EMPLOYEES OLD-AGE BENEFITS
ACT, 1976
ALONGWITH HISTORICAL BACK GROUND
(BEAR ACT)
UPDATED
BY: -
MAHMOOD ALAM SOOMRO
M.A., LL.B.
DIRECTOR (LAW)
EOBI, Head
Office,
HISTORICAL BACK GROUND ALONG
WITH
BRIEF ON AMENDMENTS
FROM 1976 TO 2005.
Prior to this law, in Pakistan, there were
so many labour laws like Work’s Compensation Act, 1923 Factories Act, 1934, Payment
of Wages Act,1936, West Pakistan Social Security Ordinance, 1965 (Ordinance No:
X of 1965), West Pakistan Industrial and Commercial (Standing Orders)
Ordinance, 1968, Companies Profit (workers’ Participation)Act,1968, West
Pakistan Shops and Establishment Ordinance,1969, Industrial Relation
Ordinance,1969, Workers Welfare Fund Ordinance, 1971, Workers Children
(Education) Ordinance, 1972, etc. In many labour laws remedial, beneficial and
welfare clauses and sections were provided but none from these laws or others
provide such coverage of the old-age risk thus it was necessary to make a law
that can provide security in the eve of old age when a man becomes handicap to
work hard, condition of invalidity and in the case of death of a worker /
employee the pension to the widows and orphans. In the European countries such
laws were in operation.
In view of
this need, first time in
This better
scheme was promulgated on
Later on the Employees' Old‑Age
Benefits Ordinance, 1975, was substituted by the better enactment, the
Employees' Old‑Age Benefits Act, 1976, (Act No XIV of 1976) which was
passed by the National Assembly on
After promulgation of this statute many
amendments are made therein and the last amendment has been mad in June 2005
through Finance Act, 2005. Since the process of amendment is a non-stop process
hence this journey of amendment is in way of further amendments in view of the
need of the nation and ILO conventions and recommendations on Social Security
laws/ schemes. Till June 2005 this law has been amended through amendments as
below:-
-
Employees’ Old-Age
Benefits (Amendment) Ordinance, 1983. (Ordinance No. XVII of 1983),
-
Finance Act, 1986.
(Act 1 of 1986),
-
Labour Laws
(Amendments) Ordinance, 1993 (Ordinance XXIII of 1993),
-
Employees Old-Age
Benefits (Amendment) Ordinance, 2000. (Ordinance IX of 2000),
-
Labour Laws
(Amendment) Ordinance, 2001. (Ordinance LIII of 2001),
-
Employees’ Old-Age
Benefits (Amendment) Ordinance, 2002. (Ordinance I of 2002),
- Employees' Old-age Benefits (Amendment)
Ordinance, 2002. (Ordinance XLVI of 2002), and
- Finance Act, 2005.
EMPLOYEES’ OLD-AGE BENEFITS ACT, 1976
CONTENTS
PRELIMINARY.
1.
Short title, extent, commencement and application.
2.
Definition.
CHAPTER – II
INSURED PERSON
3.
Compulsory
Insurance.
4.
Administration.
5.
Nomination of a
body corporate pending establishment of an Institution.
6.
Management.
7.
Board of Trustees
8.
Powers and Functions of the Board of Trustees
8A.
Appointment, Powers and
Functions of Chairman
CHAPTER –
III
CONTRIBUTION
9.
Rates and Assessment
9A. Contribution by Government.
9B. Contribution by the insured person
10.
Records and Returns by Employers.
11.
Registration of Establishment, Etc.
11A. Cancellation of Registration of
Establishments etc.
12.
Officials of Institution to Check Employer's Books.
13.
13. Increase of Unpaid Contribution and Recovery of Contribution, etc.,
as arrears of land revenue.
14.
Safeguard of Insured Person’s Right in Default of Payment of
Contributions by Employers.
15.
Refund of Contributions Paid Erroneously
16.
