ISLAMABAD: The Federal Constitutional Court (FCC) affirms workers’ fundamental right to a pension, holding that employees with fourteen-and-a-half years or more of service are entitled to a monthly pension. Applying the “rounding-off” principle provided in the Employees’ Old-Age Benefits Act (EOBA), 1976, the Court rules that this duration effectively meets the 15-year requirement for pension eligibility, ensuring financial security for thousands of retiring employees.
The ruling came as a three-judge FCC bench, headed by Chief Justice Aminuddin Khan and comprising Justice Syed Hasan Azhar Rizvi and Justice Arshad Hussain Shah, dismissed five appeals filed by the Employees’ Old-Age Benefits Institution (EOBI) against Lahore High Court’s judgements that had ordered the grant of pension to the workers who had completed between 14.75 and 14.86 years of insurable employment.
It is pertinent to mention that the EOBI had denied pensions to five employees – Muhammad Rafique, Muhammad Yaqoob, Shahbaz Hussain, Muhammad Imran Butt and Rashed Anwar — on the ground that they had not completed the mandatory 15 years of insurable employment under Section 22(1)(b) of the Act.
Justice Rizvi observed that the principle of promissory estoppel restrains a public authority from resiling from a position consciously adopted and acted upon by affected persons, unless an overriding public interest so demands and such departure is sanctioned by law. No such overriding public interest was established in the present case, nor did the statutory framework permit withdrawal of pensionary benefits through a subsequent executive circular, he said.
The court acknowledged that while an authority empowered to make an order generally also has the power to rescind or modify it, this principle is subject to a well-recognised exception. Once an order has taken legal effect and rights have accrued in favour of an individual, it cannot be withdrawn to the detriment of those vested rights. Justice Rizvi observed that the rounding-off provision in the schedule to the Act is not merely computational but forms a substantive part of the pension eligibility framework.
It is designed to prevent “technical disqualifications” arising from marginal shortfalls. The FCC noted that EOBI’s Circular No. 1/2022, which sought to exclude rounding-off for determining eligibility, could not override the statutory schedule. EOBI’s 2019 circular had correctly applied the rounding-off rule and that the 2022 circular could not retrospectively take away vested rights, it observed. The court explained that while 15 years of service remains mandatory, the schedule creates a deeming provision under which a period of six months or more is treated as a full year. Accordingly, workers with 14.5 years or more of service are deemed to have completed 15 years of insurable employment.
“Once the schedule is applied in its proper perspective, the five employees cannot fall short of the mandatory requirement,” the judgement said. The FCC also rejected EOBI’s contention that the schedule applies only after eligibility is determined, holding that such an interpretation would render the rounding-off provision “redundant and ineffective.” The court dismissed all five civil petitions and connected applications, refusing leave to appeal, and reaffirmed the pro-worker intent of pension legislation.
