The Industrial Relations Advisers,

Management & Labour Laws Consultants


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

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Circular No. C 134 Date: - 19-09-2012



Illegal insistence of the EOBI to use its WEB facilitation



1-            Both the workers/employees and employers have various Complaints against the EOBI and some employers have already filed constitutional Petitions in the High Courts.

2-            The latest tool of harassment of the EOBI is its WEB facilitation. The Institution insists on registration of new insured persons and payment of contribution worked out by its said WEB. As reported to us it includes in it the following traps and mischiefs:

(i)                 Monthly contribution is payable every month on the number of insured persons employed in the month. If for some reason the number of insured persons is reduced in any month, the WEB would not work out contribution on the reduced number of insured persons but on the earlier higher number of insured persons which is illegal. It is right of the employer to employ any number of employees as per work requirement which may increase or decrease.

(ii)               Section 2(p) of the Act as substituted with effect from 01-07-2005 the wages of every insured person has to be presumed as the minimum wage declared under the Minimum Wages for Unskilled Workers Ordinance, 1969 from time to time which is Rs. 6000/= p.m. till now but WEB of the Institution illegally works out contribution on Rs. 7000/= p.m. and now claiming on Rs. 8000/= p.m. wage fixed under a different law i.e. the Minimum Wages Ordinance, 1961. The Punjab Govt. has fixed Rs. 9000/= p.m. minimum wage under the Minimum Wages Ordinance, 1961 or any other provincial govt. may declare any minimum wage under the Minimum Wages Ordinance, 1961 will have nothing do with contribution under the EOB Act, 1976.

(iii)             5% contribution payable is not at fixed rate on the minimum wage of Rs. 6000/= p.m. and wrongly taken as Rs. 7000/= or Rs. 8000/= p.m. by the WEB but the wage of every insured person has to be worked out every month on wage rate of Rs. 6000/= p.m. minimum wage according to attendance and paid leave/festival holiday of every month of every insured person. If any insured person is not entitled to wages for any number of days in any month, his wage so worked out and contribution would be proportionately reduced in a such month.

(iv)             Registration forms of new insured persons are not accepted by the Institution and directed to use the WEB also for this purpose thereby actual signatures of employer and the employee would not be there to make it legally authentic document.

3-            After adopting the presumptive wage w.e.f. 01-07-2005 according to Section 2(p) of the Act as mentioned above the actual wages earned, paid by the employers at actual rate of wages of employees, record of such actual wages paid, ledgers, vouchers, or cash book related with the actual wage paid to the employees have now become totally irrelevant for the purposes of calculating due contribution. Profits or losses were always irrelevant. Inspite of it the officials of the EOBI insist on production of these records to illegally harass the employers.

4-            The Institution has made its EOB (Verification) Regulations 2007 contrary and in conflict with the provisions of the main Act making it illegal, invalid and ultra vires of the main Act which has already been challenged in the constitutional Petition No. D 1701/2012 in the Sindh High Court being conducted by us.

5-            It is unfortunate that the Institution is using the modern technology not for benefit and convenience of both the Institution and the employers but it is using it as a trap to harass and victimize employers illegally as explained above.

6-            Please note that the employers are not legally bound to use the WEB of the Institution as the Act does not provide the same. The employers may sent monthly contribution through cross cheque alongwith payment form PR 03 and so also registration forms and other documents related to the insured persons through Registered post which will be sufficient compliance of the At according to the law. The postal receipts of the same be kept on record by the employers.

7-            Please note that contribution is payable on wage at the rate of Rs. 6000/= p.m. as per Section 2(p) of the Act worked on the member of days payable to every employee every month and Rs. 7000/= p.m., Rs. 8000/= p.m. or Rs. 9000/= p.m. minimum wage under a different law are irrelevant for the purposes of the Act and such letters/claims of the EOBI be totally rejected by the employers.