Private sector employees across Pakistan have received significant relief after the Federal Constitutional Court issued a landmark ruling in their favour regarding old-age pension benefits.
The court directed the Employees’ Old-Age Benefits Institution (EOBI) to pay monthly old-age pension to all eligible private-sector employees, rejecting the institution’s objections and appeals.
Who Is Eligible for Pension
While dismissing all appeals filed by EOBI, the court upheld the 2024 and 2026 judgments of the Lahore High Court. The ruling declared that employees who have completed at least 14.5 years of service must be treated as having completed the required 15 years for pension eligibility.
The judgment clarified that:
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Any service period of six months or more will be counted as a full year
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The principle of rounding off will apply in pension cases
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Employees with 14 years and 6 months of service or more will be considered fully eligible
EOBI Circular Declared Ineffective
The court ruled that EOBI’s 2022 circular cannot override pension rights, stating that denying pensions through strict interpretation of welfare laws amounts to injustice. The schedule governing pension rules was declared an essential and binding part of the law.
Bench and Key Observations
The verdict was issued by a three-member bench headed by Amin-ud-Din Khan. The court observed that welfare legislation must be interpreted in favour of workers, not against them.
The bench concluded that employees who have dedicated the majority of their working lives to service cannot be deprived of pensions due to technical or rigid interpretations.
Why This Decision Matters
This ruling is being viewed as a major victory for private-sector employees, strengthening labour rights and ensuring financial security after retirement. Legal experts say the decision will benefit thousands of workers who were previously denied pensions despite nearing the required service period.
