he/she under 60/55 yrs of age
(2) invalidity pension continues as long as
invalidity continues.
EOAB BENEFITS
28. Non-duplication of Benefits
1. An insured person shall not be paid for the
same period more than one of the
benefits provided for in this Act.
2. Where an insured person is entitled to
more than one benefit under this Act, he
shall be given the higher of such benefits.
33. Decisions on complaints,
questions & disputes:
Any complaint received or any question or dispute
arises as to:
* Whether a person is insured or not,
* Amount of wages of an insured person
* Amount of contribution payable by employer
* Person who is or was the employer
* Entitlement to any benefit, its amount & duration
* Registration of industry or establishment, or
* any other matter
the matter shall be decided by the Institution
according to its regulations and communicated to the
person in writing stating the reason for its decision.
34. Review of DecisionsThe Institution may review its
decision under section 33 if new
facts are brought to its notice.
35. Appeal to BoardA person aggrieved by a decision
of the Institution under section 33
or 34 may appeal to the Board.
EOBI Case Laws & Issues
Part-time worker is an “employee” on
whose behalf contribution has to be
paid.
[SC(Pak): Lahore Race Club vs. Deputy Director,
EOBI; PLJ 1998 SC 1728 = 1998 SCMR 1571]
[SC(Pak): Cawasjee And Sons vs. Board of
Trustees, EOBI & another; 2001 SCMR 949]
EOBI Case Laws & Issues
Non-profit educational institutions
are also included in the definition
of “establishment”.
[HC(Lah): Saint Peter High School, Gujranwala
vs. Asstt. Director (Field Operation), EOBI; 1990
PLC 244]