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Tuesday January 18, 2022

SHC dismisses employers’ pleas against demand notices for charging of EOBI contributions

December 05, 2021
SHC dismisses employers’ pleas against demand notices for charging of EOBI contributions

The Sindh High Court has dismissed petitions of employers against demand notices by the federal government for the charging of contribution for fixing minimum wages for unskilled workers under the employees old-age benefit law.

The petitioners had submitted that the issuance of a federal government notification for the charging of contribution for fixing the minimum wages for unskilled workers could not imposed on institutions working in the province of Sindh. They submitted that the employees old-age benefit institution’s notification for the demand notice was only applicable to Islamabad, and not to the province of Sindh.

The petitioners’ counsel said the rates specified with retrospective effect cannot be applied in entire Pakistan, except Islamabad.

The deputy attorney general submitted that an amendment is common for the unskilled workers ordinance of 1969 and the same is applicable all over the Pakistan. He submitted that the rates have been defined in the act itself; therefore, the petitioners cannot challenge the issue in question.

The EOBI counsel contended that the petitioners are avoiding the payment of the EOBI contributions, which is payable by the employers to the employees on the basis of the wages and rates of the wages as declared under the minimum wages for unskilled workers ordinance of 1969.

He submitted that the federal government has declared the rates of minimum wages for the unskilled workers at par with the provinces through act of 2016 with retrospective effect, and if the contention of the petitioners were accepted the minimum wages would always remain static at RS6,000 for calculation contribution, which will not only be disastrous for the scheme but also for the employees.

He stated that the share of contributions as required to be paid by the employers has direct co-orelation with the amount of benefit to be disbursed to a pensioner in his old age when he is infirm, physically and mentally, not capable enough to further strive for meeting his economic needs. Moreover, he said the amount of the pension or the old-age grant he is getting during his lifetime or after his death received by his survivors is directly dependent upon the amount of contributions share the employers are paying to the EOBI. He said that propriety demands raising the contribution shares on the basis of minimum wages as declared from time to time.

A division bench comprising Justice Salahuddin Panhwar and Justice Adnanul Karim Memon, after hearing the arguments of the counsel, submitted that after 18th amendment subject matter with regard to the legislation on wages rests with the provinces; however, in terms of court orders it is quite evident that the EOBI has not devolved to the provinces, an aspect not disputed by anyone.

The court observed that till the time the provisional enactment is made functional, the rights of certain class of the people cannot be allowed to be frustrated in the name of passing of the provincial enactment alone, particularly where the petitioners have not challenged depositing of contributions under the federal law, which too because of the admitted position of non-implementation of the provincial law in its letter and spirit.

The court observed that it is prima facie evident that vires of the 2016 Act has not been challenged but the notification so issued under the act by the petitioners. It observed that challenge to the application of the notification only without assailing the vires of the act under which the notification has been issued, legally, cannot be made, particularly where things notified are with reference to the act itself.

The court observed that petitions are not tenable in the law and dismissed the same with no order as to cost.

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