Extinguishment of Claims to Contributions
CHAPTER – IV
FINANCE
AND AUDIT
17.
Employees' Old‑Age Benefits Fund
18.
Investments and Loans
19.
Budget, Accounts and Audit
20.
.Annual Report
21.
Valuation of Assets and Liabilities
CHAPTER – V
BENEFITS
22.
Old-Age Pension
22-A Old-Age Grant
22-B
Survivor’s Pension
23.
Invalidity Pension.
CHAPTER – VI
PROVISIONS COMMON TO ALL BENEFITS.
24.
Calculation of Qualifying Contribution Periods.
25.
Benefit Claims and Payments.
26.
Extinguishment of Benefits.
27.
Suspension of Old‑Age Pension and Survivor's Pension.
28.
Non‑Duplication of Benefit.
29.
Benefit nor Attachable, Chargeable Or
Assignable.
30.
Repayment of benefit improperly received.
31.
Institution's Right to Be Indemnified in Certain Cases
32.
Recovery of Amounts Due
CHAPTER – VII
DETERMINATION
OF QUESTIONS AND CLAIMS
33.
Decisions of Complaints, questions and disputes.
34.
Review of decision
35.
Appeal to Board.
36. Assessment of invalidity.
CHAPTER – VIII
OFFENCE AND PENALTIES.
37.
Offences.
38.
Prosecution.
CHAPTER – IX
40.
Exemption From Stamp Duty
41.
Exemption From Taxes
42.
Member and servants of the institution to be public servants
43.
Delegation of Powers
44.
Power to make Rules
45.
Power to make Regulations
46.
Power to exempt.
47.
Act not to apply
to certain persons.
48.
Repealed
Schedule
EMPLOYEES' OLD‑AGE
BENEFITS ACT, 1976
(ACT No. XIV OF 1976)
[
An Act
to repeal and re‑enact the Law relating of Old‑Age benefits
for the persons employed in industrial, commercial and other organizations.
WHEREAS it is expedient to repeal
and re‑enact the law relating to
old‑age benefits for the persons employed in industrial, commercial and
other organizations and matters connected therewith:
It is hereby
enacted as follows: ‑
CHAPTER 1
PRELIMINARY
1. Short Title, Extent, Commencement and
Application. (1) This Act may be called the Employees' Old‑Age
Benefits Act, 1976.
(2) It extends to the whole of
(3) It shall come into force at
once.
1[(4) It applies
to every industry or establishment.
(i)
wherein ten or more persons are employed by the employer, directly or through
any other person, whether on behalf of himself or any other person, or were so
employed on any day during the preceding twelve months, and shall continue to
apply to every such industry or establishment even if the number of persons
employed therein is, at any time after this Act becomes applicable to it,
reduced to less than ten; or
2[(i-a)
wherein less than ten persons are employed if such industry or establishment
voluntarily applies for application of this Act and this Act shall apply to such
industry or establishment for the date of submission of an application by such
industry or establishment; or
(ii) which the Federal Government may, by notification in the
official Gazette, specify in this behalf.}
_________________________________________________________________
1.
Sub-sec.(4) by Ord.
XVII of 1983.s.e enforced from July 1,1983=1983 PLS 81
2.
Inserted Cl.(i-a)
in sub-sec(4) by Labour Laws (Amendment) Ordinance,2001(Ord. LIII), s.7(1),
effective from
2.
Definitions.‑In this Act, unless the context otherwise requires,‑
[(a) "benefits"
mean old‑age pension, invalidity pension, [survivor’s] 2 pension, old‑age
grant and such other payments as may be determined by the Federal Government
from time to time;}
3[(aa)
"Board” means the Board of
Trustees constituted under section 7 ;}
(b) "Contribution" means the sum of money payable to the
Institution by the employer {or by the Federal Government}4 in respect of
an insured person under the provisions of the Act.
