The Court holds that marginal deficiencies can be remedied through statutory “rounding mechanism” provided by law
ISLAMABAD:
The Federal Constitutional Court (FCC) has upheld a series of Lahore High Court (LHC) judgments directing the Employees Old-Age Benefits Institution (EOBI) to grant a monthly old-age pension to workers who had completed more than 14 and a half years of insurable service.
The court has ruled that marginal deficiencies can be remedied through the statutory “rounding mechanism” set out in the Act.
A three-member bench headed by Justice Amin-ud-Din Khan, and comprising Justice Syed Hasan Azhar Rizvi and Justice Syed Arshad Hussain Shah, dismissed five civil petitions filed by EOBI against the LHC verdicts. The detailed order was authored by Justice Rizvi.
EOBI challenged LHC orders dated August 29, 2024 and March 5, 2025, whereby the high court had allowed writ petitions of five insured persons and directed EOBI to pay them old-age pension.
It had argued that the workers were not eligible because they had not completed the mandatory 15 years of insurable employment required under Section 22(1)(b) of the EOBI Act, 1976.
According to the facts recorded by the court, the accused – Muhammad Rafique, Muhammad Yaqoob, Shahbaz Hussain, Imran Butt and Rasheed Anwar – had completed between 14 years and six months and 14 years and 11 months of insurable service before retirement.
Their pension claims were rejected by the EOBI and in some cases by the adjudicating and appellate authorities under the Act.
However, the LHC granted relief by invoking the proviso contained in the Schedule to the Act which provides that a period of 6 months or more of insurable employment shall be treated as a full year.
Before the FCC, EOBI maintained that the scheme only applied at the pension calculation stage and could not override the substantive eligibility requirement of 15 full years.
It further relied on an internal circular issued in February 2022 which clarified that service of 14.5 years or more could not be rounded off for determining eligibility and that such persons were only entitled to a lump sum old-age allowance under Section 22A.
The court rejected the arguments, holding that the Act created two separate benefit schemes – a monthly pension under section 22 and a lump sum under section 22A – but that the scheme formed an integral part of the statutory scheme and could not be separated from the issue of eligibility.
The court noted that a rigid, literal interpretation of section 22(1)(b) would lead to “unjust, harsh and disproportionate consequences” by denying pensions to workers who had substantially complied with the law but fell short by an insignificant margin.
The FCC noted that the legislature deliberately incorporated the rounding rule to avoid technical disqualifications and difficulties in social welfare legislation.
