The Industrial Relations Advisers,

Management & Labour Laws Consultants


Room 3, 1st floor, Falaknuma Building, Near The Laboratory & Haroon Radio, Abdullah Haroon Road, Karachi

Phone: 32727266 & 32729770 Fax: 32729770 (S M Iqbal) Email: 



†††††††††††††† Circular No. C Ė 132†††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† Date: -14-05-2012



Sindh Govt. Notifications dated 19-12-2011 & 17-06-2011

applying Social Security Scheme on the whole Karachi



††††††††††††††††††††††††††††††††††††††††††††† The Sindh Govt. quietly issued the Notification dated 19-12-2011 under Section 1(3) of the Provincial Employees Social Security Ordinance, 1965 applying the Scheme to all establishments situated in all Districts of Karachi which employ 5 or more persons and has been followed by the Notification dated 17-06-2011 giving the names of all 18 towns of the entire Karachi. In this connection our views and comments are given in the subsequent paras:


1-            It is mandatory to publish the said notifications in the Sindh Govt. Gazette and would become applicable from the date of publication in the Gazette.

2-            Under the Employees Old-Age Benefits Act, 1976 previous limit of itís application was 10 or more employees which was reduced to 5 employees by the amendment w.e.f. 01-07-2008 by the Finance Act, 2008. Amendment in the labour laws through the Finance Act has been held illegal and invalid by the Sindh High Court in the case of the Employers Federation of Pakistan decided on 26-02-2011.

3-            Even otherwise this amendment could not be implemented as EOBI maintains separate accounts of all registered establishments and by reducing the limit to five employees large number of small establishments and shops would come in itís fold making it difficult for the Institution to manage and it has not been implemented since before the above decision of the Sindh High Court except selectively used to blackmail establishments.

4-            Previously there has been internal circular / memo of SESSI to notify only those establishments which employ 10 or more employees for administrative convenience of the Institution which was practical and going on well.

5-            There is competition between EOBI and the Social Security Institution to have more powers. What the EOBI intended to get through above amendment of 2008, the Sindh Social Security Institution has attempted to get the same by the said above two Notifications which amounts to amendment in the Ordinance by the Notification and may be declared invalid if challenged in superior courts.††††††

6-            Previously Notifications u/s 1(3) of the Ordinance were issued containing names of establishments published in the Sindh Govt. Gazette and copy of it was given to every establishment which started paying due contribution and the Scheme started applying, but the above two notifications have been quietly issued of which large number of small establishments are not unaware of. Even the SESSI has kept quiet about applying the same.

7-            Officials of SESSI select any such establishment not covered before and send high demand for the period from 01-07-2011 and bargaining starts for obvious reasons. We fail to unstand by such general notifications being ambiguous and unspecific without giving names of establishments in contrast to earlier notifications what the Sindh Govt. intends to achieve? Are these notifications for gaining popularity, giving benefits of the Scheme of the employees or a tool given in the hands of unscrupulous officials of the Institution to harass and blackmail employers? It is for the Sindh Labour Minister and the Sindh Govt. to seriously consider the same and decide whatever is just and proper without loss to time.