5[(bb) "employee" means any person employed, whether directly or
through any other person, for wages or otherwise, to do any skilled or
unskilled, supervisory, clerical, manual or other work in, or in connection
with the affairs of, an industry or establishment, under a contract of service
or apprenticeship, whether written or oral, express or implied, and includes
such person when laid off {:]]
6[ Omitted]
Provided5[ * * ] that a director of a limited company or
of a corporation set up under any law shall not be treated as an employee
under this Act, irrespective of his wages or emoluments ;]
7[(c) "employer", in relation to an industry or establishment, mean
any employee, and includes‑
(i) in the case of an individual, an heir, successor,
administrator or assign;
(ii) a
person who has ultimate control over the affairs of an industry or establishment, or where the affairs of an
industry or establishment are entrusted to any other person (whether called a
managing agent, managing director, manager, superintendent, secretary or by any
other name), such other person ;and]
8[(iii) [Omitted]
(d) "employment injury" means a personal injury to an insured person caused by
an accident, or by such occupational disease as may be specified in the
regulations, arising out of and in the course of his employment:
_________________________________________________________________________________
1 Cl..(a) added after re-numbering
original cl.(a) as (aa) by
Or. XVII of 1983, enforced from 1st July 1983= 1983 PLS 81
2. Subs.
for word”widow’s”,by Employees’ Old Age Benefits
(Amendment) Ord. 2002,s. 2(a)
3. Original
Cl. (a) re-numbered as (aa), ibid.
4. Add.
By Finance Act, 1986(Act I of 1986) s.11.1.(a)
5. Cl. (bb) add by Ord. XVII of 1983.
6. Omitted
1st proviso of cl.(bb) added
by Act I of 1986, by Labour Laws(Amendment) Act, 1994.
7. Cl. ( c ) subs. By Ord. XVII of
1983, s. 3
8. Sub-Clause
(iii) omitted by Act I of 1986
1[(e) "establishment" means‑
( i ) an establishment to which the West of Pakistan
and Establishments Ordinance, l969 (West Pakistan Ordinance No. VIII of 1969)
for the time being applies, and notwithstanding anything contained in section 5
thereof, includes clubs, hostels, organisations and
messes not maintained for profit or gain and establishment, including
hospitals, for the treatment or care of sick, infirm, destitute or mentally
unfit persons ;
( ii ) a
construction industry as defined in the West Pakistan Industrial and Commercial
Employment (Standing Orders) Ordinance, 1968 (West Pakistan Ordinance No. VI of
1968);
( iii ) a
factory as defined in the Factories Act, 1934 (XXV of 1934);
(iv) a mine
as defined in the Mines Act, 1923(IV of 1923) ;
(v) a road transport service as
defined in the Road Transport Workers Ordinance, 1961 (XXVIII of1961) ; and
includes any class of industries or establishments which the Federal Government
may, by notification in the official Gazette, declare to be establishments for
the purposes of this Act.]
(f) "fund" means the Employees'
Old‑Age Benefits Fund set up under section l7 ;
(g) "industry" means any
business, trade, undertaking, manufacture or calling of employers, and includes
any calling, service, employment,
handicraft industrial occupation or avocation of workmen ;
(h) "institution" means the
Employees' Old‑Age Benefits Institution established or nominated under
section 4 [or section 5;] 2
(i) "insured person" means [an employee] 3
who is or was in
insurable employment;
(j) "insurable employment" means employment of a person under a contract of
service or apprenticeship, whether written or oral, express or implied and in
respect of which contributions are payable under this Act;
_________________________________________________________________
1.
Cl. (a) subs. By Ord. XVII of 1983,
s.4=1983 PLS 81.
2.
Words and figure added. ibid.
3.
Subs for “a person”, by Act I of 1986.
