ISLAMABAD: The Federal Constitutional Court (FCC) has upheld the rights of workers to receive pension under the Employees’ Old-Age Benefits Act, ruling that employees with fourteen-and-a-half years or more of insurable service are entitled to benefits. The judgement reaffirmed the “rounding-off” principle in the 1976 law, which treats periods of six months or more as a full year of service.
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The decision came from a three-judge bench headed by Chief Justice Aminuddin Khan, alongside Justice Syed Hasan Azhar Rizvi and Justice Arshad Hussain Shah. The bench dismissed five appeals filed by the Employees’ Old-Age Benefits Institution (EOBI) against Lahore High Court rulings that had ordered pension payments to workers who completed between 14.75 and 14.86 years of service.
EOBI had denied pensions to five employees on the grounds that they fell marginally short of the mandatory 15-year service requirement. However, the 16-page judgement authored by Justice Rizvi held that legitimate expectations created through past practice could not be undone arbitrarily or through executive circulars.
The court noted that principles of promissory estoppel and legitimate expectation require public authorities to act consistently, fairly and without discrimination, especially in matters related to social welfare benefits. It observed that no overarching public interest justified overturning previously vested rights.
The verdict further clarified that while authorities possess the power to amend or rescind previous orders, they cannot do so once legal rights have accrued to individuals. The FCC stressed that the rounding-off schedule was not merely computational, but a substantive provision intended to prevent “technical disqualifications.”
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It concluded that EOBI’s 2022 circular, which excluded rounding-off for eligibility calculations, could not override the statutory schedule nor retrospectively deprive workers of pension rights. The court therefore dismissed all appeals and reaffirmed the pro-worker intent behind pension legislation.