In a significant ruling with long-term implications for private-sector workers, Pakistan’s top constitutional court has directed the Employees’ Old-Age Benefits Institution (EOBI) to release pensions to eligible employees who completed 14 and a half years of service, reaffirming that welfare laws must be interpreted in favor of workers.
The judgment strengthens pension protections for thousands of employees who were previously denied benefits due to rigid administrative interpretations.
What the Court Decided
A three-member bench of the Federal Constitutional Court, headed by Ameenuddin Khan, dismissed all appeals filed by EOBI against earlier decisions of the Lahore High Court.
The court ruled that:
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Employees with 14 years and 6 months of service qualify for pension
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Any service period of six months or more counts as a full year
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The principle of rounding off applies in pension calculations
As a result, such employees are legally treated as having completed the required 15 years of service.
Why This Ruling Matters
For years, EOBI maintained that pensions could only be granted after completing a full 15 years of service, excluding workers who fell short by a few months. This approach left many retirees without income support despite decades of contributions.
The court held that welfare legislation must not be applied in a way that defeats its purpose. Denying pensions on narrow technical grounds, the bench observed, goes against the spirit of social protection laws.
EOBI Circular Declared Ineffective
The court also ruled that EOBI’s 2022 internal circular could not override statutory pension rights. Administrative instructions, the judgment clarified, cannot restrict benefits guaranteed under law.
In its written decision, issued by Hasan Azhar Rizvi, the court emphasized that welfare institutions are bound to serve beneficiaries, not limit entitlements through internal policies.
Impact on Private-Sector Employees
This decision is expected to benefit a large number of private-sector retirees who were previously denied pensions due to minor service shortfalls. It also sets a binding legal precedent, ensuring uniform application of pension rules nationwide.
Employees who meet the service threshold can now seek pension payments with greater legal certainty, while EOBI is required to process claims in line with the court’s ruling.
What Comes Next
Following this judgment, EOBI will need to:
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Review pending and rejected pension cases
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Apply the rounding-off principle consistently
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Ensure compliance with court directives
Failure to implement the ruling could expose the institution to further legal action.
Final Takeaway
The court’s directive reinforces the principle that pension rights are a matter of social justice, not administrative discretion. By upholding worker-friendly interpretations of service requirements, the ruling restores financial security to deserving retirees and strengthens trust in Pakistan’s welfare framework.
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