(k) "invalidity" means a condition, other than that caused by an employment
injury, as a result of which an insured person is permanently incapacitated to
such an extent as to earn from his usual or other occupation more than one
third of the normal rates of earning in his usual occupation ;
(1) "member" means a member of
the Board ;
(m) "prescribed" means
prescribed by rules ;
(n) "regulations" means
regulations made by the Board ;
(o) "rules" means rules made
under this Act;
1[(oa) [ Omitted}
2[(P) “wages” means the rates of wages
as declared under the Minimum Wages for Unskilled Worker Ordinance, 1969 (W.P.Ordinance XX of 1969)”
[(q) “year”, with respect to insurable employment means, a total of three
hundred and sixty‑five days for which contribution are payable, or, in the
case of insured persons who are not paid for weekly holidays, a minimum of
three hundred and twelve days.]
1 Self Assessment
scheme omitted by Finance Act, 2005.
2 Clauses (p)
subs. by
Finance Act, 2005.
CHAPTER II
INSURED PERSONS
1[3. Compulsory Insurance.‑
All employees in an industry or establishment shall be insured in the manner
prescribed by or under this Act.]
4.
Administration.‑(1) As soon as may be, after the commencement of this
Act, the Federal Government shall establish or nominate by notification an
Institution to be called the Employees' Old‑Age Benefits Institution.
(2) The Institution shall be a body
corporate having perpetual succession and a common seal, with powers, subject
to the provisions of the Act, to acquire, hold and dispose of property, both
movable and immovable, and shall by the aforesaid name sue or be sued.
5.
Nomination of a Body Corporate Pending Establishment of An
Institution.‑
(1) Notwithstanding anything
contained in section 4, the Federal Government may, pending the establishment
of an Institution, by notification in the official Gazette, nominate a body
corporate to exercise and perform all the powers and functions of the
Institution under this Act and appoint the head of such body corporate, by
whatever name called, to be the
2[Chairman] of the Institution.
(2) The nomination of a body
corporate under sub‑section (1) shall be subject to such terms and
conditions as the Federal Government ma, from time to time, determine.
6.
Management.‑(1) The general direction and
superintendence of the affairs of the Institution shall vest in Board which
may, with the assistance of the
2[Chairman] of the Institution, exercise all powers and do all
acts and things which may be exercised or done by the Institution.
(2) In discharging its functions,
the Institution shall be guided by such instructions on questions of policy as
may be given to it from time to time, by the Federal Government, which shall be
the sole judge as to whether any instructions are on a question of policy or
not.
7.
Board of Trustees.‑(1) The Board of Trustees
shall consist of the following members to be appointed by the Federal
Government, by notification, namely:‑
_____________________________________________________________________
1. Subs
by Finance Act,(Act 1 of 1986)
2. Subs
for word ”head” by Ord. XVII of 1983, s. 5=1983 PLS 81
3. Appointments
of members notified under S.R.O.588 (1)/76, June, 14=Gaz.
Of Pak.Extr. Pt. II,
(a) the
Secretary of Additional Secretary in the Labour Division, who shall also be the
1[President] of
the Board of Trustees ;
2(b) four persons to represent the
Federal Government, one each from the Ministries of Finance and Labour;
(c) four
persons to represent the Provincial Governments, one to be nominated by each of
the Provincial Government ;
(d) four
persons to represent employers ;
(e) four
persons to represent insured persons ; and
3(f) one persons to represent
the Institution.
(2) Members to be appointed under
clause (d) and (e) of sub‑section (1) shall respectively be chosen from a
list of names submitted in the prescribed manner by the organisations
to the employers and employees recognized by the Federal Government for that
purpose.
Provided that, pending the making of
rules in this behalf, the first members to be so appointed shall be chosen from
such persons as the Federal Government may deem fit.
8.
Powers and Functions of the Board of Trustees. In addition to the powers
conferred on, and the functions entrusted to it by the other provisions of this
Act or by the rules, the Board shall have powers.
(a) to approve the budget estimates,
the audited accounts and the annual report of the Institution for submission to
the Federal Government in accordance with the provisions of this Act ;[
]4
(b) to call for any information or direct any research to be made for the furtherance of the objects of the Act[, and]